<PAGE>
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, 2000
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 8,679,069 Shares outstanding at
June 30, 2000
<PAGE>
PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2000
<PAGE>
VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
JUNE 30, 2000
<TABLE>
<CAPTION> <CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements
Balance Sheets as of June 30, 2000 1-2
and December 31, 1999
Statements of Operations For the Three and 3
Six Months Ended June 30, 2000 and 1999
Statements of Cash Flows For the Six Months 4
Ended June 30, 2000 and 1999
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis 6
of Financial Condition and Results of Operations
PART II
Item 1-5 not applicable, Item 6 7
</TABLE>
<PAGE>
VICON FIBER OPTICS CORP.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION> <CAPTION>
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $378,651 $354,379
Accounts receivable - net of 471,737 652,971
allowance for doubtful accounts
Inventories (Note 2) 719,189 1,356,276
Prepaid expenses and other current 24,750 32,643
assets
Income tax refunds receivable 151,495 65,383
Deferred income taxes 200,890 51,626
---------- ----------
Total Current Assets 1,946,712 2,513,278
---------- ----------
PROPERTY, PLANT AND EQUIPMENT -
net of accumulated depreciation
and amortization 354,225 383,625
---------- ----------
OTHER ASSETS:
Excess of cost over net assets of
businesses acquired 254,567 260,607
Deposits 4,487 4,487
Investment in joint venture -- 26,515
Cash surrender value of life
insurance contract 101,287 96,027
---------- ----------
Total Other Assets 360,341 387,636
---------- ----------
TOTAL ASSETS: 2,661,278 $3,284,539
========== ==========
</TABLE>
See Notes To Financial Statements
<PAGE>
VICON FIBER OPTICS CORP.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION> <CAPTION>
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $199,821 $174,327
Income taxes payable -- 62,036
Current portion of long-term debt 78,170 102,006
----------- ----------
Total Current Liabilities 277,991 338,369
LONG-TERM DEBT 344,498 347,492
Deferred income tax payable 52,671 62,677
----------- ----------
TOTAL LIABILITIES 675,160 748,538
----------- ----------
SHAREHOLDERS' EQUITY:
Common stock - authorized 20,000,000
shares,
$.01 par value, issued and outstanding 86,790 86,790
8,679,069 shares
Additional paid-in capital 6,139,288 6,139,288
Deficit (4,183,710) (3,605,702)
Deferred stock incentive (56,250) (84,375)
---------- ----------
Total Shareholders' Equity 1,986,118 2,536,001
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' $2,661,278 $3,284,539
EQUITY
========== ==========
</TABLE>
See Notes To Financial Statements
<PAGE>
VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION> <CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUE
Sales $571,515 $498,149 $1,173,656 $1,006,370
Interest Income 4,450 1,226 8,633 2,446
TOTAL REVENUE 575,965 499,375 1,182,289 1,008,816
COSTS AND EXPENSES:
Cost of goods sold 484,221 302,930 910,771 611,985
Writedown of subnormal 551,811 551,811
inventory
Selling, general and 227,291 180,600 438,516 367,842
administrative expenses
Research and development 2,896 - 5,792 2,267
Interest expense 23,879 6,715 38,310 13,713
Provision for doubtful 32,510 -- 32,510 --
accounts
Loss on investment in joint
venture 26,515 -- 26,515 --
------- ------- ------- -------
TOTAL COSTS AND EXPENSES 1,349,123 186,092 2,004,225 381,379
INCOME (LOSS)BEFORE PROVISION (773,158) 9,127 (821,936) 13,006
FOR INCOME TAXES .
PROVISION FOR INCOME TAXES (233,518) 4,731 (243,923) 7,386
(Note 3)
------ ------ ------- -------
NET INCOME (LOSS) $(539,640) $4,396 $(578,013) $5,620
======== ======== ======== ========
INCOME(LOSS) PER COMMON SHARE: $(0.06) $0.00 $(0.07) $0.00
AVERAGE NUMBER OF SHARES USED 8,679,069 9,003,546 8,679,069 8,864,589
IN COMPUTATION
</TABLE>
See Notes to Financial Statements
<PAGE>
VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION> SIX MONTHS ENDED
JUNE 30
<S> <C> <C>
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $(578,013) $5,620
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 35,440 35,240
(Increase) decrease in accounts receivable 181,234 286,999
(Increase) decrease in inventory 637,087 (29,441)
(Increase) decrease in prepaid expenses and
other current assets 7,893 2,326
(Increase)in income tax refunds receivable (86,112) --
(Increase) decrease in deferred income taxes (149,264) 1,175
Increase (decrease) in accounts payable and
accrued expenses 25,494 (404,077)
Increase (decrease) in deferred income taxes
payable (10,006) 1,789
Increase (decrease) in income taxes payable (62,036) 4,422
-------- --------
Total Adjustments 579,730 (101,567)
-------- --------
Net Cash Provided (Used) By Operating Activities 1,717 (95,947)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment -- (18,938)
Increase in cash surrender value of
life insurance contract (5,260) (8,243)
Loss on investment in joint venture 26,515 --
-------- --------
Net Cash Provided by (Used In) Investing 21,255 (27,181)
Activities
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (50,086) (42,129)
Increase in long-term debt 23,261 317,528
Decrease in deferred stock incentive 28,125 28,125
-------- --------
Net Cash Provided By (used in) Financing
Activities 1,300 303,524
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 24,272 180,396
CASH AND CASH EQUIVALENTS - Beginning 354,379 254,580
--------- ---------
CASH AND CASH EQUIVALENTS - End $378,651 $434,976
======== ========
</TABLE>
See Notes to Financial Statements
<PAGE>
VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION> SIX MONTHS ENDED
JUNE 30
<S> <C> <C>
2000 1999
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $30,872 $13,713
------- -------
Income taxes 54,454 --
------- -------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2000
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,
2000 and December 31, 1999 and the results of operations and cash flows for the
six months ended June 30, 2000 and 1999.
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, 1999, which is incorporated herein by reference.
NOTE 2 - INVENTORIES
The composition of inventories is:
<TABLE>
<CAPTION> JUNE 30, 2000 DECEMBER 31, 1999
(Unaudited)
<S> <C> <C>
Raw Materials $509,063 $964,163
Work-in-process 64,850 57,665
Finished goods 145,276 334,448
---------- --------
$719,189 $1,356,276
========== ========
</TABLE>
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 or income tax returns.
<PAGE>
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, 2000 compared to the same
period in 1999 increased by $167,286. Management attributes this principally
to increased sales of the Company's fiber optic dental video components due to
greater demand by the Company's dental customers.
Cost of Goods Sold:
Cost of goods sold for the six months ended June 30, 2000 was 78%,
compared to 61% for the same period in 1999. Management attributes this to
increased costs of shipping Fantasia lamps from China by airfreight in order to
fulfill customer orders and also to overtime costs required to complete orders
for dental customers.
Writedown of subnormal inventory: During the first half of fiscal year
2000, the company discovered, during production, that approximately $194,000 of
glass was defective. While examining more of their inventory, they found it
necessary to discard an additional $90,000. Based on the discovery of the
large quantity of defective glass, the company revised its reserve for
obsolescence calculation resulting in a $267,000 increase. The combination of
the aforementioned events has been separately stated on the statement of income
under the caption "Writedown of subnormal inventory" so as not to distort the
true cost of goods sold.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six months ended June
30, 2000 increased to $432,248 from $367,842 for the same period in 1999.
Management attributes this predominantly to increases in professional fees,
investor relations fees and trade show expenses.
Financial Condition of the Company: The Company gauges its liquidity and
financial stability by the measurements as shown in the following table:
<TABLE>
<CAPTION> June 30 December 31
2000 1999
(Unaudited)
<S> <C> <C>
Working capital $1,668,721 $2,174,909
Current ratio 7.00 to 1 7.43 to 1
Shareholders' equity $1,986,118 $2,536,001
</TABLE>
PART II
Item 6, Exhibit 11
VICON FIBER OPTICS CORP.
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION> Three Months Ended Six Months Ended
June 30, June 30,
<S> <C> <C> <C> <C>
2000 1999 2000 1998
Basic:
Average shares outstanding 8,679,069 8,679,069 8,679,069 8,529,069
based on the treasury stock
method using average market
price -- 324,477 -- 185,520
--------- --------- --------- ---------
Diluted 8,679,069 9,003,546 8,679,069 8,864,589
========= ========= ========= =========
Net Income (Loss) $(539,640) $4,396 $(578,013) $5,620
========= ========= ========= =========
Per share amount - basic and
diluted
$(0.06) $0.00 $(0.07) $0.00
========= ========= ========= =========
</TABLE>
<PAGE>
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 21, 2000 /s/Les Wasser
LES WASSER,
Chief Financial Officer
