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 May 27, 2000
For the Transition Period from_________ to _________
Commission File Number 0-5109
MICROPAC INDUSTRIES, INC.
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 (972) 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
--------------- ----------------
At November 30, 1999 and May 27, 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
MAY 27, 2000
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Statements of Income for the three months and six months
ended May 27, 2000 and May 29, 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
5/27/00 5/29/99 5/27/00 5/29/99
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales, Net of Returns & Allowances $ 2,450 $ 2,875 $ 5,408 $ 5,502
Cost of Goods Sold (1,808) (2,117) (3,999) (4,101)
------- ------- ------- -------
Gross Margin $ 642 $ 757 $ 1,409 $ 1,401
Selling, General & Administrative Expense (584) (597) (1,184) (1,145)
Miscellaneous interest income 52 27 96 44
------- ------- ------- -------
Pre-Tax Income $ 110 $ 187 $ 321 $ 300
Provision for Income Taxes (44) (75) (128) (120)
------- ------- ------- -------
Net Income $ 66 $ 112 $ 193 $ 180
======= ======= ======= =======
Net Income Per Share $ .02 $ .03 $ .05 $ .05
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 5/27/00 11/30/99
------- --------
<S> <C> <C>
Cash $ 89 $ 502
Short term investments 3,712 2,933
Receivables, net of allowance for doubtful accounts of 1,557 1,579
$95 on May 27, 2000 and $92 on November 30, 1999
Inventories:
Raw materials 1,124 1,246
Work-in process 972 908
Prepaid expenses and other current assets 28 57
Deferred income tax 248 249
Prepaid income taxes -- 166
------- -------
Total current assets 7,730 7,640
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 80 80
Buildings 498 498
Facility improvements 678 678
Machinery and equipment 4,609 4,493
Furniture and fixtures 373 340
------- -------
Total property, plant, and equipment $ 6,238 $ 6,089
Less accumulated depreciation (5,071) (4,945)
------- -------
Net property, plant and equipment 1,167 1,144
------- -------
Total assets $ 8,897 $ 8,784
======= =======
CURRENT LIABILITIES:
Accounts payable $ 321 $ 365
Accrued payroll 136 214
Accrued professional fees 86 75
Other accrued liabilities 146 182
Income taxes payable 68 --
------- -------
Total current liabilities 757 836
DEFERRED INCOME TAXES 42 43
SHAREHOLDERS' EQUITY
Common stock, $.10 par value, authorized 10,000,000 shares 363 363
3,627,151 outstanding at May 27, 2000 and November 30, 1999
Paid-in capital 885 885
Retained earnings 6,850 6,657
------- -------
Total shareholders' equity 8,097 7,905
------- -------
Total liabilities and shareholders' equity $ 8,897 $ 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: 5/27/00 5/29/99
-------- -------
<S> <C> <C>
Net Income $ 193 $ 180
Adjustments to reconcile net income to
cash from operating activities:
Depreciation and amortization 124 118
Changes in current assets and liabilities:
Accounts receivable 22 (108)
Inventories 58 415
Prepaid expenses & other current assets 195 24
Income taxes 68 (92)
Accounts payable (44) 23
Payroll & withholdings (78) (175)
Accrued liabilities (23) (5)
------- -------
Net cash from operating activities 515 380
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase)/ decrease in short term investments (779) 485
Additions to property, plant and equipment (149) (92)
------- -------
Net cash used in investing activities (928) 393
Net increase (decrease) in cash (413) 773
Cash at beginning of period 502 420
------- -------
Cash at end of period $ 89 $ 1,193
======= =======
</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>
MICROPAC INDUSTRIES, INC.
ITEM 2 MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. Sales for the second quarter and year to date 2000 totaled $2,450,000 and
$5,408,000 respectively. Sales for the second quarter decreased (14.8%) or
($425,000) below sales for the same period of 1999 while year to date sales
in 2000 were down (1.7%) or ($94,000) below the first six months of 1999.
Although the Company's backlog for the comparable periods ended May 2000
versus May 1999 increased $877,000, sales were down due to lack of
shippable backlog for the second quarter 2000.
2. Cost of sales for the second quarter 2000 totaled 73.8% of net sales versus
73.6% for the comparable second quarter of 1999 while cost of sales
year-to-date 2000 totaled 73.9% of net sales compared to 74.5% for the same
six month period of 1999.
3. Selling, general and administrative expenses for the second quarter of 2000
totaled 23.8% of sales compared to 20.8% for the second quarter in 1999.
Year to date selling, general and administrative expenses totaled 21.9% of
revenues compared to 20.8% for the same six months in 1999; with the
increase attributable to increased selling expense.
4. Net income in the second quarter was $66,000, compared to $112,000 for the
comparable period of 1999; resulting in pretax income of $321,000 for the
six months ended May 2000, compared to $300,000 for the first six months of
1999. Income per share for the second quarters 2000 versus 1999 totaled
$.02 and $.03 respectively while year to date income per share totaled $
.05 for the comparable six months of 2000 and 1999.
5. New orders for the second quarter and year to date 2000 totaled $4,138.000
and $6,467,000 respectively compared to $2,508,000 and $ $4,785,000 for the
comparable periods of 1999. The new orders are for add-on's to existing
contracts re-buys for certain custom products as well as orders for some of
the Company's new standard products.
6. Backlog totaled $5,355,000 on May 27, 2000 in comparison to $4,478,000 as
of May 29, 1999 and $4,360,000 on November 30, 1999. The backlog increase
is a result of strong bookings in the second quarter. 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 in fiscal 2000.
7. Assets totaled $8,897,000 as of May 27, 2000 compared to $8,784,000 as of
November 30, 1999, an increase of $113,000. The increase is attributed
primarily to increased current assets. The largest changes occurred in
short term investments totaling $779,000, which was offset by a decrease in
cash totaling ($413,000), a decrease in prepaid taxes totaling ($166,000)
and a decrease in inventories totaling ($58,000). The decrease in prepaid
taxes was due to a refund due the Company on 1999's tax return. Cash
derived from the tax refund and cash from the Company's operating accounts
were used to purchase additional certificates of deposit. Inventories
decreased due to increased shipments in May and emphasis on materials
management.
8. Cash and short term investments as of May 27, 2000 totaled $3,801,000
compared to $3,435,000 on November 1999 an increase of $366,000. The
increase in cash and short term earnings combined is related to cash
derived from retained earnings and changes in operating activities.
9. Accounts receivable totaled $1,557,000 as of May 27, 2000 representing a
decrease of ($22,000) from November 30, 1999. Days' sales totaled 57 days
on May 27, 2000 compared to 50 days on November 30, 1999.
10. Inventories totaled $2,096,000 at the end of the second quarter compared to
$2,154,000 on November 30, 1999, a decrease of ($58,000). Inventories are
comprised of raw material and work-in-process. Raw materials and
work-in-process inventories at the end of the second quarter 2000 totaled
$1,124,000 and $972,000 respectively compared to $1,246,000 and $908,000 on
November 30, 1999. Since November 30, 1999, raw materials inventories
decreased ($122,000) while work-in-process increased $64,000. The changes
in inventories are related to production requirements and improved
purchasing and materials control.
11. Current Liabilities total $757,000 as of the end of the second quarter 2000
and represents a decrease of ($79,000) since the fiscal year end of 1999.
The decrease in liabilities is related to the reduction of accounts
payable, reduction of reserves for product returns, reduced accrued payroll
expenses pertaining to decreased employee count, offset by increased
accrued tax liabilities for the current year.
<PAGE>
12. Shareholders' equity has increased $192,000 in the first six months of
2000. Earnings per share for the six month period was $0.05 per share.
PART II - OTHER INFORMATION
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. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
-------------------------------------------------
The annual stockholders' meeting was held on March 2, 2000 at
which time directors were elected to serve until the next
annual meeting of shareholders in 2001.
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.
6-27-00
--------------------------- --------------------------
Date Nicholas Nadolsky
Chairman of the Board/CEO
6-27-00
--------------------------- --------------------------
Date Dave Hendon
Controller
