SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-9040
METRO TEL CORP.
DELAWARE 11-2014231
____________________________________________________________________________
(State of other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
500 North Broadway, Suite 240, Jericho, New York 11753
(516) 937-3420
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
reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X. No .
State the number of shares outstanding of each of the issuer's
classes of common equity as of the latest practicable date:
Common Stock, $.025 par value per share - 2,004,046 shares
outstanding as of November 9, 1995.
============================================================================
Metro Tel Corp.
Statement of Operations
(Unaudited, Note A)
For the three months ended
September 30,
1995 1994
Net Sales $ 923,012 $1,100,595
Cost of goods sold 590,719 671,064
Gross Profit 332,293 429,531
Selling, general and administrative
expenses 296,814 266,822
Research and development 72,813 68,552
Interest expense 419
Interest income (306)
369,321 335,793
Earnings (loss) before provision for
income taxes (37,028) 93,738
Provision (credit) for income taxes (14,800) 37,500
Net earnings (loss) $ (22,228) $ 56,238
==========================================================================
Earnings (loss) per common
share (Note B) $ (.01) $ .03
==========================================================================
Weighted average number of shares
outstanding 2,004,046 2,004,046
============================================================================
Metro Tel Corp.
Balance Sheets
(Unaudited, Note A)
ASSETS
September 30, June 30,
1995 1995
Current Assets
Cash and cash equivalents $ 299,541 $ 297,157
Accounts receivable, net 431,592 598,281
Inventories 1,515,171 1,498,562
Prepaid expenses 71,894 16,141
Total current assets 2,318,198 2,410,141
Property and equipment - at cost
Machinery and equipment 466,054 450,498
Furniture and fixtures 88,564 88,564
Leasehold improvements 8,765 8,765
563,383 547,827
Less accumulated depreciation 487,243 478,708
76,140 69,119
Other assets
Goodwill, net of accumulated
amortization of $347,076
on September 30, 1995 and
$339,621 on June 30, 1995 845,624 853,079
Other, net 27,660 29,692
873,284 882,771
$3,267,622 $3,362,031
==========================================================================
Metro Tel Corp.
Balance Sheets
(Unaudited, Note A)
LIABILITIES AND
STOCKHOLDERS' EQUITY
September 30, June 30,
1995 1995
Current Liabilities
Accounts payable $ 137,770 $ 196,378
Accrued liabilities 171,548 154,156
Income taxes payable 30,965
Total current liabilities 309,318 381,499
Stockholders' Equity
Preferred Stock, $1 par value, 200,000
shares authorized, none issued or
outstanding
Common stock, $.025 per value,
6,000,000 shares authorized,
2,030,296 shares issued, 2,004,046
shares outstanding 50,757 50,757
Additional paid-in capital 2,107,173 2,107,173
Retained earnings 869,124 891,352
3,027,054 3,049,282
Less 26,250 shares of treasury
stock - at cost (68,750) (68,750)
2,958,304 2,980,532
$3,267,622 $3,362,031
=============================================================================
Metro Tel Corp.
Statements of Cash Flows
(Unaudited, Note A)
For the three months ended
September 30,
1995 1994
Cash flows from operating activities
Net earnings (loss) $ (22,228) $ 56,238
Adjustments to reconcile net earnings
to cash provided by operating
activities
Depreciation and amortization 18,022 18,917
(Increase) decrease in operating assets
Accounts receivable 166,689 (45,538)
Inventories (16,609) 46,465
Prepaid expenses and other (55,753) (34,408)
Increase (decrease) in operating
liabilities
Accounts payable (58,608) (20,631)
Accrued liabilities 17,392 (19,335)
Income taxes payble (30,965) 34,362
Net cash provided
by operating activities 17,940 36,170
Cash flows from investment activities
Capital expenditures (15,556) (1,932)
Net cash used in
investing activities (15,556) (1,932)
Cash flows from financing activities
Principal payment of debt (12,501)
Net cash used in financing
activities (12,501)
Net increase in cash and
cash equivalents 2,384 (21,737)
Cash and cash equivalents at beginning
of year 297,157 180,653
Cash and cash equivalents at end of
three months $ 299,541 $ 202,390
============================================================================
Supplement disclosures of cash flow
information
Cash paid during the period for
Interest $ $ 419
Income taxes $ 29,540 $ 489
[FN]
METRO TEL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - General: The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-QSB
related to interim period financial statements. Accordingly, these
financial statements do not include certain information and footnotes
required by generally accepted accounting principles for complete
financial statements. However, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary in order to
make the financial statements not misleading. The results of operations
for interim periods are not necessarily indicative of the results to be
expected for the full year. For further information, refer to the
Company's financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended June 30, 1995.
Note B - Earnings Per Common Share: Earnings per common share is based upon
the weighted average number of shares of common stock outstanding during the
year. Stock options have not been included in the calculation since their
inclusion would not be materially dilutive.
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Liquidity and Capital Resources
During the three month period ended September 30, 1995, cash
increased by $2,384. Of the cash generated by operating activities
($17,940), $15,556 was used to purchase capital assets.
The Company believes that the cash which it expects to generate from
operations will be sufficient to meet operational needs.
Results of Operations
Net sales decreased by $177,583 (16.1%) in the first quarter of fiscal
1996 from the same period in fiscal 1995. The decrease in sales in the
current year's first quarter was mainly due to a reduction in foreign orders
and a continuing reduction in sales to the Regional Bell Operating Companies
(RBOCs). Prices remained constant and were not material to operations.
Sales of telephone test equipment and cutomer premise equipment
decreased by $148,662 (15.9%) and $48,101 (41.0%), respectively, for the three
month period of fiscal 1996 from the same period of fiscal 1995. Decreases
in sales of outside plant test sets (30.6%) and installer's test sets (6.1%)
offset increases in transmission test equipment (5.2%). The decrease in
outside plant test sets is attibuted to the downsizing of the RBOCs while
the decrease in installer's test sets is mainly due to a reduction in foreign
orders. The increase in transmission test equipment was the result of
increased sales to a non-RBOC company. Sales of miscellaneous products,
parts and repairs increased by 31.9%.
The Company's gross profit margin, expressed as a percentage of sales,
decreased to 36.0% in the first quarter of fiscal 1996 from 39.0% for the
same period of fiscal 1995. The decrease was mainly due to the lower level
of sales which reduced the degree to which the Company could absorb its fixed
expenses.
Selling, general and administrative expenses increased by $29,992 (11.2%)
for the first quarter of fiscal 1996 from the comparable period of fiscal
1995. The increase was mainly attributable to increased sales expenses,
including the addition of a Vice President of Sales and Marketing which
offset a reduction in royalty expenses due to the renegotiation of a
royalty agreement.
Research and development expenses increased by $4,261 (6.2%) due to
salary increases to existing staff and associated payroll expenses.
PART ll - OTHER INFORMATION
Item 7. Exihibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
quarter ended September 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
METRO-TEL CORP.
Date: November 7, 1995 By:Venerando J. Indelicato
President, Treasurer and
Principal Financial and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Description Page
27. Financial Data Schedule 10
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<ARTICLE> 5
<CIK> 0000065312
<NAME> METRO TEL CORP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 199,541
<SECURITIES> 100,000
<RECEIVABLES> 451,592
<ALLOWANCES> 20,000
<INVENTORY> 1,515,171
<CURRENT-ASSETS> 2,318,198
<PP&E> 563,383
<DEPRECIATION> 487,243
<TOTAL-ASSETS> 3,267,622
<CURRENT-LIABILITIES> 309,318
<BONDS> 0
<COMMON> 50,757
0
0
<OTHER-SE> 2,907,547
<TOTAL-LIABILITY-AND-EQUITY> 3,267,622
<SALES> 923,012
<TOTAL-REVENUES> 923,012
<CGS> 590,719
<TOTAL-COSTS> 369,321
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 20,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (37,028)
<INCOME-TAX> (14,800)
<INCOME-CONTINUING> (22,228)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,228)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
