<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 February 24, 1996
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.
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
---------------------------------
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
----- -----
On February 24, 1996, 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
FEBRUARY 24, 1996
INDEX
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
Condensed Statements of Income for the three months ended
February 24, 1996 and February 25, 1995.
Condensed Balance Sheets
Condensed Statements of Cash Flows
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
<PAGE> 3
MICROPAC INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
<TABLE>
<CAPTION>
Statement of Income
For periods ending
02/24/96 02/25/95
<S> <C> <C>
Sales, Net of Returns & Allowances $2,765,264 $1,709,229
Cost of Goods Sold (2,284,583) (1,292,295)
---------- ----------
Gross Margin 480,681 416,934
Selling, General & Administrative Expenses (630,987) (561,661)
---------- ----------
Pre-Tax Income (150,306) (144,727)
Provision for Income Taxes $ 51,104 49,207
----------- ----------
Net Income (99,202) (95,520)
---------- ----------
Net Income per Share $ (.03) $ (.03)
---------- ----------
Dividends per Share $ - $ -
---------- ----------
Weighted average number of shares 3,627,151 3,627,151
</TABLE>
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
<PAGE> 4
MICROPAC INDUSTRIES, INC.
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
02/24/96 11/30/95
<S> <C> <C>
CURRENT ASSETS:
Cash $ 72,081 $ 213,405
Short term investments 402,688 507,694
Receivables, net of allowance for doubtful accounts
of $106,719 for both periods 1,826,308 1,996,595
Inventories:
Raw materials 1,602,300 1,551,171
Work-in-process 1,324,905 1,182,326
----------- -----------
Total inventories 2,927,205 2,733,496
Prepaid expenses & other current assets (4,491) 28,463
Deferred income taxes 243,456 243,456
----------- -----------
Total current assets 5,467,247 5,723,110
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 80,000 80,000
Buildings 497,924 497,924
Facility improvements 666,148 649,261
Machinery and equipment 4,048,027 4,005,823
Furniture and fixtures 248,874 244,651
----------- -----------
Total property, plant and equipment 5,540,973 5,477,659
Less accumulated depreciation (4,348,916) (4,297,980)
----------- -----------
Net property, plant and equipment 1,192,057 1,179,679
Total Assets $ 6,659,304 $ 6,902,789
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,041,846 $ 866,481
Accrued payroll 241,116 297,590
Accrued professional fees 91,543 95,043
Other accrued liabilities 207,427 291,535
Income taxes payable (65,927) 109,639
----------- -----------
Total current liabilities 1,516,005 1,660,287
DEFERRED INCOME TAXES 174,899 174,899
SHAREHOLDERS' EQUITY:
Common stock ($.10 par value)
3,627,151 shares outstanding 362,715 362,715
Paid-in capital 885,540 885,540
Retained earnings 3,720,145 3,819,347
----------- -----------
Total shareholders' equity 4,968,400 5,067,602
----------- -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 6,659,304 $ 6,902,789
=========== ===========
</TABLE>
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
<PAGE> 5
MICROPAC INDUSTRIES, INC.
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
2/24/96 2/25/95
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income/(loss) $ (99,202) $ (95,520)
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 50,936 46,595
Changes in current assets and liabilities
Accounts receivable 170,287 273,174
Inventories (193,709) (202,625)
Prepaid expenses & other current assets 32,954 31,527
Current year income taxes (175,566) (59,761)
Accounts payable 175,366 78,189
Payroll & withholdings (56,474) (27,947)
Other accrued liabilities (87,608) (157,031)
Deferred income taxes -0- 10,554
---------- -----------
Net cash from operating activities (183,016) (102,843)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (63,314) (109,997)
---------- -----------
Net cash flow from investing activities (63,314) (109,997)
---------- -----------
Net decrease in cash (246,330) (212,840)
Cash and cash equivalents at beginning of period $ 721,099 $ 1,066,216
---------- -----------
Cash and cash equivalents at end of period $ 474,769 $ 853,376
========== ===========
</TABLE>
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period.
<PAGE> 6
Item 2
MICROPAC INDUSTRIES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. Sales for the first quarter 1996 totaled $2,765,000 and exceeded sales for
the same period in 1995 by $1,056,000 or 62%. The increase in sales for
1996 over 1995 is attributed to the Company's increased backlog of
shippable orders. Backlog for the first quarter 1996 totaled $8,845,000
compared to $5,146,000 for the same quarter in 1995.
Pre tax losses for the first quarter 1996 totaled ($150,000) compared to
($145,000) for the same period 1995.
2. Cost of sales for the first quarter 1996 increased approximately $993,000
compared to the same period for 1995. Cost of sales was 82.6% of related
revenue versus 75.5% for the same quarter in 1995 and the increase is
attributable to changes in product mix, to start-up costs associated with
new contracts, and increased personnel required to support higher sales
volume. The increase in cost of sales is primarily in cost of materials
and manufacturing overheads. The Company's current staffing should be
adequate for production of the current backlog.
3. Selling, general and administrative expenses increased approximately
$69,000 in the first quarter 1996, compared to the prior year's first
quarter. The increase in SG&A is due to increased travel expense and
increased commission expenses associated with the increased billings for
the comparable periods. As a percent of sales, selling, general and
administrative expenses were approximately 22.8% for the first quarter
1996 versus 32.9% for the same period in 1995; primarily attributable to
increased sales.
4. After tax losses totaled ($99,000) for the first quarter compared to
losses of ($96,000) for the same period in 1995. The losses incurred are
attributed to increased cost of sales referred to in item # 2 and
increased selling, general and administrative expenses outlined in item
#3. As a percent of net sales, after tax losses were (3.6%) for the first
quarter 1996 compared to (5.6%) in the same quarter in 1995.
5. Backlog as of February 24, 1996 totaled $8,845,000 compared to $5,146,000
as of February 25, 1995 and $8,317,000 at November 30, 1995. The major
portion of the Company's backlog is shippable in the current year. New
orders totaled approximately $3,324,000 for the first quarter 1996
compared to $2,800,000 for the comparable quarter in 1995.
6. Total assets decreased approximately ($244,000) since November 30, 1995.
Decreases of accounts receivable, prepaids, and cash totaled approximately
($450,000) and was partially offset by increases in inventories of
$194,000 and net property and equipment of $12,000.
Total liabilities decreased approximately ($144,000) year-to-date and is
related to decreases in tax liabilities of ($176,000), accrued liabilities
of ($144,000) and increased accounts payable of $176,000.
Shareholders' equity decreased approximately ($99,000) for the quarter
ended February 24, 1996. The average loss per share was approximately
($.03).
7. Cash flow decreased approximately ($246,000) since November 30, 1995 and
was attributed to operating activities of ($183,000) and investing
activities of ($63,000). Cash generated from increased accounts payable,
decreased accounts receivable, depreciation and decreased prepaid expenses
totaled approximately $430,000. Cash flow decreased due to increased
inventories, payment of income taxes, purchases of equipment, losses of
net income for the quarter decreased accrued liabilities and payroll
<PAGE> 7
totaling approximately ($675,000). Investments were made in production
equipment to support the increased sales volume. The Company currently
does not have any existing loans from any lending institutions.
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. DEFAULT SENIOR SECURITIES
None
ITEM 4. SUBMISSION TO MATTERS TO VOTE OF SECURITY HOLDERS
The Company held an Annual meeting of Stockholders on February 20,
1996. The purpose of the meeting was to elect four directors and
transact any business brought properly before the group. All existing
directors were re-elected and no other issues were brought before the
directors.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 Financial Data Schedule
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.
4/16/96 /s/ Nicholas Nadolsky
- ---------------------------- -------------------------
Date Nicholas Nadolsky
Chairman of the Board/CEO
4/10/96 /s/ Dave Hendon
- ---------------------------- -------------------------
Date Dave Hendon
Controller
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> FEB-24-1996
<CASH> 72,081
<SECURITIES> 402,688
<RECEIVABLES> 1,933,027
<ALLOWANCES> 106,719
<INVENTORY> 2,927,205
<CURRENT-ASSETS> 5,467,247
<PP&E> 5,540,973
<DEPRECIATION> 4,348,916
<TOTAL-ASSETS> 6,659,304
<CURRENT-LIABILITIES> 1,516,005
<BONDS> 0
<COMMON> 362,715
0
0
<OTHER-SE> 4,605,685
<TOTAL-LIABILITY-AND-EQUITY> 6,659,304
<SALES> 2,765,264
<TOTAL-REVENUES> 2,765,264
<CGS> 2,284,583
<TOTAL-COSTS> 2,284,583
<OTHER-EXPENSES> 630,987
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (150,306)
<INCOME-TAX> 51,104
<INCOME-CONTINUING> (99,202)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (99,202)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
