<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
F O R M 1 0 QSB
OMB Approval
OMB Number: XXXX-XXXX
Expires: Approval Pending
Estimated Average Burden Hours Per Response: 1.0
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended May 27, 1995
For the Transition Period from __________ to __________
Commission File Number 0-5109
M I C R O P A C I N D U S T R I E S, I N C.
<TABLE>
<S> <C>
Delaware 75-1225149
- --------------------------------------- ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
905 E. Walnut, Garland, Texas 75040
- --------------------------------------- ---------------------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code (214) 272-3571
---------------------------------
</TABLE>
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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
----- -----
At November 30, 1994, there were 3,627,151 shares of registrant's common stock
outstanding. On that date, the aggregate market value of Common Stock could
not be determined since there is no established public trading market for the
Company's Common Stock.
<PAGE> 2
MICROPAC INDUSTRIES, INC.
FORM 10-Q
MAY 27, 1995
INDEX
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
Condensed Statements of Operations for the three and six months
ended May 27, 1995 and May 28, 1994.
Condensed Balance Sheets
Condensed Statements of Cash Flows
Notes to Condensed Financial Statements
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
ITEM 2 CHANGES IN SECURITIES
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5 OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
2
<PAGE> 3
MICROPAC INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- --------------------------
5/27/95 5/28/94 5/27/95 5/28/94
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales, Net of Returns & Allowances $ 2,859,505 $ 2,356,637 $ 4,868,735 $ 4,660,061
Cost of Goods Sold (2,138,202) (1,659,379) (3,430,316) (3,228,383)
----------- ----------- ----------- -----------
Gross Margin 1,021,485 697,258 1,438,419 1,431,678
Selling, General & Administrative Expenses (682,417) (611,145) (1,244,078) (1,219,820)
----------- ----------- ----------- -----------
Pre-Tax Income 339,068 86,113 194,341 211,858
Provision for Income Taxes (115,283) (29,336) (66,076) (76,739)
----------- ----------- ----------- -----------
Net Income $ 223,786 $ 56,777 $ 128,266 $ 135,120
=========== =========== =========== ===========
Net (loss) Income per share $ 0.06 $ 0.02 $ 0.04 $ 0.04
=========== =========== =========== ===========
Dividends per Share $ - $ - $ - $ -
=========== =========== =========== ===========
Weighted Average Number of Shares 3,627,151 3,627,151 3,627,151 3,627,151
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
3
<PAGE> 4
MICROPAC INDUSTRIES, INC.
CONDENSED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
5/27/95 11/30/94
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 32,614 $ 264,186
Short-term investments 596,670 802,030
Receivables, net of allowance for doubtful accounts
of approximately $117,000 and $140,000 on May 27, 1995
and November 30, 1994, respectively 1,994,158 1,345,833
Inventories:
Raw materials 1,271,805 1,283,974
Work-in-process 936,355 867,188
Prepaid expenses & other current assets 2,042 35,269
Deferred income tax 243,456 263,412
----------- -----------
Total current assets 5,077,099 4,861,892
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 80,000 80,000
Buildings 497,924 497,924
Facility improvements 649,261 628,047
Machinery and equipment 3,893,150 3,681,648
Furniture and fixtures 237,505 235,535
----------- -----------
Total plant, property and equipment 5,357,840 5,123,153
Less accumulated depreciation (4,201,394) (4,108,162)
----------- -----------
Net property, plant and equipment 1,156,445 1,014,991
TOTAL ASSETS $ 6,233,545 $ 5,876,883
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
----------------------------------
CURRENT LIABILITIES:
Accounts payable $ 688,851 $ 332,457
Accrued payroll 229,614 253,029
Accrued professional fees 71,520 73,669
Other accrued liabilities 286,036 408,658
Income taxes payable 29,589 -
----------- -----------
Total current liabilities 1,305,611 1,067,812
DEFERRED INCOME TAXES 174,899 184,301
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock ($.10 par value, 10,000,000
authorized, 3,627,151 outstanding) 362,715 362,715
Paid-in Capital 885,540 885,540
Retained earnings 3,504,780 3,376,515
----------- -----------
Total shareholders' equity 4,753,085 4,624,770
----------- -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 6,233,545 $ 5,876,883
=========== ===========
</TABLE>
See accompanying notes to financial statements.
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
4
<PAGE> 5
MICROPAC INDUSTRIES, INC.
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
------------------------------
5/27/95 5/28/94
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 128,265 $ 135,120
Adjustments to reconcile net income to
Net cash from operating activities:
Depreciation 93,233 91,675
Changes in assets and liabilities
Accounts receivable (648,324) (21,536)
Inventories (56,997) (58,180)
Prepaid expenses & other assets 32,207 6,174
Income taxes 29,589 22,107
Accounts payable 356,394 123,927
Payroll & withholdings (23,414) 8,691
Accrued liabilities (124,772) (72,734)
Deferred income taxes 10,554 -
---------- ----------
Net cash provided by operating activities (202,245) 235,244
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (234,687) (89,178)
---------- ----------
Net cash flows from investing activities (234,687) (89,178)
---------- ----------
Net increase (decrease) in cash (436,932) 146,066
Cash at beginning of period 1,066,216 567,113
---------- ----------
Cash at end of period $ 629,284 $ 713,179
========== ==========
</TABLE>
See accompanying notes to financial statements.
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
5
<PAGE> 6
Item 2
MICROPAC INDUSTRIES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. Sales and profits for the second quarter ended May 27, 1995, increased
approximately $503,000 and $157,000, respectively, compared to the second
quarter 1994. Year-to-date sales have increased approximately $209,000
over the same period in 1994, while profits decreased ($7,000). Improved
sales in the second quarter 1995 are attributable to increased new orders.
New orders for the second quarter and year-to-date 1995 totaled $3,910,000
and $7,099,000, respectively, compared to $2,675,000 and $5,008,000,
respectively, for the same periods in 1994.
2. Cost of sales for the second quarter and year-to-date increased
approximately $479,000 and $202,000, respectively, compared to the same
periods in 1994. As a percent of sales, cost of sales for the second
quarter 1995 was 74.8% versus 70.4% in 1994. Year-to-date cost of sales,
as a percent of sales, was 70.5% in 1995 compared to 69.3% in 1994.
Changes in product mix i.e., increased custom products, compared to
standard products resulted in higher material and labor costs in the first
half of 1995 compared to 1994. Startup costs associated with new custom
product orders, and materials quality problems further impacted cost of
sales for the current period.
3. Selling, general and administrative expenses increased approximately
$71,000 for the quarter and $24,000 year-to-date. The increase in both
periods is primarily attributed to increased travel expense incurred by
the sales staff and management in efforts to identify and capture new
business and to increased commission expenses paid to the sales
representatives.
4. The net income per share for the second quarter 1995 versus 1994 was
approximately $.06 and $.02, respectively. The difference is attributed
to $500,000 increase in sales for the same quarters comparing 1995 and
1994. Income per share year-to-date was approximately $.04 for both 1995
and 1994. Despite the negative performance in the first quarter, due to
unusually low billings, the Company's performance for the year is
comparable with 1994.
5. New orders for the first quarter 1995 totaled approximately $3,910,000
compared to $2,675,000 for the same period in 1994. Year-to-date 1995,
new orders totaled approximately $7,099,000 compared to $5,007,000 for the
same six months in 1994. The increases in new orders is attributed to
continued new product development, aggressive field sales efforts, and
qualification by the Company for class "K" and Jan "S" (space) products.
6. Backlog on May 27, 1995, was approximately $5,190,000 compared to
$4,219,000 for the period ended May 1994. Backlog has increased due to
increased new orders when comparing the two years.
7. Raw material and line work-in-process inventories are stable at
approximately $2,151,000 comparing November 30, 1994, to May, 1995. The
build-up of inventories ($2,354,000) in the first quarter 1995 was
depleted due to the increased sales experienced during the second
quarter..
8. Net receivables have increased approximately $648,000 from $1,346,000 as
of November 30, 1994, to $1,994,000 as of May 1995. The increase is
attributed to increased sales in the second quarter of 1995. Day's sales
have increased from approximately 57 days to 59 days since the beginning
of the year.
6
<PAGE> 7
9. Capital expenditures for the first six months of 1995 have been
approximately $235,000 compared to $89,000 for the same six months in
1994. Additional production and test equipment has been purchased to
support the increased sales, and a new clean room has been added to the
foreign assembly plant in order to increase production in that facility.
10. Total assets increased approximately $356,000 since November 30, 1994.
The increase is comprised of increases in current assets of approximately
$215,000 and plant, property, and equipment of $141,000. The increases
are primarily due to increased accounts receivable and equipment purchases
as explained in Items 8 and 9 above.
Total liabilities increased approximately $237,000 for the first six
months of 1995 primarily attributable to increased accounts payable offset
by reductions in accrued liabilities.
Shareholders' equity increased approximately $128,000 for the first half
of the year.
11. Cash flows decreased approximately $437,000 since November 30, 1994, and
is attributed to decreased cash flows from operating activities of
($202,000) and expenditures for capital assets of ($235,000). The capital
asset expenditures are primarily for production and test equipment needed
as explained in Item 9. The Company does not anticipate the need to
borrow cash in the near future. The Company currently does not have any
existing loans from any lending institution.
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any material current or pending legal
proceedings, other than ordinary routine litigation incidental to
its business.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
7
<PAGE> 8
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 duly authorized.
MICROPAC INDUSTRIES, INC.
7/14/95 /S/ Nicholas Nadolsky
- --------- ------------------------------
Date Nicholas Nadolsky
Chairman of the Board/CEO
7/14/95 /S/ Dave E. Hendon
- --------- ------------------------------
Date Dave Hendon
Controller
8
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> MAY-27-1995
<CASH> 32,614
<SECURITIES> 596,670
<RECEIVABLES> 2,111,158
<ALLOWANCES> 117,000
<INVENTORY> 2,208,160
<CURRENT-ASSETS> 5,077,099
<PP&E> 5,357,840
<DEPRECIATION> 4,201,394
<TOTAL-ASSETS> 6,233,545
<CURRENT-LIABILITIES> 1,305,611
<BONDS> 0
<COMMON> 362,715
0
0
<OTHER-SE> 4,390,320
<TOTAL-LIABILITY-AND-EQUITY> 6,233,545
<SALES> 4,868,735
<TOTAL-REVENUES> 4,868,735
<CGS> 3,430,316
<TOTAL-COSTS> 3,430,316
<OTHER-EXPENSES> 1,244,078
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 194,341
<INCOME-TAX> 66,076
<INCOME-CONTINUING> 128,266
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,266
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
