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, 1997
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 30,1997
PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 1997
VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
JUNE 30, 1997
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of June 30, 1997
and December 31, 1996
1-2
Statements of Operations For the Three and
Six Months Ended June 30, 1997 and 1996
3
Statements of Cash Flows For the Six
Months Ended June 30, 1997 and 1996
4-5
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 30,1997 DEC. 31, 1996
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents
$ 854,581 $ 1,049,186
Accounts receivable - net of
allowance for uncollectible accounts
520,855 411,627
Inventories (Note 2)
1,160,793 983,094
Prepaid expenses and other
current assets
1,294 14,459
Deferred income taxes
36,679 33,040
Total Current Assets
2,574,202 2,491,406
PROPERTY, PLANT AND EQUIPMENT -
net of accumulated depreciation
and amortization
412,165 399,001
OTHER ASSETS:
Excess of cost over net assets of
businesses acquired
290,807 296,847
Deposits
4,487 4,487
Investment in joint venture
26,515 26,515
Cash surrender value of life insurance contract
53,329 46,286
Total Other Assets
375,138 374,135
TOTAL ASSETS
$ 3,361,505 $ 3,264,542
See Notes To Financial Statements
1
VICON FIBER OPTICS CORP.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
JUNE 30, 1997 DEC. 31, 1996
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $
206,787 $ 118,852
Income taxes payable
75,429 151,133
Current portion of long-term debt
166,202 166,202
Total Current Liabilities
448,418 436,187
LONG-TERM DEBT
245,891 258,023
Deferred income tax payable
43,000 35,011
TOTAL LIABILITIES
737,309 729,221
SHAREHOLDERS' EQUITY:
Common stock - authorized
20,000,000 shares, $.01 par value,
issued and outstanding 8,515,636 shares
85,156 85,156
Additional paid-in capital
5,962,171 5,960,921
Deficit
(3,423,131) (3,510,756)
Total Shareholders' Equity
2,624,196 2,535,321
TOTAL LIABLIITIES AND SHAREHOLDERS' EQUITY $ 3,361,505
$ 3,264,542
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30
JUNE 30 .
1997
1996 1997 1996
SALES $745,397
$678,481 $1,308,699 $1,337,140
COST OF GOODS SOLD 431,144 412,114
753,441 781,665
GROSS MARGIN 314,253
266,367 555,258 555,475
OTHER COSTS (INCOME) AND EXPENSES:
Selling, general and
administrative expenses 201,206
152,631 375,428 307,617
Research and development 22,976
12,430 34,971 28,766
Interest expense
13,846 14,701 28,021 29,598
Interest income ( 12,426)
( 13,001) ( 24,433) (24,520)
TOTAL OTHER COSTS (INCOME) AND EXPENSES 225,602 166,761 413,987
341,461
INCOME BEFORE PROVISION FOR INCOME
TAXES 88,651
99,606 141,271 214,014
PROVISION FOR INCOME TAXES (Note 3) 29,800 39,055
53,646 82,743
NET INCOME $ 58,851 $
60,551 $ 87,625 $131,271
INCOME PER COMMON SHARE:
NET INCOME $ .01
$ .01 $ .01 $ .02
AVERAGE NUMBER OF SHARES
USED IN COMPUTATION 8,637,400 8,515,636
8,686,503 8,515,636
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
$ 87,625 $ 131,271
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization
32,040 24,562
(Increase) decrease in accounts receivable (
109,228) 85,157
(Increase) decrease in inventory
(177,699) ( 50,301)
(Increase) decrease in prepaid
expenses and other current assets
13,165 13,963
(Increase) decrease in deferred income taxes (
3,639) 82,023
Increase (decrease) in accounts
payable and accrued expenses
87,935 32,469
Increase in deferred income taxes payable
7,989
Capital stock issued for expenses
- -- 35,000
Increase (decrease)in income taxes payable
(75,704) 720
Total Adjustments
(225,141) 223,593
Net Cash Provided By (uses by)
Operating Activities
(137,516) 354,864
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment (
39,164) ( 286,215)
Increase in cash surrender value of
life insurance contract
( 7,043) ( 5,200)
Net Cash (Used In) Investing Activities (
46,207) ( 186,343)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt
( 12,132) ( 10,445)
Issuance of stock warrants
1,250 --___
Net Cash Provided By (used in)
Financing Activities
( 10,882) ( 10,445)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (
194,605) 158,076
CASH AND CASH EQUIVALENTS - Beginning 1,049,186
858,681
CASH AND CASH EQUIVALENTS - End $ 854,581
$1,016,757
See Notes To Financial Statements
VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30
1997 1996
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$ 24,496 $29,598
Income taxes
$125,000 $ --___
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30,1997
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, 1997 and December 31, 1996 and
the results of operations and cash flows for the six months
ended June 30, 1997 and 1996.
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,
1996, which is incorporated herein by reference.
NOTE 2 - INVENTORIES
The composition of inventories is:
JUNE 30, 1997
DEC. 31, 1996
(Unaudited)
Raw materials $ 781,501
$ 649,331
Work-in-process 142,469
39,480
Finished goods 236,823
294,283
$1,160,793
$983,094
NOTE 3 - INCOME TAXES
Under the provisions of SFAS 109 the Company recognizes
deferred tax assets and liabilities for future tax consequences
of events that have been previously recognized in the financial
statements of income tax returns.
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, 1997 compared to
the same period in 1996 decreased by $28,441. Management
attributes this to decreased purchases by the dental industry of
dental equipment containing Vicon's fiber optic components.
Cost of Sales
Cost of sales for the six months ended June 30, 1997 were
consistent with the same period in 1996.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six
months ended June 30, 1997 increased to $375,428 from $307,617
for the six months ended June 30, 1996. Management attributes
this to increased marketing and selling expenses.
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
1997
1996
(Unaudited)
Working capital $2,125,784
$2,055,219
Current ratio 5.74 to 1
5.71 to 1
Shareholders' equity $2,624,196 $ 2,535,321
PART II
Items 1-5 not applicable.
Item 6., Exhibit 11:
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Primary:
Average shares outstanding 8,515,636
8,515,636 8,515 636 8,515,636
Net effect of dilutive stock options -
based on the treasury stock
method using average market price 121,764 --
170,867 --___
TOTALS 8,637,400
8,515,636 8,686,503 8,515,636
Net Income $ 58,851 $
60,551 $ 87,625 $ 131,271
Per share amount $ .01
$ .01 $ .01 $ .02
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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