<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-15486
MIKRON INSTRUMENT COMPANY, INC.
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(Exact Name of Registrant as Specified in its Charter)
NEW JERSEY 22-1895668
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
445 West Main Street, Wyckoff, New Jersey 07481
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(Address of Principal Executive Office) (Zip Code)
201-891-7330
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(Registrant's telephone number including area code)
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 (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
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The number of shares of registrant's Common Stock, $.003 par value,
outstanding as of July 31, 1995 was 3,654,000 shares.
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MIKRON INSTRUMENT COMPANY, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I - FINANCIAL INFORMATION:
Balance Sheet - July 31, 1995 and October 31, 1994 1
Statement of Operations - Three months and Nine months ended 2
July 31, 1995 and 1994
Statement of Cash Flows - Nine months ended July 31, 1995 3
and 1994
Notes to Financial Statements 4
MANAGEMENT'S DISCUSSION ANALYSIS OF FINANCIAL 5-6
CONDITION AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION 7
SIGNATURES 8
</TABLE>
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MIKRON INSTRUMENT COMPANY, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
July 31,
1995 October 31,
(Unaudited) 1994
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ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 50,252 $ 54,190
Marketable securities 1,068,744 822,323
Accounts receivable, less allowance for doubtful
accounts of $53,363 in 1995 and $54,000 in 1994 842,545 968,108
Inventories 1,781,755 1,635,212
Prepaid expenses and other current assets 13,043 65,286
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TOTAL CURRENT ASSETS 3,756,339 3,545,119
PROPERTY AND EQUIPMENT 198,582 220,077
OTHER ASSETS 32,602 10,360
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$3,987,523 $3,775,556
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 596,973 $ 546,903
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TOTAL CURRENT LIABILITIES 596,973 546,903
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STOCKHOLDERS' EQUITY:
Common stock, $.003 par value,
authorized 15,000,000 shares,
3,654,200 issued and out-
standing in 1995 and 1994 12,181 12,181
Paid-in capital 3,151,165 3,151,165
Retained earnings 227,204 65,307
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TOTAL STOCKHOLDERS' EQUITY 3,390,550 3,228,653
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$3,987,523 $3,775,556
========== ==========
</TABLE>
See notes to financial statements.
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<PAGE> 4
MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
July 31, July 31,
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1995 1994 1995 1994
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<S> <C> <C> <C> <C>
NET SALES $ 1,508,411 $1,536,070 $4,612,755 $4,166,275
----------- ---------- ---------- ----------
COSTS AND EXPENSES:
Cost of goods sold 744,459 691,564 2,142,338 1,886,860
Selling, general and administrative 720,605 661,217 2,120,164 1,960,411
Research and development 112,018 92,103 319,465 280,586
----------- ---------- ---------- ----------
Total costs and expenses 1,577,082 1,444,884 4,581,967 4,127,857
----------- ---------- ---------- ----------
OPERATING INCOME (LOSS) (68,671) 91,186 30,788 38,418
----------- ---------- ---------- ----------
OTHER INCOME (EXPENSES):
Interest and dividend income 12,440 7,173 29,232 17,915
Other income 37,192 18,470 101,876 409,411
----------- ---------- ---------- ----------
Total other income (expense) 49,632 25,643 131,108 427,326
----------- ---------- ---------- ----------
NET INCOME $ (19,039) $ 116,829 $ 161,896 $ 465,744
=========== ========== ========== ==========
NET INCOME PER SHARE $ (0.01) $ 0.03 $ 0.04 $ 0.13
=========== ========== ========== ==========
NET INCOME PER SHARE
ASSUMING FULL DILUTION $ (0.01) $ 0.03 $ 0.04 $ 0.13
=========== ========== ========== ==========
NUMBERS OF SHARES USED IN
COMPUTATION 3,654,200 3,654,200 3,654,200 3,654,200
</TABLE>
See notes to financial statements.
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MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
July 31,
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1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 161,896 $ 465,744
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation 31,832 43,200
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193,728 508,944
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 125,563 (263,659)
(Increase) decrease in inventories (146,543) (123,556)
(Increase) decrease in prepaid expenses and other assets 30,001 9,127
Increase (decrease) in accounts payable and accrued expense 50,070 17,914
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NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 252,819 148,770
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (10,337) (23,260)
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NET CASH FROM INVESTING ACTIVITIES (10,337) (23,260)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 242,483 125,510
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 876,513 607,148
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,118,996 $ 732,658
=========== =========
</TABLE>
See notes to financial statements.
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<PAGE> 6
MIKRON INSTRUMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair
presentation of the financial position and the results of operations
for the interim periods presented.
Certain financial information which is normally included in
financial statements prepared in accordance with generally accepted
accounting principles, but which is not required for interim reporting
purposes has been condensed or omitted. The accompanying financial
statements should be read in conjunction with the financial statements
and notes thereto as of October 31, 1994 contained in the Company's
Annual Report on Form 10-K.
2. EARNINGS (LOSS) PER SHARE
Per share information is computed based on the weighted average
number of shares outstanding during the period.
3. OTHER INCOME
In February 1992, the Company instituted suit in the Federal
District Court for Eastern Pennsylvania against Square D Company
("Square D"), Land Instruments International Inc. ("Land"), and certain
of their affiliates for infringement of one of the Company's patents.
The Company settled the Square D litigation (effective July 1, 1992)
and the Land litigation (effective March 31, 1994) on terms the Company
believes are favorable to the Company. The settlement with Square D
included (I) payment to the Company of a royalty for sales of the
patented products sold by Square D prior to June 1, 1992, (ii) royalty
payments to the Company for subsequent Square D sales of patented
products, and (iii) receipt by the Company of a paid up license for two
of Square D's patents. The settlement with Land included (I) payment to
the Company of a royalty for sales of the patented products sold by
Land in the United States prior to April 1, 1994, (ii) royalty payments
to the Company for Land sales of patented products in the United States
after March 31, 1994, and (iii) a damage payment.
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<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion should be read in
conjunction with the financial statements and notes thereto appearing elsewhere
herein.
a. Results of Operations
Net sales for the quarter ended July 31, 1995 were $1,508,000
as compared to net sales of $1,536,000 for the quarter ended July 31,
1994. The cost of sales as a percentage of net sales for the quarter
ended July 31, 1995 was 49% as compared to 45% for the comparable 1994
period. Net sales for the nine months ended July 31, 1995 were
$4,613,000 as compared to net sales of $4,166,000 for the nine months
ended July 31, 1994. The cost of sales as a percentage of net sales for
the nine month 1995 period was 46% as compared to 45% for the
comparable 1994 period.
Selling, general and administrative expenses for the three
month and nine month periods ended July 31, 1995 were $721,000 and
$2,120,000 as compared to $661,000 and $1,960,000 for the same 1994
periods. The increase represents spending on advertising, trade shows
and sales commissions.
Research and development expenses for the quarter ended July
31, 1995 were $112,000 as compared to $92,000 for the quarter ended
July 31, 1994. For the nine months ended July 31, 1995 research and
development expenses were $319,000 as compared to $281,000 for the nine
months ended July 31, 1994. The increase is attributable to the
company's continuous efforts to develop new infrared thermometers.
Other income for the three and nine month periods ended July
31, 1995 was $37,000 and $102,000 as compared to $18,000 and $409,000
for the three and nine month periods ended July 31, 1994. The 1994
amount represents a lump sum payment from the litigation. In 1995 all
other income represents amounts received from royalties.
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<PAGE> 8
b. Material Change in Financial Condition,
Liquidity and Capital Resources
The Company's working capital increased from $2,998,000 at
October 31, 1994 to $3,159,000 at July 31, 1995. The increase is
attributable to the income for the nine month period.
At July 31, 1995, the Company's capital resources and its
sources of liquidity were a $300,000 unused line of credit and
$1,119,000 of cash and temporary cash investments.
Management does not believe that a return of inflation will
have a material adverse effect on the Company's operations because it
believes that the Company will be able to increase its selling prices
to reflect most increases in its cost.
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<PAGE> 9
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS - NONE
Item 2 - CHANGES IN SECURITIES - NONE
Item 3 - DEFAULTS UPON SENIOR SECURITIES - NONE
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS -
NONE
Item 5 - OTHER INFORMATION - NONE
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. 11 - Statement re: computation of per share earnings
incorporated by reference to statement of income filed as part of this
quarterly report on Form 10-Q.
(b) No Form 8-K was filed during the quarter ended July 31, 1995.
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<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
MIKRON INSTRUMENT COMPANY, INC.
/S/ Keikhosrow Irani
--------------------------------
Keikhosrow Irani, President, as
Registrant's duly authorized
officer
/S/ Alex K.F.Wu
--------------------------------
Alex K.F.Wu
Treasurer
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<PAGE> 11
EXHIBIT INDEX
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Exhibit No. Description Page No.
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>This Schedule contains summary financial information extracted from (a)
the Balance Sheet at July 31, 1995 and the Statement of Operations for the nine
months ended July 31, 1995 as included in the Form 10Q for the quarterly period
ended July 31, 1995 and is qualified in its entirety by reference to such (b)
Financial Statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 50,252
<SECURITIES> 1,068,744
<RECEIVABLES> 842,545
<ALLOWANCES> 0
<INVENTORY> 1,781,755
<CURRENT-ASSETS> 3,756,339
<PP&E> 198,582
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,987,523
<CURRENT-LIABILITIES> 596,973
<BONDS> 0
<COMMON> 12,181
0
0
<OTHER-SE> 3,378,369
<TOTAL-LIABILITY-AND-EQUITY> 3,987,523
<SALES> 4,612,755
<TOTAL-REVENUES> 4,612,755
<CGS> 2,142,388
<TOTAL-COSTS> 4,581,967
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 161,896
<INCOME-TAX> 0
<INCOME-CONTINUING> 161,896
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 161,896
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
