<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 29, 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: April 29, 1997
Capital stock - $1 par value - 600,380 shares outstanding at April 29, 1997.
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EICO ELECTRONIC INSTRUMENT CO., INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDING MARCH 29, 1997
- I N D E X -
Part I - Financial Information:
Item 1 - Financial Statements
Balance sheet - March 29, 1997 (unaudited)
Statement of operations - for the twenty-six weeks and thirteen weeks
ended March 29, 1997 and March 30, 1996 (unaudited)
Statement of cash flows - for the twenty-six weeks and thirteen weeks
ended March 29, 1997 and March 30, 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 MARCH 29, 1997
(UNAUDITED)
A S S E T S
-----------
Cash $ 284,583
Mortgage receivable (less unrecognized
gain on sale of property of $4,082,216) --
Prepaid expenses 6,253
Deferred income taxes 571,000
Investment in U.S. Treasury obligations
(at amortized cost; approximate
market $750,000) 755,000
Other assets 10,332
----------
T O T A L $1,627,168
==========
L I A B I L I T I E S
---------------------
Accrued wages, taxes and other expenses $ 61,295
Income taxes payable 45,966
Escrow deposit payable (less cash in bank
account of $88,289) --
----------
Total Liabilities 107,261
----------
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 314,392
----------
T o t a l 1,539,898
Less cost of 7,913 shares capital
stock in treasury 19,991
----------
Total stockholders' equity 1,519,907
----------
T O T A L $1,627,168
==========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended Thirteen Weeks Ended
------------------------------ ------------------------------
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income:
Interest on mortgage $164,118 $166,825 $ 81,883 $ 83,250
Interest on investments 26,984 28,927 13,180 14,389
Gain on sale of property 35,327 32,620 17,839 16,472
-------- -------- -------- --------
T o t a l 226,429 228,372 112,902 114,111
General and corporate expenses 103,352 103,182 56,892 52,635
-------- -------- -------- --------
Earnings before income taxes 123,077 125,190 56,010 61,476
Income taxes 55,000 55,000 26,000 27,000
-------- -------- -------- --------
NET EARNINGS $ 68,077 $ 70,190 $ 30,010 $ 34,476
======== ======== ======== ========
Net earnings per share $ .11 $ .12 $ .05 $ .06
======== ======== ======== ========
Number of shares used in computing
earnings per share 600,380 600,385 600,380 600,385
======== ======== ======== ========
Dividends declared per share None None None None
======== ======== ======== ========
</TABLE>
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 29, March 30,
1997 1996
------------- -------------
Cash flows from operating activities:
Cash paid to suppliers and employees $(81,416) $(84,632)
Interest received 201,130 185,749
Income taxes paid (55,339) (49,518)
-------- --------
Net cash provided by
operating activities 64,375 51,599
-------- --------
Cash flows from investing activities:
Proceeds from sale of property-
collection of mortgage principal 35,327 32,620
Proceeds from redemption of U.S.
Treasury obligations 115,000
-------- --------
Net cash provided by
investing activities 150,327 32,620
-------- --------
Cash flows from financing activities:
Dividends paid (120,076) (180,123)
Payment for treasury stock (50)
-------- --------
Net cash (used in)
financing activities (120,076) (180,173)
-------- --------
NET INCREASE (DECREASE) IN CASH 94,626 (95,954)
Cash - beginning of period 189,957 162,450
-------- --------
CASH - END OF PERIOD $284,583 $ 66,496
======== ========
Reconciliation of net earnings to net
cash provided by operating activities:
Net earnings $ 68,077 $ 70,190
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Gain on sale of property (35,327) (32,620)
Deferred income taxes 5,000 4,000
Decrease (increase) in:
Prepaid expenses 10,028 (4,628)
Other assets 1,600 2,174
Increase (decrease) in:
Accrued wages, taxes and other expenses 20,336 11,001
Income taxes payable (5,339) 1,482
-------- --------
Net cash provided by operating
activities $ 64,375 $ 51,599
======== ========
The attached notes are made a part hereof.
<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 $4,082,216 is held by
the Company. The mortgage principal, with interest at 8% a 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 $199,445 reflected as interest income on mortgage and gain on sale of
property in the twenty-six weeks ended March 29, 1997 is the same amount
received in the prior comparative period.
The Company has cash and investments in U.S. Treasury obligations at
March 29, 1997 of $1,039,000.
The Company has no formal material commitment for future capital
expenditures.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FORM 10-QSB
(UNAUDITED)
(NOTE A):
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 results for the interim periods.
(2) The results of operations for the twenty-six weeks ended March 29,
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 statement of operations comprise:
Twenty-Six Thirteen
Weeks Ended Weeks Ended
---------------------- ----------------------
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
--------- --------- ---------- ---------
Currently payable:
Federal $31,000 $34,000 $13,000 $17,000
State and local 19,000 17,000 10,000 8,000
Deferred:
Federal 3,000 3,000 1,800 1,000
State and Local 2,000 1,000 1,200 1,000
------- ------- ------- -------
Total $55,000 $55,000 $26,000 $27,000
======= ======= ======= =======
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 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 March 29,
1997 - recognized gain (35,327)
----------
Unrecognized gain on sale of property
at March 29, 1997 $4,082,216
==========
<PAGE>
S I G N A T U R E S
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.
May 7, 1997 By: /s/ Linda Ashley
----------------------------------------
Linda Ashley, President
May 7, 1997 By: /s/ Gordon Katz
----------------------------------------
Gordon Katz, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-START> SEP-29-1996
<PERIOD-END> MAR-29-1997
<CASH> 284,583
<SECURITIES> 755,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,627,168
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,627,168
<CURRENT-LIABILITIES> 107,261
<BONDS> 0
0
0
<COMMON> 608,293
<OTHER-SE> 911,614
<TOTAL-LIABILITY-AND-EQUITY> 1,627,168
<SALES> 0
<TOTAL-REVENUES> 226,429
<CGS> 0
<TOTAL-COSTS> 103,352
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 123,077
<INCOME-TAX> 55,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,077
<EPS-PRIMARY> .11
<EPS-DILUTED> 0
<FN>
<F1>
United States Treasury Obligations
</TABLE>
