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 March 31, 1999
Commission File Number 0-3425
PLATRONICS, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1440857
(State or other jurisdiction (IRS Employer
of incorporation) Identification 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 |X| No |_|
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
PART I--Financial Information
Item 1. Financial Statements
Independent Accountants' Report ........................................... 1
Financial Statements:
Condensed Balance Sheets
September 30, 1998 (audited) and
March 31, 1999 (unaudited) ...................................... 2
Unaudited Condensed Statements of
Income Three Months Ended
March 31, 1998 and March 31, 1999
and Six Months Ended March 31, 1998
and March 31, 1999 .............................................. 4
Condensed Statement of Cash Flows
Six Months Ended March 31, 1998
and March 31, 1999 .............................................. 5
Notes to Condensed Financial
Statements ...................................................... 7
Item 2. Management Discussion and Analysis or Plan of
Operation ................................................................. 9
Signatures ............................................................... 9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The Company's loss from operations before provision for income taxes for
the second quarter of fiscal 1999 was ($ 65,073), as compared to income of $
35,935 in the second quarter of fiscal 1998. Net sales were $ 977,659 during the
second quarter of fiscal 1998 and were $ 793,229 during the second quarter of
fiscal 1999.
The Company attributes its decrease in sales to a general softening of the
domestic electronics market because of less expensive foreign imports.
In addition, selling, general and administrative expenses increased due to
certain non-recurring expenses incurred by the Company in connection with a
proposed private offering of its securities.
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 May 19, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Platronics, Inc.
Linden, New Jersey
The accompanying condensed balance sheet of Platronics, Inc. as of March 31,
1999 and the related condensed statements of income for the three month and six
month periods ended March 31, 1998 and 1999 and the condensed statements of cash
flows for the six months ended March 31, 1998 and 1999, included in the
accompanying Securities and Exchange Commission Form 10-Q for the period ended
March 31, 1999 were not audited by us, and, accordingly, we do not express an
opinion on them.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of September 30, 1998, and the related
statements of income, stockholders' equity and cash flows for the year then
ended (not presented herein). In our report dated November 23, 1998, we
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, 1998 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
May 13, 1999
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
ASSETS
September 30 March 31,
----------------- -----------------
1998 (Audited) 1999 (Unaudited)
----------------- -----------------
Current Assets:
Cash $ 66,257 $ 46,626
Accounts Receivable - Net 485,884 486,303
Inventories 485,223 488,268
Prepaid Expenses 7,920 23,852
---------- ----------
Total Current Assets 1,045,284 1,045,049
Property and Equipment - Net 236,491 273,711
Other Assets:
Security Deposits 34,165 34,165
Deposits on Equipment -- 5,000
---------- ----------
Total Assets $1,315,940 $1,357,925
========== ==========
See Accompanying Independent Accountants' Report
and Notes To Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
September 30, March 31,
-------------- ----------------
1998 (Audited) 1999 (Unaudited)
-------------- ----------------
Current Liabilities:
Note Payable - Related Party $ 248,610 $ 315,473
Accounts Payable 263,750 425,125
Deferred Rental Obligations-
Current Portion 10,000 10,000
------------ ------------
Total Current Liabilities 522,360 750,598
------------ ------------
Long-Term Liabilities
Note Payable - Related Party 46,862 --
Deferred Rental Obligations-
Long-Term 35,832 30,832
------------ ------------
Long Term Liabilities 82,694 30,832
------------ ------------
Total Liabilities 605,054 781,430
------------ ------------
Stockholders' Equity:
Common Stock 91,003 91,003
Additional Paid in Capital 6,156 6,156
Retained Earnings 613,727 479,336
------------ ------------
Total Stockholders' Equity 710,886 576,495
------------ ------------
Total Liabilities and
Stockholders' Equity $ 1,315,940 $ 1,357,925
============ ============
See Accompanying Independent Accountants' Report
and Notes To Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
March 31, March 31,
----------------------------- -----------------------------
1998 1999 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 977,659 $ 793,229 $ 1,988,949 $ 1,666,893
Cost of Sales 834,121 758,099 1,677,211 1,584,377
------------ ------------ ------------ ------------
Gross Profit 143,538 35,130 311,738 82,516
Operating Expenses:
Selling, General and
Administrative Expenses 93,816 96,857 180,541 209,118
------------ ------------ ------------ ------------
Operating Income (Loss) 49,722 (61,727) 131,197 (126,602)
------------ ------------ ------------ ------------
Other Income (Expense):
Interest Expense (13,787) (3,346) (13,787) (7,564)
Miscellaneous Income -- -- 350 --
------------ ------------ ------------ ------------
Total Other Income (Expense) (13,787) (3,346) (13,437) (7,564)
------------ ------------ ------------ ------------
Income (Loss) Before Provision
for Taxes on Income 35,935 (65,073) 117,760 (134,166)
Provision for Taxes on Income 175 25 175 225
------------ ------------ ------------ ------------
Net Income (Loss) $ 35,760 $ (65,098) $ 117,585 $ (134,391)
============ ============ ============ ============
Earnings (Loss) Per Share $ 0.04 $ (0.07) $ 0.13 $ (0.15)
============ ============ ============ ============
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
Six Months Ended
-------------------------
March 31,
-------------------------
1998 1999
---------- ----------
Operating Activities:
Net Income (Loss) $ 117,585 $ (134,391)
---------- ----------
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used in)
Operating Activities
Depreciation & Amortization 15,884 24,188
Changes in Assets and
Liabilities:
Accounts Receivable 25,347 (419)
Inventories (121,887) (3,045)
Prepaid Expenses (4,404) (15,932)
Deferred Rental
Obligations (5,000) (5,000)
Accounts Payable, Accrued
Expenses and Taxes 116,034 161,375
---------- ----------
Total Adjustments 25,974 161,167
---------- ----------
Net Cash Provided By
(Used in) Operating
Activities 143,559 26,776
---------- ----------
Investing Activities:
Capital Expenditures (113,185) (61,407)
Deposits on Equipment -- (5,000)
---------- ----------
Net Cash Used in Investing
Activities (113,185) (66,407)
---------- ----------
(continued)
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(continued)
Six Months Ended
-------------------------
March 31,
-------------------------
1998 1999
-------- --------
Financing Activities:
Decrease in Long Term Debt (40,759) --
Note Payable Proceeds -- 30,000
Principal Payments on Note -- (10,000)
-------- --------
Net Cash Provided by (Used
in) Financing Activities (40,759) 20,000
-------- --------
Net Decrease in
Cash and Cash Equivalents (10,385) (19,631)
Cash and Cash Equivalents -
Beginning of Period 45,297 66,257
-------- --------
Cash and Cash Equivalents -
End of Period $ 34,912 $ 46,626
======== ========
Cash Paid During the Period For:
Interest $ 13,787 $ 7,564
Income Taxes 175 225
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 March 31, 1999
and the results of operations for the three months and six months ended
March 31, 1998 and 1999, and cash flows for the six months ended March 31,
1998 and 1999. 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, 1998.
2. Inventories
Inventories are summarized as follows:
September 30, March 31,
------------- ---------
1998 1999
---- ----
Raw Materials $ 464,223 $ 476,268
Finished Goods 21,000 12,000
--------- ---------
$ 485,223 $ 488,268
========= =========
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 March 31, 1999 is
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 six months ended
March 31, 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).
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 46,626
<SECURITIES> 0
<RECEIVABLES> 497,487
<ALLOWANCES> 11,184
<INVENTORY> 488,268
<CURRENT-ASSETS> 1,045,049
<PP&E> 2,565,628
<DEPRECIATION> 2,291,917
<TOTAL-ASSETS> 1,357,925
<CURRENT-LIABILITIES> 750,598
<BONDS> 0
0
0
<COMMON> 91,003
<OTHER-SE> 485,492
<TOTAL-LIABILITY-AND-EQUITY> 1,357,925
<SALES> 1,666,893
<TOTAL-REVENUES> 1,666,893
<CGS> 1,584,377
<TOTAL-COSTS> 1,793,495
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,564
<INCOME-PRETAX> (134,166)
<INCOME-TAX> 225
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (134,391)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
</TABLE>
