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 December 31, 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 |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
Financial Statements:
Condensed Balance Sheets
September 30, 1998 (audited) and
December 31, 1998 (unaudited)
Unaudited Condensed Statements of
Income Three Months Ended
December 31, 1997 and
December 31, 1998
Condensed Statement of Cash Flows
Three Months Ended December 31, 1997
and December 31, 1997
Notes to Condensed Financial
Statements
Item 2. Management Discussion and Analysis or Plan of Operation.
PART II-Other Information.
Item 4. Submission of Matters to a Vote of Security Holders.
Signatures
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Platronics, Inc.
Linden, New Jersey
The accompanying condensed balance sheet of Platronics, Inc. as of December 31,
1998 and the related condensed statements of income and cash flows for the three
months ended December 31, 1997 and 1998, included in the accompanying Securities
and Exchange Commission Form 10-Q for the period ended December 31, 1998 were
not audited by us, and, accordingly, we do not express an opinion on them.
We have previously auditied, 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
February 4, 1999
<PAGE>
PART 1--FINANCIAL STATEMENTS.
Item 1. Financial Statements.
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
---------------- ----------------
1998 (Audited) 1998 (Unaudited)
---------------- ----------------
Current Assets:
Cash $ 66,257 $ 81,670
Accounts Receivable 485,884 493,929
Inventories 485,223 478,533
Prepaid Expenses 7,920 7,500
---------------- ----------------
Total Current Assets 1,045,284 1,061,632
Property and Equipment-Net 236,491 249,137
Security Deposits 34,165 34,165
---------------- ----------------
Total Assets $ 1,315,940 $ 1,344,934
================ ================
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
September 30, December 31,
--------------- ---------------
1998 (Audited) 1998 (Unaudited)
--------------- ---------------
Current Liabilities:
Note Payable-Related Party $ 248,610 $ 325,473
Accounts Payable 263,750 334,537
Deferred Rental Obligations-
Current Portion 10,000 10,000
--------------- ---------------
Total Current Liabilitiers 522,360 670,010
--------------- ---------------
Long-Term Liabilities:
Note Payable-Related Party 46,862 --
Deferred Rental Obligations-
Long-Term 35,832 33,332
--------------- ---------------
Total Long-Term Liabilities 82,694 33,332
--------------- ---------------
Total Liabilities 605,054 703,342
--------------- ---------------
Stockholders' Equity:
Common Stock 91,003 91,003
Additional Paid in Capital 6,156 6,156
Retained Earnings 613,727 544,433
--------------- ---------------
Total Stockholders' Equity 710,886 641,592
--------------- ---------------
Total Liabilities and
Stockholders' Equity $ 1,315,940 $ 1,344,934
=============== ===============
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
Three Months Ended
December 31,
------------
1997 1998
---- ----
Net Sales $ 1,011,291 $ 873,665
Cost of Sales 843,089 826,277
--------------- ---------------
Gross Profit 168,202 47,388
Operating Expenses:
Selling, General and
Administrative Expenses 86,727 112,262
--------------- ---------------
Operating Income (Loss) 81,475 (64,874)
--------------- ---------------
Other Income (Expense):
Interest Expense -- (4,218)
Miscellaneous Income 350 --
--------------- ---------------
Total Other Income (Expense) 350 (4,218)
--------------- ---------------
Income (Loss) Before Provision
for Taxes on Income 81,825 (69,092)
Provision for Taxes on Income -- 200
--------------- ---------------
Net Income (Loss) $ 81,825 $ (69,292)
=============== ===============
Earnings (Loss) Per Share $ 0.09 $ (0.08)
=============== ===============
Weighted Average Number of
Shares of Common Shares
Outstanding 910,031 910,031
=============== ===============
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED STATEMENT OF CASH FLOWS
Three Months Ended
December 31,
------------
1997 1998
---- ----
Operating Activities:
Net Income (Loss) $ 81,825 $ (69,293)
------------ ------------
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used in)
Operating Activities
Depreciation & Amortization 7,341 12,094
Changes in Assets and
Liabilities:
Accounts Receivable 127,458 (8,045)
Inventories (70,052) 6,690
Prepaid Expenses 4,259 420
Deferred Rental Obligations (2,500) (2,500)
Accounts Payable, Accrued
Expenses and Taxes (33,464) 70,787
------------ ------------
Total Adjustments 33,042 79,446
------------ ------------
Net Cash Provided By
(Used in) Operating
Activities 114,867 10,153
------------ ------------
Investing Activities:
Capital Expenditures (32,926) (24,740)
------------ ------------
Net Cash Used in
Investing Activities (32,926) (24,740)
------------ ------------
Financing Activities:
Note Payable Proceeds -- 30,000
------------ ------------
Net Cash Provided by
Financing Activities -- 30,000
------------ ------------
(continued)
See Accompanying Independent Accountants' Report
and Notes to Condensed Financial Statements
<PAGE>
PLATRONICS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(continued)
Three Months Ended
December 31,
------------
1997 1998
---- ----
Net Increase in Cash and
Cash Equivalents $ 81,941 $ 15,413
Cash and Cash Equivalents -
Beginning of Period 45,297 66,257
------------ ------------
Cash and Cash Equivalents -
End of Period $ 127,238 $ 81,670
============ ============
Cash Paid During the Period For:
Interest $ -- $ --
Income Taxes -- --
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 December 31, 1998
and the results of operations and cash flows for the three months ended
December 31, 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, 1998
2. Inventories
Inventories are summaried as follows:
September 30, December 31,
1998 1998
---- ----
Raw Materials $ 464,223 $ 466,533
Finished Goods 21,000 12,000
------------ ------------
$ 485,223 $ 478,533
============ ============
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 December 31, 1998 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 three months ended
December 31, 1998 include prior-period information that has been
retroactively restated after the initial reporting of the three months
ended December 31, 1997. Manufacturing overhead as 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 Company's loss from operations before provision for income taxes for
the first quarter of fiscal 1999 was ($ 69,092), as compared to income of $
81,825 in the first quarter of fiscal 1998. Net sales were $ 873,665 during the
first quarter of fiscal 1998 and were $ 1,011,291 during the first quarter of
fiscal 1998.
The Company's decrease in sales were attributable to a two week plant
shut-down during this quarter and weakened demand for orders which the Company
attributes to uncertainty during this period about future military spending.
In addition, selling, general and administrative expenses increased due to
certain non-recurring expenses incurred by the Company in connection with
marketing activities.
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
A special meeting of shareholders was held on November 24, 1998 for the
purposes of amending the Certificate of Incorporation of the Registrant to
increase the number of authorized shares from Two Million Shares to Ten Million
Shares of Common Stock and to adopt the majority voting provisions of the New
Jersey Business Corporation Act for all shareholder action which heretofore
required the vote of the holders of two-thirds (2/3rds) of the common stock
present and voting.
The proposal to amend the Certificate of Incorporation of the Registrant
to increase the number of authorized shares from Two Million to Ten Million
shares of Common Stock was adopted by the required vote of the holders of
two-thirds (2/3rds) of the issued and outstanding shares of stock, with 619,500
of the 910,031 shares of issued and outstanding shares voting in favor of the
proposal. There were no votes against the proposal.
The proposal to amend the Certificate of Incorporation of the Registrant
to adopt the majority voting requirements of the New Jersey Business Corporation
Act, which provides that a majority of those present and voting, provided that a
quorum was present, would be required to approve shareholder action regarding
future amendments to the Certificate of Incorporation of the Registrant, mergers
and consolidations, sales of substantially all of the assets of the Registrant
not in the ordinary course of business, or the dissolution of the Registrant,
rather than two-thirds of the issued and outstanding shares of stock, was
adopted by the required vote of the holders of two-thirds (2/3rds) of the issued
and outstanding shares of stock, with 619,500 of the 910,031 shares of
<PAGE>
issued and outstanding shares voting in favor of the proposal. There were no
votes against the proposal.
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 February 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 81,670
<SECURITIES> 0
<RECEIVABLES> 505,113
<ALLOWANCES> 11,184
<INVENTORY> 478,533
<CURRENT-ASSETS> 1,061,632
<PP&E> 2,528,961
<DEPRECIATION> 2,279,824
<TOTAL-ASSETS> 1,344,934
<CURRENT-LIABILITIES> 670,010
<BONDS> 0
0
0
<COMMON> 91,003
<OTHER-SE> 550,589
<TOTAL-LIABILITY-AND-EQUITY> 1,344,934
<SALES> 873,665
<TOTAL-REVENUES> 873,665
<CGS> 826,277
<TOTAL-COSTS> 938,539
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,218
<INCOME-PRETAX> (69,092)
<INCOME-TAX> 200
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (69,292)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> 0
</TABLE>
