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 September 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
September 30,1996
PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1996
VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
SEPTEMBER 30, 1996
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of September 30, 1996
and December 31, 1995 1-2
Statements of Operations For the Three and
Nine Months Ended September 30, 1996 and 1995 3
Statements of Cash Flows For the Nine
Months Ended September 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 1-5 not applicable, Item 6 7
VICON FIBER OPTICS CORP.
BALANCE SHEETS
ASSETS
SEPTEMBER 30,1996 DEC. 31, 1995
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents
$ 988,020 $ 858,681
Accounts receivable - net of
allowance for uncollectible accounts
486,762 621,499
Inventories (Note 2)
1,029,201 669,830
Prepaid expenses and other
current assets
3,803 19,295
Total Current Assets
2,507,786 2,169,305
PROPERTY, PLANT AND EQUIPMENT -
net of accumulated depreciation
and amortization
383,514 95,848
OTHER ASSETS:
Deferred income taxes
- -- 92,649
Excess of cost over net assets of
businesses acquired
299,867 308,960
Investment in joint venture
26,515 26,515
Deposits
4,487 109,559
Cash surrender value of life insurance contract
43,900 33,827
Total Other Assets
374,769 571,510
TOTAL ASSETS
$ 3,266,069 $ 2,836,663
See Notes To Financial Statements
1
VICON FIBER OPTICS CORP.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
SEPTEMBER 30, 1996 DEC. 31, 1995
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $
275,031 $ 194,572
Income taxes payable
93,237 33,586
Current portion of long-term debt
29,212 29,212
Total Current Liabilities
397,480 257,370
LONG-TERM DEBT
408,248 424,225
TOTAL LIABILITIES
805,728 681,595
SHAREHOLDERS' EQUITY:
Common stock - authorized
20,000,000 shares, $.01 par value,
issued and outstanding 8,515,636 shares
and 8,340,636 respectively
85,156 83,406
Additional paid-in capital
5,961,121 5,925,921
Deficit
(3,585,936) (3,854,259)
Total Shareholders' Equity
2,460,341 2,155,068
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,266,069
$ 2,836,663
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
NINE MONTHS ENDED
SEPTEMBER 30
SEPTEMBER 30 .
1996
1995 1996 1995
SALES $752,190
$602,862 $2,089,330 $1,886,386
COST OF GOODS SOLD 383,068 335,091
1,164,733 1,051,120
GROSS MARGIN 369,122
267,771 924,597 835,266
OTHER COSTS (INCOME) AND EXPENSES:
Selling, general and
administrative expenses 150,162
114,037 457,779 349,446
Research and development 10,419
10,052 39,185 13,472
Interest expense
14,616 12,428 44,214 29,273
Interest income ( 12,684)
( 12,185) ( 37,204) (38,038)
TOTAL OTHER COSTS (INCOME) AND EXPENSES 162,513 124,332
503,974 354,153
INCOME BEFORE PROVISION FOR INCOME
TAXES 206,609
143,439 420,623 481,113
PROVISION FOR INCOME TAXES (Note 3) 69,557 58,300
152,300 174,900
INCOME BEFORE EXTRAORDINARY ITEM 137,052 85,139
268,323 306,213
EXTRAORDINARY ITEM:
Forgiveness of debt(Net of income
taxes of $15,386) --
30,161 -- 30,161
NET INCOME $137,052
$115,300 $268,323 $336,374
INCOME PER COMMON SHARE:
Income before extraordinary item .01
.01 .03 .04
Extraordinary Item --
- -- -- -- .
NET INCOME $ .01
$ .01 $ .03 $ .04
AVERAGE NUMBER OF SHARES
USED IN COMPUTATION 8,557,107 8,340,636
8,523,691 8,340,636
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
$ 268,323 $ 336,374
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization
39,593 27,693
(Increase) decrease in accounts
receivable
134,747 ( 78,022)
(Increase) decrease in inventory
( 359,371) ( 88,711)
(Increase) decrease in prepaid expenses
and other current assets
15,492 ( 9,698)
Increase (decrease) in accounts
payable and accrued expenses
80,459 ( 12,880)
Decrease in deferred income taxes
92,649 192,693
Capital stock issued for expenses
35,000 --
Increase (decrease)in income taxes payable
59,651 ( 14,963)
Total Adjustments
98,220 16,112
Net Cash Provided By
Operating Activities
366,543 352,486
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment
(317,976) ( 63,990)
Decrease in deposits
105,072
Increase in cash surrender value of
life insurance contract
( 10,073) ( 7,800)
Issuance of stock option for cash
1,750 _--__
Net Cash (Used In) Investing Activities
(221,227) ( 71,790)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt
( 15,977) (344,469)
Net Cash Provided By (used in)
Financing Activities
( 15,977) ( 344,469)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
129,339 ( 63,773)
CASH AND CASH EQUIVALENTS - Beginning
858,681 1,020,910
CASH AND CASH EQUIVALENTS - End $
988,020 $ 957,137
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
1996 1995
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$40,689 $47,007
Income taxes
$ -- $12,312
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 September 30, 1996 and December 31, 1995
and the results of operations and cash flows for the nine months
ended September 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:
SEPTEMBER
30, 1996 DEC. 31, 1995
(Unaudited)
Raw materials $332,419
$ 554,032
Work-in-process 187,545
19,588
Finished goods 509,237
96,210
$1,029,201 $ 669,830
NOTE 3 - INCOME TAXES
Investment tax credits are applied, if available, as a reduction
of income tax expense.
ITEM 2 -Management's Discussion and Analysis of Financial
Condition and Results of Operations
Net Sales
Net sales for the nine months ended September 30, 1996
compared to the same period in 1995 increased by $202,944.
Management attributes this to increased purchases by the dental
profession of dental equipment containing fiber optic components
amounting to $28,126 and to an increase in sales of the Company's
Fantasia line of fiber optic decorative lamps of $174,818.
Cost of Sales
Cost of sales for the nine months ended September 30, 1996 was
56%, the same as it was for the same period in 1995. Management
attributes this to consistent manufacturing costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the nine
months ended September 30, 1996 increased to $457,779 from
$349,446 for the same period in 1995. Management attributes this
increased marketing and public relations expenses and to issuance
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 to $39,185 for the nine months ended
September 30, 1996 compared to $13,472 in 1995 is a result of the
expenditures commencing in the second quarter of 1995. Research
and development expenses were not segregated in the 1995
financial statements and have been reclassified in order to
reflect comparative presentation with 1996 information.
Financial Condition of the Company The Company gauges its
liquidity and financial stability by the measurements as shown in
the following table:
September 30
December 31
1996
1995
(Unaudited)
Working capital $2,110,306
$1,911,935
Current ratio 6.31 to 1
8.43 to 1
Shareholders' equity $2,460,341 $
2,155,068
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 for $35,000 for the 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 6., Exhibit 11
VICON FIBER OPTICS CORP.
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
Primary:
Average shares outstanding
8,464,541 8,340,636
Net effect of dilutive stock options -
based on the treasury stock
method using average market price
59,150 --____
TOTALS
8,523,691 8,340,636
Net Income
$ 268,323 $ 336,374
Per share amount
$.03 $.04
SIGNATURES
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:November 15, 1995 /s/Leonard Scrivo .
LEONARD SCRIVO,
President, Chief Executive
Officer and Chief Financial
Officer
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