<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
EXCHANGE ACT
For the transition period from ________ to ________
Commission file number 0-122
EICO Electronic Instrument Co., Inc.
(Exact name of small business issuer as
specified in its charter)
New York 11-1524626
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
233 Broadway, Suite 1085, New York, New York 10279
(Address of principal executive offices)
(212) 566-4995
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
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 report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No ....
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes .... No ....
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: April 24, 1996
Capital stock - $1 par value - 600,385 shares outstanding at April 24, 1996.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDING MARCH 30, 1996
- INDEX -
Part I - Financial Information:
Item 1 - Financial Statements
Balance sheet - March 30, 1996 (unaudited)
Statement of operations - for the twenty-six weeks and thirteen
weeks ended March 30, 1996 and April 1, 1995 (unaudited)
Statement of cash flows - for the twenty-six weeks
ended March 30, 1996 and April 1, 1995 (unaudited)
Notes to Form 10-QSB (unaudited)
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 5 - Other Information
Signature Page
<PAGE>
Item 1. Financial Statements
EICO ELECTRONIC INSTRUMENT CO., INC.
BALANCE SHEET
AS AT MARCH 30, 1996
(UNAUDITED)
ASSETS
------
Cash $ 66,496
Mortgage receivable (less unrecognized
gain on sale of property of $4,151,489) --
Prepaid expenses 17,273
Deferred income taxes 581,000
Investment in U.S. Treasury obligations
(at amortized cost; approximate market $926,000) 930,000
Other assets 13,562
----------
TOTAL $1,608,331
==========
LIABILITIES
-----------
Accrued wages, taxes and other expenses $ 55,360
Income taxes payable 55,963
Escrow deposit payable (less cash in bank account
of $81,230) --
----------
Total liabilities 111,323
----------
STOCKHOLDERS' EQUITY
--------------------
Capital stock - $1 par value - authorized 1,000,000
shares; issued 608,293 shares (including treasury shares) 608,293
Additional paid-in capital 617,213
Retained earnings 291,483
----------
Total 1,516,989
Less cost of 7,908 shares capital stock in treasury 19,981
----------
Total stockholders' equity 1,497,008
----------
TOTAL $1,608,331
==========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
Twenty-Six Weeks Ended Thirteen Weeks Ended
---------------------- --------------------
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
--------- -------- --------- --------
Income:
Interest on mortgage $166,825 $ 52,380 $ 83,250 $ 52,380
Interest on investments 28,927 28,683 14,389 14,141
Gain on sale of property
(less unrecognized gain
in each period) 32,620 5,103 16,472 5,103
-------- -------- -------- --------
Total 228,372 86,166 114,111 71,624
General and corporate expenses 103,182 94,223 52,635 45,975
-------- -------- -------- --------
Earnings (loss) before
income taxes 125,190 (8,057) 61,476 25,649
Income tax provision (benefit) 55,000 (4,000) 27,000 12,000
-------- -------- -------- --------
NET EARNINGS (LOSS) $ 70,190 $ (4,057) $ 34,476 $ 13,649
======== ======== ======== ========
Net earnings (loss) per share $.12 $(.01) $.06 $.02
==== ===== ==== ====
Number of shares used in
computing earnings (loss)
per share 600,385 600,450 600,385 600,450
======== ======== ======== ========
Dividends declared per share None None None None
==== ==== ==== ====
The attached notes are made a part hereof.
Management's discussion and analysis of financial
condition and results of operations is included in item 2.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
Twenty-Six Weeks Ended
--------------------------
March 30, April 1,
1996 1995
------------ ------------
Cash flows from operating activities:
Cash paid to suppliers and employees $ (84,632) $ (73,030)
Interest received 185,749 81,063
Income taxes paid (49,518) (93,640)
--------- ---------
Net cash provided by (used in)
operating activities 51,599 (85,607)
--------- ---------
Net cash flows provided by investing
activities - proceeds from sale of
property - collection of mortgage
interest (through date of cost
recovery) and principal 32,620 147,065
--------- ---------
Cash flows from financing activities:
Dividends paid (180,123) (180,135)
Payment for treasury stock (50)
--------- ---------
Net cash (used in)
financing activities (180,173) (180,135)
--------- ---------
NET (DECREASE) IN CASH (95,954) (118,677)
Cash - beginning of period 162,450 228,263
--------- ---------
CASH - END OF PERIOD $ 66,496 $ 109,586
========= =========
Reconciliation of net earnings (loss)
to net cash provided by (used in)
operating activities:
Net earnings (loss) $ 70,190 $ (4,057)
Adjustments to reconcile net earnings
(loss) to net cash provided by
(used in) operating activities:
Gain on sale of property (32,620) (5,103)
Deferred income taxes 4,000 (59,000)
Decrease (increase) in:
Prepaid expenses (4,628) 5,600
Other assets 2,174 (859)
Increase (decrease) in:
Accrued wages, taxes and other
expenses 11,001 16,452
Income taxes payable 1,482 (38,640)
--------- ---------
Net cash provided by (used in)
operating activities $ 51,599 $ (85,607)
========= =========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FORM 10-QSB
(UNAUDITED)
(Note A):
The financial information contained in this Form 10-QSB represents
condensed financial data and, therefore, does not include all footnote
disclosures required to be included in financial statements prepared in
conformity with generally accepted accounting principles. Such footnote
information was included in the Company's annual Form 10-KSB for the year ended
September 30, 1995; the condensed financial data included herein should be read
in conjunction with the annual report.
(Note B):
(1) In management's opinion, all necessary adjustments have been made in
order to present fairly the results for the interim periods.
(2) The results of operations for the twenty-six weeks ended March 30, 1996
are not necessarily indicative of the results of operations for the year ending
September 28, 1996.
(Note C):
Earnings (loss) per share is based on the average number of shares
outstanding during each period, exclusive of treasury shares.
(Note D):
Income tax provision (benefit) on the statement of operations comprises:
Twenty-Six Thirteen
Weeks Ended Weeks Ended
------------------- ---------------------
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
--------- -------- --------- ---------
Currently payable (refundable):
Federal $34,000 $ 36,000 $17,000 $ 18,000
State and local 17,000 19,000 8,000 9,000
Deferred:
Federal 3,000 (38,000) 1,000 (10,500)
State and local 1,000 (21,000) 1,000 (4,500)
------- -------- ------- --------
Total $55,000 $ (4,000) $27,000 $ 12,000
======= ======== ======= ========
Federal income taxes are computed at statutory rates, including the effect
of surtax exemptions.
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FORM 10-QSB
(UNAUDITED)
- Sheet 2 -
(Note D) (Continued):
Deferred income taxes result from reporting the sale of property on the
cost recovery method for financial accounting purposes, and on the installment
method for income tax purposes.
(Note E):
On June 25, 1993, the Company sold its property for $5,000,000. The
contract of sale required the payment of $750,000 at the closing and a first
mortgage of $4,250,000 to be held by the Company. The mortgage principal with
interest at 8% a year is due in monthly payments of $33,241, with a balloon
payment of $4,000,617 due September 1998. For financial accounting purposes, the
Company has recorded the sale on the cost recovery method.
The sale comprises:
Sales price $5,000,000
Less real estate transfer taxes
and other closing costs 788,876
----------
Balance 4,211,124
Cost basis 535,219
----------
Gain on sale of property 3,675,905
Interest collected (unrecognized) to
September 30, 1995 544,651
----------
Recognized gain to September 30, 1995 (36,447)
----------
Unrecognized gain on sale of property
at September 30, 1995 4,184,109
Period October 1, 1995 to March 30, 1996 -
recognized gain 32,620
----------
Unrecognized gain on sale of property
at March 30, 1996 $4,151,489
==========
<PAGE>
Item 2
EICO ELECTRONIC INSTRUMENT CO., INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
On June 25, 1993, the Company sold its real property in Flushing for
$5,000,000. The contract of sale required the purchasers to pay $750,000 at the
closing. In addition, a first mortgage with a balance of $4,151,489 is held by
the Company. The mortgage principal with interest at 8% per year, is payable in
60 monthly payments of $33,241, with a balloon payment of $4,000,617 due
September 1998. For financial accounting purposes, the Company has recorded the
sale on the cost recovery method. Using this method, no profit is recognized
until cash payments by the buyers exceed the Company's cost basis of the
property plus selling expenses. This level of buyer payment occurred during the
year ended September 30, 1995.
Interest income and gain on sale of property in the twenty-six weeks ended
March 30, 1996 is approximately the same amount received in the prior
comparative period but was previously reflected partially as a recovery of cost.
General and corporate expenses increased in the current periods primarily
as a result of increased compensation and occupancy costs.
The Company has cash and investments in U.S. Treasury obligations at March
30, 1996 totalling approximately $996,000.
The Company has no formal material commitment for future capital
expenditures.
<PAGE>
Item 5. Other Information
423,143 shares formerly held of record by the Estate of Harry Ashley have been
distributed and are held as follows: (a) 240,000 shares are held of record by
Trust u/w/o Harry Ashley f/b/o Sophie Ashley ("Trust A"); (b) 64,048 shares are
held of record by Trust f/b/o Harriet Ehren ("Trust B"); (c) 64,048 shares are
held of record by Trust f/b/o Beverly Evangelos ("Trust C"); and (d) 64,047
shares are held of record by Trust f/b/o Linda Ashley ("Trust D"). Linda Ashley
is Co-trustee of Trusts A, B and D, and, in such capacity, shares voting and
dispositive power over the Trusts 368,095 shares. Linda Ashley disclaims
beneficial ownership of the 304,948 shares held in the A and B Trusts.
<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.
EICO ELECTRONIC INSTRUMENT CO., INC.
(Registrant)
Dated: May 9, 1996 By /s/ Linda Ashley
--------------------------------------------
Principal Financial Officer - Linda Ashley,
President
Dated: May 9, 1996 /s/ Gordon Katz
--------------------------------------------
Secretary - Gordon Katz
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-30-1996
<CASH> 66,496
<SECURITIES> 930,000<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 83,769
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,608,331
<CURRENT-LIABILITIES> 111,323
<BONDS> 0
0
0
<COMMON> 608,293
<OTHER-SE> 888,715
<TOTAL-LIABILITY-AND-EQUITY> 1,608,331
<SALES> 0
<TOTAL-REVENUES> 228,372
<CGS> 0
<TOTAL-COSTS> 103,182
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 125,190
<INCOME-TAX> 55,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,190
<EPS-PRIMARY> .12
<EPS-DILUTED> 0
<FN>
<F1>
United States Treasury Obligations.
</TABLE>
