UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30, 1996
Commission file number 0-10976
MICROWAVE FILTER COMPANY, INC.
(Exact name of registrant as specified in its charter.)
New York 16-0928443
(State of Incorporation) (I.R.S. Employer Identification Number)
6743 Kinne Street, East Syracuse, N.Y. 13057
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (315) 437-3953
Indicate by check mark whether 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 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 ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Stock, $.10 Par Value - 3,538,958 shares as of June
30, 1996.
<PAGE>
PART I. - FINANCIAL INFORMATION
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended Nine months ended
June 30 June 30
1996 1995 1996 1995
[S] [C] [C] [C] [C]
Net sales $1,877 $1,860 $5,829 $5,852
Cost of goods sold 1,171 1,215 3,591 3,925
------- ------- ------- -------
Gross profit 706 645 2,238 1,927
Selling, general and
administrative expenses 613 673 1,884 2,060
------- ------- ------- -------
Income (loss) from
operations 93 (28) 354 (133)
Other income (expense) 9 (3) 13 (6)
------- ------- ------- -------
Income (loss) before
income taxes 102 (31) 367 (139)
Provision (benefit)
for income taxes 35 (11) 127 (48)
------- ------- ------- -------
NET INCOME (LOSS) $67 ($20) $240 ($91)
======= ======= ======= =======
Earnings (loss) per share $0.02 ($0.01) $0.07 ($0.03)
======= ======= ======= =======
[FN]
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
JUNE 30, 1996 SEPTEMBER 30, 1995
(Unaudited)
[S] [C] [C]
Assets
Current Assets:
Cash and cash equivalents $ 1,208 $ 521
Accounts receivable-trade,net 647 879
Inventories 1,319 1,969
Prepaid expenses and other
current assets 211 215
-------- --------
Total current assets 3,385 3,584
Property,plant and equipment,net 1,525 1,625
Other assets 55 65
-------- --------
Total assets $ 4,965 $ 5,274
======== ========
Liabilities And Stockholders' Equity
Current liabilities:
Current portion of long term
debt $ 52 $ 147
Accounts payable 299 362
Customer deposits 170 282
Accrued federal and state
income taxes 151 43
Accrued payroll and related
expenses 85 91
Accrued compensated absences 231 183
Other current liabilities 98 83
-------- --------
Total current liabilities 1,086 1,191
-------- --------
Long term debt, less current
portion 117 440
Deferred compensation and
other liabilities 56 59
-------- --------
Total liabilities 1,259 1,690
-------- --------
Stockholders' Equity:
Common stock,$.10 par value 425 400
Additional paid-in capital 3,185 2,881
Retained earnings 734 940
-------- --------
4,344 4,221
Common stock in treasury,
at cost (638) (637)
-------- --------
Total stockholders' equity 3,706 3,584
-------- --------
Total liabilities and
stockholders' equity $ 4,965 $ 5,274
======== ========
[FN]
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
Three months ended Nine months ended
June 30 June 30
1996 1995 1996 1995
[S] [C] [C] [C] [C]
Cash flows from operating
activities:
Net income $ 67 $ (20) $ 240 $ (91)
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 84 100 251 299
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 59 315 233 346
Inventories 225 (206) 649 (352)
Prepaid expenses & other
assets 62 17 1 (29)
Increase (decrease) in:
Accounts payable & accrued
expenses 25 (102) (107) (86)
Deferred compensation &
other liabilities (1) (1) (4) (3)
------- ------- ------- -------
Net cash provided by
operating activities 521 103 1,263 84
------- ------- ------- -------
Cash flows from investing activities:
Capital expenditures (86) (19) (138) (107)
Cash flows from financing activities:
Principal payments on
long-term debt (248) (38) (320) (107)
Proceeds from sale of
common stock 6 7 51 43
Purchase of treasury
stock (1) (97)
Dividend paid (168)
------- ------- ------- -------
Net cash used in
financing activities (242) (31) (438) (161)
Increase (decrease) in cash
and cash equivalents 193 53 687 (184)
Cash and cash equivalents
at beginning of period 1,015 419 521 656
------- ------- ------- -------
Cash and cash equivalents
at end of period $1,208 $ 472 $1,208 $ 472
======= ======= ======= =======
[FN]
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
MICROWAVE FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1. Summary of Significant Accounting Policies
The accompanying financial statements, which should be read in conjunction
with the financial statements of Microwave Filter Company, Inc. ("the
Company") included in the 1995 Annual Report filed on Form 10-K, are
unaudited but have been prepared in the ordinary course of business for
the purpose of providing information with respect to the interim period.
The Company believes that all adjustments (none of which were other than
normal recurring accruals) necessary for a fair presentation for such
periods have been included.
Note 2. Earnings (loss) per share
Earnings (loss) per common share are calculated based upon the weighted
average number of shares of common stock outstanding during the periods
including, when significant, any common stock equivalents and after
restatement of any stock dividends. The weighted average number of shares
of common stock outstanding used for the computations were 3,520,194 for
the nine months and 3,535,786 for the three months ending June 30, 1996
and 3,475,280 for the nine months and 3,515,320 for the three months ending
June 30, 1995.
Note 3. Inventories
Inventories are stated at the lower of cost determined on the first-in,
first-out method or market.
Inventories consisted of the following:
June 30, September 30,
1996 1995
Raw materials and stock parts $ 711 $ 1,107
Work-in-process 220 394
Finished goods 388 468
------- -------
$ 1,319 $ 1,969
======= =======
<PAGE>
MICROWAVE FILTER COMPANY, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
JUNE 30, 1996
Net income increased $86,864 to $66,802 during the three months ended
June 30, 1996 when compared to a net loss of $20,062 during the same period
last year. Net income increased $331,357 to $240,361 during the nine months
ended June 30, 1996 when compared to a net loss of $90,996 during the same
period last year.
The increase in net income can primarily be attributed to the improvements
in gross profit and reductions in selling, general and administrative
expenses.
As a percentage of sales, gross profit increased to 37.6% during the three
months ended June 30, 1996 when compared to 34.7% during the same period
last year. Gross profit increased to 38.4% of sales during the nine months
ended June 30, 1996 when compared to 32.9% of sales during the same period
last year. These improvements can primarily be attributed to product sales
mix and the reduction in the manufacturing costs which were associated with
new product development in fiscal 1995.
Selling, general and administrative (SG&A) expenses decreased $59,873 or
8.9% to $612,814 during the three months ended June 30, 1996 when compared
to $672,687 during the same period last year. As a percentage of sales,
SG&A expenses decreased to 32.7% during the three months ended June 30,
1996 when compared to 36.2% during the same period last year. For the nine
months ended June 30, 1996, SG&A expenses decreased to 32.3% of sales
when compared to 35.2% during the same period last year.
For the three months and nine months ended June 30, 1996, net sales are
essentially identical when compared to the same periods last year. Net sales
increased $16,397 to $1,876,806 during the three months ended June 30, 1996
when compared to net sales of $1,860,409 during the same period last year.
For the nine months ended June 30, 1996, net sales are down $22,827 to
$5,829,309 when compared to net sales of $5,852,136 during the same period
last year.
Cash and cash equivalents increased $687,366 to $1,208,042 at June 30,
1996 when compared to $520,676 at September 30, 1995. The increase is a
result of $1,262,975 in net cash provided by operating activities, $137,571
in net cash used for capital expenditures and $438,038 in net cash used in
financing activities.
At June 30, 1996, the Company had available aggregate lines of credit
totaling $600,000. In addition, the Company has a Letter of Credit facility
available, for up to $500,000, which will be secured by specified inventory
being purchased.
Management believes that its working capital requirements for the forseeable
future will be met by its existing cash balances, future cash flows and its
current credit arrangements.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is unaware of any material threatened or pending
litigation against the Company.
Item 2. Changes in Securities
None during this reporting period.
Item 3. Defaults Upon Senior Securities
The Company has no senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
None during this reporting period.
Item 6. Exhibits and Reports on Form 8-K
None during this reporting period.
<PAGE>
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MICROWAVE FILTER COMPANY, INC.
August 14, 1996 Carl F. Fahrenkrug
(Date) --------------------------
Carl F. Fahrenkrug
Chief Executive Officer
August 14, 1996 Richard L. Jones
(Date) --------------------------
Richard L. Jones
Chief Financial Officer
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<S> <C>
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<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
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<COMMON> 425
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