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, 1999
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
MIKRON INSTRUMENT COMPANY, INC.
-------------------------------
(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 March 9, 1999 was 3,785,700 shares.
1
<PAGE>
MIKRON INSTRUMENT COMPANY, INC.
INDEX
Page No.
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PART I - FINANCIAL INFORMATION:
Balance Sheet - January 31, 1999 3
Statement of Operations - Three months
ended January 31, 1999 and 1998 4
Statement of Cash Flows - Three months
ended January 31, 1999 and 1998 5
Notes to Financial Statements 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7
PART II - OTHER INFORMATION 8
SIGNATURES 9
2
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MIKRON INSTRUMENT COMPANY, INC.
BALANCE SHEET
January 31, 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 689,569
Trade accounts receivable, less allowance for
doubtful accounts of $83,000 929,138
Inventories 2,070,871
Prepaid expenses and other current assets 42,302
----------
TOTAL CURRENT ASSETS 3,731,880
----------
PROPERTY AND EQUIPMENT, net 268,799
----------
OTHER ASSETS 44,802
----------
$4,045,481
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 384,946
----------
TOTAL CURRENT LIABILITIES 384,946
----------
STOCKHOLDERS' EQUITY
Common stock, $.003 par value;
authorized - 15,000,000 shares; issued and outstanding
3,785,700 shares 12,576
Additional paid-in capital 3,301,675
Retained earnings 346,284
----------
TOTAL STOCKHOLDERS' EQUITY 3,660,535
----------
$4,045,481
==========
See notes to financial statements
3
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MIKRON INSTRUMENT COMPANY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
January 31,
--------------------------
1999 1998
----------- -----------
REVENUES:
Net sales $ 1,704,507 $ 2,175,728
Royalties 28,000 41,668
----------- -----------
TOTAL REVENUES 1,732,507 2,217,396
----------- -----------
COSTS AND EXPENSES:
Cost of goods sold 816,256 1,009,534
Selling, general and administrative 826,324 821,613
Research and development 173,408 155,720
----------- -----------
TOTAL COSTS AND EXPENSES 1,815,988 1,986,867
----------- -----------
INCOME (LOSS) FROM OPERATIONS (83,481) 230,529
----------- -----------
OTHER INCOME:
Investment and interest income 4,164 1,802
----------- -----------
NET INCOME (LOSS) $ (79,317) $ 232,331
=========== ===========
NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED $ (0.02) $ 0.06
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES 3,698,033 3,654,200
=========== ===========
See notes to financial statements
4
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MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (79,317) $ 232,331
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 19,014 5,063
Amortization -- 12,500
Changes in assets and liabilities:
Decrease (Increase) in trade accounts receivable 127,941 (419,409)
Decrease in inventories 214,180 149,599
Decrease in prepaid and other current assets 51,181 12,339
(Increase) in other assets (44,802)
(Decrease) in accounts payable and accrued liabilities (152,090) (270,343)
--------- ---------
215,424 (510,251)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 136,107 (277,920)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,343) --
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital lease obligation (10,835) (886)
Sale of stock pursuant to exercise of stock options 150,239
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 139,404 (886)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 274,168 (278,806)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 415,401 547,995
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 689,569 $ 269,189
========= =========
</TABLE>
See notes to financial statements
5
<PAGE>
MIKRON INSTRUMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(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, 1998 contained
in the Company's Annual Report on Form 10-KSB for the fiscal year then ended.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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.
Results of Operations
Net sales for the quarter ended January 31, 1999 (the "1999 Period")
declined 21.6% to $1,704,508 from net sales of $2,175,728 for the quarter ended
January 31, 1998. Such decline was primarily due to purchase reductions
triggered by slowdowns of the economies in various Southeast Asian countries.
The cost of sales as a percentage of net sales for the 1999 period was 48% as
compared to 46% for the comparable 1998 period. The increase in cost of sales as
a percentage of net sales for the 1999 Period was due to lower margins in
products sold during the period.
Selling, general and administrative expenses for the 1999 Period were
$826,324 as compared to $821,613 for the comparable period in 1998.
Research and development expenses for the 1999 Period was $173,408 as
compared to $155,720 for the quarter ended January 31, 1998. The increases in
the 1999 Period over the comparable 1998 period are attributable to the addition
of personnel and outside consultants.
Other income for the 1999 Period was $4,146 as compared to $1,802 for the
quarter ended January 31, 1998.
Liquidity and Capital Resources
The Company's working capital increased from $3,227,978 at October 31,
1998 to $3,346,933 at January 31, 1999.
At January 31, 1999, the Company's capital resources and its sources of
liquidity consisted of $689,569 in cash and temporary cash investments and
accounts receivable of $929,138.
Management does not believe that increases in the rate of inflation would
have a material adverse effect on the Company's operations or financial
condition because it believes that the Company would be able to increase the
selling prices of its products to offset most increases in its costs.
7
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PART II - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
The exhibit listed below is filed as part of this report.
Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
for which this report has been filed.
8
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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.
March 10, 1999
MIKRON INSTRUMENT COMPANY, INC.
By: /s/ Alex Wu
-------------------------------------------------
Alex Wu, Treasurer (Principle Accounting
Officer), as Registrant's duly authorized officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at January 31, 1999 and the Statement of Operations for the year ended
January 31, 1999, as included in this Form 10Q-SB, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 689,569
<SECURITIES> 0
<RECEIVABLES> 1,012,138
<ALLOWANCES> (83,000)
<INVENTORY> 2,070,871
<CURRENT-ASSETS> 3,731,880
<PP&E> 1,040,092
<DEPRECIATION> (771,293)
<TOTAL-ASSETS> 4,045,481
<CURRENT-LIABILITIES> 384,946
<BONDS> 0
0
0
<COMMON> 12,576
<OTHER-SE> 3,647,959
<TOTAL-LIABILITY-AND-EQUITY> 4,045,481
<SALES> 1,704,507
<TOTAL-REVENUES> 1,732,507
<CGS> 816,256
<TOTAL-COSTS> 1,815,988
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (79,317)
<INCOME-TAX> 0
<INCOME-CONTINUING> (79,317)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79,317)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
