<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTER ENDED JULY 3, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM TO
-------- --------
Commission File Number: 0-9856
AM COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 23-1922958
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
100 Commerce Boulevard, Quakertown, PA 18951-2237
- -------------------------------------- ----------
(Address of principal executive offices) Zip Code
(215) 538-8700
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
----- -----
On August 10, 1999, there were 32,331,596 shares of the Registrant's Common
Stock, par value $.10 per share, outstanding.
<PAGE>
AM COMMUNICATIONS, INC.
FORM 10-QSB
FOR THE QUARTER ENDED JULY 3, 1999
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Balance Sheets - July 3 (Unaudited) and April 3, 1999 3
Statements of Operations - Quarters Ended July 3, 1999 4
and June 27, 1998 (Unaudited)
Statements of Cash Flows - Quarters Ended July 3, 1999 5
and June 27, 1998 (Unaudited)
Notes to Financial Statements 6, 7
Item 2. Management's Discussion and Analysis of Operations 8 - 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13 - 14
<PAGE>
Item 1. Financial Statements
AM COMMUNICATIONS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
July 3, April 3,
1999 1999
------------ ------------
ASSETS
Current Assets:
<S> <C> <C>
Cash $ 383,000 $ 24,000
Accounts Receivable, Net of Reserves
of $221,000 at July 3 and April 3,1999 1,130,000 1,489,000
Due from Affiliates 82,000 42,000
Inventory 1,310,000 1,218,000
Prepaid Expenses and Other 41,000 43,000
------------ ------------
Total Current Assets 2,946,000 2,816,000
Equipment and Fixtures, Net 324,000 396,000
Other Assets 15,000 16,000
------------ ------------
Total Assets $ 3,285,000 $ 3,228,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Capital Lease Obligations $ 20,000 $ 38,000
Current Portion of Notes Payable 30,000 30,000
Bank Line of Credit 750,000 625,000
Accounts Payable 1,040,000 1,163,000
Accrued Expenses 1,374,000 889,000
------------ ------------
Total Current Liabilities 3,214,000 2,745,000
------------ ------------
Notes Payable - Long Term 120,000 120,000
Senior Convertible Redeemable Preferred Stock,
$100 Par Value, Authorized 1,000,000 Shares;
Issued and Outstanding 25,825 Shares at July 3
and April 3, 1999 2,583,000 2,583,000
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, $.10 Par Value, Authorized
50,000,000 Shares at July 3 and April 3, 1999;
Issued and Outstanding 32,047,296 Shares at
July 3 and 31,072,296 Shares at April 3, 1999 3,205,000 3,107,000
Capital in Excess of Par 32,030,000 31,981,000
Accumulated Deficit (37,867,000) (37,308,000)
------------ ------------
Stockholders' Equity (Deficit) (2,632,000) (2,220,000)
------------ ------------
Total Liabilities and Stockholders' Equity $ 3,285,000 $ 3,228,000
============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
AM COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Quarters Ended
July 3, June 27,
1999 1998
------------ ------------
Revenues $ 2,043,000 $ 2,438,000
Costs and Expenses:
Cost of Sales 1,066,000 1,275,000
Selling, General and Administrative 633,000 748,000
Research and Development 887,000 1,041,000
------------ ------------
Operating Loss (543,000) (626,000)
Other Income (Expense) (16,000) 1,000
------------ ------------
Loss Before Income Taxes (559,000) (625,000)
Income Tax Provision -- _---___
------------ ------------
Net Loss $ (559,000) $ (625,000)
============ ============
Basic Net Loss Per Share $ (0.02) $ (0.02)
============ ============
Diluted Net Loss Per Share $ (0.02) $ (0.02)
============ ============
Shares Used in Computation of Basic
Net Loss Per Share 31,209,000 31,072,000
============ ============
Shares Used in Computation of
Diluted Net Loss Per Share 31,209,000 31,072,000
============ ============
See Notes to Financial Statements
<PAGE>
AM COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Quarters Ended
July 3, June 27,
1999 1998
--------- ---------
Cash Flows from Operating Activities:
<S> <C> <C>
Net Loss $(559,000) $(625,000)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided By (Used in) Operating Activities:
Depreciation and Amortization 87,000 133,000
Changes in Assets and Liabilities Which
Provided (Used) Cash:
Accounts Receivable 359,000 395,000
Due from Affiliate (40,000) --
Inventory (92,000) 75,000
Prepaid Expenses and Other 2,000 2,000
Accounts Payable (123,000) (296,000)
Advances -- (95,000)
Accrued and Other Expenses 485,000 (69,000)
--------- ---------
Net Cash Provided by (Used In)
Operating Activities 119,000 (480,000)
--------- ---------
Cash Flows From Investing Activities:
Purchase of Equipment and Intangible Assets (14,000) (10,000)
--------- ---------
Net Cash Used In Investing Activities (14,000) (10,000)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from Borrowings Under Bank Line of Credit 125,000 --
Proceeds from Note Payable -- 29,000
Exercise of Stock Options 147,000 --
Payments Under Capital Lease Obligations (18,000) (36,000)
--------- ---------
Net Cash Provided By (Used In) Financing Activities 254,000 (7,000)
--------- ---------
Net Increase (Decrease) in Cash 359,000 (497,000)
Cash:
Beginning 24,000 710,000
--------- ---------
Ending $ 383,000 $ 213,000
========= =========
Interest Paid $ 18,000 $ 5,000
--------- ---------
Income Taxes Paid $ -- $ --
--------- ---------
</TABLE>
See Notes to Financial Statements
<PAGE>
AM COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
As of July 3, 1999 and for the Quarters Ended
July 3, 1999 and June 27, 1998
1. The accompanying interim financial statements should be read in conjunction
with the annual financial statements and notes thereto included in AM
Communications, Inc.'s Annual Report. The Balance Sheet as of July 3, 1999 and
the related Statements of Operations and Statements of Cash Flows for the
quarters ended July 3, 1999 and June 27, 1998 are unaudited, but in the opinion
of management include all normal and recurring adjustments necessary for a fair
statement of the results for such interim periods.
July 3, April 3,
1999 1999
(Unaudited)
2. Inventory Comprises:
Raw Material $ 1,898,000 $ 1,940,000
Work-in-Process 752,000 595,000
Finished Goods 160,000 183,000
------------- -------------
2,810,000 2,718,000
Inventory Reserves (1,500,000) (1,500,000)
-------------- -----------
Net Inventory $ 1,310,000 $ 1,218,000
============= =============
3. Accrued Expenses Comprise:
Accrued Compensation $ 394,000 $ 341,000
Accrued Contracted Services 437,000 ---
Accrued Rent 175,000 180,000
Accrued Real Estate Taxes 54,000 41,000
Warranty Reserve 203,000 203,000
Accrued Taxes 2,000 2,000
Accrued Professional Fees 45,000 63,000
Other 64,000 59,000
------------- -------------
$ 1,374,000 $ 889,000
============= =============
<PAGE>
4. Income Taxes:
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109.
The provision for taxes on income consisted of:
Quarters Ended
July 3, June 27,
1999 1998
--------- ---------
Current Income Taxes $ -- $ --
Deferred Income Taxes (231,000) (236,000)
Change in Valuation Allowance 231,000 236,000
--------- ---------
Net $ -- $ --
========= =========
A reconciliation between the provision for income taxes, computed by
applying the statutory federal income tax rate of 34% to income before income
taxes and the actual provision for income taxes follows:
Quarters Ended
July 3, June 27,
1999 1998
--------- ---------
Federal Income Tax Provision (Benefit)
at Statutory Rate $(190,000) $(213,000)
State Income Taxes, Net of Federal Benefit (37,000) (41,000)
Research and Development Credits (5,000) (5,000)
Non-deductible Amounts 1,000 1,000
Change in Valuation Allowance 231,000 236,000
Other -- 22,000
--------- ---------
Income Tax Provision $ -- $ --
========= =========
The components of the net deferred tax asset as of July 3 and April 3 were
as follows:
Quarters Ended
July 3, June 27,
1999 1998
--------- ---------
Deferred Tax Items:
Inventory $ 609,000 $ 609,000
Accrued Expenses and Reserves 377,000 379,000
Net Operating Loss Carryforwards 9,039,000 8,811,000
Tax Credit Carryforwards 827,000 822,000
Valuation Allowance (10,852,000) (10,621,000)
------------ ------------
Net Deferred Tax Assets $ -- $ --
============ ============
The Company has total net operating loss carryforwards available to offset
future taxable income of approximately $26 million expiring at various times
from 1999 to 2014. Due to certain statutory limitations under Internal Revenue
Code Section 382, a portion of such carryforwards may not be available or may
expire before being utilized.
<PAGE>
Item 2. Management's Discussion and Analysis of Operations
The following discussion contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements represent the Company's present expectations or beliefs concerning
future events. The Company cautions that such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or anticipated results. Potential risks and
uncertainties include, without limitation, the impact of economic conditions
generally; the competitive nature of the CATV network monitoring market; the
Company's ability to enhance its existing products and develop and introduce new
products which keep pace with technological developments in the marketplace; and
market demand.
The following discussion should be read in conjunction with the Company's Form
10-KSB for its 1999 fiscal year ended April 3, 1999.
General
The Company is a provider of high technology system level products for the
broadband communications industry, primarily for CATV monitoring and control
systems. As disclosed in the Company's Form 10-KSB for the fiscal year ended
April 3, 1999, the Company experienced a significant downturn in its business
during fiscal 1999, primarily due to the cessation of programs involving two
major customers, which contributed approximately 50% of revenues in fiscal 1998.
Also during fiscal 1999, the Company undertook several major organizational
changes including entering into a strategic development and manufacturing
relationship with Network Systems & Technologies (P) Ltd. (NeST), under which
NeST provides a substantial portion of the Company's engineering and
manufacturing requirements. As a result of this relationship, the Company
undertook development programs to upgrade its software and certain hardware
products, which were introduced in fiscal 2000. Also during fiscal 1999, the
Company elected a new Chairman, Mr. Javad Hassan, who also is the Chairman, CEO
and majority shareholder of NeST. Through certain contractual agreements
associated with Mr. Hassan becoming Chairman and the NeST ownership, Mr. Hassan
controls the voting of 14,391,837 shares of the Company's Common Stock presently
owned by the Company's majority shareholder, Alvin Hoffman, and has rights to
acquire an additional 9,170,806 shares through the exercise of stock options and
warrants.
During fiscal 1999 and continuing into the first quarter of fiscal 2000, the
Company incurred operating losses which were financed by a reduction in working
capital and borrowings under the Company's line of credit. The costs associated
with the NeST technology development efforts are payable, at the Company's
option, either in cash or warrants. The Company believes the actions taken
during fiscal 1999 significantly improve the Company's ability to compete and
the Company is presently undertaking an aggressive marketing and sales effort to
re-establish its market position and return to profitability.
<PAGE>
Results of Operations
Quarter 1 Fiscal 2000 vs. 1999
Quarter 1 Quarter 1
Fiscal 2000 Fiscal 1999
----------- -----------
Revenues 100.0% 100.0%
Cost of Sales 52.1 52.3
Selling, General and Administrative 31.0 30.7
Research and Development 43.4 42.7
---- ----
Operating Loss (26.5) (25.7)
Revenues
Revenues for the first quarter of fiscal 2000 ended July 3, 1999 were $2.0
million compared to $2.4 million in the first quarter of fiscal 1999,
representing a 16% decline. The Company continues to execute its strategy of
attempting to increase revenues by introducing its new software platform called
Omni2000 and other new monitoring products through a recently expanded sales and
marketing staff and strategy. Such new products have been introduced in the
first quarter of fiscal 2000 and are planned for commercial release during the
Company's second quarter of fiscal 2000. Until such products are available to
the marketplace, the Company is limited in its ability to increase revenue
levels to previously reported levels.
The Company continues to maintain key strategic OEM relationships with General
Instrument, Philips, and Scientific-Atlanta. OEM revenues were 73% of the total
for the first quarter of fiscal 2000 compared to 70% for the comparable period a
year ago. Backlog at July 3, 1999 was $2.1 million compared to $2.6 million a
year ago.
Development and software revenues totaled $263,000 in the first quarter of
fiscal 2000 compared to $485,000 in the prior year period. Development revenues
primarily relate to OEM development efforts which are recognized when defined
milestones are reached, the timing of which may be different from when the
related development expenses were incurred. The related development costs are
reported as research and development expense. All software development costs are
charged to research and development when incurred.
Cost of Sales
Cost of sales includes manufacturing costs of the Company's hardware products.
Cost of sales represented 52% of revenues in the first quarter of fiscal 2000
compared to 52% in the comparable prior year period. The Company's margins are
generally dependent on product mix and customer mix, with sales to OEM customers
generally having a lower profit margin.
Selling, General and Administrative
Selling, general and administrative (S,G&A) expenses were $633,000 in the first
quarter of fiscal 2000 compared to $748,000 in the comparable period a year ago.
Expenses have decreased due to cost reduction actions implemented in response to
the decline in revenues and from services fees charged to NeST for certain
administrative services provided by the Company under a separate agreement. Such
fees commenced in the first quarter of fiscal 2000 and totaled $142,000.
<PAGE>
Research and Development
Research and development expense totaled approximately $900,000 in the first
quarter of fiscal 2000 compared to $1.0 million reported in the comparable
period a year ago. The Company was previously limited in its access to
development resources, which has negatively impacted its competitive position.
As a result of the NeST partnership, the Company has significantly increased
engineering staff and expects to release several new products in the second
quarter of its fiscal 2000 including its new Omni2000 software platform, SIMS 2
(ingress monitoring system), a new lower priced master control unit and several
new transponders.
In November 1998, the Company announced a new strategic development relationship
with Network Systems & Technologies Ltd. (NeST). NeST is a provider of system
solutions and electronic manufacturing resources located in Southwest India.
Under the agreement, AM has integrated the NeST technology resources as a
dedicated part of its engineering organization. Engineering efforts at the
Company's headquarters continue to focus on product specification, technical
customer support and project management. NeST performs product design and
development, predominately in India. The Company also utilizes the NeST
manufacturing resources on a turnkey basis to reduce manufacturing costs of
products. The Company has the option of paying for development services in cash
or warrants to purchase shares of AM stock. A total of $437,000 of NeST expenses
were incurred during the three months ended July 3, 1999 and has been reported
as an accrued liability as of July 3, 1999.
As a result of the NeST relationship, the Company has increased its development
staff working on critical programs, reduced its cash outlays for product
development as NeST development has been funded with AM stock or has been
deferred as a liability, and is starting to achieve manufacturing cost
reductions as product manufacturing is transferred to India.
Operating Income (Loss)
The Company experienced operating losses of $543,000 in the first quarter of
fiscal 2000 compared to an operating loss of $626,000 in the comparable period a
year ago. The Company has reduced its annual operating costs going forward
primarily through staff reductions at its Quakertown facility. However, such
cost reductions have been partially offset by increased spending related to the
NeST technical resources, of which payment is presently being deferred pending
improvement in the Company's cash situation or a decision to pay such costs in
AM stock warrants as provided in the Agreement.
Income Taxes
Due to the significant net operating loss carry-forward, the Company is subject
to minimum income taxes which include state income taxes and federal income
taxes based on an "alternative minimum tax" calculation.
Industry Factors
The cable and broadband communications industry is undergoing significant change
as cable television (CATV) operators continue to expand and consolidate their
operations. Operators are also implementing new interactive services such as
video on demand, Internet access and telephony. In addition, competition for
video services has increased with new entrants, including telephone and
satellite providers. This has resulted in existing CATV operators planning to
expand and upgrade their distribution infrastructures and new providers planning
to construct new distribution systems capable of providing a mix of services.
There continue to be many unresolved issues and uncertainties impacting this
convergence of CATV and telecommunications industries, including governmental
regulations, competing distribution technologies, and significant capital costs.
<PAGE>
Demand for CATV network monitoring products has generally increased as
monitoring of cable distribution systems has become an important factor in
increasing operating efficiency and reliability. However, the Company's
operations are subject to the timing and success of new product introductions,
the scheduling of orders by customers and the Company's ability to support its
technology in the field. In the past, the Company has experienced technical
field problems primarily with its software product, which has required the
Company to incur added expenses in field applications and development and which
has impacted new selling efforts. The Company also continues to identify product
development needs in excess of its available development resources, which has
negatively impacted its competitive position. While the Company's new
relationship with NeST is expected to improve the Company's ability to introduce
new products and its competitive position, improvement in the Company's
operating position is dependent on timely transition to NeST of critical
development programs and the successful introduction of new technology products.
Due to the effects of these factors on future operations, past performance is a
limited indicator in assessing potential future performance which could impact
the trading price of the Company's common stock.
Liquidity and Capital Resources
In the first three months of fiscal 2000, the Company generated net cash of
$359,000 compared to consuming net cash of $497,000 during the comparable period
in fiscal 1999. The Company has financed its operating losses through cash
provided by the exercise of stock options, a reduction in accounts receivables,
an increase in accounts payables, drawdowns on its line of credit, and the
payment of NeST development expenses through the issuance of warrants or
deferral of payment.
As of July 3, 1999, the Company's cash totaled $383,000 and the outstanding
borrowings under its bank line of credit was $750,000 compared to $24,000 and
$625,000, respectively at April 3, 1999. The Company's line of credit is limited
to $750,000 and borrowings are based on 80% of the value of qualified accounts
receivable. Under the terms of the agreement, all the Company's assets are
pledged and interest is payable at 1 1/2% above prime (increased to 2% effective
July 31, 1999). As a result of the losses incurred for fiscal 1999, the Company
was in technical default on several financial covenants under the line of credit
agreement. The Company received from the bank a waiver of the default and also
an extension of the line through July 31, 2000.
In June 1999, the Company entered into an agreement with its chairman, Javad K.
Hassan, whereby Mr. Hassan will provide a $500,000 line of credit to the
Company, with interest payable at 10%. Payment of all outstanding borrowings and
interest is due by December 31, 2000. No amounts have been drawn under this
line.
Under the terms of the NeST Development Agreement, the Company has the option to
pay for NeST development services either in cash or by the issuance of warrants
to purchase AM Common Stock. On April 3, 1999, the Company issued 4,170,806
warrants to purchase common stock at an exercise price of $.01 per share as
payment for $670,000 owed NeST for services performed from November 1998 through
April 3, 1999. NeST cost of development services for the first quarter of fiscal
2000 totaled $437,000 which has been reflected as a current liability.
<PAGE>
The Company has undertaken several restructuring actions during fiscal 1999 and
during the first quarter of fiscal 2000, which are designed to reduce operating
cash expenses. The Company expects to continue to utilize the NeST technology
resources in India for a substantial portion of its development efforts, which
is expected to allow the Company to reduce its overall expenses for research and
development and provide flexibility in payment of services through the issuance
of warrants or payment in cash, at the Company's option.
During the last quarter of fiscal 1999, the Company began the transfer of a
substantial portion of its manufacturing operations to a NeST associated company
located in India. The use of NeST manufacturing operations is anticipated to
reduce the Company's manufacturing costs and overhead structure. The Company
will continue to manage and provide technical support to the NeST manufacturing
operations from its facility in Quakertown.
During the first quarter of fiscal 2000, the Company agreed to provide certain
administrative and manufacturing support services and provide office space to
NeST and several other entities associated with Mr. Hassan's non-AM business
ventures. The Company is to receive a fee of $142,000 per quarter for such
services. Should the level of services exceed planned levels, the parties will
negotiate an increase in the quarterly fee.
As previously described, the Company was required to undertake a significant
upgrade to its software products during fiscal 1999 which impacted its ability
to attract new customers and increase revenues sufficient to cover the operating
costs of the business. The new software product platform has been introduced in
the first quarter of fiscal 2000 and the Company has re-focused its marketing
efforts in an attempt to expand its revenue base.
The Company believes its present operating structure has reduced its cash
operating requirements to a level, which can be supported under the present
revenue levels. It is the Company's goal to increase revenue levels through
successful marketing of its upgraded product offerings during fiscal 2000.
During the first quarter of fiscal 2000, the Company has expanded its marketing
efforts by replacing and adding additional sales and technical support staff and
launched an aggressive marketing program. The Company believes that existing
cash, available lending lines and the ability to pay for NeST development
services in cash or warrants, will provide sufficient liquidity to support
operations through the next fiscal year. However, should operating losses
continue beyond levels which can be supported, the Company would expect to
implement further actions to reduce expenses or raise additional capital to
enable continued execution of its strategy. There can be no assurance that
additional capital could be raised under acceptable terms.
Capital expenditures totaled $14,000 in the first quarter of fiscal 2000 and
$10,000 in comparable period in fiscal 1999 which included capital leases,
computers, manufacturing assembly and test equipment and facility related
improvements and fixtures.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) (1) Exhibits
See end of exhibit list for footnote references indicated by
asterisks.
*3-a. (3.1) Restated Certificate of Incorporation of
Registrant.
*3-b. (3.2) Amended By-Laws of Registrant.
*4-a. (4.1) Specimen of Common Stock Certificate, par value
$.10 per share.
4-b (4.2) Warrant issued to NeST.
9-a Voting Trust and Share Participation Agreement (Exhibit
9.1)
**10-a. 1991 Incentive Stock Option Plan.
***10-b. Joint Development Agreement between AM Communications
and Scientific-Atlanta dated May 1996.
***10-c. Distribution Agreement and Manufacturing License dated
June 14, 1996.
***10-d. Registration Rights Agreement dated June 17, 1996.
***10-e. Warrant Agreement dated June 17, 1996.
10-f. 1999 Stock Option Plan.
10-g. Line of Credit Commitment Letter with Progress Bank
dated June 29, 1999.
****10-h. Services Agreement between the Company and Jay Hassan
(Exhibit 10.1)
****10-i. Consulting Services Agreement between the Company and
NeST. (Exhibit 10.2)
27. Financial Data Schedule
* Incorporated by reference to the Exhibit with the
number indicated parenthetically in Registrant's
Registration Statement on Form S-1, File No. 33-10163.
** Incorporated by reference to the Exhibit number
indicated in Registrant's Annual Report on Form 10-K
for the fiscal year ended March 28, 1992.
*** Incorporated by reference to the Exhibit number
indicated in Registrant's Annual Report on Form 10-KSB
for the fiscal year ended March 30, 1996.
**** Incorporated by reference to the Exhibit number
indicated in Registrant's Report on Form 8-K dated
November 9, 1998.
(b) No reports on Form 8-K have been filed for the period covered by this
report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AM COMMUNICATIONS, INC.
(Registrant)
Date: August 17, 1999 By: /s/ Keith D. Schneck
----------------- --------------------------------------
Keith D. Schneck
President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-04-1999
<PERIOD-END> JUL-03-1999
<CASH> 383,000
<SECURITIES> 0
<RECEIVABLES> 1,130,000
<ALLOWANCES> 221,000
<INVENTORY> 1,310,000
<CURRENT-ASSETS> 2,946,000
<PP&E> 5,033,000
<DEPRECIATION> 4,709,000
<TOTAL-ASSETS> 3,285,000
<CURRENT-LIABILITIES> 3,214,000
<BONDS> 0
2,583,000
0
<COMMON> 3,205,000
<OTHER-SE> 32,030,000
<TOTAL-LIABILITY-AND-EQUITY> 3,285,000
<SALES> 2,043,000
<TOTAL-REVENUES> 2,043,000
<CGS> 1,066,000
<TOTAL-COSTS> 2,586,000
<OTHER-EXPENSES> (2,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,000
<INCOME-PRETAX> (559,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (559,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (559,000)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
