UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission File Number 0-11057
VICON FIBER OPTICS CORP.
(Exact name of small business issuer as specified in its
charter)
Delaware 13-
2615925 .
(State of Incorporation) (IRS Employer
Identification No)
90 Secor Lane, Pelham Manor, NY 10803
(Address of principal executive offices)
Issuer's telephone number (914) 738-5006
Check whether the issuer (1)filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act 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
The number of shares outstanding of each of the issuers classes
of common equity, as the latest practicable date is:
Common Stock, $.01 par value, 8,515,636 Shares outstanding at
June 30,1996
PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 1996
VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
JUNE 30, 1996
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of June 30, 1996
and December 31, 1995 1-2
Statements of Operations For the Three and
Six Months Ended June 30, 1996 and 1995 3
Statements of Cash Flows For the Six
Months Ended June 30, 1996 and 1995
4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations
6
PART II
Item 1-6 not applicable 6
VICON FIBER OPTICS CORP.
BALANCE SHEETS
ASSETS
JUNE 30,1996 DEC. 31, 1995
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents
$1,016,757 $ 858,681
Accounts receivable - net of
allowance for uncollectible
accounts
536,342 621,499
Inventories (Note 2)
745,131 669,830
Prepaid expenses and other
current assets
5,332 19,295
Total Current Assets
2,303,562 2,169,305
PROPERTY, PLANT AND EQUIPMENT -
net of accumulated depreciation
and amortization
363,563 95,848
OTHER ASSETS:
Deferred income taxes
2,126 92,649
Excess of cost over net assets of
businesses acquired
302,898 308,960
Deposits
4,487 109,559
Investment in joint venture
26,515 26,515
Cash surrender value of life insurance contract
39,027 33,827
Total Other Assets
375,053 571,510
TOTAL ASSETS
$ 3,042,178 $ 2,836,663
See Notes To Financial Statements
1
VICON FIBER OPTICS CORP.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
JUNE 30, 1996 DEC. 31, 1995
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $
227,041 $ 194,572
Income taxes payable
34,306 33,586
Current portion of long-term debt
29,212 29,212
Total Current Liabilities
290,559 257,370
LONG-TERM DEBT
413,780 424,225
TOTAL LIABILITIES
704,339 681,595
SHAREHOLDERS' EQUITY:
Common stock - authorized
20,000,000 shares, $.01 par value,
issued and outstanding 8,515,636 shares
85,156 83,406
Additional paid-in capital
5,959,171 5,925,921
Deficit
(3,706,488) (3,854,259)
Total Shareholders' Equity
2,337,839 2,155,068
TOTAL LIABLIITIES AND SHAREHOLDERS' EQUITY $ 3,042,178
$ 2,836,663
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30
JUNE 30 .
1996
1995 1996 1995
SALES $678,481
$723,929 $1,337,140 $1,283,524
COST OF GOODS SOLD 387,114 416,889
756,665 716,029
GROSS MARGIN 291,367
307,040 580,475 567,495
OTHER COSTS (INCOME) AND EXPENSES:
Selling, general and
administrative expenses 152,631
114,497 307,617 235,409
Research and development 12,430
3,420 28,766 3.420
Interest expense
14,701 15,464 29,598 16,845
Interest income ( 13,001)
(14,141) ( 24,520) (25,853)
TOTAL OTHER COSTS (INCOME) AND EXPENSES 166,761 119,240 341,461
229,821
INCOME BEFORE PROVISION FOR INCOME
TAXES 124,606
187,800 239,014 337,674
PROVISION FOR INCOME TAXES (Note 3) 47,555 67,230
91,243 116,600
NET INCOME $ 77,051
$120,570 $147,771 $221,074
INCOME PER COMMON SHARE:
NET INCOME $ .01
$ .02 $ .02 $ .03
AVERAGE NUMBER OF SHARES
USED IN COMPUTATION 8,643,353 8,340,636
8,493,855 8,340,636
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
$ 147,771 $ 221,074
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization
24,562 18,462
(Increase) decrease in accounts
receivable
85,157 ( 130,376)
(Increase) decrease in inventory
( 75,301) ( 111,256)
(Increase) decrease in prepaid
expenses and other current assets
13,963 8,587
Increase (decrease) in accounts
payable and accrued expenses
32,469 ( 47,649)
Decrease in deferred income taxes
90,523 121,769
Capital stock issued for expenses
35,000 --
Increase (decrease)in income taxes payable
720 ( 19,699)
Total Adjustments
207,093 ( 155,162)
Net Cash Provided By
Operating Activities
354,864 65,912
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment (
286,215) ( 2,485)
Decrease in deposits
105,072
Increase in cash surrender value of
life insurance contract
( 5,200) ( 5,200)
Net Cash (Used In) Investing Activities (
186,343) ( 7,685)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt
( 10,445) ( 226,362)
Net Cash Provided By (used in)
Financing Activities
( 10,445) ( 226,362)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
158,076 ( 168,135)
CASH AND CASH EQUIVALENTS - Beginning 858,681
1,020,910
CASH AND CASH EQUIVALENTS - End $1,016,757
$ 852,775
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30
1996 1995
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$29,598 $35,268
Income taxes
$ -- $ 9,584
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim
financial statements of Vicon Fiber Optics Corp. (the Company)
contain all adjustments necessary to present fairly the Company's
financial position as of June 30, 1996 and December 31, 1995 and
the results of operations and cash flows for the six months
ended June 30, 1996 and 1995.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements included in its
Annual Report on Form 10-KSB for the year ended December 31,
1995, which is incorporated herein by reference.
NOTE 2 - INVENTORIES
The composition of inventories is:
JUNE 30, 1996
DEC. 31, 1995
(Unaudited)
Raw materials $ 559,114 $
416,076
Work-in-process 61,409
119,651
Finished goods 124,608
36,515
$ 745,131
$572,242
NOTE 3 - INCOME TAXES
Investment tax credits are applied, if available, as a reduction
of income tax expense. Net operating loss carryforwards are
available to the Company in the approximate amount of $465,000
expiring in years through 2006.
ITEM 2 -Management's Discussion and Analysis of Financial
Condition and Results of Operations
Net Sales
Net sales for the six months ended June 30, 1996 compared to
the same period in 1995 increased by $53,616. Management
attributes this to increased purchases by the dental profession
of dental equipment containing fiber optic components amounting
to $25,829 and to an increase in sales of the Company's Fantasia
line of fiber optic decorative lamps of $27,787.
Cost of Sales
Cost of sales for the six months ended June 30, 1996 increased
to 57% as compared to 56% for the same period in 1995.
Management attributes this increase to a larger segment of sales
coming from lower margin products.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six
months ended June 30, 1996 increased to $307,617 from $235,409
for the six months ended June 30, 1995. Management attributes
this to increased marketing and public relations expenses and to
payment of salary incentives in the form of common stock to key
employees.
Research and Development
Research and development represents expenditures for the
creation of new products and manufacturing techniques. The
increase in this expense for the six months ended June 30, 1996
compared to 1995 is a result of the expenditures commencing in
the second quarter of 1995. Research and development expenses
for 1995 were not segregated and have been reclassified in order
to reflect comparative presentation with 1996 information.
Interest Expense
Interest expense increased to $29,598 for the six months ended
June 30, 1996 from $16,845 for the six months ended June 30,
1995. This was the result of the settlement of a long-term debt
in 1995 which included the forgiveness and reversal of accrued
interest payable in the amount of $20,822.
Financial Condition of the Company The Company gauges its
liquidity and financial stability by the measurements as shown in
the following table:
June 30 December 31
1996 1995
(Unaudited)
Working capital $2,013,003 $1,515,510
Current ratio 7.93 to 1 5.99 to 1
Shareholders' equity $2,337,839 $ 1,590,425
Related Party Transactions
On March 20, 1996, the Company issued 175,000 restricted
shares of common stock to certain key employees and a consultant
of the Company in lieu of compensation.
Due to the restrictions and non-marketability of the shares
issued, the value of the stock and the corresponding compensation
were recorded at a value of $35,000 ($.20/share). Net income for
the period reflects a charge against income for the $35,000 of
compensation.
Also on March 20, 1996, the Company granted, to certain key
employees and a consultant, options to purchase 235,000 shares of
the Company's common stock @ $.875. These options are due to
expire between 3/20/01 and 3/20/06.
PART II
Items 1-6 not applicable.
Item 6 - COMPUTATION OF EARNINGS PER SHARE (UNAUDITED) EXHIBIT 11
Three Months
ended Six Months Ended
June 30
_____June 30___
1996
1995 1996 1995
Primary:
Average shares outstanding 8,515,636 8,340,636
8,438,713 8,340,636
Net effect of dilutive stock
options-based on the
treasury stock method
using market price 127,717 --
55,142 --_____
TOTALS 8,643,353 8,340,636
8,493,855 8,340,636
Net income $ 77,051 $ 120,570
$ 147,771 $ 221,074
Per share amount $.01 $.02
$.02 $.03
SIGNATURE
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.
VICON FIBER OPTICS CORP.
(Registrant)
Date:August 10, 1995 /s/Leonard Scrivo
LEONARD SCRIVO,
President, Chief Executive
Officer and Chief Financial
Officer
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