================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1998.
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: 0-8574
MICROWAVE POWER DEVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3622306
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
49 Wireless Boulevard
Hauppauge, New York 11788-3935
(Address of principal executive offices, including zip code)
(516) 231-1400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ___
As of May 1, 1998, there were 10,379,030 shares outstanding of the registrant's
Common Stock, $.01 par value.
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<PAGE>
MICROWAVE POWER DEVICES, INC.
INDEX
PART I -- FINANCIAL INFORMATION Page No.
- ------------------------------- --------
ITEM 1. Consolidated Financial Statements
Consolidated Balance Sheets --
March 31, 1998 and December 31, 1997........................... 3
Consolidated Statements of Operations --
Three months ended March 31, 1998 and 1997 .................... 4
Consolidated Statements of Cash Flows --
Three months ended March 31, 1998 and 1997 .................... 5
Notes to Consolidated Financial Statements..................... 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 8
PART II -- OTHER INFORMATION
- ----------------------------
ITEM 1. Legal Proceedings................................................ 11
ITEM 6. Exhibits and Reports on Form 8-K................................. 11
SIGNATURES.................................................................. 12
Page 2
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- --------
(unaudited) (audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .............................................. $ 607 $ 687
Accounts receivable, net of allowance for doubtful accounts of $75 ..... 7,598 8,329
Inventories, net ....................................................... 18,451 16,931
Prepaid expenses and other current assets .............................. 629 706
Deferred income taxes .................................................. 1,964 1,777
-------- --------
Total current assets .............................................. 29,249 28,430
PROPERTY, PLANT AND EQUIPMENT, net .......................................... 8,078 8,273
INTANGIBLE ASSETS, net ...................................................... 386 389
OTHER LONG-TERM ASSETS ...................................................... 852 903
DEFERRED INCOME TAXES ....................................................... 3,631 3,827
-------- --------
$ 42,196 $ 41,822
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt ...................................... $ 838 $ 650
Accounts payable ....................................................... 5,693 4,848
Accrued liabilities .................................................... 2,868 3,186
Customer advance payments .............................................. 1,142 1,563
-------- --------
Total current liabilities ......................................... 10,541 10,247
-------- --------
LONG-TERM DEBT .............................................................. 12,523 12,626
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; 5,000,000 shares authorized;
no shares issued or outstanding ..................................... -- --
Common stock, $.01 par value; 25,000,000 shares authorized;
10,378,890 and 10,378,750 shares issued and outstanding, respectively 104 104
Additional paid-in capital ............................................. 23,306 23,306
Notes receivable from shareholders ..................................... (188) (188)
Retained earnings (accumulated deficit) ................................ (4,090) (4,273)
-------- --------
Total shareholders' equity ........................................ 19,132 18,949
-------- --------
$ 42,196 $ 41,822
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
Page 3
<PAGE>
MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 31, March 31,
1998 1997
------- -------
<S> <C> <C>
NET SALES ............................................. $11,439 $10,004
COST OF SALES ......................................... 7,680 7,507
------- -------
Gross profit ................................ 3,759 2,497
------- -------
OPERATING EXPENSES:
General and administrative ....................... 974 857
Selling .......................................... 896 710
Research and development ......................... 1,408 647
------- -------
3,278 2,214
------- -------
Income from operations ...................... 481 283
INTEREST EXPENSE, net ................................. 276 279
------- -------
Income before income taxes .................. 205 4
PROVISION FOR INCOME TAXES ............................ 22 1
------- -------
Net income .................................. $ 183 $ 3
======= =======
PER SHARE INFORMATION:
Net income per common share:
Basic ....................................... $ 0.02 $ 0.00
======= =======
Diluted ..................................... $ 0.02 $ 0.00
======= =======
Common shares used in computing per share amounts:
Basic ....................................... 10,379 10,375
======= =======
Diluted ..................................... 10,479 10,382
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE>
MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 31, March 31,
1998 1997
------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income .................................................................. $ 183 $ 3
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization .......................................... 331 298
Deferred income taxes .................................................. 9 (20)
Loss on sale of property, plant and equipment .......................... -- --
Changes in operating assets and liabilities:
Accounts receivable .................................................... 731 (36)
Inventories ............................................................ (1,519) (848)
Prepaid expenses and other assets ...................................... 134 (198)
Accounts payable and accrued liabilities ............................... 527 (1,993)
Customer advance payments .............................................. (421) --
------- -------
Net cash used in operating activities ............................. (25) (2,794)
------- -------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment ............................. (111) (58)
Proceeds from sale of property, plant and equipment .................... -- --
Investment in marketable securities .................................... (7) (6)
------- -------
Net cash used in investing activities ............................. (118) (64)
------- -------
FINANCING ACTIVITIES:
Proceeds from long-term debt ........................................... 939 2,700
Principal payments of long-term debt ................................... (150) --
Net repayments on revolving credit loans ............................... (704) (341)
Deferred financing costs ............................................... (22) (88)
Net proceeds from issuance of common stock ............................. -- --
------- -------
Net cash provided by financing activities ......................... 63 2,271
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS ............................................ (80) (587)
CASH AND CASH EQUIVALENTS, beginning of year ..................................... 687 1,149
------- -------
CASH AND CASH EQUIVALENTS, end of period ......................................... $ 607 $ 562
======= =======
SUPPLEMENTAL DATA:
Cash paid for interest ...................................................... $ 290 $ 301
======= =======
Cash paid for income taxes .................................................. $ 52 $ 21
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
Page 5
<PAGE>
MICROWAVE POWER DEVICES, INC. and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(in thousands, except share and per share data)
(unaudited)
1. Reference is made to the Notes to Consolidated Financial Statements
contained in the Company's December 31, 1997 audited consolidated financial
statements included in the Company's 1997 Annual Report and the Company's 1997
Annual Report on Form 10-K filed with the SEC on March 20, 1998. In the opinion
of Management, the interim unaudited financial statements included herein
reflect all adjustments necessary, consisting of normal recurring adjustments,
for a fair presentation of such data on a basis consistent with that of the
audited data presented therein. The consolidated results of operations for
interim periods are not necessarily indicative of the results to be expected for
a full year.
2. Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
Per Share." Basic net income per common share ("Basic EPS") is computed by
dividing net income by the weighted average number of common shares outstanding.
Diluted net income per common share ("Diluted EPS") is computed by dividing net
income by the weighted average number of common shares and dilutive common share
equivalents then outstanding. SFAS No. 128 requires the presentation of both
Basic EPS and Diluted EPS on the face of the consolidated statement of
operations. The impact of the adoption of this statement was not material to all
previously reported EPS amounts. A reconciliation between the numerator and
denominator of Basic EPS and Diluted EPS is as follows:
<TABLE>
<CAPTION>
Net
Income
Per
Net Common Common
Income Shares Share
------ ------ -----
For the quarter ended March 31, 1998
<S> <C> <C> <C>
Basic EPS
Net income attributable to common stock $ 183 10,379 $0.02
Effect of dilutive securities: stock options -- 100 --
------ ------ -----
Diluted EPS
Net income attributable to common stock and
assumed option exercises $ 183 10,479 $0.02
====== ====== =====
<CAPTION>
For the quarter ended March 31, 1997
<S> <C> <C> <C>
Basic EPS
Net income attributable to common stock $ 3 10,375 $0.00
Effect of dilutive securities: stock options -- 7 --
------ ------ -----
Diluted EPS
Net income attributable to common stock and
assumed option exercises $ 3 10,382 $0.00
====== ====== =====
</TABLE>
Diluted EPS, for the three months ended March 31, 1998 and March 31, 1997,
does not include the impact of other stock options then outstanding as their
inclusion would be anti-dilutive.
3. The following stock options were granted, cancelled or exercised during
the first quarter of 1998 under either the 1995 or 1996 Stock Option Plans:
Granted Cancelled Exercised
------- --------- ---------
202,680 @ $6.375 2,750 @ $2.875 - $6.375 140 @ $2.875
Page 6
<PAGE>
4. Recently Issued Accounting Standards
In the first quarter of 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," which requires companies to report all changes in equity
during a period, except those resulting from investment by owners and
distribution to owners, for the period in which they are recognized.
Comprehensive income is the total of net income and all other nonowner changes
in equity (or other comprehensive income) such as unrealized gains/losses on
securities classified as available-for-sale, foreign currency translation
adjustments and minimum pension liability adjustments. Comprehensive and other
comprehensive income must be reported on the face of annual financial statements
or in the case of interim reporting, the footnote approach may be utilized. For
fiscal years 1997 and 1996, and for the quarters ended March 31, 1998 and 1997,
the Company's operations did not give rise to items includible in comprehensive
income which were not already included in net income. Accordingly, the Company's
comprehensive income is the same as its net income for all periods presented.
Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Overview
Microwave Power Devices, Inc. ("Microwave Power Devices" or the "Company")
commenced operations in 1967. During the past 31 years, the Company has
designed, manufactured and marketed high power, solid-state, radio frequency
("RF") and microwave power amplifiers and related subsystems for military,
medical, satellite and wireless telecommunications applications.
The Company historically has been dependent upon the military market as its
principal source of revenue. In 1992, as the military market was declining, the
Company increased the scope of its business and entered commercial markets,
thereby broadening its product offerings. The Company now develops precision
high-power amplifiers for a variety of commercial uses.
Forward-Looking Statements
Certain information contained in this Quarterly Report on Form 10-Q,
including, without limitation, information appearing under Part I, Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," are forward-looking statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934). Factors set forth in the Company's 1997 Annual Report on Form 10-K, filed
March 20, 1998, under Item 1, "Business - Risk Factors," together with other
factors that appear with the forward-looking statements, or in the Company's
other Securities and Exchange Commission filings, including its Registration
Statement on Form S-1 dated September 29, 1995, could affect the Company's
actual results and could cause the Company's actual results to differ materially
from those expressed in any forward-looking statements made by, or on behalf of,
the Company in this Quarterly Report on Form 10-Q.
Results of Operations --
First Quarters Ended March 31, 1998 and March 31, 1997
Net Sales. Net sales increased by 14% to $11.4 million in the first quarter
of 1998 from $10.0 million in the first quarter of 1997. This sales increase was
primarily due to higher shipments of the Company's commercial and military
products. Sales of commercial products increased by 8% to $6.8 million in the
first quarter of 1998 from $6.3 million in the first quarter of 1997,
representing 59% and 63%, respectively, of net sales in such periods. The
commercial sales increase was predominantly due to higher net shipments to
wireless telecommunications original equipment manufacturers ("OEMs") and higher
shipments to one satellite communications OEM. Sales of military products
increased by 25% to $4.6 million in the first quarter of 1998 from $3.7 million
in the first quarter of 1997, representing 41% and 37%, respectively, of net
sales in such periods. The military sales increase was predominantly due to
higher shipments on a U. S. Government military program, partially offset by
lower market demand for various MPD and Republic military products.
International sales decreased by 36% to $1.7 million in the first quarter
of 1998 from $2.7 million in the first quarter of 1997, totaling 15% of net
sales in the first quarter of 1998 compared to 27% in the first quarter of 1997.
The decrease in international sales was predominantly due to lower market demand
for Republic foreign military business and, to a lesser extent, lower market
demand for foreign wireless telecommunications business. In the first quarter of
1998, sales to two domestic commercial OEMs (Customer B and Customer D) and one
domestic military OEM (Customer G) accounted for 22%, 18% and 18%, respectively,
of the Company's net sales. In the first quarter of 1997, sales to two domestic
commercial OEMs (Customer B and Customer D) accounted for 28% and 19%,
respectively, of the Company's net sales.
Gross Profit. Gross profit increased by 51% to $3.8 million in the first
quarter of 1998 from $2.5 million in the first quarter of 1997. The Company's
gross profit margin (gross profit as a percentage of net sales) also
Page 8
<PAGE>
increased to 32.9% in the first quarter of 1998 from 25.0% in the first quarter
of 1997. These increases were primarily due to lower commercial warranty expense
(specifically for the Company's multi-channel, cellular-CDMA product) and a more
favorable revenue mix of higher net gross profit margin business in both the
wireless and military product lines. Despite the above, the following factors
adversely affected the Company's gross profit margin for the first quarter of
1998: (i) low gross profits the Company is experiencing on two foreign military
OEM contracts (the result of competitive pricing pressures and technical
problems) and (ii) a lower than anticipated absorption of overhead expenses.
Certain of the Company's inventory costing techniques involve developing a
standard cost which estimates the average, or standard, cost per unit over the
extended life cycle of a product. Such costs include labor, material, other
direct costs and related overheads. If the extended life cycle of a product does
not materialize or if there is no reasonable certainty that product maturation
will take place within the near future, write-offs of work-in-process inventory
would be required. Such write-offs could materially adversely affect the
Company's gross profit and results of operations.
Certain of the purchase orders or contracts comprising backlog at March 31,
1998 set forth product specifications not yet achieved by the Company that would
require the Company to complete additional product development. Failure to
develop products meeting such specifications could lead to the cancellation of
the related purchase orders or contracts. The reduction, delay or cancellation
of orders or contracts from one or more significant customers could materially
adversely affect the Company's business, financial condition and results of
operations.
There can be no assurances that gross profit will improve. If the Company
is not able to reduce its production costs to the extent anticipated, or to
introduce new products with greater margins, and if average selling prices
decline beyond current expectations, the Company's gross profit and results of
operations could be materially adversely affected. The Company's gross profit
may also be affected by a variety of other factors, including the mix of systems
and equipment sold; technical, production, reliability or quality problems; and
price competition.
General and Administrative Expenses. General and administrative expenses
increased slightly to $1.0 million in the first quarter of 1998 from $0.9
million in the first quarter 1997, representing 8.5% and 8.6%, respectively, of
net sales.
Selling Expenses. Selling expenses increased by 26% to $0.9 million in the
first quarter of 1998 from $0.7 million in the first quarter of 1997,
representing 7.9% and 7.1%, respectively, of net sales. The increase in selling
expenses resulted primarily from higher advertising and trade show expenses, and
higher sales representative commissions, the result of product sales mix
variations and higher overall sales volume.
Research and Development Expenses. Research and development expenses
increased by 118% to $1.4 million in the first quarter of 1998 from $0.6 million
in the first quarter of 1997, representing 12.3% and 6.5%, respectively, of net
sales. This increase resulted primarily from increased wireless
telecommunications product development and, to a much lesser extent, increased
military research and development. The Company believes that the continued
introduction of new products is essential to its competitiveness, especially in
the wireless telecommunications market, and is committed to continued investment
in research and development. The Company viewed the low level of wireless
telecommunications product development in the first quarter of 1997 as a short
term solution to assist in reducing costs to match reduced wireless revenue.
Fundamental to this effort was a planned temporary reallocation, in the first
quarter of 1997, of some of the Company's engineering and technology resources
to either revenue producing or customer-funded product development. This action
enabled the Company to leverage its other commercial and military product lines
while insuring a continued and focused emphasis on critical wireless
telecommunications development projects. The Company views the level of research
and development expenses incurred in the first quarter of 1998 to be more
indicative of a typical quarterly research and development expense for the
Company. As such, the Company anticipates experiencing this more typical
quarterly level throughout the balance of 1998.
Interest Expense. Interest expense remained relatively stable at $0.28
million in both the first quarters of 1998 and 1997.
Page 9
<PAGE>
Provision for Income Taxes. The Company's effective tax rate decreased to
10.7% in the first quarter of 1998 from 40.0% in the first quarter of 1997. The
effective tax rate for the first quarter of 1998 was favorably impacted by the
partial recovery of a previously reserved deferred tax asset as a result of the
Company's improved profitability position as compared to 1997. Without the
benefit of this change in the reserve, the effective tax rate for the first
quarter of 1998 would have been 40.0%. The Company will continue to assess its
reserved deferred tax asset each reporting quarter.
Liquidity and Capital Resources
In the fourth quarter of 1995, the Company successfully completed its IPO,
raising net proceeds to the Company of approximately $20.4 million from the
Company's sale of 2,875,000 shares of Common Stock, including the exercise of
the underwriters' over-allotment option. Since the IPO, the Company has financed
its operations and met its capital requirements through the following two
sources: (i) a credit facility and/or (ii) cash provided by operating
activities.
In February 1998, the Company entered into a loan agreement with IBJ
Schroder Business Credit Corporation ("IBJ") which provides for a $15.45 million
credit facility consisting of a revolving line of credit in the amount of $10.3
million, a term loan in the amount of $2.15 million and a $3.0 million capital
equipment ("Capex") loan facility. The revolving line of credit and both the
term loan and Capex loan bear interest at annual rates equal to the prime rate
plus 0.5% and the prime rate plus 0.75%, respectively. The credit facility
matures in February 2001 and automatically renews itself for one-year periods
thereafter, unless terminated by either the Company or IBJ. Aggregate borrowings
under the revolving line of credit are limited by a borrowing base, which is
calculated as the sum of 85% of eligible accounts receivable and 40% of eligible
raw materials and work-in-process inventories (with borrowings based on
aggregate eligible inventory limited to $6.0 million). The term loan requires a
monthly principal payment of $0.05 million. The revolver increases each month
commensurate with term loan repayments until a maximum revolving line of credit
of $12.0 million is reached. The Capex loan requires monthly principal payments
that are recalculated each month based on the prior month's Capex borrowings, if
any, amortized over 60 months. Capex loans borrowings must occur prior to
February 27, 1999. At March 31, 1998, the term loan balance was $2.1 million,
borrowings under the $3.0 million Capex facility were $0.9 million and
borrowings under the $10.35 million revolving line of credit were $5.7 million.
The credit facility is subject to customary covenants, including, among other
things, limitations with respect to incurring indebtedness, payment of dividends
and affiliate advances, and a provision for maintaining a certain fixed charge
coverage ratio.
Operating activities used net cash of $0.03 million and $2.8 million in the
first three months of 1998 and 1997, respectively. From December 31, 1997 to
March 31, 1998, inventory increased by $1.5 million, accounts payable, accrued
liabilities and customer advance payments increased by $0.1 million and accounts
receivable decreased by $0.7 million. The increase in inventory was primarily
due to an increase in work-in-process inventory for wireless telecommunications
products and an increase in net inventory on a U.S. government military program.
The increase in accounts payable, accrued liabilities and customer advance
payments was primarily the result of the Company's cash management system which
created a more favorable float situation at March 31, 1998 (i.e.: checks in
vendors hands but not yet cleared) as compared to year end 1997, almost entirely
offset by first quarter 1998 continuing use of an advance payment received in
the fourth quarter of 1997 from a foreign military OEM and a smaller first
quarter 1998 payroll and related benefits accrual as compared to year end 1997.
The decrease in accounts receivable was primarily due to the lower sales for the
first quarter of 1998 as compared to the fourth quarter of 1997. Investing
activities, which consisted primarily of equipment acquisitions, used net cash
of $0.1 million and $0.06 million in the first three months of 1998 and 1997,
respectively. Financing activities, which consisted primarily of proceeds from
long-term debt, principal payments of long-term debt and net repayments made on
the revolving line of credit, provided net cash of $ 0.06 million and $2.3
million in the first three months of 1998 and 1997, respectively.
Capital expenditures were $0.1 million and $0.06 million in the first three
months of 1998 and 1997, respectively. These expenditures were funded primarily
through cash provided by beginning of year cash balances and the Company's
credit facility. Principal expenditures for the first three months of 1998
included engineering and
Page 10
<PAGE>
manufacturing test equipment and enhancements to the Company's CAE/CAD systems.
The Company anticipates making additional capital expenditures of approximately
$1.9 million during the remainder of 1998, including the purchase of additional
engineering and manufacturing test equipment, computer equipment upgrades,
continued enhancements to its CAE/CAD systems and the purchase of a second
automated surface-mount pick-n-place machine. It is anticipated that capital
expenditures for 1998 will be financed by the Company's credit facility, cash
provided by operating activities and/or third party financing sources.
As of March 31, 1998, the Company had working capital of approximately
$18.7 million, compared to approximately $18.2 million as of December 31, 1997.
Working capital as of March 31, 1998 included approximately $7.6 million and
$18.5 million in accounts receivable and inventory, respectively compared to
December 31, 1997 working capital which included approximately $8.3 million and
$16.9 million in accounts receivable and inventory, respectively. The Company's
current ratio (ratio of current assets to current liabilities) as of both March
31, 1998 and December 31, 1997 was 2.8:1. As of both March 31, 1998 and December
31, 1997, the Company's debt to equity ratio was 0.7:1.
The Company believes that cash generated from operations, amounts available
under its credit facility, and/or other third party financing will be sufficient
to fund necessary capital expenditures and to provide adequate working capital
for at least the next 12 months. There can be no assurance, however, that the
Company will not require additional financing prior to such date to fund its
operations, and, if required, that such financing will be available on
commercially reasonable terms. In addition, the Company may require additional
financing after such date to fund its operations.
The majority of any Year 2000 issues have already been addressed by the
Company. In 1997, the Company's business and computing system was upgraded and
is now Year 2000 "friendly" (according to the Company's software providers). The
remaining efforts for the Company, all of which are scheduled for 1998, include
certain personal computer applications and Windows 95 upgrades. These efforts
are not expected to require a significant financial expense for the Company.
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings
The Chapter 7 bankruptcy trustee (the "Trustee") for Pinpoint
Communications, Inc. ("Pinpoint"), a former customer of the Company, has filed
an amended complaint in the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division, dated April 16, 1998, objecting to the
Company's claim for $0.6 million in unpaid contract obligations and asserting a
counterclaim for the return of $0.5 million that Pinpoint paid to the Company
under the terms of the purchase agreement between the parties. The Company has
answered the Trustee's amended complaint and is defending against the Trustee's
claims and counterclaim.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27.1 Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ending March 31,
1998.
Page 11
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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 thereunto duly authorized.
MICROWAVE POWER DEVICES, INC.
(Registrant)
Dated: May 8, 1998 /s/ Edward J. Shubel
----------------------------- --------------------
By: Edward J. Shubel
President and CEO
Dated: May 12, 1998 /s/ Paul E. Donofrio
----------------------------- --------------------
By: Paul E. Donofrio
Vice President Finance/CFO
(Principal Financial and
Accounting Officer)
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
financial statements found on the Quarterly Report on Form 10-Q, March 31, 1998,
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 607
<SECURITIES> 0
<RECEIVABLES> 7,673
<ALLOWANCES> 75
<INVENTORY> 18,451
<CURRENT-ASSETS> 29,249
<PP&E> 13,081
<DEPRECIATION> 5,003
<TOTAL-ASSETS> 42,196
<CURRENT-LIABILITIES> 10,541
<BONDS> 12,523
0
0
<COMMON> 104
<OTHER-SE> 19,028
<TOTAL-LIABILITY-AND-EQUITY> 42,196
<SALES> 11,439
<TOTAL-REVENUES> 11,439
<CGS> 7,680
<TOTAL-COSTS> 7,680
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 276
<INCOME-PRETAX> 205
<INCOME-TAX> 22
<INCOME-CONTINUING> 183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
