<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission
September 30, 1996 File Number 0-8241
- --------------------- --------------------
BARRINGER LABORATORIES, INC.
----------------------------------------------
(Name of small business issuer in its charter)
DELAWARE 84-0951626
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15000 WEST 6TH AVENUE, SUITE 300, GOLDEN, COLORADO 80401-5047
-------------------------------------------------------------
(Address of principal executive office)
Issuer's telephone number, including area code (303) 277-1687
--------------------------
Note: Please address financial or S.E.C. compliance queries to: Chief
Financial Officer, 15000 West 6th Avenue, Suite 300, Golden, Colorado
80401-5047.
Indicate by check mark whether the issuer (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 issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Number of shares outstanding as of September 30, 1996 - 1,652,016 of Common
Stock, $.01 par value.
1
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BARRINGER LABORATORIES, INC.
INDEX
Part I - Financial Information
- Consolidated Balance Sheets as of September 30,
1996 (Unaudited) and December 31, 1995;
- Consolidated Statements of Operations (Unaudited) for the Three
Months and Nine Months Ended September 30, 1996 and 1995;
- Consolidated Statements of Cash Flows (Unaudited) for the Three
Months and Nine Months Ended September 30, 1996 and 1995;
- Notes to Consolidated Financial Statements; and
- Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II - Other Information
- None
Signatures
2
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------ ------------
(UNAUDITED)
Assets
Current Assets:
Cash $ 646,000 $ 170,000
Trade receivables, less
allowance of $10,000 and
$21,000 for doubtful accounts 1,088,000 1,078,000
Due from affiliate - 1,000
Prepaid expenses and other 38,000 113,000
---------- ----------
Total Current Assets 1,772,000 1,362,000
---------- ----------
Property and Equipment:
Machinery and equipment 1,837,000 1,677,000
Machinery and equipment under
capital lease obligations 320,000 472,000
Leasehold improvements 644,000 639,000
Office furniture and equipment 79,000 62,000
---------- ----------
2,880,000 2,850,000
Less accumulated depreciation
and amortization 2,443,000 2,309,000
---------- ----------
Net Property and Equipment 437,000 541,000
Other Assets 56,000 47,000
---------- ----------
Total Assets $2,265,000 $1,950,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
3
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(CONCLUDED)
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
(UNAUDITED)
Liabilities and Shareholders' Equity
Current Liabilities:
Line of Credit $ - $ 84,000
Trade accounts payable 215,000 235,000
Accrued liabilities:
Payroll, compensation and
related expenses 241,000 239,000
Other 152,000 203,000
Current maturities of long-
term debt 77,000 150,000
---------- ----------
Total Current Liabilities 685,000 911,000
Long-Term Debt, less current
maturities 112,000 33,000
---------- ----------
Total Liabilities 797,000 944,000
---------- ----------
Commitments
Shareholders' Equity
Preferred stock, $2.00 par value,
1,000,000 shares authorized;
none issued - -
Common stock, $0.01 par value,
shares authorized, 10,000,000;
issued 2,299,254 and out-
standing 1,652,016 23,000 23,000
Additional paid-in capital 3,278,000 3,278,000
Accumulated deficit (965,000) (1,425,000)
Translation Adjustment (13,000) (15,000)
---------- ----------
2,323,000 1,861,000
Less common stock in treasury,
at cost, 647,238 shares (855,000) (855,000)
---------- ----------
Total Shareholders' Equity 1,468,000 1,006,000
---------- ----------
Total Liabilities and
Shareholders' Equity $2,265,000 $1,950,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
4
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
1996 1995 1996 1995
------ ------ ------ ------
Sales of Services
United States $1,915 $1,763 $4,382 $4,632
Mexico 204 104 708 324
------ ------ ------ ------
Total Sales of Services 2,119 1,867 5,090 4,956
Cost of Services Sold 1,320 1,216 3,455 3,438
------ ------ ------ ------
Gross Profit 799 651 1,635 1,518
------ ------ ------ ------
Selling, general and
administrative 407 336 1,154 1,025
------ ------ ------ ------
Operating Profit 392 315 481 493
Other Income (Expense):
Interest income 8 19 15 53
Interest expense (11) (22) (42) (67)
Translation loss (5) (3) (5) (19)
Other (2) (14) 11 (47)
------ ------ ------ ------
Total Other Income
(Expense) (10) (20) (21) (80)
------ ------ ------ ------
Income before
Income Taxes 382 295 460 413
Provision for Income Taxes - - - -
------ ------ ------ ------
Net Income for
the period $ 382 $ 295 $ 460 $ 413
------ ------ ------ ------
------ ------ ------ ------
See accompanying notes to consolidated financial statements.
5
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
(CONTINUED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Per Share Data:
Net Income per share $ .23 $ .13 $ .28 $ .18
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average common
shares outstanding 1,652,016 2,299,254 1,652,016 2,299,254
--------- --------- --------- ---------
--------- --------- --------- ---------
See accompanying notes to consolidated financial statements.
6
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------- --------------
1996 1995 1996 1995
----- ----- ----- -----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period $ 382 $ 295 $ 460 $ 413
Items not affecting cash
Depreciation and
amortization 102 145 312 420
Bad debt expense 6 4 14 8
Other (2) 3 2 19
Decrease (increase) in
operating assets net
of operating liabilities (17) 111 (26) (148)
----- ----- ----- -----
Cash Provided by (Used In)
Operating Activities 471 588 762 712
----- ----- ----- -----
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and
equipment (57) (86) (170) (164)
----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term debt - - 148 -
Reduction in long-term debt (43) (79) (180) (250)
Increase (decrease) in
short term borrowings (21) (107) (84) (4)
----- ----- ----- -----
Cash Provided by (Used In)
Financing Activities (64) (186) (116) (254)
----- ----- ----- -----
Increase (decrease) in cash 350 286 476 294
Cash-beginning of period 296 47 170 39
----- ----- ----- -----
Cash-end of period $ 646 $ 333 $ 646 $ 333
----- ----- ----- -----
----- ----- ----- -----
See accompanying notes to consolidated financial statements.
7
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS EXCEPT SHARE DATA
INCREASE (DECREASE) IN CASH
(UNAUDITED)
(CONTINUED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
1996 1995 1996 1995
----- ----- ----- -----
Decrease (increase) in
operating assets net of
operating liabilities
Trade receivables $(184) $ 91 $ (24) $(127)
Due from affiliate 3 42 1 48
Other current assets 54 23 75 (6)
Accounts payable and
accrued liabilities 114 (58) (69) (78)
Other (4) 13 (9) 15
----- ----- ----- -----
Total - net $ (17) $ 111 $ (26) $(148)
----- ----- ----- -----
----- ----- ----- -----
Cash paid during the
period for interest $ 11 $ 22 $ 42 $ 67
----- ----- ----- -----
----- ----- ----- -----
Cash paid during the
period for income taxes $ - $ - $ - $ -
----- ----- ----- -----
----- ----- ----- -----
See accompanying notes to consolidated financial statements.
8
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of the Company, the unaudited financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position of the Company and its wholly owned
subsidiary, Barringer Laboratorios de Mexico S.A. de C.V. (BLM) as of
September 30, 1996 and the results of their operations and their cash flows
for the three months and the nine months ended September 30, 1996 and 1995.
The accounting policies followed by the Company are set forth in the Notes
to Consolidated Financial Statements in the 1995 audited financial
statements of Barringer Laboratories, Inc. and Subsidiary included in their
Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission. The Form 10-KSB should be read in conjunction herewith.
2. SHAREHOLDERS' EQUITY
The Company has entered into an exclusive arrangement with The Nassau
Group, Inc. of Westport, Connecticut, to provide the Company with financial
advisory services and investment banking support over the course of the
next two years. The Nassau Group will provide assistance in terms of
evaluating strategic growth and acquisition opportunities, evaluating
financing alternatives and helping to arrange for the Company's future
capital needs. Individuals associated with Nassau have purchased
approximately 13% of the Company's common stock from other stockholders.
In addition to the agreement mentioned above, such individuals were granted
certain warrants to purchase up to 105,000 shares of the Company's common
stock at an average price of $1.11 per share. Such warrants expire May 13,
2001. As of November 7, 1996, such warrants have not been exercised.
3. SEASONALITY
The business of the Company has been seasonal as a result of cold weather
restricting the availability of samples to the laboratories in the cold
winter months. Therefore, the results of operations for the interim
periods are not necessarily indicative of the results to be expected for
the full year.
9
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Sales of services for the three months ended September 30, 1996 of $2,119,000
represents an increase of $252,000 (13.5%) from the same period in 1995. The
Environmental Division experienced a decrease of $102,000 (8.0%) primarily as a
result of volume decreases of $102,000 from existing customers due the
uncertainty surrounding the allocation of funds through the government budgeting
process. Environmental sales for the remaining three months of 1996 will
continue to be below 1995 sales levels due to this uncertainty. The Mineral
Division experienced an increase of $354,000 (59.7%) over the same period in
1995. Mineral sales in the United States increased $254,000 (51.9%) over same
period in 1995 due to volume increase in sales of $150,000 from an existing
customer and sales from four new customers, who became customers in the first
quarter of 1996. Mineral sales in Mexico increased $100,000 (96.2%) due
primarily to an increase in sales of $91,000 from one existing customer and the
addition of two new customers. Mineral sales for the remaining three months of
1996 should continue to be above 1995 sales levels due to increasing activities
in both the U.S. Mineral market and Mexico Mineral market.
Gross profit as a percentage of sales for the three months ended September 30,
1996 was 37.7% as compared to 34.9% for the same period in 1995. This increase
was primarily due to production efficiencies in the Mineral Division as a result
of higher sales and fixed costs allocated over a larger sales base.
Additionally, this increase was due to lower equipment costs and lower
depreciation costs.
Operating expenses for the three months ended September 30, 1996 of $407,000
increased by $71,000 (21.1%) from the same period in 1995 primarily due to
higher selling expenses (payroll and advertising) and higher professional fees.
Other expenses for the three months ended September 30, 1996 were $10,000
compared to $20,000 for the same period in 1995. This decrease of $10,000 was
due to lower interest expense and lower other expenses, offset by lower interest
income.
10
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (CONTINUED)
For the three months ended September 30, 1996 the Company had income before
income taxes of $382,000 compared to income before income taxes of $295,000 for
the same period in 1995. This increase of $87,000 (29.5%) was due primarily to
production efficiencies in the Mineral Division, lower equipment costs, lower
depreciation costs, lower interest expense, and other income, offset by higher
operating expenses and lower interest income.
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Sales of Services for the nine months ended September 30, 1996 of $5,090,000
represents a increase of $134,000 (2.7%) from the same period in 1995. The
Environmental Division experienced a decrease of $554,000 (16.5%) due to the
loss of one customer's large one-time project, which generated sales of $254,000
for the nine months ended September 30, 1995. Additionally, there were volume
decreases of $300,000 from existing customers due to the uncertainty surrounding
the allocation of funds through the government budgeting process. Environmental
sales for the remaining three months of 1996 will continue to be below 1995
sales levels due to this uncertainty. The Mineral Division experienced an
increase of $688,000 (43.1%) due primarily to volume increases in Mexico sales
of $384,000 (118.5%) over the same period in 1995. This increase was due
primarily to an existing customer's special project, which generated sales of
$92,000 in the three months ended March 31, 1996, volume sales increases of
$243,000 from another existing customer, and the addition of new customers.
Mineral sales in the United States increased $304,000 (23.9.4%) due to volume
sales increases of $182,000 from one existing customer and the addition of four
new customers. Mineral sales for the remaining three months of 1996 should
continue to be above 1995 sales levels due to increasing activity in the Mineral
U.S. market and Mineral Mexico market.
Gross profit as a percentage of sales for the nine months ended September 30,
1996 was 32.1% as compared to 30.6% for the same period in 1995. This increase
is primarily due to production efficiencies in the Mineral Division as a result
of higher sales, lower equipment costs, and lower depreciation costs.
11
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (CONTINUED)
Operating expenses for the nine months ended September 30, 1996 of $1,154,000
increased by $129,000 (12.6%) from the same period in 1995 primarily due to
higher selling expenses (payroll, commissions, and advertising) and higher
professional fees.
Other expenses for the nine months ended September 30, 1996 were $21,000
compared to $80,000 for the same period in 1995. This decrease of $59,000
(73.0%) was primarily due to lower interest expense, lower translation losses,
and other income, offset by lower interest income.
For the nine months ended September 30, 1996 the Company had income before
income taxes of $460,000 compared to income before income taxes of $413,000 for
the same period in 1995. This increase of $47,000 (11.4%) was primarily due to
higher sales, production efficiencies, lower equipment costs, lower
depreciation, lower translation losses, and other income, offset by higher
selling/general and administrative expenses and lower interest income.
CAPITAL RESOURCES AND LIQUIDITY
Cash totaled $646,000 at September 30, 1996, compared with $170,000 at December
31, 1995. The $476,000 increase in cash resulted from cash provided by
operating activities of $762,000 which was offset by cash used in the purchase
of property and equipment of $170,000 and net cash used in financing activities
of $116,000.
Cash provided by operating activities resulted from the effect of certain
non-cash reconciling items of $328,000 (primarily depreciation and
amortization) and an increase in operating assets (primarily trade
receivables) net of operating liabilities of $26,000, and net income of
$460,000.
Cash used for the purchase of property and equipment of $170,000 was primarily
related to the acquisition of computer hardware and software to upgrade the
Laboratory Information Management System (LIMS).
12
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY
Cash used in financing activities of $116,000 consisted of $180,000 used to
reduce long-term debt and a decrease in the working line of credit of $84,000,
offset by an increase in long term debt of $148,000. This increase was related
to the Capitalized Lease debt on the computer hardware and software to upgrade
the Laboratory Information Management System (LIMS).
On September 30, 1996, the Company signed a working line of credit with a bank.
This line of credit bears interest, payable monthly, at a floating rate of prime
plus 1% (9.5% at September 30, 1996) with a minimum yearly charge of $2,500.
This line of credit replaced a previous working line of credit with a lending
institution. This previous line of credit had a floating interest rate of prime
plus 10% with a minimum monthly charge of $2,500. This new line of credit
availability is equal to 80% of the Company's eligible accounts receivable.
This line of credit is funding the Company's current working capital
requirements and has also been used to guarantee a $150,000 letter of credit
required by the Colorado Department of Health to increase the level of the
Company's Radiochemistry License. This increase in the license gives the
Company the ability to grow the radiochemistry analytical business.
Management of the Company believes that additional capital is required to fund
the short-term and long-term expansion of its environmental and mineral services
business and to continue to improve overall Company liquidity. Management is
currently evaluating potential funding sources to obtain additional debt or
equity financing. Should the receipt of additional funding be delayed, the
continued growth of the Company's business may be negatively impacted.
INFLATION
Inflation was not a material factor in either the sales or the operating
expenses of the Company during the periods presented herein.
13
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
PART II
OTHER INFORMATION
None
14
<PAGE>
SIGNATURES
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.
BARRINGER LABORATORIES, INC.
(REGISTRANT)
Date: November 7, 1996 By: /s/ Charles E. Ramsay
--------------------- ----------------------------------
Charles E. Ramsay
Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 646,000
<SECURITIES> 0
<RECEIVABLES> 1,088,000
<ALLOWANCES> 10,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,772,000
<PP&E> 2,880,000
<DEPRECIATION> 2,443,000
<TOTAL-ASSETS> 2,265,000
<CURRENT-LIABILITIES> 685,000
<BONDS> 0
23,000
0
<COMMON> 0
<OTHER-SE> 2,242,000
<TOTAL-LIABILITY-AND-EQUITY> 2,265,000
<SALES> 5,090,000
<TOTAL-REVENUES> 5,090,000
<CGS> 3,455,000
<TOTAL-COSTS> 4,609,000
<OTHER-EXPENSES> 21,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,000
<INCOME-PRETAX> 460,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 460,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 460,000
<EPS-PRIMARY> .28
<EPS-DILUTED> 0
</TABLE>
