<PAGE> 1
FORM 10-QSB
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 April 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number: 0-15486
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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.)
16 Thornton Road, Oakland, New Jersey 07436
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(Address of Principal Executive Office) (Zip Code)
(201) 405-0900
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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
------ ------
The number of shares of registrant's Common Stock, $.003 par value,
outstanding as of April 30, 1997 was 3,654,200 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 - April 30, 1997 and October 31, 1996 1
Statement of Operations - Three months and six months
ended April 30, 1997 and 1996 2
Statement of Cash Flows - Three months and six months
ended April 30, 1997 and 1996 3
Notes to Financial Statements 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5-6
PART II - OTHER INFORMATION 7
SIGNATURES 8
</TABLE>
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MIKRON INSTRUMENT COMPANY, INC.
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
April 30,
1997 October 31,
(Unaudited) 1996
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<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 287,155 $ 206,364
Trade Accounts receivable, less allowance for doubtful
accounts of $137,000 in 1997 and 1996 1,061,074 1,248,776
Inventories 2,015,446 2,255,277
Prepaid expenses and other current assets 99,740 73,337
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TOTAL CURRENT ASSETS 3,463,414 3,783,754
PROPERTY AND EQUIPMENT, net 283,880 293,117
OTHER ASSETS 62,500 87,500
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$ 3,809,794 $ 4,164,371
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 451,400 $ 515,057
Short-term notes payable - 100,000
Current maturity of long-term liability 50,000 50,000
Current portion of capital obligation 3,323 3,323
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TOTAL CURRENT LIABILITIES 504,723 668,380
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LONG-TERM LIABILITY
Long-term debt 12,500 37,500
Capital lease obligation 12,661 14,245
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TOTAL LONG-TERM LIABILITIES 25,161 51,745
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COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.003 par value,
authorized 15,000,000 shares, 3,654,200 shares
issued and outstanding in 1997 and 1996 12,181 12,181
Additional paid-in capital 3,151,831 3,151,831
Retained earnings 115,898 280,234
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TOTAL STOCKHOLDERS' EQUITY 3,279,910 3,444,246
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$ 3,809,794 $ 4,164,371
=========== ===========
</TABLE>
See notes to financial statements.
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MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
April 30, April 30,
----------------------------------- -----------------------------------
1997 1996 1997 1996
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales $ 1,681,520 $ 1,647,936 $ 3,304,371 $ 3,256,497
Royalties 29,076 59,803 60,414 84,803
Investment income 206 4,187 607 13,807
---------------- ---------------- --------------- ----------------
TOTAL REVENUES 1,710,802 1,711,926 3,365,392 3,355,107
---------------- ---------------- --------------- ----------------
COSTS AND EXPENSES:
Cost of goods sold 757,836 865,094 1,591,293 1,587,709
Selling, general and administrative 815,197 819,214 1,615,092 1,596,183
Research and development 155,594 150,247 323,342 263,392
---------------- ---------------- --------------- ----------------
TOTAL COSTS AND EXPENSES 1,728,627 1,834,555 3,529,727 3,447,284
---------------- ---------------- --------------- ----------------
NET INCOME (LOSS) $ (17,825) $ (122,629) $ (164,335) $ (92,177)
================ ================ =============== ================
NET INCOME (LOSS) PER SHARE $ (0.00) $ (0.03) $ (0.04) $ (0.02)
================ ================ =============== ================
NUMBERS OF SHARES USED IN
COMPUTATION 3,654,200 3,734,856 3,654,200 3,734,856
================ ================ =============== ================
</TABLE>
See notes to financial statements.
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<PAGE> 5
MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
April 30,
--------------------------------
1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (164,335) $ (92,177)
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Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 28,524 42,026
Amortization 25,000 25,000
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 187,702 9,872
(Increase) decrease in inventories 239,831 (293,368)
(Increase) decrease in prepaid expenses and other assets (26,403) (70,891)
Increase (decrease) in accounts payable and accrued expenses (63,657) (41,361)
------------ ------------
NET CASH PROVIDED USED IN OPERATING ACTIVITIES 226,663 (420,899)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (19,287) (162,895)
Decrease in long-term liability (25,000) (25,000)
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NET CASH USED IN INVESTING ACTIVITIES (44,287) (187,895)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of short-term notes payable (100,000) -
Payment of long-term liabilities (1,584) -
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NET CASH USED IN FINANCING ACTIVITIES (101,584) -
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 80,792 (608,794)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 206,364 863,832
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 287,155 $ 255,038
============= =============
</TABLE>
See notes to financial statements.
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<PAGE> 6
MIKRON INSTRUMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997
(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, 1996 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 common shares and dilutive common share equivalents
outstanding during the respective periods.
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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 April 30, 1997 were $1,682,000
as compared to net sales of $1,648,000 for the quarter ended April 30,
1996. The cost of sales as a percentage of net sales for the 1997
period was 45 % as compared to 52% for the comparable 1996 period. Net
sales for the six months ended April 30, 1997 were $3,304,000 as
compared to net sales of $3,256,000 for the six months ended April 30,
1996. The cost of sales as a percentage of net sales for the six months
ended April 30, 1997 was 48% as compared to 49% for the comparable 1996
period. The decrease in cost of sales as a percentage of net sales for
the three and six months ended April 30, 1997 is due to decrease in
production wages and overtime.
Selling, general and administrative expenses for the three and
six month periods ended April 30, 1997 were $815,000 and $1,615,000 as
compared to $819,000 and $1,596,000 for the respective 1996 periods.
The decrease in the three month period ended April 30, 1997 is due to
decrease in salesmen's salaries, commissions, and office expenses.
Research and development expenses for the quarter ended April
30, 1997 were $156,000 as compared to $150,000 for the quarter ended
April 30, 1996. As for the six months ended April 30, 1997, research
and development expenses were $323,000 as compared to $263,000 for the
six months ended April 30, 1996. The increases in the three and six
month periods ended April 30, 1997 over the comparable 1996 periods is
attributable to the Company's efforts to develop new infrared
thermometers and the hiring of new people for the research and
development department.
Other income for the quarter ended April 30, 1997 were $29,300
as compared to $64,000 for the quarter ended April 30, 1996. This
represents $29,100 of royalty income and $200 of investment income for
the quarter ended April 30, 1997, compared to $60,000 of royalty income
and $4,000 of investment income for the quarter ended April 30, 1996.
As for the six months ended April 30, 1997 was $61,000, as compared to
$99,000 for the six months ended April 30, 1997. This represents
$60,400 of royalty income and $600 of investment income for the six
months ended April 30, 1997, compared to $85,000 of royalty income and
$14,000 of investment income for the six months ended April 30, 1996.
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<PAGE> 8
b. Material Change in Financial Condition, Liquidity and Capital Resources
The Company's working capital decreased from $3,115,000 at
October 31, 1996 to $2,958,000 at April 30, 1997.
At April 30, 1997, the Company's capital resources and its
sources of liquidity was $287,000 in 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) None
(b) None
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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.
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Keikhosrow Irani, President, as
Registrant's duly authorized officer
---------------------------------------
Douglas Frank, Vice President
and Sales Manager
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Alex Wu, Treasurer
MIKRON INSTRUMENT COMPANY, INC.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q REPORT
FOR THE QUARTER ENDED APRIL 30, 1997 FOR MIKRON INSTRUMENT COMPANY INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q REPORT FOR THE QUARTER
ENDED APRIL 30, 1997 FOR MIKRON INSTRUMENT COMPANY INC.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> FEB-01-1997
<PERIOD-END> APR-30-1997
<CASH> 287,155
<SECURITIES> 0
<RECEIVABLES> 1,198,074
<ALLOWANCES> (137,000)
<INVENTORY> 2,015,446
<CURRENT-ASSETS> 3,463,414
<PP&E> 939,954
<DEPRECIATION> (656,074)
<TOTAL-ASSETS> 3,890,794
<CURRENT-LIABILITIES> 504,723
<BONDS> 0
0
0
<COMMON> 12,181
<OTHER-SE> 3,267,729
<TOTAL-LIABILITY-AND-EQUITY> 3,809,794
<SALES> 1,681,520
<TOTAL-REVENUES> 1,710,802
<CGS> 757,836
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 970,791
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17,825)
<INCOME-TAX> 0
<INCOME-CONTINUING> (17,825)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,825)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> 0
</TABLE>
