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 March 31, 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, 8,340,636 Shares outstanding at
March 31,1996
PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1996
VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
MARCH 31, 1996
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of March 31, 1996
and December 31, 1995 1-2
Statements of Operations For the Three
Months Ended March 31, 1996 and 1995 3
Statements of Cash Flows For the Three
Months Ended March 31, 1996 and 1995
4-5
Notes to Financial Statements
6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations
6-7
PART II
Item 1-5 not applicable 8
Item 6 Computation of earnings per share
8
VICON FIBER OPTICS CORP.
BALANCE SHEETS
ASSETS
March 31,1996 DEC. 31, 1995
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents
$ 993,848 $ 858,681
Accounts receivable - net of
allowance for uncollectible
accounts
447,862 621,499
Inventories (Note 2)
735,410 669,830
Prepaid expenses and other
current assets
12,008 19,295
Total Current Assets
2,189,128 2,169,305
PROPERTY, PLANT AND EQUIPMENT -
net of accumulated depreciation
and amortization
105,808 95,848
OTHER ASSETS:
Deferred income taxes
49,347 92,649
Excess of cost over net assets of
businesses acquired
305,929 308,960
Deposits
167,977 109,559
Investment in joint venture
26,515 26,515
Cash surrender value of life insurance contract
36,427 33,827
Total Other Assets
586,195 571,510
TOTAL ASSETS
$ 2,881,131 $2,836,663
LIABILITIES AND SHAREHOLDERS' EQUITY
MARCH 31, 1996 DEC. 31, 1995
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued expenses
138,062 194,572
Income taxes payable
33,972 33,586
Current portion of long-term debt
29,212 29,212
Total Current Liabilities
201,246 257,370
LONG-TERM DEBT
419,097 424,225
TOTAL LIABILITIES
620,343 681,595
CAPITAL SUBSCRIBED
35,000 --
SHAREHOLDERS' EQUITY:
Common stock - authorized
20,000,000 shares, $.01 par value,
issued and outstanding 8,340,636
83,406 83,406
Additional paid-in capital
5,925,921 5,925,921
Deficit
(3,783,539) (3,854,259)
Total shareholders' equity
2,225,788 2,155,068
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,881,131
$ 2,836,663
VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
1996 1995
SALES
$658,659 $559,595
COST OF GOODS SOLD
369,551 299,640
GROSS MARGIN
289,108 259,955
OTHER COSTS (INCOME) AND EXPENSES:
Selling, general and administrative expenses
154,986 120,912
Research and development
16,336 --
Interest expense
14,897 1,381
Interest income
( 11,519) ( 11,712)
TOTAL OTHER COSTS (INCOME) AND EXPENSES 174,700
110,581
INCOME BEFORE PROVISION FOR INCOME TAXES 114,408
149,374
PROVISION FOR INCOME TAXES (Note 3)
43,688 49,370
NET INCOME
$ 70,720 $100,004
INCOME PER COMMON SHARE:
NET INCOME
.01 $ 01
AVERAGE NUMBER OF SHARES
USED IN COMPUTATION
8,367,471 8,340,636
VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
$ 70,720 $ 100,004
Adjustments for noncash items
included in net income:
Depreciation and amortization
9,531 9,231
(Increase) decrease in accounts
receivable
173,637 1,397
(Increase) decrease in inventory
( 65,580) ( 97,666)
(Increase) decrease in prepaid
expenses and other current assets
7,287 4,567
Increase (decrease) in accounts
payable and accrued expenses
( 56,510) 41,161
Decrease in deferred income taxes
43,302 57,726
Capital stock subscribed for expenses
35,000 --
Increase(decrease) in income taxes payable
386 ( 17,941)
Total Adjustments
147,053) ( 4,125)
Net Cash Provided (Used) By
Operating Activities
217,773 95,879)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment
(74,878) --
(Increase) in cash surrender value of life insurance (
2,600) --
Net Cash (Used in) Financing Activities
(77,478) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt
5,128 218,442
Net Cash Provided By (Used In)
Financing Activities
( 5,128) (218,442)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
135,167 (122,563)
CASH AND CASH EQUIVALENTS - Beginning 858,681
1,020,910
CASH AND CASH EQUIVALENTS - End $ 993,848
$ 898,347
VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
1996 1995
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$11,372 $16,304
Income taxes
$ --- $ 9,584
On March 20, 1996, the Company subscribed to issue shares of
common stock. The transaction was accounted for as follows:
Increase in capital subscribed
$35,000
Increase in cost of goods sold
( 4,000)
Increase in research and development
( 4,000)
Increase in selling, general and administrative expenses
(27,000)
$ ------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996
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 March 31, 1996 and December 31, 1995 and
the results of operations and cash flows for the three
months ended March 31, 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:
MARCH 31, 1996 DEC.
31, 1995
(Unaudited)
Raw materials $ 586,049 $
554,032
Work-in-process 34,677
19,588
Finished goods 114,684
96,210
$ 735,410
$ 669,830
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 through 2005.
ITEM 2 -Management's Discussion and Analysis of
Financial Condition and Results of Operations
Net Sales
Net sales for the three months ended March 31,
1996 compared to the same period in 1995 increased by
$99,064. Management attributes this to increased demand
in the marketplace for the Company's products.
Cost of Sales
Cost of sales for the three months ended March 31,
1996 increased to 56% as compared to 54% for the same
period in 1995. Management attributes this increase
principally to a general inflationary rise in the cost
of goods and services.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the
three months ended March 31, 1996 increased to $154,986
from $120,912 for the three months ended March 31,
1995. Management attributes this to increased expenses
necessary to administer the additional sales and to
payment of salary incentives in the form of common
stock to key employees.
Interest Expense
Interest expense increased to $14,897 for the
three months ended March 31, 1996 from $1,381 for the
three months ended March 31, 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:
March 31
December 31
1996
1995
(Unaudited)
Working capital $1,987,882
$1,911,935
Current ratio 10.88 to 1
8.43 to 1
Shareholders' equity $2,225,788
$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 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 1-5 not applicable.
Item 6 - COMPUTATION OF EARNINGS PER SHARE (UNAUDITED) EXHIBIT
11
Three Months Ended March 31,
1996 1995
Primary:
Average shares outstanding 8,361,790
8,340,636
Net effect of dilutive stock
options-based on the
treasury stock method using
average market price
5,681 --____
TOTALS
8,367,471 8,340,636
Net Income $
70,720 $ 100,004
Per share amount
$.01 $.01
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:May 15, 1995 /s/Leonard Scrivo _
LEONARD SCRIVO,
President, Chief Executive
Officer and Chief Financial
Officer
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<RECEIVABLES> 447,862
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0
0
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<TOTAL-COSTS> 369,551
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