SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 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 August 26, 2000
For the Transition Period from_________ to _________
Commission File Number 0-5109
MICROPAC INDUSTRIES, INC.
Delaware 75-1225149
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(State of Incorporation) (IRS Employer Identification No.)
905 E. Walnut, Garland, Texas 75040
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code (972) 272-3571
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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
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At November 30, 1999 and August 26, 2000, there were 3,627,151 shares of
registrant's common stock outstanding. On these dates, 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>
MICROPAC INDUSTRIES, INC.
FORM 10-QSB
August 26, 2000
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Statements of Income for the three
months and nine months ended August 26, 2000
and August 28, 1999
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>
<TABLE>
<CAPTION>
MICROPAC INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statement
Statement of Income Statement of Income
For three months ended Year-to-date
8/26/00 8/28/99 8/26/00 8/28/99
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<S> <C> <C> <C> <C>
Sales, Net of Returns & Allowances $ 3,566 $ 2,678 $ 8,974 $ 8,180
Cost of Goods Sold (2,442) (2,118) (6,441) (6,219)
------- ------- ------- -------
Gross Margin $ 1,124 $ 560 $ 2,533 $ 1,961
Selling, General & Administrative Expense (618) (530) (1,803) (1,675)
Miscellaneous interest income 65 43 162 87
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Pre-Tax Income $ 571 $ 73 $ 892 $ 373
Provision for Income Taxes (228) (29) (357) (149)
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Net Income $ 343 $ 44 $ 535 $ 224
======= ======= ======= =======
Net Income Per Share $ .09 $ .01 $ .15 $ .06
Dividends per Share -- -- -- --
Weighted Average Number of Shares 3,627 3,627 3,627 3,627
</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>
<TABLE>
<CAPTION>
MICROPAC INDUSTRIES, INC.
BALANCE SHEET
(dollars in thousands)
(Unaudited)
ASSETS
CURRENT ASSETS 8/26/00 11/30/99
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<S> <C> <C>
Cash $ -- $ 502
Short term investments 3,775 2,933
Receivables, net of allowance for doubtful accounts of 2,242 1,579
$93 on August 26, 2000 and $92 on November 30, 1999
Inventories:
Raw materials 1,148 1,246
Work-in process 902 908
Prepaid expenses and other current assets 44 57
Deferred income tax 249 249
Prepaid income taxes -- 166
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Total current assets 8,360 7,640
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 80 80
Buildings 498 498
Facility improvements 718 678
Machinery and equipment 4,664 4,493
Furniture and fixtures 381 340
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Total property, plant, and equipment $ 6,341 $ 6,089
Less accumulated depreciation (5,128) (4,945)
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Net property, plant and equipment 1,213 1,144
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Total assets $ 9,573 $ 8,784
======= =======
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $ 518 $ 365
Accrued payroll 131 214
Accrued professional fees 95 75
Other accrued liabilities 170 182
Income taxes payable 177 --
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Total current liabilities 1,091 836
DEFERRED INCOME TAXES 42 43
SHAREHOLDERS' EQUITY
Common stock, $.10 par value, authorized 10,000,000 shares 363 363
3,627,151 outstanding at August 26, 2000 and November 30, 1999
Paid-in capital 885 885
Retained earnings 7,192 6,657
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Total shareholders' equity 8,440 7,905
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Total liabilities and shareholders' equity $ 9,573 $ 8,784
======= =======
</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>
<TABLE>
<CAPTION>
MICROPAC INDUSTRIES, INC.
STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES: 8/26/00 8/28/99
------- -------
<S> <C> <C>
Net Income $ 535 $ 224
Adjustments to reconcile net income to
cash from operating activities:
Depreciation and amortization 182 176
Changes in current assets and liabilities:
Accounts receivable (663) (85)
Inventories 104 565
Prepaid expenses & other current assets 179 3
Income taxes 177 (139)
Accounts payable 153 56
Payroll & withholdings (83) (157)
Accrued liabilities 8 50
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Net cash from operating activities 592 693
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase)/ decrease in short term investments (842) (815)
Additions to property, plant and equipment (252) (106)
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Net cash used in investing activities (1,093) (921)
Net increase (decrease) in cash (502) (228)
Cash at beginning of period 502 298
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Cash at end of period $ -0- $ 70
======= =======
</TABLE>
These statements reflect all adjustments which, in the opinion of management,
are necessary for fair statement of the results for the interim period. Certain
prior year balances have been reclassified to conform to current year
presentation.
<PAGE>
MICROPAC INDUSTRIES, INC.
ITEM 2 MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. Sales for the third quarter and year to date 2000 totaled $3,566,000 and
$8,974,000 respectively compared to $2,678,000 and $8,180,000 for the
comparable periods in 1999. Sales for the third quarter 2000 increased
33.2% above sales for the same period of 1999 while year to date sales in
2000 increased 9.7% above the comparable three quarters sales results of
1999. Increased new orders and shipments against long-running contracts
were the primary reasons for increased revenues for the third quarter.
2. Cost of sales, as a percentage of net sales for the third quarter and year
to date 2000, totaled 68.5% and 71.8% respectively versus 79.1% and 76.0%
for the comparable quarter and year to date in 1999. The reduction in
percentage for the comparable periods is related to changes in product mix,
improved labor efficiencies and lower indirect cost.
3. Selling, general and administrative expenses for the current quarter of
2000 totaled 17.3% of sales compared to 19.8% for the third quarter in
1999. Year to date selling, general and administrative expenses totaled
20.1% of revenues compared to 20.5% for the same nine months in 1999. The
decrease in percentage for the comparable quarters and nine months is
primarily related to increased sales in the current periods. The increase
when compared in dollars is primarily related to increased selling
expenses.
4. Net income in the third quarter totaled $343,000 compared to $44,000 for
the same period of 1999. Year to date, net income totaled $535,000 in 2000
compared to $224,000 in 1999. Income per share for the comparable third
quarters of 2000 versus 1999 totaled $.09 and $.01 respectively. Year to
date income per share totaled $ .15 and $.06 respectively for 2000 versus
1999. The increase in net income is related primarily to reduced cost of
sales as a percentage of net sales for the comparable periods.
5. New orders for the third quarter and year to date 2000 totaled $3,791,000
and $10,236,000 respectively compared to $3,374,000 and $ $8,159,000 for
the comparable periods of 1999. New orders are comprised of add-ons to
existing contracts and re-buys for certain custom products as well as
orders for some of the Company's new standard products. The Company is
experiencing an increase in new customers.
6. Backlog totaled $5,572,000 on August 26, 2000 compared to $5,164,000 as of
August 28, 1999 and $4,360,000 on November 30, 1999. The backlog increase
is a result of strong bookings in the second and third quarters of 2000.
The backlog reflects a good mix of the Company's products, and shipments of
a significant amount of the backlog are estimated to be made within six
months.
7. Assets totaled $9,573,000 as of August 26, 2000 compared to $8,784,000 on
November 30, 1999, an increase of $789,000. The increase is attributed
primarily to increased current assets. Increases in short term investments
and accounts receivable were partially offset by decreased cash and prepaid
income taxes. Short-term investments increased $842,000 as excess cash was
invested in certificates of deposit. Accounts receivable increased $663,000
due to increased sales in the third quarter and a temporary slow down in
collections of accounts receivable for the period ended August 26, 2000.
Prepaid taxes decreased ($166,000) due to a refund received on overpaid
taxes. Cash decreased ($502,000) due to increased investing activities.
Minor decreases occurred in inventories and prepaid expenses totaling
($116,000). The increase in property, plant and equipment was $70,000, net
of depreciation.
8. Cash and short term investments as of August 26, 2000 totaled $3,775,000
compared to $3,435,000 on November 30, 1999, an increase of $340,000.
9. Accounts receivable totaled $2,242,000 on August 26, 2000 and represents an
increase of $663,000 from November 30, 1999. Days' sales totaled 57 days on
August 26, 2000 compared to 50 days on November 30, 1999.
10. Combined Inventories totaled $2,050,000 on August 26, 2000 compared to
$2,154,000 on November 30, 1999, a decrease of ($104,000). Inventories are
comprised of raw material and work-in-process. Raw materials and
work-in-process inventories totaled $1,148,000 and $902,000 respectively
for the third quarter 2000 compared to $1,246,000 and $908,000 on November
30, 1999. Raw materials inventories have decreased ($98,000) while
work-in-process decreased ($6,000) since the beginning of the fiscal year.
The changes in inventories are related to production requirements.
11. Current Liabilities totaled $1,091,000 on August 26, 2000 and represents an
increase of $255,000 since November 30, 1999. The increase is related
primarily to short-term increases in accounts payable and income taxes
payable generated during the third quarter 2000.
<PAGE>
12. Shareholders' equity has increased $535,000 since November 30, 1999.
Earnings per share for the quarter totaled $0.09 and $0.15 year to date. In
comparison, third quarter and year to date results for 1999 totaled $0.01
and $0.06 respectively.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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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. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
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None
ITEM 4. OTHER INFORMATION
-----------------
None
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
None
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.
9-27-00 /s/ Nicholas Nadolsky
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Date Nicholas Nadolsky
Chairman of the Board/CEO
9-27-00 /s/ Dave Hendon
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Date Dave Hendon
Controller
