<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
JUNE 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 June 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 June 30, 1996
(Unaudited) and December 31, 1995;
- Consolidated Statements of Operations (Unaudited) for the Three
Months and Six Months Ended June 30, 1996 and 1995;
- Consolidated Statements of Cash Flows (Unaudited) for the Three
Months and Six Months Ended June 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
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
Assets
Current Assets:
Cash $ 296,000 $ 170,000
Trade receivables, less
allowance of $26,000 and
$21,000 for doubtful accounts 910,000 1,078,000
Due from affiliate 3,000 1,000
Prepaid expenses and other 92,000 113,000
---------- ----------
Total Current Assets 1,301,000 1,362,000
---------- ----------
Property and Equipment:
Machinery and equipment 1,638,000 1,677,000
Machinery and equipment under
capital lease obligations 479,000 472,000
Leasehold improvements 644,000 639,000
Office furniture and equipment 62,000 62,000
---------- ----------
2,823,000 2,850,000
Less accumulated depreciation
and amortization 2,341,000 2,309,000
---------- ----------
Net Property and Equipment 482,000 541,000
Other Assets 52,000 47,000
---------- ----------
Total Assets $1,835,000 $1,950,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
3
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(CONCLUDED)
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
Liabilities and Shareholders' Equity
Current Liabilities:
Line of Credit $ 21,000 $ 84,000
Trade accounts payable 202,000 235,000
Accrued liabilities:
Payroll, compensation and
related expenses 187,000 239,000
Other 105,000 203,000
Current maturities of long-
term debt 110,000 150,000
---------- ----------
Total Current Liabilities 625,000 911,000
Long-Term Debt, less current
maturities 122,000 33,000
---------- ----------
Total Liabilities 747,000 944,000
---------- ----------
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 (1,347,000) (1,425,000)
Translation Adjustment (11,000) (15,000)
---------- ----------
1,943,000 1,861,000
Less common stock in treasury,
at cost, 647,238 shares (855,000) (855,000)
---------- ----------
Total Shareholders' Equity 1,088,000 1,006,000
---------- ----------
Total Liabilities and
Shareholders' Equity $1,835,000 $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 SIX MONTHS
---------------- ----------------
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
Sales of Services
United States $1,409 $1,491 $2,467 $2,869
Mexico 266 156 504 220
------ ------ ------ ------
Total Sales of Services 1,675 1,647 2,971 3,089
Cost of Services Sold 1,124 1,141 2,135 2,222
------ ------ ------ ------
Gross Profit 551 506 836 867
------ ------ ------ ------
Selling, general and
administrative 385 339 747 689
------ ------ ------ ------
Operating Profit 166 167 89 178
Other Income (Expense):
Interest income 4 20 7 34
Interest expense (16) (24) (31) (45)
Translation loss - (16) - (16)
Other 10 (32) 13 (33)
------ ------ ------ ------
Total Other Income
(Expense) (2) (52) (11) (60)
------ ------ ------ ------
Income before
Income Taxes 164 115 78 118
Provision for Income Taxes - - - -
------ ------ ------ ------
Net Income for
the period $ 164 $ 115 $ 78 $ 118
------ ------ ------ ------
------ ------ ------ ------
See accompanying notes to consolidated financial statements.
5
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
(CONTINUED)
THREE MONTHS SIX MONTHS
---------------- ----------------
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
Per Share Data:
Net Income per share $ .10 $ .05 $ .05 $ .05
--------- --------- --------- ---------
--------- --------- --------- ---------
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 SIX MONTHS
--------------- ----------------
ENDED JUNE 30, ENDED JUNE 30,
--------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period $ 164 $ 115 $ 78 $ 118
Items not affecting cash
Depreciation and
amortization 98 139 210 275
Bad debt expense 5 2 8 4
Other (6) 29 4 16
Decrease (increase) in
operating assets net
of operating liabilities (269) (175) (9) (259)
------ ------ ------ ------
Cash Provided by (Used In)
Operating Activities (8) 110 291 154
------ ------ ------ ------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and
equipment (4) (32) (113) (78)
------ ------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term debt - - 148 -
Reduction in long-term debt (72) (91) (137) (171)
Increase (decrease) in
short term borrowings 21 28 (63) 103
------ ------ ------ ------
Cash Provided by (Used In)
Financing Activities (51) (63) (52) (68)
------ ------ ------ ------
Increase (decrease) in cash (63) 15 126 8
Cash-beginning of period 359 32 170 39
------ ------ ------ ------
Cash-end of period $ 296 $ 47 $ 296 $ 47
------ ------ ------ ------
------ ------ ------ ------
See accompanying notes to consolidated financial statements.
7
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS EXCEPT SHARE DATA
INCREASE (DECREASE) IN CASH
(UNAUDITED)
(CONTINUED)
THREE MONTHS SIX MONTHS
-------------- ---------------
ENDED JUNE 30, ENDED JUNE 30,
-------------- ---------------
1996 1995 1996 1995
----- ----- ----- -----
Decrease (increase) in
operating assets net of
operating liabilities
Trade receivables $(177) $(110) $ 160 $(218)
Due from affiliate (2) (10) (2) (29)
Other current assets 22 (13) 21 6
Accounts payable and
accrued liabilities (107) (34) (183) (20)
Other (5) (8) (5) 2
----- ----- ----- -----
Total - net $(269) $(175) $ (9) $(259)
----- ----- ----- -----
----- ----- ----- -----
Cash paid during the
period for interest $ 16 $ 24 $ 31 $ 45
----- ----- ----- -----
----- ----- ----- -----
Cash paid during the
period for income taxes $ - $ - $ - $ -
----- ----- ----- -----
----- ----- ----- -----
See accompanying notes to consolidated financial statements.
8
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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
June 30, 1996 and the results of their operations and their cash flows for
the three months and the six months ended June 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 averaging price of $1.11 per share. Such warrants expire
May 13, 2001. As of July 26, 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 DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Sales of services for the three months ended June 30, 1996 of $1,675,000
represents an increase of $28,000 (1.7%) from the same period in 1995. The
Environmental Division experienced a decrease of $208,000 (19.1%) primarily due
to the loss of an existing customer's large one-time project which generated
sales of $48,000 for the three months ended June 30, 1995. Additionally, there
were volume decreases of $160,000 from other existing customers due to the
uncertainty surrounding the allocation of funds through the government budgeting
process. Environmental sales for the remaining six months of 1996 will
continue to be below 1995 sales levels due to this uncertainty. The Mineral
Division experienced an increase of $236,000 (43.2%) over the same period in
1995. Mineral sales in the United States increased $126,000 (31.3%) over same
period in 1995 due to the addition of four new customers. Mineral sales in
Mexico increased $110,000 (70.5%) due primarily to an increase in sales of
$110,000 from one existing customer. Mineral sales for the remaining six months
of 1996 should continue to be above 1995 sales levels due to increasing
activities in the Mineral Mexico market.
Gross profit as a percentage of sales for the three months ended June 30, 1996
was 32.9% as compared to 30.7% 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 is due to lower equipment costs and lower depreciation.
Operating expenses for the three months ended June 30, 1996 of $385,000
increased by $46,000 (13.6%) from the same period in 1995 primarily due to
higher selling expenses and higher professional fees.
Other expenses for the three months ended June 30, 1996 were $2,000 compared to
$52,000 for the same period in 1995. This decrease of $50,000 was due to a lack
of translation losses, which were $16,000 in 1995, lower interest expense, and
higher other income, offset by lower interest income.
10
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995 (CONTINUED)
For the three months ended June 30, 1996 the Company had income before income
taxes of $164,000 compared to income of $115,000 for the same period in 1995.
This increase of $49,000 (42.6%) was due primarily to production efficiencies in
the Mineral Division, lower equipment costs, lower depreciation, lower interest
expense, a lack of translation losses, and other income, offset by higher
selling, general administrative expenses and lower interest income.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Sales of Services for the six months ended June 30, 1996 of $2,971,000
represents a decrease of $118,000 (3.8%) from the same period in 1995. The
Environmental Division experienced a decrease of $452,000 (21.7%) due to the
loss of one customer's large one-time project, which generated sales of $254,000
for the six months ended June 30, 1995. Additionally, there were volume
decreases of $198,000 from existing customers due to the uncertainty surrounding
the allocation of funds through the government budgeting process. Environmental
sales for the remaining six months of 1996 will continue to be below 1995 sales
levels due to this uncertainty. The Mineral Division experienced an increase of
$334,000 (33.3%) due primarily to volume increases in Mexico sales of $294,000
(129.1%) 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 increase in sales of $143,000 from
another existing customer, and the addition of new customers. Mineral sales in
the United States increased $50,000 (6.4%) due to addition of new customers.
Mineral sales for the remaining six months of 1996 should continue to be above
1995 sales levels due to increasing activity in the Mineral Mexico market.
Gross profit as a percentage of sales for the six months ended June 30, 1996
was 28.1% which equals the gross profit percentage for the same period in 1995.
Operating expenses for the six months ended June 30, 1996 of $747,000 increased
by $58,000 (8.4%) from the same period in 1995 primarily due to higher selling
expense and higher professional fees.
11
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (CONTINUED)
Other expenses for the six months ended June 30, 1996 were $11,000 compared to
$60,000 for the same period in 1995. This decrease of $49,000 was due primarily
to lower interest expense, a lack of translation losses, and other income,
offset by lower interest income.
For the six months ended June 30, 1996 the Company had income before income
taxes of $78,000 compared to income of $118,000 for the same period in 1995.
This decrease of $40,000 was primarily due to lower sales and higher selling,
general and administrative expenses, lower interest income, offset by lower
interest expense, a lack of translation losses, and other income.
12
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY
Cash totaled $296,000 at June 30, 1996, compared with $170,000 at December 31,
1995. The $126,000 increase in cash resulted from cash provided by operating
activities of $291,000 which was offset by cash used in the purchase of property
and equipment of $113,000 and net cash used in financing activities of $52,000.
Cash provided by operating activities resulted from the effect of certain
non-cash reconciling items of $222,000 (primarily depreciation and
amortization) and a decrease in operating assets (primarily trade receivables)
net of operating liabilities of $9,000, and net income of $78,000.
Cash used for the purchase of property and equipment of $113,000 was primarily
related to the acquisition of computer hardware and software to upgrade the
Laboratory Information Management System (LIMS).
Cash used in financing activities of $52,000 consisted of $137,000 used to
reduce long-term debt and a decrease in the working line of credit of $63,000,
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).
The Company has a working line of credit from a lending institution. This 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 expansion of its environmental and mineral services business and 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.
13
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
INFLATION
Inflation was not a material factor in either the sales or the operating
expenses of the Company during the periods presented herein.
14
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BARRINGER LABORATORIES, INC. AND SUBSIDIARY
PART II
OTHER INFORMATION
None
15
<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: July 29, 1996 By: /s/ Charles E. Ramsay
--------------------- ----------------------------------
Charles E. Ramsay
Chief Financial Officer
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 296,000
<SECURITIES> 0
<RECEIVABLES> 910,000
<ALLOWANCES> 26,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,301,000
<PP&E> 2,823,000
<DEPRECIATION> 2,341,000
<TOTAL-ASSETS> 1,835,000
<CURRENT-LIABILITIES> 625,000
<BONDS> 0
0
0
<COMMON> 23,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,835,000
<SALES> 2,971,000
<TOTAL-REVENUES> 2,971,000
<CGS> 2,135,000
<TOTAL-COSTS> 2,135,000
<OTHER-EXPENSES> 758,000
<LOSS-PROVISION> 26,000
<INTEREST-EXPENSE> 31,000
<INCOME-PRETAX> 78,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78,000
<EPS-PRIMARY> .05
<EPS-DILUTED> 0
</TABLE>
