<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 December 28, 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, 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: January 29, 1997
Capital stock - $1 par value - 600,380 shares outstanding at January 29, 1997.
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EICO ELECTRONIC INSTRUMENT CO., INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDING DECEMBER 28, 1996
- I N D E X -
Part I - Financial Information:
Item 1 - Financial Statements
Balance sheet - December 28, 1996 (unaudited)
Statement of operations - thirteen weeks ended
December 28, 1996 and December 30, 1995
(unaudited)
Statement of cash flows - thirteen weeks ended
December 28, 1996 and December 30, 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 DECEMBER 28, 1996
(UNAUDITED)
A S S E T S
-----------
Cash $ 262,502
Mortgage receivable (less unrecognized
gain on sale of property of $4,100,055)
Prepaid expenses --
Deferred income taxes 10,689
Investment in U.S. Treasury obligations 574,000
(at amortized cost; approximate
market $867,000) 870,000
Other assets 11,117
----------
T O T A L $1,728,308
==========
L I A B I L I T I E S
---------------------
Accrued wages, taxes and other expenses $ 47,064
Income taxes payable 71,271
Dividends payable 120,076
Escrow deposit payable (less cash in bank
account of $24,790) --
----------
Total Liabilities 238,411
----------
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 284,382
----------
T o t a l 1,509,888
Less cost of 7,913 shares capital
stock in treasury 19,991
----------
Total stockholders' equity 1,489,897
----------
T O T A L $1,728,308
==========
The attached notes are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS
(NOTES A AND B)
(UNAUDITED)
Thirteen Weeks Ended
------------------------------
December 28, December 30,
1996 1995
------------ ------------
Income:
Interest on mortgage $ 82,235 $ 83,575
Interest on investments 13,804 14,538
Gain on sale of property 17,488 16,148
-------- --------
T o t a l 113,527 114,261
General and corporate expenses 46,460 50,547
-------- --------
Earnings before income taxes 67,067 63,714
Income taxes 29,000 28,000
-------- --------
NET EARNINGS $ 38,067 $ 35,714
======== ========
Net earnings per share $ .06 $ .06
======== ========
Number of shares used in computing
earnings per share 600,380 600,385
======== ========
Dividends per share 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)
Thirteen Weeks Ended
------------------------------
December 28, December 30,
1996 1995
------------- -------------
Cash flows from operating activities:
Cash paid to suppliers and employees $(39,137) $(41,894)
Interest received 101,228 89,414
Income taxes paid (7,034) (19,829)
-------- --------
Net cash provided by
operating activities 55,057 27,691
Net cash provided by investing activities--
proceeds from sale of property--
collection of mortgage principal 17,488 16,148
Net cash (used in) financing activities--
payment for treasury stock (50)
-------- --------
NET INCREASE IN CASH 72,545 43,789
Cash - beginning of period 189,957 162,450
-------- --------
CASH - END OF PERIOD $262,502 $206,239
======== ========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
Sheet 2
Thirteen Weeks Ended
-----------------------------
December 28, December 30,
1996 1995
------------ ------------
Reconciliation of net earnings to net
cash provided by operating activities:
Net earnings $ 38,067 $ 35,714
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Gain on sale of property (17,488) (16,148)
Deferred income taxes 2,000 2,000
Decrease (increase) in:
Prepaid expenses 5,592 (6,011)
Other assets 815 815
Increase in:
Accrued wages, taxes and other expenses 6,105 5,150
Income taxes payable 19,966 6,171
-------- --------
Net cash provided by operating
activities $ 55,057 $ 27,691
======== ========
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 $4,100,055 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 $99,723 reflected as interest income on mortgage and gain on sale of
property in the thirteen weeks ended December 28, 1996 is the same amount
received in the prior comparative period.
The Company has cash and investments in U.S. Treasury obligations at
December 28, 1996 of $1,133,000.
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):
The finanical 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 conjuction 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 thirteen weeks ended December 28,
1996 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 comprises:
Thirteen Weeks Ended
----------------------------
December 28, December 30,
1996 1995
------------ ------------
Currently payable:
Federal $18,000 $17,000
State and local 9,000 9,000
Deferred - federal 2,000 2,000
------- -------
Total $29,000 $28,000
======= =======
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 December 28,
1996 - recognized gain (17,488)
----------
Unrecognized gain on sale of property
at December 28, 1996 $4,100,055
==========
<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 there unto duly authorized.
EICO ELECTRONIC INSTRUMENT CO., INC.
(Registrant)
Dated: 2/10/97 By: /s/ Linda Ashley
----------------------------------------
Principal Financial Officer-Linda Ashley
Dated: 2/10/97 By: /s/ Gordon Katz
----------------------------------------
Secretary-Gordon Katz
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-START> SEP-29-1996
<PERIOD-END> DEC-28-1996
<CASH> 262,502
<SECURITIES> 870,000<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,728,308
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,728,308
<CURRENT-LIABILITIES> 238,411
<BONDS> 0
0
0
<COMMON> 608,293
<OTHER-SE> 881,604
<TOTAL-LIABILITY-AND-EQUITY> 1,728,308
<SALES> 0
<TOTAL-REVENUES> 113,527
<CGS> 0
<TOTAL-COSTS> 46,460
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 67,067
<INCOME-TAX> 29,000
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<NET-INCOME> 38,067
<EPS-PRIMARY> .06
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<FN>
<F1>
United States Treasury Obligations.
</TABLE>
