SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM 10-QSB-QUARTERLY OR TRANSITIONAL REPORT
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
For the quarterly period ended October 31, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
COMMISSION FILE NUMBER 0-12873
---------
FIRECOM, INC.
- --------------------------------------------------------------------------------
(Exact name of Small Business Issuer in its charter)
New York 13-2934531
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
39-27 59th Street, Woodside, New York 11377
- ---------------------------------------- ----------
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code: (718) 899-6100
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
--- ---
As of November 30, 1999, the Registrant had 5,730,931 shares of Common Stock
outstanding, and 5,012,463 shares of Class A Common Stock outstanding.
1
<PAGE>
INDEX
-----
PAGE NO.
--------
Safe Harbor Statement 3
PART I FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheet-October 31, 1999 4-5
Consolidated Statements of Income-
Six and Three Months Ended October 31, 1999 and 1998 6
Consolidated Statements of Cash Flows-
Six Months Ended October 31, 1999 and 1998 7-8
Notes to Consolidated Financial Statements 9-11
Item 2: Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-13
PART II OTHER INFORMATION 13-14
2
<PAGE>
SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-QSB for the six months ended October 31, 1999 contains certain
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995, which can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "anticipate," "estimate," "should"
or "continue" or the negative thereof or other variations thereon or comparable
terminology. The matters set forth under the captions "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Cautionary
Statements" herein constitute cautionary statements identifying important
factors with respect to such forward-looking statements, including certain risks
and uncertainties, that could cause actual results to differ materially from
those in such forward-looking statements.
3
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
------------------------------
CONSOLIDATED BALANCE SHEET
(unaudited)
OCTOBER 31, 1999
----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,326,000
Accounts receivable, net of allowance for doubtful
accounts of $560,000 3,845,000
Inventories 1,912,000
Deferred tax asset 712,000
Prepaid expenses and other 112,000
-----------
Total current assets $10,907,000
-----------
FIXED ASSETS
PROPERTY, PLANT AND EQUIPMENT $ 1,670,000
Less: Accumulated Depreciation & Amortization 1,058,000
-----------
Total Fixed Assets $ 612,000
-----------
OTHER ASSETS
Intangible assets, less accumulated amortization of $106,000 $ 66,000
-----------
TOTAL ASSETS $11,585,000
===========
4
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
------------------------------
CONSOLIDATED BALANCE SHEET
(unaudited)
OCTOBER 31, 1999
----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of notes payable $ 370,000
Accounts payable 977,000
Line of credit borrowing 800,000
Accrued expenses 1,816,000
-----------
Total current liabilities $ 3,963,000
-----------
LONG-TERM LIABILITIES:
Notes payable, less current portion 813,000
Accrued compensation 290,000
Deferred tax liability 60,000
-----------
Total Long-Term liabilities $ 1,163,000
-----------
SHAREHOLDERS' EQUITY
Preferred Stock, par value $1; authorized 1,000,000 shares,
none issued $ - 0 -
Common Stock, par value $.01: Authorized 30,000,000 shares.
Issued: 7,298,224 Outstanding: 5,730,735 73,000
Class A Common Stock, par value $.01: Authorized 10,000,000 shares.
Issued: 6,043,657 Outstanding: 5,012,663 60,000
Additional Paid-In Capital 2,789,000
Retained Earnings 4,763,000
-----------
Sub-Total $ 7,685,000
Less: Treasury Stock, at cost, 1,567,489 shares of Common Stock
and 1,030,994 shares of Class A Common Stock 1,226,000
-----------
Total Shareholders' Equity $ 6,459,000
-----------
TOTAL LIABILITIES & EQUITY $11,585,000
===========
5
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
------------------------------
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
OCTOBER 31 OCTOBER 31
-------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES:
Product $ 2,685,000 $ 2,924,000 $ 4,953,000 $ 5,498,000
Service 2,208,000 1,525,000 3,861,000 3,169,000
----------- ----------- ----------- -----------
Total Sales 4,893,000 4,449,000 8,814,000 8,667,000
----------- ----------- ----------- -----------
COST OF SALES:
Product 1,884,000 2,115,000 3,579,000 4,049,000
Service 1,072,000 776,000 1,848,000 1,561,000
----------- ----------- ----------- -----------
Total Cost of Sales 2,956,000 2,891,000 5,427,000 5,610,000
----------- ----------- ----------- -----------
GROSS PROFIT 1,937,000 1,558,000 3,387,000 3,057,000
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Selling, general and administrative 1,188,000 1,011,000 2,149,000 1,990,000
Research and development 185,000 186,000 391,000 322,000
----------- ----------- ----------- -----------
Total operating expenses 1,373,000 1,197,000 2,540,000 2,312,000
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 564,000 361,000 847,000 745,000
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest income 51,000 51,000 93,000 104,000
Interest expense (47,000) (55,000) (97,000) (111,000)
Other (63,000) 22,000 (64,000) 62,000
----------- ----------- ----------- -----------
Total Other Income (Expense) (59,000) 18,000 (68,000) 55,000
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX 505,000 379,000 779,000 800,000
INCOME TAX EXPENSE 238,000 179,000 367,000 377,000
NET INCOME $ 267,000 $ 200,000 $ 412,000 $ 423,000
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE:
Basic $ .02 $ .02 $ .04 $ .04
Diluted $ .02 $ .02 $ .04 $ .04
WEIGHTED AVERAGE NUMBER OF
SHARES USED IN COMPUTING EPS:
Basic 10,743,000 11,624,000 10,743,000 11,452,000
Diluted 11,286,000 12,112,000 11,286,000 11,940,000
</TABLE>
6
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
SIX MONTHS ENDED
OCTOBER 31
----------
1999 1998
------ -----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $412,000 $ 423,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 119,000 119,000
Provision for doubtful accounts 160,000 175,000
Increase (decrease) in cash attributable
to changes in assets and liabilities:
Accounts receivable (427,000) (277,000)
Inventories 50,000 (471,000)
Prepaid expenses and other 146,000 (44,000)
Accounts payable (63,000) 234,000
Accrued expenses 219,000 319,000
Accrued compensation 55,000 (68,000)
------ ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 671,000 410,000
----------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business (123,000) -0-
Capital expenditures (45,000) (41,000)
NET CASH USED IN INVESTING ACTIVITIES (168,000) (41,000)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (238,000) (194,000)
Purchase of May family stock -0- (308,000)
----------- ---------
NET CASH USED IN FINANCING ACTIVITIES (238,000) (502,000)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 265,000 (133,000)
CASH AND CASH EQUIVALENTS:
Beginning of period 4,061,000 4,204,000
--------- ---------
End of period $4,326,000 $4,071,000
========== ==========
7
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
(unaudited)
SIX MONTHS ENDED
----------------
OCTOBER 31
----------
1999 1998
------ -----
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid for interest
during the period $ 96,000 $110,000
======== ========
Cash paid for income taxes
during the period $192,000 $389,000
======== ========
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Note payable issued for purchase
of May Common Stock $ -0- $,308,000
======= =========
8
<PAGE>
FIRECOM, INC. AND SUBSIDIARIES
------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: ACCOUNTING POLICIES:
The accounting policies followed by the Company are set forth in Note 1 of the
Company's financial statements on Form 10-KSB for the fiscal year ended April
30, 1999.
In the opinion of management the accompanying consolidated financial statements
contain the necessary adjustments, all of which are of a normal and recurring
nature, to present fairly Firecom Inc. and its subsidiaries' financial position
at October 31, 1999 and the results of operations for the three and six months
ended October 31, 1999 and 1998, and cash flows for the six months ended October
31, 1999 and 1998.
NOTE 2: INVENTORIES
Inventories consist of the following
at October 31, 1999:
Raw materials and sub-assemblies $1,909,000
Work-in-process 3,000
--------------
$1,912,000
==============
NOTE 3: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of
the following at October 31, 1999:
Building improvements $ 329,000
Machinery and equipment 766,000
Furniture and fixtures 575,000
-----------
$1,670,000
Less accumulated depreciation
and amortization 1,058,000
-----------
$ 612,000
===========
NOTE 4: NOTES PAYABLE
The Company's long-term debt consists
of the following at October 31, 1999:
Notes payable to banks and other:
Note payable to Norwood Venture $ 839,000
Note payable to May Family
(first transaction)(See Note 6) 62,000
Note payable to May Family
(second transaction)(See Note 6) 246,000
Other note payable 36,000
-----------
$1,183,000
Less current portion 370,000
-----------
$ 813,000
===========
NOTE 5: INCOME PER COMMON SHARE
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
requires dual presentation of basic and diluted earnings per share for all
periods presented. Basic earnings per share excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
9
<PAGE>
issue common stock were exercised or converted into common stock or resulted in
the issuance of common stock that then shared in the earnings of the entity.
A reconciliation of the income and weighted-average shares used in both
calculations follows:
Periods ended October 31, 1999
------------------------------
Three Months Six Months
--------------------------- ----------------------------
Income Shares EPS Income Shares EPS
------ ------ --- ------ ------ ---
Basic EPS $267,000 10,743,000 $.02 $412,000 10,743,000 $.04
Effect of
Stock options - 543,000 -0 - - 543,000 -0-
-------- ----------- ----- ---------- ------------ ----
Diluted EPS $267,000 11,286,000 $.02 $412,000 11,286,000 $.04
-------- ---------- ---- -------- ---------- ----
Periods ended October 31, 1998
------------------------------
Three Months Six Months
---------------------------- ----------------------------
Income Shares EPS Income Shares EPS
------ ------ --- ------ ------ ---
Basic EPS $200,000 11,624,000 $.02 $423,000 11,452,000 $.04
Effect of
Stock options - 488,000 -0- - 488,000 -0-
-------- --------- --- ----------- ---------- ---
Diluted EPS $200,000 12,112,000 $.02 $423,000 11,940,000 $.04
---------- ----------- --- -------- ---------- ----
Unexercised employee stock options to purchase 160,660 shares of the Company's
common stock for the three and six months ended October 31, 1999 were not
included in the computation of diluted EPS because the options' exercise prices
were greater than the average market price of the Company's common stock during
the respective periods.
NOTE 6: STOCKHOLDERS' EQUITY TRANSACTIONS
In 1995 the Company purchased 1,072,988 shares of the Company's common stock
held by certain members of the May family at $.45 per share (first transaction).
Terms of the agreement provide for a cash payment in the amount of $174,448 and
a five (5) year note in the amount of $308,397, bearing interest at 12% per
annum. Interest is payable monthly. The principal is to be paid in five equal
annual installments of $61,679. The Company's obligation under the note is
collateralized by a pledge by the Company to the noteholder of certain shares of
the repurchased common stock.
On September 2, 1998 the Company purchased 536,494 shares of the Company's $.01
par value common stock and an equal number of shares of class A common stock
held by certain members of the May family at $.575 per share (second
transaction). Terms of the agreement provide for a cash payment in the amount of
$308,485 and a five (5) year note in the amount of $308,485, bearing interest at
11.5% per annum. The principal is to be paid in five equal installments of
$61,697. The Company's obligation under the note is collateralized by a pledge
by the Company to the noteholders of certain repurchased shares.
NOTE 7: COMMITMENTS AND CONTINGENCIES:
On December 31, 1992, the Company entered into an employment agreement with the
Chairman of the Company, which was amended on March 28, 1995, providing for base
salary plus incentive compensation and fringe benefits as defined in the
agreement, through April 30, 2000. At October 31, 1999, the Company has accrued
approximately $239,000 of incentive compensation and $162,000 of accrued fringe
benefits.
10
<PAGE>
In connection with the purchase of certain assets, the Company entered into a
Consulting and Non-competition Agreement with the President of the corporation
from whom the assets were acquired, and have continuing payment requirements of
$25,000 per quarter through September 2000.
On September 1, 1999, the Company purchased certain assets from the San
Francisco office of Allwest Systems. The Company purchased the assets for
$100,000, and entered into a Consulting Agreement having payment requirements of
$150,000 through February 29, 2000
The Board of Directors approved a discretionary Profit Sharing Plan under which
subject to further approval of the Board, contribution to employees based on Net
Income, subject to certain adjustments, of twenty percent of the excess over two
million per year, subject to limits imposed by tax law. Based on current
payroll, the maximum Company contribution would be approximately $400,000 per
year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(unaudited)
- -------------------------------------------------------------------------------
LIQUIDITY
Net cash provided by operations for the six months ended October 31, 1999 was
$671,000. The increase in cash and accounts receivable were partially offset by
the increase in accrued expenses.
In April, 1999, the Company refinanced its line of credit under an agreement
with a major New York bank. Under the new line of credit, the Company may borrow
up to $5,000,000, with interest at the bank's agreed rate (5.44% at October 31,
1999) plus 1 3/4%. Borrowings under the line of credit are secured by
substantially all of the Company's assets, excluding real estate and have been
guaranteed by the Company. Any borrowings under the line of credit outstanding
in April 2001, which have been drawn upon for acquisition purposes (as defined
in the credit agreement), will be converted into a 5 year term note payable in
monthly installments, plus interest. In April 2002, any borrowings outstanding
that are not repaid in total, will be converted into a 4-year term note, payable
in monthly installments, plus interest. Borrowings under the line of credit at
October 31, 1999 were $800,000.
The line of credit contains certain covenants.
Management believes that it will be able to maintain adequate working capital
and cash balances to meet its current needs.
RESULTS OF OPERATIONS
Consolidated sales and net income for the quarter ended October 31, 1999 were
$4,893,000 and $267,000 respectively as compared to $4,449,000 and $200,000 for
the quarter ended October 31, 1998. Consolidated sales and net income for the
six months ended October 31, 1999 were $8,814,000 and $412,000 respectively as
compared to $8,667,000 and $423,000 for the six months ended October 31, 1998.
Sales increased by 2% during the six months ended October 31, 1999 versus the
same period last year. These higher sales reflect the increase in service
revenue versus the same period in 1998.
Gross profit percentage for the six months ended October 31, 1999 was 38.4% as
compared to 35.3% for the six months ended October 31, 1998. Gross profit
percentage for the three months ended October 31, 1999 was 39.6% as compared to
35.0% for the three months ended October 31, 1998. The increase in gross profit
11
<PAGE>
percentage was primarily due to an increase in service revenue, and a decrease
in new construction jobs and subcontracting, which have a lower gross profit
percentage than maintenance and service.
Operating income for the six months ended October 31, 1999 was $847,000 as
compared to $745,000 for the six months ended October 31, 1998. As a percentage
of revenue, the operating income for the six months ended October 31, 1999 was
9.6% versus 8.6% in the same period in 1998. The increase in operating income
and its percentage to revenue was primarily due to an increase in service
revenue.
The Company's backlog for its life safety and other systems totaled $2,537,000
at October 31, 1999 as compared to $2,420,000 at April 30, 1999. Due to
fluctuations in the Company's backlog, management remains cautious about
predicting revenue in the fiscal year. Orders continue to be booked on the
Company's fire safety system being marketed outside of New York City, and
management is encouraged about future growth in this product category.
Significant changes in balance sheet items from April 30, 1999 to October 31,
1999 are highlighted as follows:
1: Cash increased primarily due to income from operations.
2: Accounts receivable increased due to increased sales.
3: Prepaid expenses and other decreased due to a reduction in prepaid
income taxes.
4: Long term debt decreased due to payments made on current maturities of
the long-term debt.
5. Accrued expenses increased primarily due to an increase in income taxes
payable and accrued consulting.
6. Accrued compensation increased due to an increase in stock appreciation
rights expense.
COMPUTER ISSUES FOR THE YEAR 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any computer program that
has date sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a temporary inability to process
transactions or engage in normal manufacturing or other business activities.
As a provider of life safety systems which are computer based, the Company is
aware of the potential problems the year 2000 could have on its computer systems
and programs. The Company has completed a review of its computer systems and
programs to determine which, if any, systems and programs are not capable of
recognizing the year 2000. The Company has concluded that all of its systems and
programs are year 2000 compliant.
The Company's internal and manufacturing software was upgraded in fiscal 1999 to
a version that the vendors have represented to be Year 2000 compliant. The
expense incurred by the Company to achieve compliance has not been material. The
Company intends to test that software during 1999.
The Company is in process of verifying whether our suppliers are Year 2000
compliant. The Company's bank and payroll service company have provided
assurances of their Year 2000 compliance. However, there can be no assurance
that all of the Company's vendors will achieve compliance on a timely basis. In
the event of any such noncompliance by vendors, an adverse effect to the
Company's operations and financial results could occur. No contingency plans
have been developed because we do not expect the impact of vendor-related Year
2000 problems to be material.
12
<PAGE>
CAUTIONARY STATEMENTS
Information or statements provided by the Company from time to time contain
certain "forward-looking information" relating to such matters as liquidity,
projected sales and anticipated margins. The cautionary statements made herein
are being made pursuant to the Private Securities Litigation Reform Act of 1995
(the "Act") and with the intention of obtaining the benefits of the "safe
harbor" provisions of the Act for any such forward-looking information. The
Company cautions readers that any forward-looking information provided by the
Company is not a guarantee of future performance and that actual results may
differ materially from those in the forward-looking information as a result of
various factors, including but not limited to the acceptance in what is a new
market for the Company, the national market (historically, the vast majority of
the Company's revenues have been derived from the New York City market) of the
Company's newly-introduced line of safety products for the national market. The
principal manufacturers against whom the Company expects to compete in the
national market are generally better financed, have products accepted in the
market and have long-established distribution and servicing networks. The
Company's future growth is to a large extent dependent on being able to compete
successfully against these competitors.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Intellisec, a California corporation v. Firecom, Inc., a purported corporation;
- -------------------------------------------------------------------------------
Rosendin Electric. Inc., a purported corporation; Does 1 through 25, Inclusive,
- -------------------------------------------------------------------------------
Case No. BC 216249 The Complaint was filed on September 3, 1999, in the Los
Angeles Superior Court, Central District. The principal parties are Intellisec,
Rosendin and Firecom. L.A. Arena Company, Ltd., a limited partnership has been
added as a defendant. Rosendin is a contractor for the Staples Center in Los
Angeles, California. On or about August 28, 1998, Intellisec entered into a
written Subcontract Agreement to furnish and install complete and operational
fire life safety, smoke control and mechanical test panel systems for the
Staples Center. Intellisec alleges that, with respect to Rosendin, there were
substantial delays caused by failure of other contractors and/or subcontractors
as well as change orders such that Intellisec is owed in excess of $1,000,000 by
Rosendin. Intellisec also claims that Rosendin and Firecom agreed and conspired
between themselves to take over the work from Intellisec and to prevent
Intellisec from obtaining a contract for maintenance services for the systems
and equipment upon completion of the project.
Firecom denies there was any such conspiracy or arrangement and contends that
Intellisec failed to pay for product delivered to it, failed to have the
necessary manpower or trained technicians for the project and that the removal
of Intellisec from the job by Rosendin was done solely by Rosendin and was the
result of Intellisec's own actions or inaction.
The Complaint contains causes of action for Breach of Subcontract (against
Rosendin), Breach of Implied Covenant of Good Faith and Fair Dealing (against
Rosendin), Quantum Meruit (against Rosendin), International Interference with
Contractual Relations and Prospective Economic Advantage (against Firecom),
Negligent Interference with Contractual Relations and Prospective Economic
Advantage (against Firecom), Breach of Distributor Agreement and Purchase Order
(against Firecom) and Breach of Implied Covenant and Fair Dealing (against
Firecom). The Complaint seeks compensatory damages against Firecom based on
information and belief in an amount in excess of $1,000,000, interest thereon
and costs of suit. In addition, the Complaint seeks punitive or exemplary
damages from Firecom (in California a plaintiff may not allege a specific amount
for punitive damages).
13
<PAGE>
On September 24, 1999, Intellisec filed a First Amended Complaint which added
the owner of the property, as a party together with two additional causes of
action for Foreclosure of Mechanic's Lien and Enforcement of Stop Notice.
On October 29, 1999, Firecom filed an Answer denying liability and a
Cross-Complaint against Intellisec. The Cross-Complaint seeks compensatory
damages for breach of contract and money had and received in an amount in excess
of $200,000 together with interest and costs of suit.
Item 2. Exhibits and Reports on Form 8-K - None
Item 4: Submission of Matters to Vote of Security Holders
-------------------------------------------------
An annual meeting of stockholders of the Company was held on October 20,
1999 for the purpose of electing three directors. Proxies were solicited.
The election was not contested. The number of votes and non-votes for each
nominee were the same, namely,107,308,782 votes for and 369,000 non-votes. Each
---
share of Class A Common Stock is entitled to 30 votes per share and each share
of ordinary common stock is entitled to one vote per share.
SIGNATURES
----------
Firecom, Inc.
-------------
Dated: December 10, 1999 /s/ Paul Mendez
-------------------- ------------------------
Paul Mendez
Chairman of the Board
President and Chief Executive
Officer
/s/ Jeffrey Cohen
-------------------------
Jeffrey Cohen
Vice President-Finance,
Chief Financial Officer, and
Principal Accounting Officer
14
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIRECOM,
INC.'S CONSOLIDATED BALANCE SHEET, STATEMENT OF INCOME AND STATEMENT OF CASH
FLOW FOR THE PERIOD ENDED OCTOBER 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-END> OCT-31-1999
<CASH> 4,326
<SECURITIES> 0
<RECEIVABLES> 4,405
<ALLOWANCES> 560
<INVENTORY> 1,912
<CURRENT-ASSETS> 10,907
<PP&E> 1,670
<DEPRECIATION> 1,058
<TOTAL-ASSETS> 11,585
<CURRENT-LIABILITIES> 3,963
<BONDS> 0
<COMMON> 73
0
0
<OTHER-SE> 6,386
<TOTAL-LIABILITY-AND-EQUITY> 11,585
<SALES> 8,814
<TOTAL-REVENUES> 8,814
<CGS> 5,427
<TOTAL-COSTS> 5,427
<OTHER-EXPENSES> 2,379
<LOSS-PROVISION> 132
<INTEREST-EXPENSE> 97
<INCOME-PRETAX> 779
<INCOME-TAX> 367
<INCOME-CONTINUING> 412
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 412
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
