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, 1999
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 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: 915,140 Common Shares
Outstanding
<PAGE>
Index
PART I--Financial Information
Item 1. Financial Statements
Independent Accountants' Report ...........................................
Financial Statements:
Condensed Balance Sheets
September 30, 1998 (audited) and
June 30, 1999 (unaudited) ....................................
Unaudited Condensed Statements of
Income Three Months Ended
June 30, 1998 and June 30, 1999
and Nine Months Ended June 30, 1998
and June 30, 1999 ............................................
Condensed Statement of Cash Flows
Nine Months Ended June 30, 1998
and June 30, 1999 ............................................
Notes to Condensed Financial
Statements ...................................................
Item 2. Management Discussion and Analysis or Plan of
Operation .................................................................
Signatures ................................................................
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
This Item 2 includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical fact
included in this Item 2 are forward-looking statements. Although the Company
believes that the expectations and assumptions reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations and
assumptions will prove to have been correct.
The Company's loss from operations before provision for income taxes for
the third quarter of fiscal 1999 was ($148,726), as compared to loss of
($30,472) in the third quarter of fiscal 1998. Net sales were $ 995,584 during
the third quarter of fiscal 1998 and were $ 687,823 during the third quarter of
fiscal 1999.
The Company attributes its decrease in sales during the last quarter to
its customers having excessive inventory of their old products while they were
in the process of developing new products. These new products were not yet in
production, resulting in substantially fewer orders. Based upon discussions with
its customer base, the Company believes that this trend of reduced sales will
reverse itself by October, 1999.
<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 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 20, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Platronics, Inc.
Linden, New Jersey
The accompanying condensed balance sheet of Platronics, Inc. as of June 30, 1999
and the related condensed statements of income for the three month and nine
month periods ended June 30, 1998 and 1999 and the condensed statements of cash
flows for the nine months ended June 30, 1998 and 1999, included in the
accompanying Securities and Exchange Commission Form 10-Q for the period ended
June 30, 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 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
August 11, 1999
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
ASSETS
September 30 June 30,
------------ --------
1998(Audited) 1999(Unaudited)
------------- ---------------
Current Assets:
Cash $ 66,257 $ 62,775
Accounts Receivable - Net 485,884 371,560
Inventories 485,223 456,809
Prepaid Expenses 7,920 27,459
---------- ----------
Total Current Assets 1,045,284 918,603
Property and Equipment - Net 236,491 262,412
Other Assets:
Security Deposits 34,165 34,165
Deposits on Equipment -- 11,000
---------- ----------
Total Assets $1,315,940 $1,226,180
========== ==========
See Accompanying Independent Accountants' Report
and Notes To Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
September 30 June 30,
------------ --------
1998(Audited) 1999(Unaudited)
------------- ---------------
Current Liabilities:
Note Payable - Related Party $ 248,610 $ 17,167
Accounts Payable 263,750 444,607
Deferred Rental Obligations-
Current Portion 10,000 10,000
---------- ----------
Total Current Liabilities 522,360 471,774
---------- ----------
Long-Term Liabilities
Note Payable - Related Party 46,862 298,306
Deferred Rental Obligations-
Long-Term 35,832 28,332
---------- ----------
Long Term Liabilities 82,694 326,638
---------- ----------
Total Liabilities 605,054 798,412
---------- ----------
Stockholders' Equity:
Common Stock 91,003 91,003
Additional Paid in Capital 6,156 6,156
Retained Earnings 613,727 330,609
---------- ----------
Total Stockholders' Equity 710,886 427,768
---------- ----------
Total Liabilities and
Stockholders' Equity $1,315,940 $1,226,180
========== ==========
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,
-------------------------- --------------------------
1998 1999 1998 1999
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Net Sales $ 995,584 $ 687,823 $ 2,984,534 $ 2,354,715
Cost of Sales 911,736 726,531 2,588,947 2,310,908
----------- ----------- ----------- -----------
Gross Profit (Loss) 83,848 (38,708) 395,587 43,807
Operating Expenses:
Selling, General and
Administrative Expenses 108,411 110,018 288,953 319,136
----------- ----------- ----------- -----------
Operating Income (Loss) (24,563) (148,726) 106,634 (275,329)
----------- ----------- ----------- -----------
Other Income (Expense):
Interest Expense (5,909) -- (19,696) (7,564)
Miscellaneous Income -- -- 350 --
----------- ----------- ----------- -----------
Total Other Income (Expense) (5,909) -- (19,346) (7,564)
----------- ----------- ----------- -----------
Income (Loss) Before Provision
for Taxes on Income (30,472) (148,726) 87,288 (282,893)
Provision for Taxes on Income -- -- 175 225
----------- ----------- ----------- -----------
Net Income (Loss) $ (30,472) $ (148,726) $ 87,113 $ (283,118)
=========== =========== =========== ===========
Earnings (Loss) Per Share $ (0.03) $ (0.16) $ 0.10 $ (0.31)
=========== =========== =========== ===========
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,
----------------------------
1998 1999
----------------------------
Operating Activities:
Net Income (Loss) $ 87,113 $ (283,118)
---------- ----------
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating
Activities
Depreciation & Amortization 30,286 30,586
Changes in Assets and
Liabilities:
Accounts Receivable 14,838 114,324
Inventories (80,835) 28,414
Prepaid Expenses (6,923) (19,539)
Deferred Rental
Obligations (7,500) (7,500)
Accounts Payable, Accrued
Expenses and Taxes 174,422 180,858
---------- ----------
Total Adjustments 124,288 327,143
---------- ----------
Net Cash Provided By
Operating Activities 211,401 44,025
---------- ----------
Investing Activities:
Capital Expenditures (168,222) (56,507)
Deposits on Equipment -- (11,000)
---------- ----------
Net Cash Used in Investing
Activities (168,222) (67,507)
---------- ----------
(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,
----------------------------
1998 1999
----------------------------
Financing Activities:
Decrease in Long Term Debt (68,387) --
Note Payable Proceeds -- 30,000
Principal Payments on Note -- (10,000)
---------- ----------
Net Cash (Used in)/Provided
by Financing Activities (68,387) 20,000
---------- ----------
Net Decrease in Cash and
Equivalents (25,208) (3,482)
Cash and Cash Equivalents -
Beginning of Period 45,297 66,257
---------- ----------
Cash and Cash Equivalents -
End of Period $ 20,089 $ 62,775
========== ==========
Cash Paid During the Period For:
Interest $ 17,818 --
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 June 30, 1999 and
the results of operations for the three months and nine months ended June
30, 1998 and 1999, and cash flows for the nine months ended June 30, 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, June 30,
1998 1999
Raw Materials $ 464,223 $ 444,809
Finished Goods 21,000 12,000
---------- ----------
$ 485,223 $ 456,809
========== ==========
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, 1999 is for
seven years payable monthly beginning January, 2000 including interest at
8%.
<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.
Manufactureing 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> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 62,775
<SECURITIES> 0
<RECEIVABLES> 382,744
<ALLOWANCES> 11,184
<INVENTORY> 456,809
<CURRENT-ASSETS> 918,603
<PP&E> 2,568,495
<DEPRECIATION> 2,306,083
<TOTAL-ASSETS> 1,226,180
<CURRENT-LIABILITIES> 471,774
<BONDS> 0
0
0
<COMMON> 91,003
<OTHER-SE> 334,307
<TOTAL-LIABILITY-AND-EQUITY> 1,226,180
<SALES> 2,354,715
<TOTAL-REVENUES> 2,354,715
<CGS> 2,310,908
<TOTAL-COSTS> 2,630,044
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,564
<INCOME-PRETAX> (282,893)
<INCOME-TAX> 225
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (283,118)
<EPS-BASIC> (0.31)
<EPS-DILUTED> 0
</TABLE>
