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<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 Commission File No.
March 31, 2000 0-4671
ISOMET CORPORATION
State of Incorporation IRS Employer Identification No.
New Jersey 22-1591074
Address of Principal Executive Offices
5263 Port Royal Road
Springfield, VA 22151
Registrant's Telephone Number: (703) 321-8301
Common Shares Outstanding on March 31, 2000: 1,927,590
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceeding twelve (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
----- -----
<PAGE>
ISOMET CORPORATION
Part 1: Financial Information
Item 1: Financial Statements
A. Consolidated Statements of Income (1) (2) (3) (000 omitted)
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 1999
-----------------------
<S> <C> <C>
1. Revenues
a. Sales $2,624 $2,571
b. Interest and Other Income 30 18
-----------------------
$2,654 $2,589
2. Cost and Expenses
a. Cost of Sales $1,798 $1,790
b. Selling, General & Admin 341 305
c. Research & Development 16 -
d. Interest Expense 8 16
-----------------------
Total Costs and Expenses $2,163 $2,111
-----------------------
3. Income Before Taxes on Income $ 491 $ 478
4. Provisions for Taxes on Income 185 177
-----------------------
5. Net Income $ 306 $ 301
-----------------------
Basic Net Income Per Share $ .16 $ .16
-----------------------
Diluted Net Income Per Share $ .15 $ .16
-----------------------
6. Weighted Average Number of
Shares Outstanding 1,927,600 1,927,600
Weighted Average Number of Shares and
Stock Equivalents Outstanding 2,051,000 1,937,600
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 management, all adjustments have been made which are
necessary to reflect a fair statement of the results for the three months
periods ended March 31, 2000 and March 31, 1999. All such adjustments are
of a normal and recurring nature.
<PAGE>
ISOMET CORPORATION
Financial Statements
B. Consolidated Statements of Comprehensive Income (000 omitted)
Three Months Ended
March 31
2000 1999
---------------------
Net Income $306 $301
---------------------
Other Comprehensive Income
- --------------------------
Foreign Currency Translation Adj. 17 (4)
---------------------
Comprehensive Income $323 $297
---------------------
<PAGE>
ISOMET CORPORATION
Financial Statements
C. Segment Information Three Months Ended March 31 (000 omitted)
<TABLE>
<CAPTION>
2000
Systems Components Total
----------------------------------------
<S> <C> <C> <C>
Sales $1,247 $1,377 $2,624
Cost of Sales 986 812 1,798
------ ------ ------
Gross Profit $ 261 $ 565 $ 826
------ ------
General Corporate:
Interest Income and Other Revenue 30
Selling, General and Admin Expenses (341)
Product Development (16)
Interest Expense (8)
------
Net Income Before Income Taxes $ 491
------
<CAPTION>
1999
Systems Components Total
---------------------------------------
<S> <C> <C> <C>
Sales $1,828 $ 743 $ 2,571
Cost of Sales 1,381 409 1,790
------ ------ -------
Gross Profit $ 447 $ 334 $ 781
------ ------
General Corporate:
Interest Income and Other Revenue 18
Selling, General and Admin Expenses (305)
Product Development -
Interest Expense (16)
-------
Net Income Before Income Taxes $ 478
-------
</TABLE>
<PAGE>
ISOMET CORPORATION
Financial Statements
D. Balance Sheet (1) (000 omitted)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
------------------------------------
<S> <C> <C>
Current Assets
Cash and Investments $2,542 $2,189
Accounts Receivable Net 1,624 1,564
Other Current Assets 427 395
Inventories (2) 4,149 4,261
---------------------------------
$8,742 $8,409
--------------------------------
Property and Equipment at Cost $2,496 $2,423
Less Accumulated Depreciation 2,097 2,087
--------------------------------
$ 399 $ 336
--------------------------------
Other Assets $ 7 $ 7
--------------------------------
$9,148 $8,752
--------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 740 $ 656
Accrued Liabilities and Other 422 422
Notes Payable to Banks 199 178
--------------------------------
$1,361 $1,256
Long Term Liabilities $ 177 $ 209
--------------------------------
Stockholders' Equity (3)
Common Stock Par Value $1 Per Share:
Authorized 2,500,000 Shares; Issued
And Outstanding: $1,928 $1,928
Capital Contributed in Excess of Par Value 4,232 4,232
Retained Earnings 1,402 1,096
Foreign Exchange Adjustment 48 31
--------------------------------
$7,610 $7,287
--------------------------------
$9,148 $8,752
--------------------------------
(1) Unaudited. Subject to Year-End Adjustments
(2) Inventory Breakdown
Parts and Raw Material $1,302 $ 563
Work in Process 2,389 3,170
Finished Goods 458 528
--------------------------------
$4,149 $4,261
--------------------------------
(3) The number of shares of common stock
reserved for issuance upon the exercise
of options granted or to be granted: 253,000 253,000
</TABLE>
<PAGE>
ISOMET CORPORATION
Financial Statements
E. Statement of Cash Flows Three Months Ended March 31 (000 omitted)
<TABLE>
<CAPTION>
2000 1999
------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ 306 $ 301
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Depreciation and Amortization $ 10 $ 6
Amortization of Deferred Compensation - -
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (60) 213
(Increase) Decrease in Other Current Assets (32) (33)
(Increase) Decrease in Inventories 112 754
Increase (Decrease) in Accounts Payable 84 (518)
Increase (Decrease) in Accrued Liabilities - 168
(Increase) Decrease in Other Assets - -
------------------------------
Total Adjustments $ 114 $ 590
------------------------------
Net Cash Provided (Used) by Operating Activities $ 420 $ 891
------------------------------
Cash Flows from Investing Activities
Purchase of Property and Equipment $ (73) $ 5
Proceeds from Sale of Property and Equipment - -
------------------------------
Net Cash (Used) by Investing Activities $ (73) $ 5
------------------------------
Cash Flows from Financing Activities
Proceeds of Long-Term Debt and Notes Payables $ 49 $ (59)
Principal Payments Under Long-Term Debt and
Notes Payable (60) (20)
------------------------------
Net Cash Provided (Used) by Financing Activities $ (11) $ (79)
------------------------------
Effect of Exchange Rate Changes on Cash $ 17 $ (4)
------------------------------
Net Increase (Decrease) in Cash and Investments $ 353 $ 813
------------------------------
Cash and Investments at Beginning of Year $2,189 $1,427
------------------------------
Cash and Investments at March 31 $2,542 $2,240
------------------------------
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Year for:
Interest $ 8 $ 16
------------------------------
Income Taxes $ 200 $ 15
------------------------------
</TABLE>
<PAGE>
ISOMET CORPORATION
------------------
Item 2: Management's Analysis of Quarterly Income Statements
------------------------------------------------------------
Revenue for the first quarter of 2000 totaled $2,654,000, an increase of
$65,000 over $2,589,000 in 1999's first quarter. This improvement was due
primarily to increased deliveries in the Company's acousto-optic product line.
For the current quarter, the Company had net income of $306,000 or $.15 per
share (diluted). This compares to net income of $301,000 or $.16 per share
(diluted) in the first quarter of 1999. The increase in net income of $5,000
resulted from the following factors:
1. Increase in Gross Profit $45,000
2. Increase in Selling, G and A (36,000)
3. Decrease in Interest Expense 8,000
4. Increase in Income Tax Charge (8,000)
5. Other (4,000)
----------
$ 5,000
New orders totaled $3,442,000 for the quarter, compared to $857,000 last
year. Unfilled orders on March 31, 2000 totaled $4,419,000 compared to
$1,577,000 on the same date last year and $3,577,000 on December 31, 1999.
As of March 31, 2000, the Company has no material commitments for capital
expenditures and accordingly, no funds from sources other than internally
generated funds are considered necessary over the next twelve months. During the
period from April 1, 2000 - March 31, 2001, the Company expects to generate
sufficient cash flow from operations to meet its liquidity needs.
<PAGE>
ISOMET CORPORATION
------------------
Part 11: 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. Exhibits 27 Financial Data Schedule for quarter ended March 31, 2000.
b. No reports on form 8K have been filed by the Registrant during the
quarter ended March 31, 2000.
<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:/s/ Jerry W. Rayburn
--------------------
Jerry W. Rayburn
Executive Vice President
Finance and Treasurer
Date: May 12, 2000
---------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ISOMET CORP
AND SUBSIDIARIES 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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,542
<SECURITIES> 0
<RECEIVABLES> 1,624
<ALLOWANCES> 0
<INVENTORY> 4,149
<CURRENT-ASSETS> 8,742
<PP&E> 2,496
<DEPRECIATION> 2,097
<TOTAL-ASSETS> 9,148
<CURRENT-LIABILITIES> 1,361
<BONDS> 0
0
0
<COMMON> 1,928
<OTHER-SE> 5,682
<TOTAL-LIABILITY-AND-EQUITY> 9,148
<SALES> 2,624
<TOTAL-REVENUES> 2,654
<CGS> 1,798
<TOTAL-COSTS> 2,163
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 491
<INCOME-TAX> 185
<INCOME-CONTINUING> 306
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 306
<EPS-BASIC> .16
<EPS-DILUTED> .15
</TABLE>
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