<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997
Commission File No. 0-4671
ISOMET CORPORATION
State of Incorporation - New Jersey
IRS Employer Identification No. 22-1591074
Address of Principal Executive Offices
5263 Port Royal Road
Springfield, Virginia 22151
Registrant's Telephone Number: (703) 321-8301
Common Shares Outstanding on March 31, 1997: 1,905,590
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 preceeding 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 ninety (90) days.
X Yes No
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<PAGE>
ISOMET CORPORATION
Part 1: Financial Information
-----------------------------
Item 1: Financial Statements
----------------------------
<TABLE>
<CAPTION>
A. Statement of Income (1) (2) (3) (000 omitted)
Three Months Ended
March 31
1997 1996
---------- ----------
<S> <C> <C>
1. Revenues
a. Sales $ 1,703 $ 1,336
b. Interest Income 1 1
c. Other Income - -
---------- ----------
$ 1,704 $ 1,337
---------- ----------
2. Cost and Expenses
a. Cost of Sales $ 1,084 $ 911
b. Selling, General and Administrative 311 314
c. Research and Development - 8
d. Interest Expense 32 41
---------- ----------
Total Cost and Expenses $ 1,427 $ 1,274
---------- ----------
3. Income (Loss) Before Taxes on Income $ 277 $ 63
4. Provisions for Taxes on Income 109 1
---------- ----------
5. Net Income (Loss) $ 168 $ 62
---------- ----------
Net Income (Loss) Per Share $0.09 $0.03
---------- ----------
6. Weighted Average Number of Shares Outstanding 1,948,529 1,905,590
7. Dividends Per Share - -
</TABLE>
(1) This Financial Statement is unaudited.
(2) The results for interim periods are not necessarily indicative of results
to be expected for the year due to:
a. Fluctuations in order receipt and customer delivery.
b. Fluctuations in yield in manufacturing processes may cause
fluctuations in operating results for interim periods.
(3) In the opinion of mangement, all adjustments have beeen made which are
necessary to reflect a fair
statement of the results for the three month periods ended March 31, 1997
and March 31, 1996.
All such adjustments are of a normal and recurring nature.
<PAGE>
ISOMET CORPORATION
Financial Statements
B. Balance Sheet (1) (000 omitted)
<TABLE>
<CAPTION>
March 31 December 31
Current Assets 1997 1996
-------- -----------
<S> <C> <C>
Cash and Equivalent $ 207 $ 201
Accounts Receivable, Net 1,199 1,517
Other Current Assets 468 385
Inventories (2) 3,927 3,730
-------- --------
$ 5,801 $ 5,833
-------- --------
Property and Equipment at Cost $ 2,543 $ 2,561
Less Accumulated Depreciation 2,252 2,245
-------- --------
$ 291 $ 316
-------- --------
Other Assets $ 52 $ 52
-------- --------
$ 6,144 $ 6,201
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 555 $ 678
Accrued Liabilities 585 736
Notes Payable to Banks 351 324
-------- --------
$ 1,491 $ 1,738
Long Term Liabilities $ 816 $ 876
-------- --------
Stockholders' Equity (Deficit (3))
Common Stock Par Value $1 Per Share:
Authorized 2,500,000 Shares; Issued and
Outstanding: $ 1,906 $ 1,906
Capital Contributed in Excess of Par Value 4,221 4,221
Unamortized Deferred Compensation (56) (65)
Accumulated Deficit (2,332) (2,501)
Foreign Exchange Adjustment 98 26
-------- --------
$ 3,837 $ 3.587
-------- --------
$ 6,144 $ 6,201
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(1) Unaudited. Subject to Year-End Adjustments
(2) Inventory Breakdown
Parts and Raw Material $ 1,653 $ 1,175
Work in Process 1,897 2,083
Finished Goods 377 472
-------- --------
$ 3,927 $ 3,730
-------- --------
(3) The number of shares of common stock reserved
for issuance upon the exercise of options granted
or to be granted. 247,500 254,500
</TABLE>
<PAGE>
ISOMET CORPORATION
Financial Statements
--------------------
C. Statement of Cash Flows
Three Months Ended March 31
<TABLE>
<CAPTION>
(000 omitted)
1997 1996
----- -----
<S> <C> <C>
Cash Flow From Operating Activities
Net Income (Loss) $ 168 $ 62
Adjustment to Reconcile Net Income (Loss) to Net
Cash Provided by Operating Activities
Depreciation & Amortization $ 22 $ 22
Amortization of Deferred Compensation 9 9
Changes in Assets & Liabilities:
(Increase) Decrease in Accounts Receivable 318 (15)
(Increase) Decrease in Other Current Assets (83) (47)
(Increase) Decrease in Inventories (197) 37
Increase (Decrease) in Accounts Payable (123) 4
Increase (Decrease) in Accrued Liabilities (151) (11)
(Increase) Decrease in Other Assets - 6
----- -----
Total Adjustments: $(205) $ 5
----- -----
Net Cash Provided (Used) by Operating Activities $ (37) $ 67
----- -----
Cash Flows from Investing Activities
Purchase of Property and Equipment $ - $ -
Proceeds from Sale of Property and Equipment - -
----- -----
Net Cash (Used) by Investing Activities $ - $ -
----- -----
Cash Flows from Financing Activities
Proceeds of Long-Term Debt and Notes Payable $ 31 $ 48
Principal Payments Under Long Term Debt and
Notes Payable (60) (84)
----- -----
Net Cash Provided (Used) by Financing Activities: $ (29) $ (36)
----- -----
Effect of Exchange Rate on Changes in Cash $ 72 $ 1
----- -----
Net Increase (Decrease) in Cash $ 6 $ 32
----- -----
Cash at Beginning of Year $ 201 $ 86
----- -----
Cash at March 31 $ 207 $ 118
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Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period for:
Interest $ 32 $ 41
----- -----
Income Taxes $ - $ -
----- -----
</TABLE>
<PAGE>
ISOMET CORPORATION
------------------
Item 2: Management's Analysis of Quarterly Income Statements
Revenue for the first quarter of 1997 totaled $1,704,000, an increase of
$367,000 over $1,337,000 in 1996's first quarter. This improvement was due
primarily to increased deliveries of laser plotters to Polaroid Corporation.
For the current quarter, the Company had pre-tax income of $277,000 or $.14
per share and net, after tax income of $168,000 or $.09 per share. This
compares to net, after tax income of $62,000 or $.03 per share in the first
quarter of 1996. The increase in pre-tax income of $215,000 is almost entirely
due to larger gross profit from higher revenue levels.
New orders totaled $1,562,000 for the quarter, compared to $1,283,000 last
year. Unfilled orders on March 31, 1997 totaled $4,323,000, compared to
$5,878,000 on the same date last year and $4,549,000 on December 31, 1996.
Effective April 1, 1997, the Company's loan agreement with NationsBank was
renewed through April 1, 1998 with a fixed principal repayment schedule of
$20,000 per month. During the period from April 1, 1997 - March 31, 1998, the
Company expects to generate sufficient cash flow from operations to meet its
liquidity needs and to renew its existing loan agreement in April, 1998.
As of March 31, 1997 the Company has no material committments for capital
expenditures and accordingly, no funds from sources other than internally
generated funds are considered necessary over the next twelve months.
<PAGE>
ISOMET CORPORATION
------------------
Part II: Other Information
1. Legal Proceedings
None
2. Change in Securities
None
3. Defaults Upon Senior Securities
None
4. Submission of Matters to a Vote of Security Holders
None
5. Other Information
None
6. Exhibits and Reports on Form 8K
a. Exhibit 27 - Financial Data Schedule for quarter ended
March 31, 1997.
b. No reports on form 8K have been filed by the Registrant
during the quarter ended March 31, 1997.
<PAGE>
ISOMET CORPORATION
------------------
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly report to be signed on its behalf by
the undersigned thereunto duly authorized.
ISOMET CORPORATION
------------------------
Registrant
By:
---------------------
Jerry W. Rayburn
Executive Vice President
Finance and Treasurer
Date:
-------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 207
<SECURITIES> 0
<RECEIVABLES> 1,199
<ALLOWANCES> 0
<INVENTORY> 3,927
<CURRENT-ASSETS> 5,801
<PP&E> 2,543
<DEPRECIATION> 2,252
<TOTAL-ASSETS> 6,144
<CURRENT-LIABILITIES> 1,491
<BONDS> 0
0
0
<COMMON> 1,906
<OTHER-SE> 1,931
<TOTAL-LIABILITY-AND-EQUITY> 6,144
<SALES> 1,703
<TOTAL-REVENUES> 1,704
<CGS> 1,084
<TOTAL-COSTS> 1,427
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32
<INCOME-PRETAX> 277
<INCOME-TAX> 109
<INCOME-CONTINUING> 168
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
