UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2000
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: 570-443-9575
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 - 4,019,409 shares as of August 11, 2000.
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EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
I N D E X
PAGE(S)
PART I. FINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS -
June 30, 2000 and March 31, 2000 3
CONSOLIDATED STATEMENTS OF INCOME (LOSS) -
Three Months ended June 30, 2000 and 1999 4
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY -
Three Months ended June 30, 2000 5
CONSOLIDATED STATEMENTS OF CASH FLOWS -
Three Months ended June 30, 2000 and 1999 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7
INDEPENDENT ACCOUNTANTS' REPORT 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.
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<CAPTION>
PART I. FINANCIAL INFORMATION
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- JUNE 30, 2000 and MARCH 31, 2000 -
JUNE 30,2000 MARCH 31,2000
Unaudited
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $75,105 $261,304
U. S. Treasury Bills 1,585,704 1,773,600
Accounts receivable, net of allowance
for doubtful accts. June -$82,000/
March-$70,000 2,335,970 1,452,279
Inventories 3,683,333 3,080,313
Prepaid expenses 112,119 80,113
Income taxes refundable 497,000 402,000
Deferred income taxes 248,000 220,000
-------------------------
TOTAL CURRENT ASSETS 8,537,231 7,269,609
PROPERTY, PLANT & EQUIPMENT:
Land & land improvements 246,841 246,841
Building 617,475 617,475
Machinery & equipment 2,183,674 1,925,042
-------------------------
3,047,990 2,789,358
Less accumulated depreciation 2,316,639 2,249,467
-------------------------
NET PROPERTY, PLANT & EQUIPMENT 731,351 539,891
-------------------------
OTHER ASSETS 1,401,637 1,292,448
-------------------------
NOTE RECEIVABLE 529,000 525,000
Less deferred portion (529,000) (525,000)
-------------------------
0 0
-------------------------
TOTAL ASSETS $10,670,219 $9,101,948
==========================
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $106,000 $106,000
Notes payable (line of credit) 1,100,000 --
Accounts payable 569,153 368,671
Accrued expenses:
Payroll and related expense 216,096 214,316
Other 615,007 437,836
Deposits from customers 281,574 64,247
------------------------
TOTAL CURRENT LIABILITIES 2,887,830 1,191,070
------------------------
LONG-TERM DEBT, net of current portion 569,954 596,354
------------------------
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SHAREHOLDERS' EQUITY:
Common stock issued, $.01-2/3 par;
authorized 9,000,000 shares;issued-
4,406,361 shares 73,450 73,450
Additional paid-in capital 3,583,484 3,583,484
Retained earnings 5,244,086 5,518,241
-------------------------
8,901,020 9,175,175
Less shares held in treasury at cost:
364,752 shares June '00 and 401,764
shares Mar '00 1,688,585 1,860,651
--------------------------
TOTAL SHAREHOLDERS' EQUITY 7,212,435 7,314,524
--------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $10,670,219 $9,101,948
===========================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
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<TABLE>
<CAPTION>
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
THREE (3) MONTHS
06/30/00 06/30/99
<S> <C> <C>
NET SALES $1,680,281 $812,425
COST OF PRODUCTS SOLD 1,339,912 705,012
----------------------------
GROSS PROFIT 340,369 107,413
----------------------------
OPERATING EXPENSES:
Selling 254,079 229,892
General and administrative 367,811 225,677
Research and development 118,444 76,485
----------------------------
TOTAL OPERATING EXPENSES 740,334 532,054
----------------------------
LOSS FROM OPERATIONS (399,965) (424,641)
----------------------------
OTHER INCOME (EXPENSE), NET:
Interest expense (30,370) (18,864)
Interest income 36,403 40,335
Other (2,923) 4,693
----------------------------
TOTAL OTHER INCOME, NET 3,110 26,164
----------------------------
NET LOSS BEFORE INCOME TAXES (396,855) (398,477)
INCOME TAX EXPENSE (BENEFIT) (122,700) (98,150)
----------------------------
NET LOSS $(274,155) $(300,327)
COMMON SHARE AND COMMON
SHARE EQUIVALENT OUTSTANDING:
Basic 4,035,184 3,982,397
=============================
Diluted 4,037,266 3,982,397
=============================
LOSS PER COMMON AND
COMMON SHARE EQUIVALENT:
Basic $(.07) $(.08)
=============================
Diluted $(.07) $(.08)
=============================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
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</TABLE>
<TABLE>
<CAPTION>
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
ADDITIONAL
COMMON STOCK PAID-IN RETAINED TREASURY STOCK
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT TOTAL
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE-
3/31/00 4,406,361 $73,450 $3,583,484 $5,518,241 401,764($1,860,651)$7,314,524
TREASURY
STOCK
ISSUED (37,112) 172,066 172,066
NET LOSS
FOR THE
PERIOD (274,155) (274,155)
--------- --------
BALANCE-
6/30/00 4,406,361 $73,450 $3,583,484 $5,244,086 364,652($1,688,585)$7,212,435
=====================================================================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE (3) MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
THREE (3) MONTHS
06/30/00 06/30/99
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(274,155) $(300,327)
Adjustments:
Depreciation 67,172 66,698
Provision for doubtful accounts 12,000 9,000
(Increase) decrease in:
Accounts receivable (805,096) 117,502
Inventories (424,452) 20,010
Prepaid expenses (32,006) 51,680
Income taxes refundable (95,000)
Deferred income taxes (28,000) 21,000
Other assets 13,382 (1,500)
Increase (decrease) in:
Accounts payable 155,953 (260,034)
Accrued expenses 158,812 8,155
Deposits from customers 217,327 29,610
----------------------
NET CASH USED IN OPERATING ACTIVITIES (1,034,063) (238,206)
----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (13,632) (7,445)
Purchase of U. S. Treasury Bills (412,104) (607,551)
Proceeds from maturities of U.S. Treasury Bills 600,000 600,000
Purchase of Advanced Broadcast Systems, Inc. (400,000)
-----------------------
NET CASH USED IN INVESTING ACTIVITIES (225,736) (14,996)
-----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long term debt (26,400) (15,865)
Proceeds from line of credit borrowing 1,100,000 0
------------------------
NET CASH PROVIDED BY (USED IN)FINANCING ACTIVITIES 1,073,600 (15,865)
------------------------
NET DECREASE IN CASH (186,199) (269,067)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 261,304 1,572,423
------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $75,105 $1,303,356
========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period:
Interest Expense $27,619 $13,839
Income Taxes $0 $0
Fair Value of Assets acquired and liabilities
assumed for purchase of Advanced Broadcast
Systems, Inc.
Equipment $245,000 0
Inventory 178,568 0
Accounts receivable 90,595 0
<PAGE>
Goodwill 272,571 0
Accounts Payable (44,529) 0
Accrued liabilities (20,139) 0
Inter-company payables (150,000) 0
Treasury Stock (172,066) 0
Cash paid $400,000 $0
=========================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
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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 period ended June 30, 2000
and 1999 and are not necessarily indicative of the results to be expected
forthe full year.
3. At June 30, 2000, cash equivalents included $14,576 invested in a money
market portfolio.
4. INVENTORIES consisted of the following:
June 30, 2000 March 31, 2000
(UNAUDITED)
FINISHED GOODS $602,000 $440,000
WORK-IN-PROCESS $778,000 $468,000
RAW MATERIALS $1,169,000 $728,000
MANUFACTURED COMPONENTS $1,134,333 $1,444,313
--------------------------
$3,683,333 $3,080,313
--------------------------
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. INCOME (LOSS) PER SHARE. Basic income (loss) per share is computed by
dividing earnings (loss) applicable to common shareholders by the weighted
average number of common shares outstanding. Diluted income (loss) per share
is similar to basic income (loss) per share except that the weighted average
of common shares outstanding is increased to include the number of additional
common shares that would have been outstanding if the dilutive potential
common shares had been issued. There were no dilutive potential common shares
in the period ended June 30, 1999 because the assumed exercise of the options
would be anti-dilutive. The number of options and warrants that could
potentially dilute basic earnings(loss) per share that have been excluded from
the computation of diluted earnings(loss) per share were 315,200 at June
30,1999.
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Kronick Kalada Berdy & Co.
Certified Public Accountants
190 Lathrop Street
Kingston, PA 18704
Independent Accountants' Report
Officers and Directors
EMCEE Broadcast Products, Inc.
We have reviewed the accompanying consolidated balance sheet of EMCEE
Broadcast Products, Inc. and subsidiaries as of June 30, 2000, and the
consolidated statements of loss, shareholders' equity and cash flows for the
three-months then ended. These financial statements are the responsibility of
the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principals.
August 9, 2000
/s/ Kronick Kalada Berdy & Co.
Kronick, Kalada Berdy & Co.
<PAGE> EMCEE BROADCAST PRODUCTS, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales for the first quarter of fiscal 2001 which ended June 30, 2000,
totaled $1,680,000, an increase of 107% compared to the quarter ended June 30,
1999. One foreign customer accounted for approximately 45% of the shipments
for the first quarter of fiscal 2001. Also included in the sales amount was
$149,000 from a new subsidiary formed by an asset purchase agreement on April
17, 2000.
Although sales for the quarter ended June 30, 2000 were an improvement over
the quarter ended June 30, 1999, these shipments were 7% less than the
preceding quarter ended March 31, 2000, due primarily to a shortage of certain
critical component parts.
As shown by the opening paragraph, foreign shipments have historically been a
significant portion of the Company's sales and will continue, especially in
the next two quarters, as domestic demand is low. Foreign sales for the first
quarter for fiscal 2001, 2000 and 1999 comprised 69%, 56% and 40% of total
sales. The composition of these shipments to the following geographic regions
is as follows:
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<CAPTION> Quarter ending June 30
Region 2000* 1999* 1998*
(000's omitted)
---------------------
<S> <C> <C> <C>
Asia/Pacific Rim 819 141 386
Middle East 8 157 19
South America 20 35 79
North America 215 --- 143
Central America 10 16 39
Caribbean 4 72 41
Europe 43 23 151
Africa 23 --- 5
Other 17 8 10
--------------------
1,159 452 873
</TABLE>
*Based on customers with $2,500 or more
of sales
Although shipments for the quarter ended June 30, 2000 increased over the
first quarter one year ago, and gross profit increased from $107,000 to
$340,000 for the same periods, the low volume produced a loss from operations
of $400,000 for the first quarter of fiscal 2001 compared to a loss from
operations of $425,000 for the like period one year ago.
Gross margin equaled 20% of net shipments for the quarter ended June 30, 2000
is an improvement over the first quarter one year ago but was 13% less than
historical profitable periods of more than 33% due to low sales volume.
<PAGE>
Total operating expenses were $740,000 for the quarter ended June 30, 2000, an
increase of 39% over the same period one year ago.
Selling expense totaled $254,000 for the quarter ended June 30, 2000 compared
to $230,000 for the quarter ended June 30, 1999. An amount of $10,000 is
attributable to the aforementioned new subsidiary formed in April of 2000. An
additional $30,000 was incurred in the first quarter of fiscal 2000 for travel
expense, primarily in connection with the large foreign order which was
partially completed in the quarter. An increase occurred in salary and salary
related expense for the quarter ended June 30, 2000 as a domestic sales
manager was added in the fourth quarter of fiscal 2000. Offsetting this
increase were decreases in expenses for advertising and shows and
conventions.
General and administrative expense increased from $226,000 for the first
quarter ended June 30, 1999 to $368,000 for the first quarter ended June 30,
2000. This increase was primarily caused by the addition of the new
subsidiary general and administrative expense of $64,000 and a restoration of
salary and related expenses(including board of directors fees), that had been
reduced in the prior years'quarter.
Research and development expense for the first quarter of fiscal 2001 totaled
$118,000 compared to $76,000 for the first quarter one year ago. The Company
has added personnel and hired consultants in an effort to redesign equipment
to accept alternative component parts to alleviate part shortages, as well as
completing new transmitters for digital television (DTV) and high speed
Internet service.
Interest expense totaled $30,000 for the first quarter ended June 30, 2000
compared to $19,000 for the same period one year ago as the Registrant
utilized its line of credit to supplement cash flow in the first quarter of
fiscal 2001. Interest income was $36,000 and $40,000 for the same respective
periods as cash and cash equivalents were used for operatatS, INC.
Date: August 11, 2000 /s/ JAMES L. DeSTEFANO
JAMES L. DeSTEFANO
President/CEO
Date: August 11, 2000 /s/ ALLAN J. HARDING
ALLAN J. HARDING
Vice President-Finance
