4 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 33-16453
MICRONETICS WIRELESS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 22-2063614
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
26 Hampshire Drive, Hudson, NH 03051
(Address of principal executive offices) (Zip Code)
(603)883-2900
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Outstanding at
Class of Common Stock July 24, 1997
$.01 par share 3,188,658
Page 1 of 11. There is no Exhibit Index.
<PAGE>
MICRONETICS WIRELESS, INC.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheets -
June 30, 1997 and March 31, 1997 3-4
Condensed Statements of Operations-
Three Months Ended June 30, 1997 and
June 30, 1996 5
Condensed Statements of Cash Flows -
Three Months Ended June 30, 1997
and June 30, 1996 6-7
Notes to Condensed Financial
Statements 8
Item 2. Management's Discussion and Analysis 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
MICRONETICS WIRELESS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
Assets
--------------
June 30, March 31,
1997 1997
-----------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 978,417 $ 961,314
Receivables
Trade (net of allowance for
doubtful accounts) 664,873 755,716
Inventories (note 2) 1,150,396 1,151,640
Prepaid expenses and other
current assets 37,105 43,318
Deferred tax asset 95,113 118,481
Other current assets 0 6,250
--------- ---------
TOTAL CURRENT ASSETS 2,925,904 3,036,719
FIXED ASSETS
Land 162,000 162,000
Building & Improvements 846,547 846,547
Furniture, Fixtures, and
Equipment 1,287,662 1,269,938
Capitalized Leases 33,500 33,500
--------- ---------
Gross Fixed Assets 2,329,709 2,311,985
Accumulated Depreciation
and Amortization (844,069) (800,030)
--------- ---------
TOTAL (NET) FIXED ASSETS 1,485,640 1,511,955
OTHER ASSETS
Deposits 3,053 1,102
Intangibles (Net of 97,417 98,375
Amortization)
--------- ---------
TOTAL OTHER ASSETS 100,470 99,477
--------- ---------
TOTAL ASSETS $4,512,014 $4,648,151
========= =========
<PAGE>
MICRONETICS WIRELESS, INC.
<CAPTION>
CONDENSED BALANCE SHEETS
(UNAUDITED)
Liabilities and Shareholders' Equity
--------------------------------------------
June 30, March 31,
1997 1997
-----------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Short term loans and capitalized
leases $ 94,229 $ 91,703
Accounts payable 157,806 374,746
Accrued expenses and taxes, other
than income taxes 167,297 155,953
Subordinated Debentures 25,000 25,000
Income taxes payable 40,499 31,618
------- -------
TOTAL CURRENT LIABILITIES 484,831 679,020
LONG-TERM DEBT:
Capitalized leases 3,464 7,616
Notes Payable - Bank 928,297 948,022
------- -------
TOTAL LONG-TERM DEBT 931,761 955,638
SHAREHOLDER'S EQUITY
Common stock 31,887 31,887
Additional paid-in capital 2,393,748 2,393,748
Retained earnings (deficit) 669,787 587,858
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 3,095,422 3,013,493
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,512,014 $4,648,151
========= =========
<PAGE>
MICRONETICS WIRELESS, INC.
<CAPTION>
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1997 1996
----------- ---------
<S> <C> <C>
Operating revenues $ 1,010,699 $ 848,847
Cost of operations 616,083 481,501
--------- ---------
Gross profit 394,616 367,346
Selling, general and
administrative expenses 227,561 220,197
Research & Development 54,320 44,058
--------- ---------
Operating income 112,735 103,091
Other income (expense):
Rental income 15,062 15,062
Interest income 9,004 651
Interest expense (21,504) (23,279)
Other income (2,129) (2,253)
--------- ---------
Total 433 (9,819)
--------- ---------
Income before provision
for income taxes 113,168 93,272
Provision for income taxes 31,240 31,000
--------- ---------
Net income $ 81,928 $ 62,272
========= =========
Net income per share $ 0.03 $ 0.02
========= =========
Weighted average number
of shares outstanding 3,268,858 3,268,858
--------- ---------
<PAGE>
MICRONETICS WIRELESS, INC.
<CAPTION>
STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1997 1996
-------------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash Flows from operating
Activities:
Net income $ 81,928 $ 62,272
Adjustments to reconcile net
income to net cash provided
by operating activities:
Decrease in deferred tax asset 23,368 31,000
Depreciation and amortization 44,997 32,045
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable, inventories, prepaid
expenses and other current assets 104,550 56,913
(Increase) decrease in security
deposits and other assets (1,951) (615)
(Increase) in insurance receivable 0 0
(Decrease) increase in accounts
payable accrued liabilities,
notes payable and other current
liabilities (193,919) (75,749)
Increase (decrease) in deferred
sales 0 9,342
--------- ----------
Net cash provided (utilized)
by operating activities $ 58,973 $ 115,208
========= ==========
<PAGE>
MICRONETICS WIRELESS, INC.
<CAPTION>
STATEMENTS OF CASH FLOWS (CONT.)
(UNAUDITED)
--------------------------------------------
3 Months Ended June 30,
1997 1996
-------------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash Flows from Investment
Activities:
(Additions) to fixed assets $ (17,993) $ (26,694)
--------- ---------
Net cash provided (used) by
investment activities (17,993) (26,694)
--------- ---------
Cash Flows from Financing
Activities:
(Reduction) increase of debt
and capitalized leases (23,877) (23,801)
Proceeds from stock options
exercised 0 1,000
Proceeds from issuance of common
stock 0 0
Proceeds from issuance of
subordinated convertible
debentures 0 0
--------- ---------
Net cash provided (used)
by financing activities (23,877) (22,801)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 17,103 65,713
Cash and cash equivalents, at
beginning of year 961,314 146,674
--------- ---------
CASH AND CASH EQUIVALENTS, AT
END OF QUARTER $ 978,417 $ 212,387
========= =========
</TABLE>
<PAGE>
MICRONETICS WIRELESS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. In the opinion of the Company, the accompany-
ing unaudited consolidated condensed financial
statements contain all adjustments (consisting
of only normal recurring adjustments) which in
the opinion of management are necessary in order
to present fairly the financial position as of
June 30, 1997 and 1996, the results of
operations for the three month periods ended
June 30, 1997 and 1996 and cash flows for the
three month periods ended June 30, 1997 and
1996.
While the Company believes that the disclosures
presented are adequate to make the information
not misleading, it is suggested that these
consolidated condensed financial statements be
read in conjunction with the Company's Annual
Report on Form 10-KSB for its fiscal year ended
March 31, 1997.
The results of operations for the three month
period ended June 30, 1997 are not necessarily
indicative of the results of the full year.
Note 2. Inventories are summarized below:
June 30, 1997 March 31, 1997
Raw materials and
work-in-process $ 984,508 $ 974,337
Finished goods 165,888 177,303
--------- ---------
Total $ 1,150,396 $ 1,151,640
========= =========
<PAGE>
Item 2. Management's Discussion and Analysis
Results of Operations
The Company had revenues of $1,010,699 and $848,847 for the
three months ended June 30, 1997 and 1996, respectively, an increase
of $161,852 or 19% in the current period. Gross profit as a percent
of net sales decreased to 39% during the current period as compared
to 43.3% during the corresponding period of the prior fiscal year.
Selling, general and administrative expenses as a percent of net
sales for the current period fell to 22.5% as compared to 25.9% for
the corresponding year earlier period. Research and development
expenses were 5.4% of net sales during the current period as compared
to 5.2% of net sales a year ago.
The Company had net income of $81,928, or $.03 per share, as
compared to net income of $62,272, or $.02 per share, for the three
month periods ended June 30, 1997 and 1996, respectively. This is an
increase of $19,656 or 31.6% in the current period. The weighted
average shares outstanding for the three months ended June 30, 1997
and June 30, 1996, were 3,268,858.
Financial Condition
The Company's working capital at June 30, 1997 was $2,441,073,
a decrease of $83,104 from $2,357,969, the working capital at March
31, 1997. The Company's current ratio was approximately 6.03 to 1 at
June 30, 1997; it was approximately 4.47 to 1 at March 31, 1997.
Net cash of $58,973 was provided by operating activities during
the three months ended June 30, 1997 as compared to $115,208 during
the year earlier period. This was primarily due to a decrease in
accounts receivable and accounts payable during the quarter, as
compared to an increase in such receivables and payables during the
year earlier period. Net cash utilized by investing activities
during the three months ended June 30, 1997 was $17,993 as compared
to $26,694 during the year earlier period. This use of cash was
primarily due to the Company's purchase of equipment during both
periods. Net cash utilized by financing activities during the three
months ended June 30, 1997 was $23,877, as compared to $22,801 during
the year earlier period. The primary use of cash was to reduce debt
in both periods. As a result of these activities, the Company's cash
position increased by $17,103 during the current three months as
compared to an increase of $65,713 in the year ago period.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) During the quarter ended June 30, 1997, the registrant did
not file any reports on Form 8-K.
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MICRONETICS WIRELESS, INC.
(Registrant)
Dated: August 4, 1997 By: s/Richard S. Kalin
Richard S. Kalin,
President (Principal Executive
and Financial Officer)
wp51\micronet\10-Q-JUN.97
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 978,417
<SECURITIES> 0
<RECEIVABLES> 664,873
<ALLOWANCES> 0
<INVENTORY> 1,150,396
<CURRENT-ASSETS> 2,925,904
<PP&E> 2,329,709
<DEPRECIATION> 844,069
<TOTAL-ASSETS> 4,512,014
<CURRENT-LIABILITIES> 484,831
<BONDS> 0
0
0
<COMMON> 31,887
<OTHER-SE> 3,063,535
<TOTAL-LIABILITY-AND-EQUITY> 4,512,014
<SALES> 1,010,699
<TOTAL-REVENUES> 1,010,699
<CGS> 616,083
<TOTAL-COSTS> 227,561
<OTHER-EXPENSES> 54,320
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,504
<INCOME-PRETAX> 113,168
<INCOME-TAX> 31,240
<INCOME-CONTINUING> 81,928
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,928
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
