UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996
Commission file number 1-6299
EMCEE Broadcast Products, Inc.*
(Exact name of registrant as specified in its charter)
Delaware 13-1926296
(State or other jurisdiction (I.R.S.Employer
of incorporation or organization) Identification No.)
Registrant's telephone number, including area code: 717-443-9575
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES [x] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical date:
Common stock, $ .01-2/3 par value - 4,158,435 shares as of
November 7, 1996.
*formerly Electronics, Missiles & Communications, Inc.<PAGE>
<PAGE>
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
I N D E X
PAGE(S)
PART I. FINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS -
September 30, 1996 and March 31, 1996 . . . . . 3
CONSOLIDATED STATEMENTS OF INCOME -
Six months and three months ended September 30,
1996 and 1995 . . . . . . . . . . . . . . . . . 4
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY -
Six months ended September 30, 1996.... . . . . 5
CONSOLIDATED STATEMENTS OF CASH FLOWS -
Six months ended September 30, 1996 and 1995... 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. . . . 7 - 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . 9 - 12
PART II. OTHER INFORMATION:
SIGNATURES.. . . . . . . . . . . . . . . . . . . 13
NOTE: Any questions concerning this report should be addressed to
Mr. Allan J. Harding, Vice President-Finance.
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- SEPTEMBER 30, 1996 and MARCH 31, 1996 -
<CAPTION>
SEPT 30, 1996 MARCH 31,1996
Unaudited
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $207,652 $1,537,759
U. S. Treasury Bills 985,032 1,569,026
Accounts receivable, net of
allowance for doubtful accounts
Sept-$121,000/March-$95,000 2,412,704 1,818,988
Inventories 4,046,083 3,375,901
Prepaid expenses and deferredt
taxes 517,082 473,933
Note receivable 2,100,000 2,100,000
Less deferred portion (2,100,000) (2,100,000)
-----------------------------
TOTAL CURRENT ASSETS 8,168,553 8,775,607
-----------------------------
PROPERTY, PLANT & EQUIPMENT:
Land & land improvements 246,841 246,841
Building 627,551 621,215
Machinery & equipment 1,914,753 2,060,799
-----------------------------
2,789,145 2,928,855
Less accumulated depreciation 1,710,350 1,982,113
-----------------------------
NET PROPERTY, PLANT &EQUIPMENT 1,078,795 946,742
-----------------------------
OTHER ASSETS 153,948 214,900
-----------------------------
TOTAL ASSETS $9,401,296 $9,937,249
=============================
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $175,000 $200,000
Accounts payable 565,263 785,159
Accrued expenses 543,170 552,506
Deposits from customers 570,187 526,199
----------------------------
TOTAL CURRENT LIABILITIES 1,853,620 2,063,864
LONG-TERM DEBT, net of current
portion 842,104 938,217
----------------------------
SHAREHOLDERS' EQUITY:
Common stock issued, $.01-2/3 par;
authorized 9,000,000 shares 72,831 72,653
Additional paid-in capital 3,539,793 3,517,778
<PAGE>
Retained earnings 4,439,252 3,396,801
---------------------------- 8,051,876 6,987,232
Less shares held in treasury at cost:
210,579 shares Sept 96; 7,325
shares Mar '96 1,346,304 52,064
----------------------------
TOTAL SHAREHOLDERS' EQUITY 6,705,572 6,935,168
----------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $9,401,296 $9,937,249
============================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
<TABLE>
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<CAPTION>
==============================================
SIX (6) MONTHS THREE (3) MONTHS
09/30/96 09/30/95 09/30/96 09/30/95
==============================================
<S> <C> <C> <C> <C>
NET SALES $7,621,657 $5,691,551 $3,322,288 $2,898,847
COST OF PRODUCTS SOLD 4,673,737 3,518,973 1,939,024 1,759,836
------------------------------------------------
GROSS PROFIT 2,947,920 2,172,578 1,383,264 1,139,011
------------------------------------------------
OPERATING EXPENSES:
Selling 817,668 713,384 379,200 411,186
General andadministrative 674,027 579,999 346,374 314,066
Research and development 180,792 197,978 110,970 122,378
-----------------------------------------------
TOTAL OPERATING EXPENSES 1,672,487 1,491,361 836,544 847,630
-----------------------------------------------
INCOME FROM OPERATIONS 1,275,433 681,217 546,720 291,381
-----------------------------------------------
OTHER INCOME (EXPENSE), NET:
Interest expense (47,622) (82,203) (29,251) (49,044)
Interest income 48,033 43,753 19,728 18,446
Gain on sale of investment
securities 106,181
Other 5,426 30,172 4,099 6,698
-----------------------------------------------
TOTAL OTHER INCOME(EXPENSE)
NET 112,018 (8,278) (5,424) (23,900)
-----------------------------------------------
Net income before income
taxes 1,387,451 672,939 541,296 267,481
INCOME TAXES 345,000 165,000 137,000 63,000
-----------------------------------------------
NET INCOME 1,042,451 507,939 404,296 204,481
===============================================
COMMON SHARE AND COMMON SHARE
EQUIVALENT OUTSTANDING 4,270,174 4,426,411 4,432,053 4,413,564
===============================================
EARNINGS PER COMMON AND
COMMON SHARE EQUIVALENT $0.24 $0.12 $0.09 $0.05
===============================================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
<TABLE> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN RETAINED
------------
SHARES AMOUNT CAPITAL EARNINGS
---------------------------------------------
<S> <C> <C> <C> <C>
BALANCE-MARCH 31,1996 4,359,381 $72,653 $3,517,778 $3,396,801
COMMON STOCK ISSUED UNDER
STOCK OPTION PLAN 9,633 178 22,015
TREASURY STOCK PURCHASED
NET INCOME FOR THE PERIOD 1,042,451
-----------------------------------------------
BALANCE-SEPTEMBER 30, 1996 4,369,014 $72,831 $3,539,793 $4,439,252
===============================================
</TABLE>
<TABLE>
<CAPTION>
TREASURY STOCK
---------------
SHARES AMOUNT TOTAL
-------------------------------------
<S> <C> <C> <C>
BALANCE-MARCH 31,1996 7,325 $(52,064) $6,935,168
COMMON STOCK ISSUED UNDER STOCK
OPTION PLAN 22,193
TREASURY STOCK PURCHASED 203,254 (1,294,240) (1,294,240)
NET INCOME FOR THE PERIOD 1,042,451
--------------------------------------
BALANCE - SEPTEMBER 30, 1996 210,579 $(1,346,304) $6,705,572
======================================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
<TABLE> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX (6) MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<CAPTION> ------------------------
SIX (6) MONTHS
09/30/96 09/30/95
------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,042,451 $507,939
Adjustments:
Depreciation 116,344 95,010
Provision for doubtful accounts 26,000 5,000
(Increase) decrease in:
Accounts receivable (619,716) 103,398
Inventory (670,182) 308,451
Prepaid expenses and deferred taxes (43,149) (482,861)
Other assets 60,952 (1,500)
Increase (decrease) in:
Accounts payable (219,896) (54,814)
Accrued expenses (9,336) (7,192)
Deposits from customers 43,988 375,502
Accrued income taxes (686,362)
-----------------------
NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES (272,544) 162,571
-----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property,plant &equipment (248,397) (139,269)
Purchase of U. S. Treasury Bills (599,686) (778,648)
Proceeds from maturities of U.S.Treasury Bills 1,183,680 179,925
-----------------------
NET CASH PROVIDED BY(USED IN)INVESTING ACTIVITIES 335,597 (737,992)
-----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long Term Debt:
New borrowings 115,000
Payments (121,113) (107,914)
Stock sold under option plans 22,193 31,648
Acquisition of company stock (1,294,240 (7,024)
-----------------------
NET CASH PROVIDED BY(USED IN)FINANCING ACTIVITIES (1,393,160) 31,710
-----------------------
NET DECREASE IN CASH (1,330,107) (543,711)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,537,759 1,440,080
-----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $207,652 $896,369
=======================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period:
Interest Expense $47,289 $77,591
=======================
Income Taxes $391,646 $1,233,280
========================
<PAGE>
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
EMCEE BROADCAST PRODUCTS, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The financial information presented as of any date other than March 31,
has been prepared from the books and records of the Company without
audit. Financial information as of March 31 has been derived from the
audited financial statements of the Company, but does not include all
disclosures required by generally accepted accounting principles. In
the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly EMCEE
Broadcast Products, Inc. and Subsidiaries' financial position, and the
results of their operations and changes in cash flow for the periods
presented.
2. The results of operations for the three month and six month periods
ended September 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.
3. Cash equivalents consist of U.S. Treasury Bills with maturities of
ninety (90) days or less.
4. INVENTORIES consisted of the following:
<TABLE>
<CAPTION>
September 30,1996 March 31, 1996
(UNAUDITED)
<S> <C> <C>
FINISHED GOODS.......... $493,000 $554,000
WORK-IN-PROCESS......... $957,000 $681,000
RAW MATERIALS............ $1,919,000 $1,614,000
MANUFACTURED COMPONENTS... $677,083 $526,901
---------------------------
$4,046,083 $3,375,901
===========================
Inventories are stated at the lower of standard cost, which
approximates current actual cost (on a first-in, first-out basis) or
market (net realizable value).
5. EARNINGS PER SHARE. Primary earnings per common and common share
equivalent are computed using the weighted average number of shares
outstanding adjusted for the incremental shares attributed to
<PAGE>
outstanding options to purchase common stock, if dilutive.
6. OTHER ASSETS include stock received in exchange for an account
receivable. In May 1996, Ten Thousand (10,000) shares (28.6%) of this
investment was sold for a net profit of $106,181. The balance of this
investment is recorded at cost. The remainder of other assets of
$2,520 are organizational costs of subsidiaries.
7. During fiscal 1992, a rural cellular license was sold for $3,100,000.
The initial payment was $845,000, net of closing costs of $155,000.
The balance, which bears interest at 7% payable at maturity, is due
December 1996. Security for the note consists of the personal
guarantee of an individual. The deferred payment and the related
interest income was not recognized because of its extended collection
period and because there is no reasonable basis to evaluate the
likelihood of collection. Revenue will be recognized upon receipt.
8. At March 31, 1996, the Company had an outstanding Letter of Credit
totaling $25,000. All outstanding Letters of Credit were retired in
the first quarter of fiscal 1997.
9. For the three months and six months ended September 30, 1996, the
federal tax provision is less than the federal statutory because the
Company has reduced its estimated federal tax rate used for interim
reporting to recognize the benefit of its Foreign Sales Corporation
(FSC) subsidiary.
10. On May 28, 1996, the Corporation purchased 200,000 shares of EMCEE
Broadcast Products,Inc. stock from the estate of a former director.
This stock has been recorded as Treasury Stock. In consideration of
this Agreement, the Company has issued a Non-Negotiable, Non-
Transferable Stock Warrant to the beneficiary of the estate which
expires on May 22, 2001, for 200,000 shares of the Company stock at an
exercise price of $9.46875 per share.
<PAGE>
EMCEE BROADCAST PRODUCTS, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FINANCIAL CONDITION
Sales for the second quarter of fiscal 1997 which ended September 30, 1996
were $3,322,000, an increase of $423,000 (15%) over the second quarter of
fiscal 1996. Sales for the six months ended September 30, 1996 totaled
$7,622,000, an increase of $1,930,000 (34%) over the same period one year
ago. Foreign sales for the quarter ended September 30, 1996 were $1,420,000
(42.7% of total sales) and $4,004,000 (52.5% of total sales) for the first
six months ended September 30, 1996. The increase for the second quarter
and six months of fiscal 1997 compared to the comparative periods for fiscal
1996 is due to the increase in industry demand, especially foreign, for
Multichannel Multipoint Distribution Service (MMDS) transmitters, that began
in the third quarter of fiscal 1996. MMDS is commonly referred to as
"wireless cable." The decrease in second quarter sales compared to the
first quarter of fiscal 1997 is primarily due to the temporary suspension
<PAGE>
of shipments to a major customer for a project in Saudi Arabia (See
paragraph 10 below for further discussion).
A slightly higher ratio of EMCEE equipment compared to original equipment
manufactured by others (OEM) for which the Company receives higher margins,
coupled with the increase in sales volume, produced gross profit amounts of
$1,383,000 for the quarter ended September 30, 1996 and $2,948,000 for the
six months ended September 30, 1996. The former is $244,000 and the latter
is a $775,000 increase over the same periods one year ago. Gross profit
margin as a percent of sales was higher the second quarter of fiscal 1997
compared to the first quarter of fiscal 1997 due to the reduction of sales
in the second quarter under the contract for transmitters to Saudi Arabia
which carry lower pricing.
Total operating expenses totaled $837,000 for the quarter ended September
30, 1996 or $11,000 less than the same quarter one year ago while year-to-date
total operating expenses totaled $1,672,000 or $181,000 more than the
same period one year ago. Selling expense commissions decreased for the
quarter but increased year to date for fiscal 1997 compared to fiscal 1996.
General and administrative expenses for the quarter and six months ended
September 30, 1996 increased as compared to the same periods ended September
30, 1995 due to increases in salaries and an increase for the reserve for
bad debts of approximately $21,000 for the year-to- date. Research and
Development expense was approximately 10% less for both the quarter and six
months ended September 30, 1996 compared to the previous fiscal year due to
additional non-recurring engineering (NRE) payments received in fiscal 1997.
Income from operations equaled $547,000 for the second quarter ended
September 30, 1996, an increase of $256,000 over the second quarter ended
September 30, 1995 and increased income from operations to $1,275,000 for
the first six months ended September 30, 1996, compared to $681,000 for the
first six months ended September 30, 1995.
Lower interest rates and debt repayments of $121,000 aided in the reduced
interest expense for the second quarter from $49,000 to $29,000 and
year-to-date from $82,000 to $48,000. Fiscal 1996 amounts also included
interest expense for discounting a foreign letter of credit equaling $23,000
for the six months ended September 30, 1995. Interest income derived primarily
from investments in U.S. Treasury bills remained fairly constant at $20,000
for the quarter and $48,000 for the six months ended September 30, 1996
compared with the same periods ended September 30, 1995.
Other income totaled $5,000 for the first half of fiscal 1997 compared to
$30,000 for the first half of fiscal 1996. Included in the latter was
rental income of approximately $14,000 and $16,000 for an inventory
transfer. Also included in this category was a gain on the sale of an
investment in a wireless cable operator in the first quarter of $106,000
netting other income (expense) to an income of $112,000 for the first half
of fiscal 1997 compared to an expense of $8,000 for the same period last
year.
Net income before federal income tax liability equaled $541,000 for the
second quarter of the current fiscal year, a $274,000 increase over the
income for the second quarter of the year earlier. Net income before
<PAGE>
federal income tax liability for the first six months accumulated to
$1,387,000, an increase of $715,000 (106%) over the last years' first half.
Estimated federal income tax expense for the first six months ended
September 30, 1996 was $345,000 compared to $165,000 for the first six
months of the prior fiscal year. Federal taxes for the periods under
discussion were under the "expected rate" due to tax reductions from a
Foreign Sales Corporation (FSC) subsidiary that was formed in April 1995.
Net income for the periods were $404,000 and $1,042,000 for the quarter and
six months ended September 30, 1996 compared to $204,000 and $508,000 for
the like periods one year ago. Net income equaled $0.09 a share per
outstanding common stock for the second quarter and $0.24 a share for the
first six months ended September 30, 1996. Comparative amounts are $0.05
and $0.12 for the same periods ended September 30, 1995.
The backlog of unsold orders was $8,458,000 as of September 30, 1996, a
decrease of $1,530,000 from the amount of $9,988,000 as of June 30, 1996,
however, an increase of $4,665,000 compared to the backlog at September 30,
1995.
The backlog at September 30, 1996 includes approximately $7,000,000
remaining for orders associated with a contract for transmitters and
ancillary equipment destined for Saudi Arabia in which the Company is a
subcontractor. Due to problems of a technical nature, not attributable to
the Registrant's compliance, this project is presently on "hold status."
The Company cannot determine with certainty when this project will resume,
however, management believes that in light of recent order demand and
requests for proposals (RFP's), that even a cancellation of this order
(which seems unlikely) would not have a serious negative impact on the
Company.
Cash and cash equivalents (consisting of U.S. Treasury Bills with maturities
of ninety days or less) at September 30, 1996 totaled $208,000 compared to
$1,538,000 as of March 31, 1996. In addition, U.S. Treasury Bills (with
maturities of over ninety days) that totaled $1,569,000 as of March 31,
1996, was reduced due to transfers to cash and cash equivalents of
approximately $584,000 to $985,000 as of September 30, 1996. The cash
generated was used to purchase 200,000 shares of the Company stock for
$1,263,000. This stock is treated on a consolidated basis as Treasury Stock
and effected a net reduction of total shareholders equity from $6,935,000
as of March 31, 1996 to $6,706,000 as of September 30, 1996.
Account receivables net of reserve for doubtful accounts equaled $2,413,000
as of September 30, 1996, an increase of $594,000 when compared to the
balance as of March 31, 1996. This increase is primarily the result of the
receivable from the Saudi Arabia order that is a payment schedule rather
than our normal terms for international receivables of downpayments and
letters of credit.
The Note receivable of $2,100,000 for both balance sheet periods under
review represents the principal balance due the Company as a Promissory Note
for the sale of a cellular license and becomes due on December 16, 1996
together with interest accrued of $845,000. As of the date of this report,
negotiations are ongoing between the parties to extend the due date of the
principal in exchange for an enhancement of the interest rate plus other
<PAGE>
considerations. The amount of the Note and the related interest income has
not been recognized as income because there is no reasonable basis to
evaluate the likelihood of collection.
Inventories increased $670,000 from March 31, 1996 to $4,046,000 due
primarily to inventories purchased for the major contract mentioned above.
The inventories are not specialized and can be used for other orders.
Accounts payable was reduced by $220,000 over the same period reflecting the
program to reduce inventory purchases to conform with present conditions.
Prepaid expenses and deferred taxes equaled $517,000 at September 30, 1996
compared to $474,000 as of March 31, 1996. The difference equals the
difference between the estimated tax liability and actual tax payments
during the six month period ended September 30, 1996.
Capital equipment purchases for the first six months of fiscal 1997 totaled
$248,000 of which $120,000 was for new testing equipment. The total capital
equipment purchase of $248,000 less depreciation expense for the period of
$116,000, resulted in a net increase of property, plant and equipment of
$132,000 as of September 30, 1996 compared to the end of fiscal year 1996.
In addition, fixed assets with an original value of $339,000 that were fully
depreciated and no longer utilized were written off in the period ended
September 30, 1996.
Other assets decreased from $215,000 as of March 31, 1996 to $154,000 as of
September 30, 1996 reflecting the sale of a portion of the Registrants'
investment in Wireless Cable of Atlanta, Inc., a wireless cable operator.
The balance in this category is the remainder of the investment of 25,000
shares at cost with the exception of $2,520 which is a capitalized
organizational costs of subsidiaries. On October 28, 1996, BellSouth
Corporation issued a press release that stated that BellSouth and Wireless
Cable of Atlanta, Inc. have signed a nonbinding letter of intent calling for
BellSouth to exchange one-half share of BellSouth stock for every share of
Wireless Cable of Atlanta, Inc. stock. BellSouth stock was listed at $40.50
per share on November 4, 1996.
Long-term debt, including current portion, equaled $1,017,000 at September
30, 1996, a decrease of $121,000 from the beginning of the fiscal period
reflecting contractual payments and no new borrowings.
Deposits from customer balances decreased approximately $44,000 at the end
of the six month period compared to the beginning of the period due to the
decrease in the backlog.
Accrued expenses totaled $543,000 as of September 30, 1996, a decrease of
approximately $9,000 from March 31, 1996 due to the difference between
accruals and payments on payroll and payroll tax accounts.
Total shareholders' equity was $6,706,000 as of September 30, 1996 compared
to $6,935,000 as of March 31, 1996. An increase of $1,042,000 provided by
net income was offset by the purchase of Treasury Stock aforementioned. An
additional $22,000 was realized for the six month period from the issuance
of stock under the Company Stock Option Plan while a decrease of $31,000 was
incurred during the same period due to the purchase of 3,254 shares of
Company stock under the repurchase agreement included in the KSOP plan.
<PAGE>
As of March 31, 1996 there were 65,611 shares of Company stock exercisable
at prices ranging from $0.34 to $3.4375 per share under the nonqualified
stock option plans. During the first six months ended September 30, 1996,
9,633 of these shares were exercised.
As of September 30, 1996, the Company employed 92 people including 10
part-time employees. This complement compares to 95 as of June 30, 1996; 92
as of March 31, 1996 and 78 as of September 30, 1995. The management does not
expect a material change in employment for the remainder of fiscal 1997.
The Registrant believes that its existing working capital coupled with the
cash flow generated from its operations, including advance deposits on sales
orders, will be sufficient to fund its anticipated working capital and debt
payment requirements for fiscal 1997. The Company has an additional
resource, a line of credit of $2,000,000 with an interest rate of prime less
1/2 percent. There have been no borrowings against this source of funding as
of September 30, 1996. At the time of this report, the Registrant is
negotiating with a new financial institution primarily for additional
foreign sales financing.
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
In prior years an individual who was an officer, director and shareholder and
the Company were named as defendants in various lawsuits instituted by
certain shareholders based on incidents alleged to have occurred in the
early-to-mid 1980's. Of these lawsuits, all were either settled or were
dismissed with prejudice and the appeal periods have expired.
On July 7, 1995, one of the prior litigants initiated another claim against
the Company and another individual who is a shareholder seeking actual
damages of $700,000. In September 1995, the presiding judge in the Circuit
Court of Cook County, Illinois ruled in favor of the Company to dismiss
plaintiff's complaint with prejudice. It is unknown at this time whether an
appeal will be taken.
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 thereto duly authorized.
EMCEE BROADCAST PRODUCTS, INC.
Date: November 11, 1996 /s/ JAMES L. DeSTEFANO
-----------------------------
JAMES L. DeSTEFANO
President/CEO
Date: November 11, 1996 /s/ ALLAN J. HARDING
-----------------------------
ALLAN J. HARDING
Vice President-Finance
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000032312
<NAME> EMCEE BROADCAST PRODUCTS, INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 207,652
<SECURITIES> 985,032
<RECEIVABLES> 2,533,704
<ALLOWANCES> 121,000
<INVENTORY> 4,046,083
<CURRENT-ASSETS> 8,168,553
<PP&E> 2,789,145
<DEPRECIATION> 1,710,350
<TOTAL-ASSETS> 9,401,296
<CURRENT-LIABILITIES> 1,853,620
<BONDS> 0
<COMMON> 72,831
0
0
<OTHER-SE> 6,632,741
<TOTAL-LIABILITY-AND-EQUITY> 9,401,296
<SALES> 7,621,657
<TOTAL-REVENUES> 7,621,657
<CGS> 4,673,734
<TOTAL-COSTS> 6,346,224
<OTHER-EXPENSES> (112,018)
<LOSS-PROVISION> 31,000
<INTEREST-EXPENSE> 47,622
<INCOME-PRETAX> 1,387,451
<INCOME-TAX> 345,000
<INCOME-CONTINUING> 1,042,451
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,042,451
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
