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, 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 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 March 31, 2000.
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PART I
ITEM 1
VICON FIBER OPTICS CORP.
FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2000
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VICON FIBER OPTICS CORP.
TABLE OF CONTENTS
MARCH 31, 2000
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of March 31, 2000
and December 31, 1999 1-2
Statements of Operations For the Three
Months Ended March 31, 2000 and 1999 3
Statements of Cash Flows For the Three
Months Ended March 31, 2000 and 1999 4-5
Notes to Financial Statements 5-6
Item 2. Management's Discussion and Analysis
Of Financial Condition and Results of Operations 6-7
PART II 7
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VICON FIBER OPTICS CORP.
BALANCE SHEET
ASSETS
<TABLE>
<S> <C> <C>
March 31, 2000 Dec. 31, 1999
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $534,870 $354,379
Accounts receivable - net of
allowance for uncollectible accounts 511,334 652,971
Inventories (Note 2) 1,287,872 1,356,276
Prepaid expenses and other current 89,761 98,026
assets
Deferred income taxes (Note 6) ___50,184 51,626
Total Current Assets 2,474,021 2,513,278
PROPERTY, PLANT AND EQUIPMENT -
Net of accumulated depreciation and
Amortization 368,925 383,625
OTHER ASSETS:
Excess of cost over net assets of
business 257,587 260,607
Acquired
Deposits 4,487 4,487
Investment in joint venture 26,515 26,515
Cash surrender value of life insurance 100,149 96,027
contract
Total Other Assets 388,738 387,636
TOTAL ASSETS $3,231,684 $3,284,539
</TABLE>
Page 1
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VICON FIBER OPTICS CORP.
BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
MARCH 31, 2000 DEC. 31, 1999
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $191,328 $174,327
Income taxes payable 39,124 62,036
Current portion of long-term debt 78,598 102,006
Total Current Liabilities 309,050 338,369
LONG-TERM DEBT 346,805 347,492
Deferred income tax payable 64,138 62,677
TOTAL LIABILITIES 719,993 748,538
SHAREHOLDERS' EQUITY:
Common Stock - authorized 20,000,000
shares,
$.01 par value, issued and outstanding 86,790 86,790
8,679,069
Additional paid-in capital 6,139,288 6,139,288
Deficit (3,644,075) (3,605,702)
Deferred stock incentive (70,312) ( 84,375)
Total shareholders' equity 2,511,691 2,536,001
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,231,684 $3,284,539
</TABLE>
Page 2
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VICON FIBER OPTICS CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C>
THREE MONTHS ENDED
MARCH 31
2000 1999
SALES $602,141 $508,221
COST OF GOODS SOLD 426,550 309,055
GROSS MARGIN 175,591 199,166
OTHER COSTS (INCOME) AND EXPENSES:
Selling, general and administrative 211,225 187,242
expenses
Research and development 2,896 2,267
Interest expense 14,431 6,998
Interest income (4,183) (1,220)
TOTAL OTHER COSTS (INCOME) AND EXPENSES 224,369 195,287
INCOME (LOSS) BEFORE PROVISION FOR INCOME (48,778) 3,879)
TAXES
PROVISION FOR INCOME TAXES (Note 3) (10,405) 2,655
NET INCOME (LOSS) $(38,373) $ 1,224
INCOME PER COMMON SHARE:
NET INCOME - BASIC AND DILUTED .00 .00
AVERAGE NUMBER OF SHARES USED IN 8,678,969 8,736,499
COMPUTATION
</TABLE>
Page 3
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VICON FIBER OPTICS CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C> <C>
THREE MONTHS ENDED
MARCH 31
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $(38,373) $ 1,224
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 17,720 17,620
(Increase) decrease in accounts receivable 141,637 331,070
(Increase) decrease in inventory 68,404 ( 44,943)
(Increase) decrease in prepaid expenses
and other current assets 8,265 9,926
(Increase) decrease in deferred income taxes 1,442 1,175
Increase (decrease) in accounts payable
and accrued expenses 17,001 (281,111)
Increase (decrease)in deferred income taxes 1,461 ( 124)
payable
Increase (decrease) in income taxes payable (22,912) 1,603
Total Adjustments 233,018 35,216
Net Cash Provided (Used) By Operating Activities 194,645 36,440
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment - (18,198)
(Increase) in cash surrender value of life (4,122) (4,121)
insurance
Net Cash (Used in) Investing Activities (4,122) (22,319)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in long-term debt - 17,528
Repayment of long-term debt (24,095) (11,422)
Decrease in deferred stock incentive 14,063 14,062
Net Cash Provided By (Used in) Financing (10,032) 20,168
Activities
NET INCREASE (DECREASE) IN CASH AND CASH 180,491 34,289
EQUIVALENTS
CASH AND CASH EQUIVALENTS - Beginning 354,379 254,580
CASH AND CASH EQUIVALENTS - End $534,870 $288,869
</TABLE>
Page 4
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VICON FIBER OPTICS CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C> <C>
THREE MONTHS ENDED
MARCH 31
1999 1999
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $4,831 $ 6,998
Income taxes $11,340 $ 0
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 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 March 31,
2000 and December 31, 1999 and the results of operations and cash flows for the
three months ended March 31, 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.
Page 5
<PAGE>
NOTE 2 - INVENTORIES
The composition of inventories is:
<TABLE>
<S> <C> <C>
MARCH 31, 2000 DEC. 31, 1999
(Unaudited)
Raw materials $894,274 $ 964,163
Work-in-process 253,555 57,665
Finished goods ___140,043 ___334,448
$1,287,872 $1,335,276
</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.
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, 2000 compared to the same period
in 1999 increased by $93,920. Management attributes this principally to new
orders from dental video customers and growing brand recognition for the
Fantasia lamps.
Cost of Sales
Cost of sales for the three months ended March 31, 2000 increased to 71% as
compared to 61% for the same period in 1999. Management attributes this to
market driven decreases in sales pricing of the Fantasia lamp products and
extraordinarily high delivery costs of lamps from China that had to be shipped
by air as a result of production delays.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended March
31, 2000 increased to $211,225 from $187,242 for the three months ended March
31, 1999. Management attributes this to increased marketing and administrative
expenses.
Page 6
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Financial Condition of the Company
The Company gauges its liquidity and financial stability by the measurements as
shown in the following table:
<TABLE>
<S> <C> <C>
March 31, 2000 December 31,
1999
(Unaudited)
Working Capital $2,164,971 $2,174,909
Current ratio 8.01 to 1 7.43 to 1
Shareholders' Equity $ 2,511,691 $2,536,001
</TABLE>
PART II
Items 1-5 not applicable.
Item 6, Exhibit 11:
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
<TABLE>
<S> <C> <C>
Three Months Ended
March 31,
2000 1999
Basic:
Average shares outstanding 8,679,069 8,679,069
Net effect of dilutive stock
options -
based on the treasury stock , 57,430
method
using average market price
Diluted 8,679,069 8,736,499
Net Income $(38,373) $ 1,224
Per share amount - basic and $.00 $.00
diluted
</TABLE>
Page 7
<PAGE>
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 24, 2000 /s/Leonard Scrivo
LEONARD SCRIVO,
President and Chief Executive Officer
Page 8
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 534870
<SECURITIES> 0
<RECEIVABLES> 518834
<ALLOWANCES> 7500
<INVENTORY> 1287872
<CURRENT-ASSETS> 2474021
<PP&E> 987741
<DEPRECIATION> 618816
<TOTAL-ASSETS> 3231684
<CURRENT-LIABILITIES> 309050
<BONDS> 0
0
0
<COMMON> 86790
<OTHER-SE> 2424901
<TOTAL-LIABILITY-AND-EQUITY> 3231684
<SALES> 602141
<TOTAL-REVENUES> 606324
<CGS> 426550
<TOTAL-COSTS> 426550
<OTHER-EXPENSES> 224369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14431
<INCOME-PRETAX> (48778)
<INCOME-TAX> (10405)
<INCOME-CONTINUING> (38373)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (38373)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
