<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
March 31, 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 March 31, 1997 - 1,563,756 of Common Stock,
$.01 par value.
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<PAGE>
BARRINGER LABORATORIES, INC.
INDEX
Part I - Financial Information
- Consolidated Balance Sheets as of March 31, 1997
(Unaudited) and December 31, 1996;
- Consolidated Statements of Operations (Unaudited) for the Three
Months Ended March 31, 1997 and 1996;
- Consolidated Statements of Cash Flows (Unaudited) for the Three
Months Ended March 31, 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
Signatures
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
(UNAUDITED)
Assets
Current Assets:
Cash and cash equivalents $ 801,000 $ 803,000
Trade receivables, less
allowance of $21,000 and
$15,000 for doubtful accounts 768,000 1,087,000
Prepaid expenses and other 146,000 99,000
---------- ----------
Total Current Assets 1,715,000 1,989,000
---------- ----------
Property and Equipment:
Machinery and equipment 2,066,000 2,000,000
Machinery and equipment under
capital lease obligations 191,000 191,000
Leasehold improvements 647,000 647,000
Office furniture and equipment 81,000 79,000
---------- ----------
2,985,000 2,917,000
Less accumulated depreciation
and amortization 2,555,000 2,487,000
---------- ----------
Net Property and Equipment 430,000 430,000
Other Assets 124,000 75,000
---------- ----------
Total Assets $2,269,000 $2,494,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(CONCLUDED)
MARCH 31, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
Liabilities and Shareholders' Equity
Current Liabilities:
Line of Credit $ 26,000 $ -
Trade accounts payable 207,000 213,000
Accrued liabilities:
Payroll, compensation and
related expenses 221,000 256,000
Other 86,000 121,000
Income tax payable - 49,000
Current maturities of long-
term debt 50,000 58,000
---------- ----------
Total Current Liabilities 590,000 697,000
Long-Term Debt, less current
maturities 81,000 89,000
---------- ----------
Total Liabilities 671,000 786,000
---------- ----------
Minority Interest 40,000 -
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 1,652,016 and out-
standing 1,563,756 17,000 17,000
Additional paid-in capital 2,532,000 2,532,000
Accumulated deficit (888,000) (715,000)
Translation Adjustment - (23,000)
---------- ----------
1,661,000 1,811,000
Less common stock in treasury,
at cost, 88,260 shares (103,000) (103,000)
---------- ----------
Total Shareholders' Equity 1,558,000 1,708,000
---------- ----------
Total Liabilities and
Shareholders' Equity $2,269,000 $2,494,000
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
Sales of Services $1,494,000 $1,296,000
Cost of Services Sold 1,245,000 1,011,000
---------- ----------
Gross Profit 249,000 285,000
---------- ----------
Selling, General and
Administrative Expenses 423,000 362,000
---------- ----------
Operating Profit (Loss) (174,000) (77,000)
Other Income (Expense):
Interest income 11,000 3,000
Interest expense (5,000) (15,000)
Translation loss (18,000) -
Other 4,000 3,000
---------- ----------
Total Other Income (Expense) (8,000) (9,000)
---------- ----------
Income (Loss) before Income
Taxes and Minority Interest
in Loss of Subsidiary (182,000) (86,000)
Provision for Income Taxes - -
Minority Interest in Loss of
Subsidiary 9,000 -
---------- ----------
Net Income (Loss) for the period $ (173,000) $ (86,000)
---------- ----------
---------- ----------
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
Per Share Data:
Net Income (Loss) per share: $ (.11) $ (.05)
---------- ----------
---------- ----------
Weighted average common shares
outstanding 1,563,756 1,652,016
---------- ----------
---------- ----------
See accompanying notes to consolidated financial statements.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period $(173,000) $ (86,000)
Items not affecting cash
Depreciation and amortization 68,000 112,000
Bad debt expense 6,000 3,000
Minority interest share in loss
of subsidiary (9,000) -
Other 23,000 10,000
Decrease (increase) in operating
assets net of operating
liabilities 92,000 260,000
--------- ---------
Cash Provided by
Operating Activities 7,000 299,000
--------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property and equipment (68,000) (109,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long term debt - 148,000
Reduction in long-term debt (16,000) (65,000)
Increase (decrease) in short term
borrowings 26,000 (84,000)
Minority interest contributions 49,000 -
--------- ---------
Cash Provided by (Used in)
Financing Activities 59,000 (1,000)
--------- ---------
Increase (decrease) in cash (2,000) 189,000
Cash and cash equivalents
- beginning of period 803,000 170,000
--------- ---------
Cash and cash equivalents
- end of period $ 801,000 $ 359,000
--------- ---------
--------- ---------
See accompanying notes to consolidated financial statements.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(UNAUDITED)
(CONTINUED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
-------- ---------
Decrease (increase) in
operating assets net of
operating liabilities
Trade receivables $ 313,000 $ 337,000
Other current assets (47,000) (1,000)
Accounts payable and accrued
liabilities (76,000) (76,000)
Income tax payable (49,000) -
Other (49,000) -
---------- ---------
Total - net $ 92,000 $260,000
---------- ---------
---------- ---------
Cash paid during the period
for interest $ 5,000 $ 15,000
---------- ---------
---------- ---------
Cash paid during the period
for income taxes $ 49,000 $ -
---------- ---------
---------- ---------
See accompanying notes to consolidated financial statements.
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<PAGE>
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 March 31, 1997 and the results of their operations and their cash
flows for the three months ended March 31, 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 Subsidiaries included in its Annual Report on Form
10-KSB filed with the Securities and Exchange Commission. The Form 10-KSB
should be read in conjunction herewith.
2. ACCOUNTING POLICIES
NEW ACCOUNTING PRONOUNCEMENTS
On March 3, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
(SFAS No. 128). This pronouncement provides a different method of
calculating earnings per share than is currently used in accordance with
Accounting Principles Board Opinion No. 15, "Earnings Per Share". SFAS 128
provides for the calculation of "Basic" and "Diluted" earnings per share.
Basic earnings per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share
reflects the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted earnings per share. The
Company will adopt SFAS No. 128 in 1997 and its implementation is not
expected to have a material effect on the consolidated financial
statements.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. ACCOUNTING POLICIES (CONTINUED)
CURRENCY TRANSLATION
The Company had been treating the peso as the functional currency for its
Mexican subsidiary. As of December 31, 1996 Mexico is considered a highly
inflationary economy. As required by Statement of Financial Accounting
Standards No. 52, "Foreign Currency Translation", the Company has changed
the functional currency of this subsidiary to the U.S. dollar. As a
result, the Company now remeasures the financial statements from the peso
to the U.S. dollar effective January 1, 1997. Nonmonetary assets and
liabilities are remeasured at the exchange rate at the date of the change
in the functional currency, which rate then becomes, in effect, the
"historical rate" for translating those assets in the future. Monetary
assets and liabilities are remeasured at the exchange rate in effect at the
date a transaction occurs. Gains and losses related to the remeasurement
of monetary assets and liabilities are included in income.
3. INCOME TAXES AND NET OPERATING LOSS CARRYFORWARDS
At March 31, 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 March 31, 1997 a valuation allowance of $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.
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<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
Sales of services for the three months ended March 31, 1997 of $1,494,000
represents a increase of $198,000 (15.3%) from the same period in 1995. The
Environmental Division, experienced an increase of $43,000 (5.7%) primarily due
to a new customer's one-time project which generated sales of $65,000 for the
three months ended March 31, 1996. Additionally, there were volume decreases of
$22,000 from existing customers. The Mineral Division experienced an increase
of $155,000 (28.5%) due to an increase in U.S. sales of $245,000 (79.9%) over
the same period in 1996. This increase was due primarily to volume increases
from existing customers. This increase was offset by a decrease of $90,000
(38.1%) in Mineral sales in Mexico primarily due to an existing customer's
special project in 1996, which generated sales of $92,000 for the three months
ended March, 1996.
Gross profit as a percentage of sales for the three months ended March 31, 1997
was 16.7% as compared to 22.0% for the same period in 1996. This decrease was
due to higher production costs (labor, supplies, and outside services) for both
divisions and costs associated with the Mineral Division's new sample
preparation facility in Lima, Peru.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Operating expenses for the three months ended March 31, 1997 of $423,000
increased by $61,000 (16.9%) from the same period in 1996 primarily due to
higher selling expenses (payroll, commissions, travel, and advertising), and
higher general and administration expenses (payroll, fringe benefits,
insurance, professional fees, and bad debt). The Company anticipates that
operating expenses will continue at this level for the remainder of the year.
Other expenses for the three months ended March 31, 1997 were $8,000 compared
to $9,000 for the same period in 1996. This decrease of $1,000 was primarily
due to higher interest income, lower interest expense, offset by translation
loss.
For the three months ended March 31, 1997 the Company incurred a loss of
$173,000 compared to a loss of $86,000 for the same period in 1996. This
increase of $87,000 was primarily due to higher production costs, costs
associated with the Mineral Division's new sample preparation facility in
Lima, Peru, higher operating expenses, and translation loss.
CAPITAL RESOURCES AND LIQUIDITY
Cash and cash equivalents totaled $801,000 at March 31, 1997, compared with
$803,000 at December 31, 1996. The $2,000 decrease in cash resulted from
cash used for the purchase of property and equipment of $68,000, offset by
cash provided by operating activities of $7,000 and net cash provided by
financing activities of $59,000.
Cash provided by operating activities resulted from the effect of certain
non-cash reconciling items of $88,000 (primarily depreciation and
amortization) and a decrease in operating assets (primarily trade
receivables) net of operating liabilities of $92,000, offset by the net loss
of $173,000.
Cash used for the purchase of property and equipment of $68,000 was related
to the acquisition of equipment for the Peruvian subsidiary.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
Cash provided by financing activities of $59,000 consisted of an increase of
$26,000 in the working line of credit and minority interest contributions of
$49,000 in the Peruvian subsidiary, offset by a decrease in long term debt of
$16,000.
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 March 31, 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 March 31, 1997 a valuation allowance of $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.
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<PAGE>
BARRINGER LABORATORIES, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
None
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<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: May 8, 1997 By: /s/ Charles E. Ramsay
----------------- ----------------------------------
Charles E. Ramsay
Chief Financial Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 801,000
<SECURITIES> 0
<RECEIVABLES> 768,000
<ALLOWANCES> 21,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,715,000
<PP&E> 2,985,000
<DEPRECIATION> 2,555,000
<TOTAL-ASSETS> 2,269,000
<CURRENT-LIABILITIES> 590,000
<BONDS> 0
0
0
<COMMON> 17,000
<OTHER-SE> 1,541,000
<TOTAL-LIABILITY-AND-EQUITY> 2,269,000
<SALES> 1,494,000
<TOTAL-REVENUES> 1,494,000
<CGS> 1,245,000
<TOTAL-COSTS> 1,245,000
<OTHER-EXPENSES> 422,000
<LOSS-PROVISION> 21,000
<INTEREST-EXPENSE> 5,000
<INCOME-PRETAX> (173,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (173,000)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> 0
</TABLE>
