<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 June 29, 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 XX 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: July 23, 1996
Capital stock - $1 par value - 600,375 shares outstanding.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDING JULY 1, 1995
- INDEX -
Part I - Financial Information:
Item 1 - Financial Statements
Balance sheet - June 29, 1996 (unaudited)
Statement of operations - for the thirty-nine weeks and thirteen
weeks ended June 29, 1996 and July 1, 1995 (unaudited)
Statement of cash flows - for the thirty-nine weeks
ended June 29, 1996 and July 1, 1995 (unaudited)
Notes to Form 10-QSB (unaudited)
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Signature Page
<PAGE>
Item 1. Financial Statements
EICO ELECTRONIC INSTRUMENT CO., INC.
BALANCE SHEET
AS AT JUNE 29, 1996
(UNAUDITED)
ASSETS
------
Cash $ 101,369
Mortgage receivable (less unrecognized
gain on sale of property of $4,134,685) --
Prepaid expenses 15,969
Deferred income taxes 578,000
Investment in U.S. Treasury obligations
(at amortized cost; approximate market $920,000) 930,000
Other assets 12,747
----------
TOTAL $1,638,085
==========
LIABILITIES
-----------
Accrued wages, taxes and other expenses $ 50,943
Income taxes payable 56,636
Escrow deposit payable (less cash in bank account
of $20,326) --
----------
Total liabilities 107,579
----------
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 324,991
----------
Total 1,550,497
Less cost of 7,918 shares capital stock in treasury 19,991
----------
Total stockholders' equity 1,530,506
----------
TOTAL $1,638,085
==========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
Thirty-Nine Thirteen
Weeks Ended Weeks Ended
---------------------- --------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
--------- -------- --------- --------
Income:
Interest on mortgage $249,743 $136,892 $ 82,918 $ 84,512
Interest on investments 43,300 42,154 14,373 13,471
Gain on sale of property
(less unrecognized gain
in thirty-nine weeks
ending July 1, 1995) 49,424 20,620 16,804 15,517
-------- -------- -------- --------
Total 342,467 199,666 114,095 113,500
General and corporate expenses 155,769 153,256 52,587 59,033
-------- -------- -------- --------
Earnings before
income taxes 186,698 46,410 61,508 54,467
Income taxes 83,000 19,000 28,000 23,000
-------- -------- -------- --------
NET EARNINGS $103,698 $ 27,410 $ 33,508 $ 31,467
======== ======== ======== ========
Net earnings per share $.17 $ .05 $.06 $.05
==== ===== ==== ====
Number of shares used in
computing earnings
per share 600,375 600,450 600,375 600,450
======== ======== ======== ========
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)
Thirty-Nine Weeks Ended
--------------------------
June 29, July 1,
1996 1995
------------ ------------
Cash flows from operating activities:
Cash paid to suppliers and employees $(140,821) $(162,268)
Interest received 284,344 176,647
Income taxes paid (73,845) (119,040)
--------- ---------
Net cash provided by (used in)
operating activities 69,678 (104,661)
--------- ---------
Cash flows provided by investing
activities - proceeds from sale of
property - collection of mortgage
interest (through date of cost
recovery) and principal 49,424 162,582
--------- ---------
Cash flows from financing activities:
Dividends paid (180,123) (180,135)
Payment for treasury stock (60)
--------- ---------
Net cash (used in)
financing activities (180,183) (180,135)
--------- ---------
NET (DECREASE) IN CASH (61,081) (122,214)
Cash - beginning of period 162,450 228,263
--------- ---------
CASH - END OF PERIOD $ 101,369 $ 106,049
========= =========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
-Sheet 2-
Reconciliation of net earnings
to net cash provided by (used in)
operating activities:
Net earnings $ 103,698 $ 27,410
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Gain on the sale of property (49,424) (20,620)
Deferred income taxes 7,000 (59,000)
Decrease (increase) in:
Prepaid expenses (3,324) (4,862)
Other costs 2,989 (5,043)
Increase (decrease) in:
Accrued wages, taxes and other
expenses 6,584 (1,506)
Income taxes payable 2,155 (41,040)
--------- ---------
Net cash provided by (used in)
operating activities $ 69,678 $(104,661)
========= =========
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 consolidated results for the interim periods.
(2) The results of operations for the thirty-nine weeks ended June 29,
1996 are not necessarily indicative of the results of operations for the year
ending September 28, 1996.
(Note C):
Earnings per share is based on the average number of shares outstanding
during each period, exclusive of treasury shares.
(Note D):
Income taxes on the consolidated statement of operations comprises:
Thirty-Nine Thirteen
Weeks Ended Weeks Ended
------------------- ---------------------
June 28, July 1, June 28, July 1,
1996 1995 1996 1995
--------- -------- --------- ---------
Currently payable
Federal $50,000 $ 51,000 $16,000 $15,000
State and local 26,000 27,000 9,000 8,000
Deferred:
Federal 5,000 (38,000) 2,000
State and local 2,000 (21,000) 1,000
------- -------- ------- --------
Total $83,000 $ 19,000 $28,000 $23,000
======= ======== ======= ========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FORM 10-QSB
(UNAUDITED)
- Sheet 2 -
(Note D) (Continued):
Federal income taxes are computed at statutory rates, including the effect
of surtax exemptions.
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 June 29, 1996 -
recognized gain 49,424
----------
Unrecognized gain on sale of property
at June 29, 1996 $4,134,685
==========
<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 $4,134,685 is held by
the Company. The mortgage, with interest at 8% per year, is payable 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. 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 thirty-nine weeks ended
June 29, 1996 is approximately the same amount as in the prior comparative
period but was previously reflected partially as a recovery of cost.
General and corporate expenses increased in the current thirty-nine week
period primarily as a result of increased compensation and occupancy costs in
excess of reduction of insurance, fees and other office costs.
In the current thirteen week period, general and corporate expenses
declined as a result of a reduction of insurance, fees and other office costs.
The Company has cash and investments in U.S. Treasury obligations at
June 29, 1996 totalling approximately $1,031,000.
The Company has no formal material commitment for future capital
expenditures.
<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: 8/7/96 By /s/ Linda Ashley
--------------------------------------------
Principal Financial Officer - Linda Ashley
Dated: 8/7/96 /s/ Gordon Katz
--------------------------------------------
Secretary - Gordon Katz
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-29-1996
<CASH> 101,369
<SECURITIES> 930,000<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 117,338
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,638,058
<CURRENT-LIABILITIES> 107,579
<BONDS> 0
0
0
<COMMON> 608,293
<OTHER-SE> 922,213
<TOTAL-LIABILITY-AND-EQUITY> 1,638,085
<SALES> 0
<TOTAL-REVENUES> 342,467
<CGS> 0
<TOTAL-COSTS> 155,769
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 186,698
<INCOME-TAX> 83,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,698
<EPS-PRIMARY> .17
<EPS-DILUTED> 0
<FN>
<F1>
United States Treasury Obligations.
</TABLE>
