<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 28, 1997
[ ] 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, N.Y. 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: July 25, 1997
Capital stock - $1 par value - 600,380 shares outstanding at July 25, 1997.
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EICO ELECTRONIC INSTRUMENT CO., INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDING JUNE 28, 1997
- I N D E X -
Part I - Financial Information:
Item 1 - Financial Statements
Balance sheet - June 28, 1997 (unaudited)
Statement of operations - for the thirty-nine weeks and thirteen weeks
ended June 28, 1997 and June 29, 1996 (unaudited)
Statement of cash flows - for the thirty-nine weeks ended June 28, 1997 and
June 29, 1996 (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 28, 1997
(UNAUDITED)
A S S E T S
Cash $ 156,130
Mortgage receivable (less unrecognized
gain on sale of property of $4,064,017) --
Prepaid expenses 10,821
Deferred income taxes 569,000
Investment in U.S. Treasury obligations
(at amortized cost; approximate market $909,000) 910,456
Other assets 9,487
----------
T O T A L $1,655,894
==========
L I A B I L I T I E S
Accrued wages, taxes and other expenses $ 44,507
Income taxes payable 51,081
Escrow deposit payable (less cash in bank
account of $29,264) --
----------
Total liabilities 95,588
----------
S T O C K H O L D E R S' E Q U I T Y
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 354,791
----------
T o t a l 1,580,297
Less cost of 7,913 shares capital
stock in treasury 19,991
----------
Total stockholders' equity 1,560,306
----------
T O T A L $1,655,894
==========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
Thirty-Nine Weeks Thirteen Weeks
Ended Ended
------------------ ------------------
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
-------- -------- -------- --------
Income:
Interest on mortgage $245,641 $249,743 $ 81,523 $ 82,918
Interest on investments 39,954 43,300 12,970 14,373
Gain on sale of property 53,526 49,424 18,199 16,804
-------- -------- -------- --------
T o t a l 339,121 342,467 112,692 114,095
General and corporate expenses 145,645 155,769 42,293 52,587
-------- -------- -------- --------
Earnings before income taxes 193,476 186,698 70,399 61,508
Income taxes 85,000 83,000 30,000 28,000
-------- -------- -------- --------
NET EARNINGS $108,476 $103,698 $ 40,399 $ 33,508
======== ======== ======== ========
Net earnings per share $.18 $.17 $.07 $.06
==== ==== ==== ====
Number of shares used in computing
net earnings per share 600,380 600,375 600,380 600,375
======= ======= ======= =======
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 28, June 29,
1997 1996
-------- --------
Cash flows from operating activities:
Cash paid to suppliers and employees $(134,192) $(140,821)
Interest received 285,595 284,344
Income taxes paid (78,224) (73,845)
--------- ---------
Net cash provided by
operating activities 73,179 69,678
--------- ---------
Cash flows provided by investing activities:
Proceeds from sale of property -
collection of mortgage principal 53,526 49,424
Proceeds from redemption of U.S.
Treasury obligations 115,000
Investment in U.S. Treasury obligation (155,456)
--------- ---------
Net cash provided by
investing activities 13,070 49,424
-------- --------
Cash flows from financing activities:
Dividends paid (120,076) (180,123)
Payment for treasury stock (60)
--------- ---------
Net cash (used in)
financing activities (120,076) (180,183)
--------- ---------
NET (DECREASE) IN CASH (33,827) (61,081)
Cash - beginning of period 189,957 162,450
--------- ---------
CASH - END OF PERIOD $ 156,130 $ 101,369
========= =========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
- Sheet 2 -
Thirty-Nine Weeks Ended
-------------------------
June 28, June 29,
1997 1996
-------- --------
Reconciliation of net earnings to net
cash provided by operating activities:
Net earnings $108,476 $103,698
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Gain on sale of property (53,526) (49,424)
Deferred income taxes 7,000 7,000
Decrease (increase) in:
Prepaid expenses 5,460 (3,324)
Other assets 2,445 2,989
Increase (decrease) in:
Accrued wages, taxes and other expenses 3,548 6,584
Income taxes payable (224) 2,155
-------- --------
Net cash provided by operating
activities $ 73,179 $ 69,678
======== ========
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 28, 1996; 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 28, 1997
are not necessarily indicative of the results of operations for the year ending
September 27, 1997.
(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 Weeks Thirteen Weeks
Ended Ended
--------------------- -------------------
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
-------- -------- -------- --------
Currently payable:
Federal $52,000 $50,000 $21,000 $16,000
State and local 26,000 26,000 7,000 9,000
Deferred:
Federal 5,000 5,000 2,000 2,000
State and Local 2,000 2,000 1,000
------- ------- ------- -------
Total $85,000 $83,000 $30,000 $28,000
======= ======= ======= =======
(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 by the purchasers 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 60 monthly payments of
$33,241 beginning September 1993, 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 28, 1996 (103,013)
----------
Unrecognized gain on sale of property
at September 28, 1996 4,117,543
Period September 29, 1996 to June 28,
1997 - recognized gain (53,526)
----------
Unrecognized gain on sale of property
at June 28, 1997 $4,064,017
==========
<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 $4,064,017 is held by
the Company. The mortgage, with interest at 8% per year, is payable in 60
monthly payments of $33,241 beginning September 1993, 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.
The $299,167 reflected as interest income on mortgage and gain on sale of
property in the thirty-nine weeks ended June 28, 1997 is the same amount
received in the prior comparative period.
The Company has cash and investments in U.S. Treasury obligations at June
28, 1997 totalling approximately $1,067,000.
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.
August 1, 1997 /s/ Linda Ashley
-----------------------
Linda Ashley, President
August 1, 1997 /s/ Gordon Katz
----------------------
Gordon Katz, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-START> SEP-29-1996
<PERIOD-END> JUN-28-1997
<CASH> 156,130
<SECURITIES> 910,456<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,655,894
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,655,894
<CURRENT-LIABILITIES> 95,588
<BONDS> 0
0
0
<COMMON> 608,293
<OTHER-SE> 617,213
<TOTAL-LIABILITY-AND-EQUITY> 1,655,894
<SALES> 0
<TOTAL-REVENUES> 339,121
<CGS> 0
<TOTAL-COSTS> 145,645
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 193,476
<INCOME-TAX> 85,000
<INCOME-CONTINUING> 108,476
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,476
<EPS-PRIMARY> .18
<EPS-DILUTED> 0
<FN>
<F1>
United States Treasury Obligations
</TABLE>
