FORM 10QSB
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 the quarterly period ended June 30, 1998
Commission File Number 0-3425
PLATRONICS, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1440857
(State or other (IRS Employer
jurisdiction of Identification
incorporation) No.)
301 Commerce Road, Linden, New Jersey 07036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 908-862-3600
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 |_| No |X|
Indicate by check mark whether the registrant has filed all documents and
reports required to filed by Sections 12, 13 or 15(d) of the Securities Act of
1934 subsequent to the distribution of securities under a plan confirmed by the
court.
Yes |_| No |X|
Indicate the number of shares outstanding of each of issuer's classes of
common stock, as of the latest practicable date: 910,140 Common Shares
Outstanding
<PAGE>
Index
Independent Accountants' Report
Financial Statements:
Condensed Balance Sheets
September 30, 1997 (audited) and
June 30, 1998 (unaudited)
Unaudited Condensed Statements of
Income Three Months Ended
June 30, 1997 and
June 30, 1998,
Income Nine Months Ended
June 30, 1997 and
June 30, 1998
Condensed Statement of Cash Flows
Nine Months Ended June 30, 1997
and June 30, 1998
Notes to Condensed Financial
Statements
Management Discussion and Analysis or Plan of Operation.
Signatures
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Platronics, Inc.
Linden, New Jersey
The accompanying condensed balance sheet of Platronics, Inc. as of June 30, 1998
and the related condensed statements of income for the three month and nine
month periods ended June 30, 1997 and 1998 and the condensed statements of cash
flows for the nine months ended June 30, 1997 and 1998, included in the
accompanying Securities and Exchange Commission Form 10-Q for the period ended
June 30, 1998 were not audited by us, and, accordingly, we do not express an
opinion on them.
In accordance with generally accepted auditing standards, the balance sheet as
of September 30, 1997, and the related statements of income, stockholders'
equity and cash flows for the year then ended (not presented herein) were
audited by other auditors whose report dated October 29, 1997 expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in in the accompanying condensed balance sheet as of
September 30, 1997 is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.
Ferdinand, Ganek & Company, CPA, PA
Union, New Jersey
August 4, 1998
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
ASSETS
September 30 June 30,
----------------- -----------------
1997 (Audited) 1998 (Unaudited)
----------------- -----------------
Current Assets:
Cash $ 45,297 $ 20,089
Accounts Receivable - Net 623,167 608,329
Inventories 402,177 483,012
Prepaid Expenses 4,259 11,182
----------- -----------
Total Current Assets 1,074,900 1,122,612
Property and Equipment - Net 96,052 233,988
Security Deposits 34,165 34,165
----------- -----------
Total Assets $ 1,205,117 $ 1,390,765
=========== ===========
See Accompanying Independent Accountants' Report
and Notes To Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
September 30, June 30,
----------------- -----------------
1997 (Audited) 1998(Unaudited)
----------------- -----------------
Current Liabilities:
Note Payable - Related Party $ 350,000 $ 188,813
Accounts Payable 97,304 271,726
Deferred Rental Obligations-
Current Portion 5,834 10,000
---------- ----------
Total Current Liabilities 453,138 470,539
---------- ----------
Long-Term Liabilities
Note Payable - Related Party -- 92,800
Deferred Rental Obligations-
Long-Term 49,998 38,332
---------- ----------
Long Term Liabilities 49,998 131,132
---------- ----------
Total Liabilities 503,136 601,671
---------- ----------
Stockholders' Equity:
Common Stock 91,003 91,003
Additional Paid in Capital 6,156 6,156
Retained Earnings 604,822 691,935
---------- ----------
Total Stockholders' Equity 701,981 789,094
---------- ----------
Total Liabilities and
Stockholders' Equity $1,205,117 $1,390,765
========== ==========
See Accompanying Independent Accountants' Report
and Notes To Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ---------------------------------
June 30, June 30,
------------------------------ ---------------------------------
1997 1998 1997 1998
-------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net Sales $ 930,930 $ 995,584 $ 2,851,494 $ 2,984,534
Cost of Sales 880,755 911,736 2,571,850 2,588,947
----------- ----------- ----------- -----------
Gross Profit 50,175 83,848 279,644 395,587
Operating Expenses:
Selling, General and
Administrative Expenses 142,568 108,411 406,290 288,953
----------- ----------- ----------- -----------
Operating Income (Loss) (92,393) (24,563) (126,646) 106,634
----------- ----------- ----------- -----------
Other Income (Expense):
Interest Expense (1,262) (5,909) (3,021) (19,696)
Miscellaneous -- -- -- 350
----------- ----------- ----------- -----------
Total Other Income (Expense) (1,262) (5,909) (3,021) (19,346)
----------- ----------- ----------- -----------
Income (Loss) Before Provision
for Taxes on Income (93,655) (30,472) (129,667) 87,288
Provision for Taxes on Income -- -- -- 175
----------- ----------- ----------- -----------
Net Income (Loss) $ (93,655) $ (30,472) $ (129,667) $ 87,113
=========== =========== =========== ===========
Earnings (Loss) Per Share $ (0.10) $ (0.03) $ (0.14) $ 0.10
=========== =========== =========== ===========
Weighted Average Number of
Shares of Common Shares
Outstanding 910,031 910,031 910,031 910,031
=========== =========== =========== ===========
</TABLE>
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
-------------------------------------
June 30,
-------------------------------------
1997 1998
----------------- -----------------
Operating Activities:
Net Income (Loss) $(129,667) $ 87,113
--------- ---------
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating
Activities
Depreciation & Amortization 31,278 30,286
Changes in Assets and
Liabilities:
Accounts Receivable 26,116 14,838
Inventories 144,385 (80,835)
Prepaid Expenses (18,180) (6,923)
Security Deposits
& Exchanges 44 --
Deferred Rental
Obligations -- (7,500)
Accounts Payable, Accrued
Expenses and Taxes (47,454) 174,422
--------- ---------
Total Adjustments 136,189 124,288
--------- ---------
Net Cash Provided By
Operating Activities 6,522 211,401
--------- ---------
Investing Activities:
Capital Expenditures -- (168,222)
--------- ---------
Net Cash Used in Investing
Activities -- (168,222)
--------- ---------
(continued)
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(continued)
Nine Months Ended
-------------------------------------
June 30,
-------------------------------------
1997 1998
----------------- -----------------
Financing Activities:
Decrease in Long Term Debt (2,462) (68,387)
-------- --------
Net Cash Used in Financing
Activities (2,462) (68,387)
-------- --------
Net Increase (Decrease) in
Cash and Cash Equivalents 4,060 (25,208)
Cash and Cash Equivalents -
Beginning of Period 80,100 45,297
-------- --------
Cash and Cash Equivalents -
End of Period $ 84,160 $ 20,089
======== ========
Cash Paid During the Period For:
Interest $ 3,021 $ 17,818
Income Taxes -- 175
For the purposes of the statement of cash flows, the company considered all
highly liquid debt instruments with a maturity of three months or less to be
cash equivalents.
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Presentation of Interim Information
In the opinion of the management of Platronics, Inc. the accompanying
condensed financial statements include all normal adjustments considered
necessary to present fairly the financial position as of June 30, 1998 and
the results of operations for the three months and nine months ended June
30, 1997 and 1998, and cash flows for the nine months ended June 30, 1997
and 1998. Interim results are not necessarily indicative of results for a
full year.
The condensed financial statements and notes are presented as permitted by
Form 10-Q and do not contain certain information included in the company's
audited financial statements and notes for the fiscal year ended September
30, 1997.
2. Inventories
Inventories are summarized as follows:
September 30, June 30,
------------- --------
1997 1998
---- ----
Raw Materials $ 392,177 $ 478,012
Finished Goods 10,000 5,000
--------- ---------
$ 402,177 $ 483,012
========= =========
3. Note Payable - Related Party
Note payable represents an unsecured loan from a shareholder owning a
majority of the outstanding stock. The note as of June 30, 1998 is a
two-year note payable monthly including interest at 8%. The note matures
December 31, 1999.
<PAGE>
PLATRONICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
4. Restatement
The accompanying condensed financial statements for the nine months ended
June 30, 1998 includes prior-period information that has been
retroactively restated after the initial reporting of the three months
ended December 31, 1997. Manufacturing overhead has been adjusted by
$32,926 to properly reflect capitalization of plating equipment. The
effect was to increase net income for the three months ended December 31,
1997 by $32,926 ($.03 per share).
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following is management's discussion and analysis of certain
significant factors which have affected the Company's condensed statement of
operation.
The Company's loss from operations before provision for income taxes for
the third quarter of fiscal 1998 was $ (30,472), as compared to loss of $
(93,655) in the third quarter of fiscal 1997. Net sales were $ 930,930 during
the third quarter of fiscal 1997 and were $ 995,584 during the third quarter of
fiscal 1998.
The Company's decreased loss for the third quarter of fiscal 1998 as
compared to the third quarter of fiscal 1997 was due to (i) an increase in sales
as a result of a stronger and more aggressive sales effort, (ii) added
technological assistance and (iii) a reduction in salaries, factory overhead and
general and administrative costs.
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 hereunto duly authorized.
PLATRONICS, INC.
By /s/ Ronald Knigge
-------------------------------------
Ronald Knigge, Chairman,
President & Chief Executive
Officer
By /s/ Mary Lou Palumbo
-------------------------------------
Mary Lou Palumbo,
Principal Accounting Officer
Date August 14, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 6/30/98
Financial Statement and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<CASH> 20,089
<SECURITIES> 0
<RECEIVABLES> 622,673
<ALLOWANCES> 14,344
<INVENTORY> 483,012
<CURRENT-ASSETS> 1,122,612
<PP&E> 2,491,021
<DEPRECIATION> 2,257,033
<TOTAL-ASSETS> 1,390,765
<CURRENT-LIABILITIES> 470,539
<BONDS> 0
0
0
<COMMON> 91,003
<OTHER-SE> 698,091
<TOTAL-LIABILITY-AND-EQUITY> 1,390,765
<SALES> 2,984,534
<TOTAL-REVENUES> 2,984,534
<CGS> 2,588,947
<TOTAL-COSTS> 2,878,250
<OTHER-EXPENSES> 350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,696
<INCOME-PRETAX> 87,288
<INCOME-TAX> 175
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,113
<EPS-PRIMARY> .10
<EPS-DILUTED> 0
</TABLE>
