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<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 January 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACTO OF 1934
For the transition period from to
----------- ----------
Commission file number: 0-15486
MIKRON INSTRUMENT COMPANY, INC.
-------------------------------
(Exact Name of Registrant as Specified in its Charter)
New Jersey 22-1895668
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
16 Thornton Road, Oakland, New Jersey 07436
-------------------------------------------
(Address of Principal Executive Office) (Zip Code)
(201) 405-0900
--------------
(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 January 31, 1997 was 3,654,200 shares.
<PAGE> 2
MIKRON INSTRUMENT COMPANY, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
-------------------
<S> <C>
PART I - FINANCIAL INFORMATION
Balance Sheet - January 31, 1997 1
Statement of Operations - Three months ended January 31, 1997
and 1996 2
Statement of Cash Flows - Three months ended January 31, 1997
and 1996 3
Notes to Financial Statements 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5
PART II - OTHER INFORMATION 6
SIGNATURES 7
</TABLE>
<PAGE> 3
MIKRON INSTRUMENTS COMPANY, INC.
BALANCE SHEETS
JANUARY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 275,860
Trade accounts receivable, less allowance for
doubtful accounts of $137,000 894,234
Inventories 2,141,068
Prepaid expenses and other current assets 105,419
----------
TOTAL CURRENT ASSETS 3,416,581
PROPERTY AND EQUIPMENT, net 293,930
OTHER ASSETS 75,000
----------
$3,785,511
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 383,486
Current portion of long-term debt 50,000
Current portion of capital lease obligation 2,545
----------
TOTAL CURRENT LIABILITIES 436,031
----------
LONG-TERM LIABILITIES:
Long-term debt 37,500
Capital lease obligation 14,245
----------
TOTAL LONG-TERM LIABILITIES 51,745
----------
STOCKHOLDERS' EQUITY
Common stock, $.003 par value;
authorized - 15,000,000 shares; issued and outstanding
3,654,200 shares 12,181
Additional paid-in capital 3,151,831
Retained earnings 133,723
----------
TOTAL STOCKHOLDERS' EQUITY 3,297,735
----------
$3,785,511
==========
</TABLE>
See notes to financial statements
-1-
<PAGE> 4
MIKRON INSTRUMENT COMPANY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
January 31,
----------------------------------------
1997 1996
------------------ -------------------
<S> <C> <C>
REVENUES:
Net sales $ 1,622,851 $ 1,608,561
Royalties 31,338 25,000
Investment income 401 9,620
------------------ -------------------
TOTAL REVENUES 1,654,590 1,643,181
------------------ -------------------
COSTS AND EXPENSES:
Cost of goods sold 833,458 722,614
Selling, general and administrative 799,895 776,969
Research and development 167,748 113,146
------------------ -------------------
TOTAL COSTS AND EXPENSES 1,801,101 1,612,729
------------------ -------------------
NET INCOME (LOSS) $ (146,511) $ 30,452
================== ===================
NET INCOME (LOSS) PER SHARE $ (0.04) $ 0.01
================== ===================
WEIGHTED AVERAGE NUMBER OF SHARES 3,654,200 3,734,856
================== ===================
</TABLE>
See notes to financial statements
-2-
<PAGE> 5
MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
January 31,
----------------------
1997 1996
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $(146,511) $ 30,452
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 14,112 17,083
Amortization 12,500 12,500
--------- ---------
(119,899) 60,035
Changes in assets and liabilities:
Decrease in trade accounts receivable 354,542 16,828
Decrease (Increase) in inventories 114,209 (175,936)
(Increase) in prepaid and other current assets (32,082) (517)
(Decrease) in accounts payable and accrued liabilities (131,571) (18,083)
--------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 185,199 (117,673)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (14,925) (108,413)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of short-term notes payable (100,000) -
Payment of long-term liabilities (778) (12,500)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (100,778) (12,500)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 69,496 (238,586)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 206,364 863,832
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 275,860 $ 625,246
========= =========
</TABLE>
See notes to financial statements.
-3-
<PAGE> 6
MIKRON INSTRUMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 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 shares equivalents
outstanding during respective periods.
-4-
<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 January 31, 1997 were
$1,623,000 as compared to net sales of $1,608,000 for the quarter ended
January 31, 1996. The cost of sales was 51% as compared to 45% for the
comparable 1996 period. The increase in cost of sales as a percentage
of net sales for the three months ended January 31, 1997 is due to
increase materials costs and the hiring of additional personnel in
order to reduce backlog and improve delivery time.
Selling, general and administrative expenses for the three
months ended January 31, 1997 were $800,000 as compared to $777,000 for
the same 1996 period. The increase represents normal salary
adjustments, opening of Mikron Japan office in Tokyo and rental expense
for the new location.
Research and development expenses for the quarter ended
January 31, 1997 were $168,000 as compared to $113,000 for the quarter
ended January 31, 1996. The increase is attributable to the Company's
efforts to develop new infrared thermometers and the hiring new people
for the research and development department.
Other income for the three month period ended January 31, 1997
was $31,700. This represents $31,300 of royalty income and $400 of
investment income.
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 $2,980,000 at January 31, 1997.
At January 31, 1997, the Company's capital resources and its
sources of liquidity was $276,000 in cash and cash equivalents.
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.
-5-
<PAGE> 8
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS - NONE
Item 2 - CHANGE 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
-6-
<PAGE> 9
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/ Douglas Frank
---------------------------------------------
Douglas Frank, Vice President and
Sales Manager
/s/ Alex Wu
---------------------------------------------
Alex Wu, Treasurer
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 275,860
<SECURITIES> 0
<RECEIVABLES> 1,031,234
<ALLOWANCES> (137,000)
<INVENTORY> 2,141,068
<CURRENT-ASSETS> 3,416,581
<PP&E> 935,592
<DEPRECIATION> (641,662)
<TOTAL-ASSETS> 3,785,511
<CURRENT-LIABILITIES> 436,031
<BONDS> 0
0
0
<COMMON> 12,181
<OTHER-SE> 3,285,554
<TOTAL-LIABILITY-AND-EQUITY> 3,785,511
<SALES> 1,622,851
<TOTAL-REVENUES> 1,654,590
<CGS> 833,458
<TOTAL-COSTS> 833,458
<OTHER-EXPENSES> 967,643
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (146,511)
<INCOME-TAX> 0
<INCOME-CONTINUING> (146,511)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (146,511)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
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