<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, 1997 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, 1997 - 1,633,792 of Common Stock,
$.01 par value.
1
<PAGE>
BARRINGER LABORATORIES, INC.
INDEX
Part I - Financial Information
- Consolidated Balance Sheets as of June 30, 1997
(Unaudited) and December 31, 1996;
- Consolidated Statements of Operations (Unaudited) for the Three
Months and Six Months Ended June 30, 1997 and 1996;
- Consolidated Statements of Cash Flows (Unaudited) for the Three
Months and Six Months Ended June 30, 1997 and 1996;
- 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
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
Assets
Current Assets:
Cash $ 577,000 $ 803,000
Trade receivables, less
allowance of $24,000 and
$15,000 for doubtful accounts 918,000 1,087,000
Prepaid expenses and other 137,000 99,000
---------- -----------
Total Current Assets 1,632,000 1,989,000
---------- -----------
Property and Equipment:
Machinery and equipment 2,104,000 2,000,000
Machinery and equipment under
capital lease obligations 191,000 191,000
Leasehold improvements 664,000 647,000
Office furniture and equipment 81,000 79,000
---------- -----------
3,040,000 2,917,000
Less accumulated depreciation
and amortization 2,602,000 2,487,000
---------- -----------
Net Property and Equipment 438,000 430,000
Other Assets 155,000 75,000
---------- -----------
Total Assets $2,225,000 $2,494,000
---------- -----------
---------- -----------
See accompanying notes to consolidated financial statements.
3
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(CONCLUDED)
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
Liabilities and Shareholders' Equity
Current Liabilities:
Line of credit $ 26,000 $ -
Trade accounts payable 210,000 213,000
Accrued liabilities:
Payroll, compensation and
related expenses 197,000 256,000
Other 130,000 121,000
Income tax payable - 49,000
Current maturities of long-
term debt 42,000 58,000
---------- ----------
Total Current Liabilities 605,000 697,000
Long-Term Debt, less current
maturities 73,000 89,000
---------- ----------
Total Liabilities 678,000 786,000
---------- ----------
Minority Interest 31,000 -
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 1,722,052 and 1,652,016
and outstanding 1,633,792 and
1,563,756 17,000 17,000
Additional paid-in capital 2,569,000 2,532,000
Accumulated deficit (967,000) (715,000)
Translation adjustment - (23,000)
---------- ----------
1,619,000 1,811,000
Less common stock in treasury,
at cost, 88,260 shares (103,000) (103,000)
---------- ----------
Total Shareholders' Equity 1,516,000 1,708,000
---------- ----------
Total Liabilities and
Shareholders' Equity $2,225,000 $2,494,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
4<PAGE>
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1997 1996 1997 1996
------ ------ ------ ------
Sales of Services
United States $1,643 $1,409 $2,990 $2,467
Mexico 125 266 272 504
------ ------ ------ ------
Total Sales of Services 1,768 1,675 3,262 2,971
Cost of Services Sold 1,420 1,124 2,665 2,135
------ ------ ------ ------
Gross Profit 348 551 597 836
------ ------ ------ ------
Selling, general and
administrative 441 385 864 747
------ ------ ------ ------
Operating Profit (Loss) (93) 166 (267) 89
Other Income (Expense):
Interest income 8 4 19 7
Interest expense (5) (16) (10) (31)
Translation gain/loss 2 - (16) -
Other (1) 10 3 13
------ ------ ------ ------
Total Other Income
(Expense) 4 (2) (4) (11)
------ ------ ------ ------
Income (Loss) before
Income Taxes (89) 164 (271) 78
Provision for Income Taxes - - - -
Minority Interest in Loss
of Subsidiary 10 - 19 -
------ ------ ------ ------
Net Income (Loss) for
the period $ (79) $ 164 $ (252) $ 78
------ ------ ------ ------
------ ------ ------ ------
See accompanying notes to consolidated financial statements.
5
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT SHARE DATA
(UNAUDITED)
(CONTINUED)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1997 1996 1997 1996
--------- --------- --------- ---------
Per Share Data:
Net Income (Loss)
per share $ (.05) $ .10 $ (.16) $ .05
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average common
shares outstanding 1,610,833 1,652,016 1,587,424 1,652,016
--------- --------- --------- ---------
--------- --------- --------- ---------
See accompanying notes to consolidated financial statements.
6
<PAGE>
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
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,
1997 1996 1997 1996
----- ----- ----- -----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for
the period $ (79) $ 164 $(252) $ 78
Items not affecting cash
Depreciation and
amortization 72 98 140 210
Bad debt expense 6 5 12 8
Minority interest share in
loss of subsidiary (10) - (19) -
Other - (6) 23 4
Increase (decrease) in
operating assets net
of operating liabilities (161) (269) (69) (9)
----- ----- ----- -----
Cash Provided by (Used In)
Operating Activities (172) (8) (165) 291
----- ----- ----- -----
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and
equipment (74) (4) (142) (113)
----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of Stock Options 37 - 37 -
Increase in long-term debt - - - 148
Reduction in long-term debt (16) (72) (32) (137)
Increase (decrease) in
short term borrowings - 21 26 (63)
Minority interest
contributions 1 - 50 -
----- ----- ----- -----
Cash Provided by (Used In)
Financing Activities 22 (51) 81 (52)
----- ----- ----- -----
Increase (decrease) in cash (224) (63) (226) 126
Cash-beginning of period 801 359 803 170
----- ----- ----- -----
Cash-end of period $ 577 $ 296 $ 577 $ 296
----- ----- ----- -----
----- ----- ----- -----
See accompanying notes to consolidated financial statements.
7<PAGE>
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
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,
1997 1996 1997 1996
------- ------ ------ -------
Decrease (increase) in
operating assets net of
operating liabilities
Trade receivables $(156) $(177) $ 157 $ 160
Due from affiliate - (2) - (2)
Other current assets 9 22 (38) 21
Accounts payable and
accrued liabilities 23 (107) (53) (183)
Income tax payable - - (49) -
Other (37) (5) (86) (5)
------- ------ ------ -------
Total - net $(161) $(269) $ (69) $ (9)
------- ------ ------ -------
------- ------ ------ -------
Cash paid during the
period for interest $ 5 $ 16 $ 10 $ 31
------- ------ ------ -------
------- ------ ------ -------
Cash paid during the
period for income taxes $ - $ - $ 49 $ -
------- ------ ------ -------
------- ------ ------ -------
See accompanying notes to consolidated financial statements.
8
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BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
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 subsidiaries,
as of June 30, 1997 and the results of their operations and their cash
flows for the three months and the six months ended June 30, 1997 and
1996. The accounting policies followed by the Company are set forth in
the Notes to Consolidated Financial Statements in the 1996 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
During the three months ended June 30, 1997 70,036 shares of common stock
were issued upon the exercise of stock options ranging in price from $.90
to $1.00 per share.
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
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and related notes included elsewhere herein. The Company's
future operating results may be affected by various trends and factors which are
beyond the Company's control. These include, among other factors, the
competitive environment in which the Company operates, future capital needs,
uncertainty of government contracts, uncertainties in revenue due to
fluctuations in weather, and other uncertain business conditions that affect the
Company's businesses.
With the exception of historical information, the matters discussed below under
the headings "Results of Operations" and "Capital Resources and Liquidity" may
include forward-looking statements that involve risks and uncertainties. The
Company wishes to caution readers that a number of important factors discussed
herein, and in other reports filed with the Securities and Exchange Commission,
could affect the Company's actual results and cause actual results to differ
materially from those in the forward-looking statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
Sales of services for the three months ended June 30, 1997 of $1,768,000
represents an increase of $93,000 (5.6%) from the same period in 1996. The
Environmental Division experienced a decrease of $48,000 (5.4%) primarily due to
volume decreases from existing customers, related to projects being canceled or
delayed to the second half of 1997. Environmental sales for the remaining six
months are expected to equal 1996 sales levels for the same period. The Mineral
Division experienced an increase of $141,000 (17.8%) over the same period in
1996. Mineral sales in the United States increased $282,000 (53.7%) due to
volume increases from existing customers. Mineral sales in Mexico decreased
$171,000 (53.0%) from the same period in 1996 primarily due to sales volume
decreases from existing customers. Mineral sales for the remaining six months
of 1997 are expected to continue to be above 1996 sales levels for the same
period as a result of the Mineral Division's expansion into Central and South
America.
10
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
THREE MONTHS ENDED JUNE 30, 1997 AND 1996 (CONTINUED)
Gross profit as a percentage of sales for the three months ended June 30, 1997
was 19.7% as compared to 32.9% for the same period in 1996. This decrease was
due primarily to higher production costs (labor, supplies, and outside services)
in both divisions, continuing start-up costs associated with the Mineral
Division's new sample preparation facility in Lima, Peru, and start-up costs
associated with the Mineral Division's new sample preparation facility in
Managua, Nicaragua.
Operating expenses for the three months ended June 30, 1997 of $441,000
increased by $56,000 (12.7%) from the same period in 1996 due primarily to
higher selling expenses, higher professional fees, and expenses associated with
the Company's 1997 annual meeting/ proxy statements.
Other income for the three months ended June 30, 1997 was $4,000, net compared
to net expenses of $2,000 for the same period in 1996. This increase of $6,000
was due to higher interest income, lower interest expense, and translation gain
in the 1997 period, offset by lower other income in the 1996 period.
For the three months ended June 30, 1997, after the elimination of the minority
interest in loss of subsidiary of $10,000, the Company had a net loss of $79,000
compared to net income of $164,000 for the same period in 1996. This decrease
of $243,000 (148.2%) was due primarily to higher production costs in both
divisions, costs associated with the Mineral Division's expansion into Central
and South America, and higher selling/general administrative expenses, offset by
higher interest income and lower interest expense.
11
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Sales of Services for the six months ended June 30, 1997 of $3,262,000
represents an increase of $291,000 (9.7%) from the same period in 1996. The
Environmental Division experienced a decrease of $5,000 (.3%) due to volume
decreases of $78,000 from existing customers related to projects being canceled
or delayed to the second half of 1997. This decrease was offset by a new
customer's one-time project which generated sales of $73,000 in the six months
ended June 30, 1997. Environmental sales for the remaining six months are
expected to be the same as sales levels in 1996 for the same period. The
Mineral Division experienced an increase of $296,000 (22.1%) due primarily to
volume increases of $528,000 (3.3%) from existing Mineral United States
customers. Mineral sales in Mexico decreased $232,000 (46.0%) from the same
period in 1996 due primarily to volume decreases from existing customers.
Mineral sales for the remaining six months of 1997 are expected to continue to
be above 1996 sales levels for the same period due to the Mineral Division's
expansion into Central and South America.
Gross profit as a percentage of sales for the six months ended June 30, 1997 was
18.3% as compared to 28.1% for the same period in 1996. This decrease was due
primarily to higher production costs (labor, supplies, and outside services) in
both divisions and the Mineral Division's costs associated with its expansion
into Central and South America.
Operating expenses for the six months ended June 30, 1997 of $864,000 increased
by $117,000 (15.7%) from the same period in 1996 due primarily to higher selling
expenses (commissions, travel, advertising, and convention), and higher
general/administrative expenses (salaries, supplies, professional fees,
Director's fees) and annual meeting/proxy expenses.
Other expenses for the six months ended June 30, 1997 were $4,000 compared to
$11,000 for the same period in 1996. This decrease of $7,000 was due primarily
to higher interest income and lower interest expense, offset by lower
miscellaneous income and higher translation loss.
12
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BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (CONTINUED
For the six months ended June 30, 1997, after the elimination of the minority
interest in loss of subsidiary of $19,000, the Company had a net loss of
$252,000 compared to net income of $78,000 for the same period in 1996. This
decrease of $330,000 was due primarily to higher production costs, costs
associated with expansion into Central and South America, higher selling/general
administrative expenses, and translation loss, offset by higher interest income
and lower interest expense.
CAPITAL RESOURCES AND LIQUIDITY
Cash totaled $577,000 at June 30, 1997, compared with $803,000 at December 31,
1996. The $226,000 decrease in cash resulted from cash used in operating
activities of $165,000 and cash used in the purchase of property and equipment
of $142,000, offset by net cash provided by financing activities of $81,000.
Cash used in operating activities of $165,000 resulted from the net loss of
$252,000, an increase in net operating assets net of operating liabilities of
$69,000, and the minority interest share in loss of subsidiary of $19,000,
offset by the effect of certain non-cash reconciling items (primarily
depreciation and amortization) of $175,000.
Cash used for the purchase of property and equipment of $142,000 was for
leasehold improvements and equipment to increase the capacity in the Mineral
Division analytical lab and for the acquisition of equipment for the Peruvian
subsidiary.
Cash provided by financing activities of $81,000 consisted of an increase of
$26,000 in the working line of credit, cash provided by the exercise of stock
options of $37,000, and minority interest contributions of $50,000 in the
Peruvian subsidiary, offset by a decrease in long term debt of $32,000.
13
<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
The Company has a working line of credit with a bank. 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.
INCOME TAXES AND NET OPERATING LOSS CARRYFORWARDS
At June 30, 1997 the Company has alternative minimum tax credits of
approximately $33,000 available to offset future federal income taxes on an
indefinite carryforward basis and unused net operating loss carryforwards of
approximately $3,500,000. Such net operating loss carryforwards expire in
varying amounts from 1997 to 2012 and are subject to certain limitations under
the Internal Revenue Code.
At June 30, 1997 a valuation allowance of approximately $1,300,000 has been
recorded as Management of the Company is not able to determine that it is more
likely than not that the deferred tax asset will be realized.
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 SUBSIDIARIES
PART II
OTHER INFORMATION
None
15
<PAGE>
<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 30, 1997 By: /s/ Charles E. Ramsay
------------------- -----------------------
Charles E. Ramsay
Chief Financial Officer
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 577,000
<SECURITIES> 0
<RECEIVABLES> 918,000
<ALLOWANCES> 24,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,632,000
<PP&E> 3,040,000
<DEPRECIATION> 2,602,000
<TOTAL-ASSETS> 2,225,000
<CURRENT-LIABILITIES> 605,000
<BONDS> 0
0
0
<COMMON> 17,000
<OTHER-SE> 1,499,000
<TOTAL-LIABILITY-AND-EQUITY> 2,225,000
<SALES> 0
<TOTAL-REVENUES> 3,262,000
<CGS> 2,665,000
<TOTAL-COSTS> 2,665,000
<OTHER-EXPENSES> 849,000
<LOSS-PROVISION> 24,000
<INTEREST-EXPENSE> 10,000
<INCOME-PRETAX> (252,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (252,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (252,000)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> 0
</TABLE>
