-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NDgwQKMzyvaf7AvbmPAppA337+yK8rERD4qjI38ZsuiO5DLpLHWiFvwa0RgS9xox WIWMLyvUO0xIAsmZLiJuSg== 0001042910-98-000092.txt : 19980218 0001042910-98-000092.hdr.sgml : 19980218 ACCESSION NUMBER: 0001042910-98-000092 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAIR ELECTRONICS INC CENTRAL INDEX KEY: 0000095366 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 590780772 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04334 FILM NUMBER: 98538114 BUSINESS ADDRESS: STREET 1: 3101 SW THIRD AVE STREET 2: EXECUTIVE OFFICES CITY: FORT LAUDERDALE STATE: FL ZIP: 33315 BUSINESS PHONE: 3055251505 MAIL ADDRESS: STREET 1: 3101 SW THIRD AVENUE CITY: FT LAUDERDALE STATE: FL ZIP: 33315 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED DECEMBER 31, 1997 COMMISSION FILE NUMBER 1-4334 ***************** ************* SUNAIR ELECTRONICS, INC. ********************************************************************** (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) FLORIDA 59-0780772 ********************************* **************************** (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 3101 SW THIRD AVE., FT. LAUDERDALE, FLA. 33315 **************************************** ************** (ADDRESS OR PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (954) 525-1505 ************** NONE ********************************************************************** (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (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 REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES ( X ) NO ( ) INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK AS OF THE CLOSE OF THE PERIOD COVERED BY THE REPORT. CLASS OUTSTANDING AT ***************************** **************************** COMMON STOCK, $0.10 PAR VALUE 12/31/97 - 3,892,370 SHARES (Net of Treasury SHARES) SUNAIR ELECTRONICS, INC. AND SUBSIDIARY INDEX ***** PAGE NO. ********** PART I. FINANCIAL INFORMATION: CONSOLIDATED CONDENSED BALANCE SHEETS - - DECEMBER 31, 1997 AND SEPTEMBER 30, 1997 3 CONSOLIDATED CONDENSED STATEMENTS OF INCOME - - THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996 4 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996 5 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6-7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED STATEMENTS 8-9 PART II. OTHER INFORMATION 10 2
PART I. FINANCIAL INFORMATION SUNAIR ELECTRONICS, INC. AND SUBSIDIARY CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) 12/31/97 9/30/97 ----------- ----------- ASSETS ------ CURRENT ASSETS: --------------- CASH AND CASH EQUIVALENTS $ 1,544,584 $ 1,511,013 ACCOUNTS AND NOTES RECEIVABLE 475,774 430,294 INVENTORIES 7,264,394 7,590,906 PREPAID EXPENSES AND OTHER CURRENT ASSETS 68,476 55,863 ----------- ----------- TOTAL CURRENT ASSETS 9,353,228 9,588,076 ----------- ----------- INVESTMENT IN MARKETABLE SECURITIES 3,153,256 3,160,423 ----------------------------------- PROPERTY, PLANT AND EQUIPMENT-NET 954,371 915,277 --------------------------------- ----------- ----------- TOTAL ASSETS $13,460,855 $13,663,776 ============ =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY ---------------------------------- CURRENT LIABILITIES: -------------------- ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 156,099 $ 304,980 CURRENT PORTION OF CAPITALIZED LEASE 22,191 24,585 CURRENT PORTION OF INCOME TAXES PAYABLE 62,114 29,614 ----------- ----------- TOTAL CURRENT LIABILITIES 240,404 359,179 ----------- ----------- LONG-TERM LIABILITIES: ---------------------- LONG-TERM PORTION OF CAPITAL LEASE 6,455 8,178 LONG-TERM PORTION OF INCOME TAXES PAYABLE 828,900 860,000 ----------- ----------- TOTAL LONG-TERM LIABILITIES 835,355 868,178 ----------- ----------- SHAREHOLDERS' EQUITY 12,385,096 12,436,419 -------------------- ----------- ----------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $13,460,855 $13,663,776 ======================================== =========== ===========
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CONSOLIDATED CONDENSED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED (UNAUDITED) 12/31/97 12/31/96 ---------- ---------- SALES $ 1,148,170 $ 462,581 COST OF SALES 827,296 330,733 ----------- ---------- GROSS PROFIT 320,874 131,848 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 287,480 366,875 ----------- ---------- OPERATING INCOME 33,394 ( 235,027) OTHER INCOME: INTEREST INCOME 63,418 61,667 INTEREST EXPENSE (380) ( 1,095) OTHER, NET 1,405 1,529 ---------- ---------- INCOME BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 97,837 ( 172,926) PROVISION (BENEFIT) FOR INCOME TAXES 31,400 ( 66,600) ---------- ---------- NET INCOME $ 66,437 $ (106,326) ========== ========== AVERAGE SHARES OUTSTANDING 3,929,000 3,932,370 EARNINGS PER SHARE $ 0.02 $ (0.03) ========== ==========
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CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED (UNAUDITED) 12/31/97 12/31/96 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $ 66,437 $ (106,326) ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES DEPRECIATION AND AMORTIZATION 23,219 26,302 CHANGES IN OPERATING ACTIVITIES: (INCR) DECR IN ACCOUNTS RECEIVABLE (45,480) ( 240,882) (INCR) IN INVENTORY 326,512 ( 236,634) (INCR) IN OTHER ASSETS (12,613) ( 3,835) (DECR) INCR IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (179,815) 106,524 (DECR) INCR IN ACCRUED INCOME TAX 1,400 ( 61,600) ----------- ---------- NET CASH USED BY OPERATING ACTIVITIES 179,660 ( 516,451) ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASE OF PROPERTY, PLANT & EQUIPMENT (62,313) ( 2,339) SALES (PURCHASES) OF INVESTMENTS - NET 38,100 0 PURCHASE OF TREASURY SHARES (117,759) 0 ----------- ---------- NET CASH FROM INVESTING ACTIVITIES (141,972) ( 2,339) ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: PRINCIPAL PAYMENT OF CAPITAL LEASE (4,117) (5,704) ----------- ---------- NET INCREASE (DECREASE) IN CASH 33,571 (524,494) CASH AT BEGINNING OF PERIOD 1,511,013 1,721,839 ----------- ---------- CASH AT END OF PERIOD $ 1,544,584 $ 1,197,345 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: CASH PAID DURING THE YEAR FOR INTEREST $ 0 $ 0 ============ ============ CASH PAID DURING THE YEAR FOR INCOME TAXES $ 30,000 $ 0 ============ ============
5 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION THE ACCOMPANYING UNAUDITED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH THE INSTRUCTIONS TO FORM 10-Q AND DO NOT INCLUDE ALL OF THE INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS. IN THE OPINION OF MANAGEMENT, ALL ADJUSTMENTS (CONSISTING OF NORMAL RECURRING ACCRUALS) CONSIDERED NECESSARY FOR A FAIR PRESENTATION HAVE BEEN INCLUDED. OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1997, ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998. 2. ACCOUNTING POLICIES (A) PRINCIPLES OF CONSOLIDATION- THE ACCOMPANYING CONSOLIDATED FINANCIAL STATEMENTS INCLUDE THE ACCOUNTS OF THE COMPANY AND ITS SUBSIDIARY. ALL SIGNIFICANT INTER-COMPANY ACCOUNTS AND TRANSACTIONS HAVE BEEN ELIMINATED IN CONSOLIDATION. (B) PROPERTY, PLANT AND EQUIPMENT- PROPERTY, PLANT AND EQUIPMENT IS DEPRECIATED OVER THE ESTIMATED USEFUL LIVES OF THE ASSETS USING BOTH STRAIGHT-LINE AND ACCELERATED METHODS. (C) RESEARCH AND DEVELOPMENT COSTS- ALL RESEARCH AND DEVELOPMENT COSTS ARE CHARGED TO EXPENSE AS INCURRED. (D) EARNINGS PER COMMON SHARE- EARNINGS PER COMMON SHARE ARE COMPUTED BASED ON WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING EACH PERIOD. (E) INVENTORIES- INVENTORIES CONSIST OF THE FOLLOWING: 12/31/97 9/30/97 ----------- ----------- RAW MATERIALS $ 1,698,952 $ 1,695,962 WORK IN PROCESS 4,553,405 4,109,569 FINISHED GOODS 1,012,037 1,785,375 ----------- ----------- $ 7,264,394 $ 7,590,906 =========== =========== 6 3. INCOME TAXES: DURING 1995, IT WAS DETERMINED THAT CONTINUED OPERATIONS OF ITS INTEREST CHARGE-DOMESTIC INTERNATIONAL SALES CORPORATION (IC-DISC) SUBSIDIARY'S ELECTION WAS NO LONGER ADVANTAGEOUS TO THE COMPANY. ACCORDINGLY, THE TAX ELECTION OF THE SUBSIDIARY WAS DISCONTINUED AND ITS RETAINED EARNINGS OF APPROXIMATELY $3,200,000 WERE DISTRIBUTED TO THE COMPANY. REGULATIONS PROVIDE FOR THE TAXATION OF SUCH DISTRIBUTION OVER A TEN YEAR PERIOD IN EQUAL ANNUAL INCREMENTS. UPON THE ASSUMPTION THE COMPANY'S BUSINESS IS PROFITABLE THROUGHOUT THE SEVEN YEARS, EXCLUDING SUCH INCREMENTAL INCOME, THE AGGREGATE INCOME TAX PAYABLE AS A CONSEQUENCE OF SUCH DISTRIBUTION WILL APPROXIMATE A MAXIMUM OF $860,000 OR $120,000 PER YEAR. INTEREST WILL NO LONGER ACCRUE ON THE UNPAID PORTION OF THE TAX AMOUNT. 4. PREFERRED STOCKS: THE COMPANY HAS 500,000 AUTHORIZED SHARES OF PREFERRED STOCK, NO PAR VALUE, THAT MAY BE ISSUED AT SUCH TERMS AND PROVISIONS AS DETERMINED BY THE BOARD OF DIRECTORS. 5. STOCK OPTIONS: AS OF DECEMBER 31, 1997, THE COMPANY HAD AUTHORIZED 100,000 SHARES FOR NON-QUALIFIED STOCK OPTIONS. NONE HAVE BEEN ISSUED. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS LIQUIDITY: ---------- DURING THE FIRST QUARTER OF THE CURRENT FISCAL YEAR ENDING DECEMBER 31, 1997, THE COMPANY MAINTAINED CASH AND SHORT TERM INVESTMENTS MORE THAN ADEQUATE TO COVER KNOWN REQUIREMENTS, UNFORESEEN EVENTS OR UNCERTAINTIES THAT MIGHT OCCUR. DURING THE THREE MONTH PERIOD, CASH AND SHORT TERM INVESTMENTS MAINTAINED AN AVERAGE BALANCE OF $1,530,868, COMPARED TO AN AVERAGE BALANCE OF $1,277,000 FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1997, OR AN AVERAGE BALANCE OF $1,626,000 FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1996. SHORT TERM INVESTMENTS ARE TAX EXEMPT MONEY MARKET FUNDS THAT ARE READILY AVAILABLE FOR IMMEDIATE USE SHOULD THE OCCASION ARISE. IT IS ANTICIPATED THAT THE COMPANY WILL REMAIN AS LIQUID DURING THE REST OF FISCAL 1998. INVENTORIES CONTAIN NO OBSOLESCENCE AS ADJUSTMENTS ARE MADE AS THEY OCCUR. ACCOUNTS AND NOTES RECEIVABLE CONTAIN NO BAD DEBTS. INTERIM RESERVES ARE MAINTAINED TO COVER CANCELLATION CHARGES UNPAID AND ANY FREIGHT CHARGE DISPUTES. ALL MONETARY TRANSACTIONS ARE IN U.S. DOLLARS AND NO LETTERS OF CREDIT INVOLVE FOREIGN EXCHANGE. CAPITAL RESOURCES: ------------------ DURING THE FIRST THREE MONTHS OF THE CURRENT FISCAL YEAR, THE COMPANY EXPENDED $62,313 FOR CAPITAL ASSETS. NO EXPENDITURES ARE CONTEMPLATED FOR PLANT EXPANSION OR EXTENSIVE MAINTENANCE. THE COMPANY HAS NO LONG TERM DEBT AND NONE IS CONTEMPLATED OTHER THAN THE LEASE OF THE COMPUTER. LIABILITIES CONSIST OF CURRENT ACCOUNTS PAYABLE AND EXPENSES RELATED TO THE CURRENT ACCOUNTING PERIOD AND THE CAPITAL LEASE. RESULTS OF OPERATIONS: ---------------------- DURING THE FIRST QUARTER OF THE CURRENT FISCAL YEAR ENDED DECEMBER 31, 1997, SHIPMENTS WERE $1,148,170, UP FROM SHIPMENTS OF $ 462,581 OR 14% FOR THE SAME QUARTER ONE YEAR AGO AND UP $ 257,459 OR 29% FOR THE FIRST QUARTER ENDED DECEMBER 31, 1995. EXPORT SHIPMENTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1997 WERE $ 334,382 OR 29% OF TOTAL SALES, UP $ 137,662 OR 70% FROM THE SAME PERIOD ONE YEAR AGO. DOMESTIC SHIPMENTS FOR THE FIRST THREE MONTHS OF THE CURRENT FISCAL YEAR WERE $ 813,788, COMPARABLE TO SHIPMENTS FOR THE SAME PERIOD ONE YEAR AGO OF $ 265,861, UP $ 547,927 OR 26%. MANAGEMENT CONTINUES TO MONITOR SELLING, GENERAL AND ADMINISTRATIVE EXPENSES WHICH DECREASED $ 79,395 FROM THE SAME PERIOD ONE YEAR AGO. THE DIRECT LABOR FORCE CONTINUES AT A REDUCED LEVEL DUE TO SUFFICIENT INVENTORY LEVELS IN FINISHED GOODS. 8 RESULTS OF OPERATIONS: (CONTINUED) ---------------------- SHIPMENTS FOR THE FIRST QUARTER WERE HIGHER THAN LAST YEAR AT THIS TIME DUE TO ORDERS RECEIVED IN THE FOURTH QUARTER OF FISCAL 1997 WHICH RESULTED IN A BACKLOG AT SEPTEMBER 30, 1997 OF $1,796,000. THE BACKLOG FOR THE FIRST QUARTER OF FISCAL 1998 ENDED DECEMBER 31, 1997 WAS $1,082,000. NEGOTIATIONS CONTINUE FOR CONTRACTS WITH BOTH DOMESTIC AND INTERNATIONAL CUSTOMERS. THE COMPANY CONTINUES TO BE OPTIMISTIC ABOUT FUTURE REQUIREMENTS EVEN THOUGH THE PROCUREMENT CYCLE CONTINUES TO BE EXTREMELY LONG. NEW MARKET OPPORTUNITIES ARE BEING PURSUED IN CENTRAL AMERICA AND OTHER GEOGRAPHIC AREAS NOT COVERED PREVIOUSLY. 9 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None. 10 SIGNATURES ---------- PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. SUNAIR ELECTRONICS, INC. FEBRUARY 11, 1998 /S/ ROBERT URICHO, JR. DATE _________________ _____________________________ ROBERT URICHO, JR., PRINCIPAL EXECUTIVE OFFICER FEBRUARY 11, 1998 /S/ SYNNOTT B. DURHAM DATE _________________ ____________________________ SYNNOTT B. DURHAM, PRINCIPAL ACCOUNTING OFFICER 11 EX-27 2 FDS --
5 0000095366 SUNAIR ELECTRONICS, INC. 3-MOS SEP-30-1998 OCT-01-1997 DEC-31-1997 1,544,584 3,153,256 475,774 300 7,264,394 9,353,228 4,111,922 3,157,551 13,460,855 240,404 0 393,237 0 0 11,991,859 13,460,855 1,148,170 1,212,613 827,296 827,296 287,480 300 380 97,837 31,400 31,400 0 0 0 31,400 .02 .02
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