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, 2000
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
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
--------------
(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 10, 2000 was 4,285,700 shares.
1
<PAGE>
MIKRON INSTRUMENT COMPANY, INC.
INDEX
Page No.
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PART I - FINANCIAL INFORMATION:
Condensed Balance Sheet - January 31, 2000 and October 31, 1999 3
Condensed Statement of Operations - Three months ended January 31,
2000 and 1999 4
Condensed Statement of Cash Flows - Three months ended January 31,
2000 and 1999 5
Notes to Condensed Financial Statements 6
Management's Discussion And Analysis Of
Financial Condition And Results Of Operations 7
PART II - OTHER INFORMATION 9
SIGNATURES 10
2
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MIKRON INSTRUMENT COMPANY, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Jan. 31, 2000 October 31, 1999
------------- ----------------
ASSETS (unaudited) (See Note)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $1,233,879 $1,229,626
Trade accounts receivable, less allowance for
doubtful accounts of $83,000 and $83,000 1,346,824 960,527
Inventories 2,209,046 2,200,733
Prepaid expenses and other current assets 78,313 77,900
---------- ----------
TOTAL CURRENT ASSETS 4,868,062 4,468,786
---------- ----------
PROPERTY AND EQUIPMENT, net 299,718 327,916
---------- ----------
OTHER ASSETS 95,390 96,815
---------- ----------
$5,263,170 $4,893,517
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 907,909 $ 749,362
Current portion of capital lease obligation 3,847 5,024
---------- ----------
TOTAL CURRENT LIABILITIES 911,756 754,386
---------- ----------
LONG TERM LIABILITIES
Capital lease obligation 1,502 1,502
---------- ----------
TOTAL LONG TERM LIABILITIES 1,502 1,502
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $.003 par value;
Authorized - 15,000,000 shares; issued and
Outstanding - 4,285,700 shares and 4,285,700 shares,
respectively 12,858 12,858
Additional paid-in capital 4,051,393 4,051,393
Retained earnings 285,661 73,378
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 4,349,912 4,137,629
---------- ----------
$5,263,170 $4,893,517
========== ==========
</TABLE>
Note: The condensed consolidated balance sheet at October 31, 1999 has been
derived from the audited financial statements of the Company at that date, but
does not include all of the information required by generally accepted
accounting principles for complete financial statements.
See notes to condensed financial statements
3
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MIKRON INSTRUMENT COMPANY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
January 31,
---------------------------
2000 1999
---- ----
REVENUES:
Net sales $ 2,485,008 $ 1,704,507
Royalties 46,114 28,000
----------- -----------
TOTAL REVENUES 2,531,122 1,732,507
----------- -----------
COSTS AND EXPENSES:
Cost of goods sold 1,186,209 816,256
Selling, general and administrative 909,812 826,324
Research and development 240,077 173,408
----------- -----------
TOTAL COSTS AND EXPENSES 2,336,098 1,815,988
----------- -----------
INCOME (LOSS) FROM OPERATIONS 195,024 (83,481)
----------- -----------
OTHER INCOME:
Investment and interest income 17,259 4,164
----------- -----------
NET INCOME (LOSS) 212,283 (79,317)
----------- -----------
NET INCOME (LOSS) PER SHARE - BASIC $ 0.05 $ (0.02)
=========== ===========
NET INCOME (LOSS) PER SHARE - DILUTED $ 0.05 $ (0.02)
=========== ===========
WEIGHTED AVERAGE BASIC SHARES OUTSTANDING 4,285,700 3,698,033
=========== ===========
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 4,294,590 3,698,033
=========== ===========
See notes to condensed financial statements
4
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MIKRON INSTRUMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 212,283 $ (79,317)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 22,973 19,014
Amortization 6,802 --
Changes in assets and liabilities:
Decrease (increase) in trade accounts receivable (386,297) 127,941
Decrease(increase) in inventories (8,313) 214,180
Decrease (increase) in prepaid and other current assets (413) 51,181
Decrease (Increase) in other assets 1,425 (44,802)
Increase (Decrease) in accounts payable and accrued liabilities 157,370 (152,090)
----------- -----------
(206,453) 215,424
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES 5,830 136,107
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,577) (1,343)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,577) (1,343)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital lease obligation -- (10,835)
Sale of stock pursuant to exercise of stock options -- 150,239
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- 139,404
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,253 274,168
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 1,229,626 415,401
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,233,879 $ 689,569
=========== ===========
</TABLE>
See notes to condensed financial statements
5
<PAGE>
MIKRON INSTRUMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(Unaudited)
1. BASIS OF PRESENTATION
The unaudited interim financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial statements and
should be read in conjunction with the Company's October 31, 1999 Annual Report
on Form 10-KSB.
The unaudited financial statements include all adjustments consisting of only
normal recurring accruals which are, in the opinion of management, necessary to
present a fair statement of financial position as of January 31, 2000 and the
results of operations and cash flows for the period then ended. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
2. EARNINGS PER SHARE
In February 1997, the Financial Standards Accounting Board issued Statement on
Financial Accounting Standards No. 128, "Earnings Per Share" (FAS No. 128) which
became effective for both interim and annual financial statements for the
periods ending December 15, 1997. FAS No. 128 requires a presentation of "basic"
and (where applicable) "diluted" earnings per share. Generally, basic earnings
per share are computed on only the weighted average number of common shares
actually outstanding during the period and the diluted computation considers
potential shares issuable upon exercise or conversion of other outstanding
instruments where dilution would result. Furthermore, FAS No. 128 requires the
restatement of the prior period reported earnings to conform to the new standard
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 three months ended January 31, 2000 was $2,485,000 as
compared to net sales of $1,705,000 for the three months ended January 31, 1999.
The 46% increase is due to two factors. First, a $300,000 specially ordered
thermal imaging system shipped in January 2000. Second, the Model TH5104, a
portable thermal imager, has gained market acceptance and demand for the product
continues to grow. The Company's order backlog as of January 31, 2000 was
$1,150,206. The cost of sales as a percentage of net sales for the quarter ended
January 31, 2000 remained unchanged from the same period last year at 48%.
Selling, general and administrative expenses for the three months ended
January 31, 2000 was $910,000 as compared to $826,000 for the same period ending
January 31, 1999. The increase of 10% was due to the increase in salaries
resulting from the addition of new senior management
Research and development expenses for the three months ended January 31,
2000 were $240,000 as compared to $173,000 for the same period last year. The
increase of 39% was primarily due to the addition of three new engineers through
the Texas Infared acquisition in October 1999. In addition, developmental
expenses for the new products increased by $20,000 over the same period last
year.
Royalty income for the three months ended January 31, 2000 was $46,000 as
compared to $28,000 for the three months ended January 31, 1999. The increase is
due to greater sales of products by third parties which incorporate technologies
licensed by the Company to them over the sales of such products made by those
third parties during the same period of fiscal 1999..
Net income was $212,000, or $.05 per share, for the three months ended
January 31, 2000 as compared to a net loss of $79,000, or $(.02) per share, for
the three months ended January 31, 1999. The increase is due to the 46% rise in
net sales. The Company has loss carryforwards relating to fiscal year end 1999
and prior years. By reason thereof, no provisions for income taxes were made.
Liquidity and Capital Resources
At January 31, 2000, the Company's liquidity position was $1,234,000 in
cash and short term investments and $1,347,000 in trade accounts receivable. The
40% increase in accounts receivable over the October 31 1999 amount is the
result of record sales volume in January 2000.
7
<PAGE>
The Company's working capital increased 6.5% from $3,714,000 at October 31, 1999
to $3,956,000 at January 31, 2000. That increase was a direct result of the
increase in trade accounts receivable.
8
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PART II - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
The exhibit listed below are 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.
9
<PAGE>
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 13, 2000
MIKRON INSTRUMENT COMPANY, INC.
By: /s/ Michael Brady
-------------------------------------
Michael Brady, Vice President
(Principle Financial Officer), as
Registrant's duly authorized officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at January 31, 2000 and the Statement of Operations for the period ended
July 31, 1999, as included in this Form 10-QSB, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 1,233,879
<SECURITIES> 0
<RECEIVABLES> 1,346,824
<ALLOWANCES> (83,000)
<INVENTORY> 2,209,046
<CURRENT-ASSETS> 4,868,062
<PP&E> 1,152,360
<DEPRECIATION> (852,642)
<TOTAL-ASSETS> 5,263,170
<CURRENT-LIABILITIES> 911,956
<BONDS> 0
12,858
0
<COMMON> 0
<OTHER-SE> 4,051,393
<TOTAL-LIABILITY-AND-EQUITY> 5,263,170
<SALES> 2,485,008
<TOTAL-REVENUES> 2,531,122
<CGS> 1,186,209
<TOTAL-COSTS> 2,336,098
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 212,283
<INCOME-TAX> 0
<INCOME-CONTINUING> 212,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 212,283
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
