UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30,December 31, 2002
Commission file number 0-10976
MICROWAVE FILTER COMPANY, INC.
(Exact name of registrant as specified in its charter.)
New York 16-0928443
(State of Incorporation) (I.R.S. Employer Identification Number)
6743 Kinne Street, East Syracuse, N.Y. 13057
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (315) 438-4700
Indicate by check mark whether 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 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 by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).
YES ( ) NO ( x )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Stock, $.10 Par Value - 2,904,781 shares as of June 30,December 31, 2002.
PART I. - FINANCIAL INFORMATION
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
JUNE 30,
December 31, 2002 SEPTEMBER 30, 20012002
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 608270 $ 373649
Investments 1,383 9001,368 1,378
Accounts receivable-trade, net 517 600545 379
Federal and state income
tax recoverable 15 0
Inventories 887 884806 963
Deferred tax asset - current 165 165180 180
Prepaid expenses and other
current assets 124 8798 120
-------- --------
Total current assets 3,684 3,0093,282 3,669
Property, plant and equipment, net 1,269 1,2611,136 1,197
-------- --------
Total assets $ 4,9534,418 $ 4,2704,866
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 162176 $ 192180
Customer deposits 145 23138 140
Accrued federal and state
income taxes 298 610 234
Accrued payroll and related
expenses 140 109 126
Accrued compensated absences 303 265243 249
Cash dividend payable 290 0
Other current liabilities 105 7147 146
-------- --------
Total current liabilities 1,153 7211,003 1,075
Deferred tax liability -
noncurrent 19 1930 30
-------- --------
Total liabilities 1,172 7401,033 1,105
-------- --------
Stockholders' Equity:
Common stock,$.10 par value 432 432
Additional paid-in capital 3,240 3,240
Retained earnings 1,615 1,3641,219 1,595
-------- --------
5,287 5,0364,891 5,267
Common stock in treasury,
at cost (1,506) (1,506)
-------- --------
Total stockholders' equity 3,781 3,5303,385 3,761
-------- --------
Total liabilities and
stockholders' equity $ 4,9534,418 $ 4,2704,866
======== ========
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED JUNE 30,MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS
ENDED DECEMBER 31, 2002 AND 2001
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended
Nine months ended
June 30 June 30
2002 2001December 31
2002 2001
Net sales $1,517 $1,782 $6,019 $5,391$1,489 $2,390
Cost of goods sold 1,104 1,286 3,642 3,654
------- -------1,039 1,220
------- -------
Gross profit 413 496 2,377 1,737450 1,170
Selling, general and
administrative expenses 544 553 1,716 1,708
------- -------589 610
------- -------
(Loss) income from
operations (131) (57) 661 29(139) 560
Other income (net),
principally interest 9 19 32 66
------- -------8 13
------- -------
(Loss) income before
income taxes (122) (38) 693 95(131) 573
(Benefit) provision for
income taxes (42) (13) 239 33
------- -------(45) 198
------- -------
NET (LOSS) INCOME ($80) ($25) $454 $62
======= =======86) $375
======= =======
Basic (loss) earnings
per share ($0.03) ($0.01) $0.16 $0.02.03) $0.13
======= =======
Weighted average number of
common shares outstanding 2,905 2,905
======= =======
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
JUNE 30,MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2002 AND 2001
(Unaudited)
(Amounts in thousands)
Three months ended
Nine months ended
June 30 June 30December 31
2002 2001
2002 2001
Cash flows from operating
activities:
Net (loss) income $ (80)(86) $ (25) $ 454 $ 62375
Adjustments to reconcile
net (loss) income to net
cash provided by operating
activities:
Depreciation and amortization 74 77 205 22476 65
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 285 181 83 350(166) (326)
Inventories 122 430 (3) 118157 (170)
Prepaid expenses & other
assets 19 22 (37) (39)7 (35)
Increase (decrease) in:
Accounts payable & accrued
expenses (263) (410) 432 (531)(362) 677
------- -------
-------- -------
Net cash (used in) provided
by operating activities 157 275 1,134 184(374) 586
------- ------- -------- -------
Cash flows from investing
activities:
Investments 47 0 (483) 92510 510
Capital expenditures (177) (20) (213) (213)(15) (28)
------- ------- -------- -------
Net cash (used in) provided
by investing activities (130) (20) (696) 712(5) 482
Cash flows from financing
activities:
Purchase of treasury stock 0 0 0 (382)
Cash dividend paid 0 0 (203) 0
------- ------- ------- -------
Net cash (used in)
financing activities 0 0
(203) (382)
Increase------- -------
(Decrease)increase in cash
and cash equivalents 27 255 235 514(379) 1,068
Cash and cash equivalents
at beginning of period 581 884649 373 625
------- -------
------- -------
Cash and cash equivalents
at end of period $ 608 $1,139 $ 608 $1,139
===== ====== ======270 $1,441
======= =======
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,DECEMBER 31, 2002
Note 1. Summary of Significant Accounting Policies The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they 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. The Operating results for the ninethree month
period ended June 30,December 31, 2002 are not necessarily indicative of the results
that may be expected for the year ended September 30, 2002.2003. For further
information, refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10K for the year ended
September 30, 2001.2002.
Note 2. Industry Segment Data
The Company's primary business segments involve (1) operations of Microwave
Filter Company, Inc. (MFC) which designs, develops, manufactures and sells
electronic filters, usedboth for preventing
interferenceradio and microwave frequencies, to help process
signal distribution and to prevent unwanted signals from disrupting transmit
or signal processing inreceive operations. Markets served include cable television, television and
radio broadcast, satellite broadcast, aerospacemobile radio, commercial and government markets;defense
electronics; and (2) operations of Niagara Scientific, Inc. (NSI), a wholly owned
subsidiary, which manufactures industrial automation equipment.custom designs case packing machines to automatically pack
products into shipping cases. Customers are typically processors of food and
other commodity products with a need to reduce labor cost with a modest
investment and quick payback.
Information by segment is as follows:
Three months ended
Nine months ended
(thousands of dollars) June 30 June 30,
2002 2001December 31
2002 2001
Net Sales (Unaffiliated):
MFC $1,389 $1,245 $5,480 $4,445$1,301 $2,369
NSI 128 537 539 946
------ ------188 21
------ ------
Total $1,517 $1,782 $6,019 $5,391
====== ======$1,489 $2,390
====== ======
Operating (loss) profit : (a)
MFC ($32) ($42) $811 $13310) $614
NSI (99) (15) (150) (104)
------ ------(129) (54)
------ ------
Total ($131) ($57) $661 $29139) $560
====== ====== ======= =======
Identifiable assets: (b)
MFC $4,023 $2,867 $4,023 $2,867$3,802 $3,944
NSI 322 286 322 286
------ ------346 436
------ ------
Subtotal 4,345 3,153 4,345 3,1534,148 4,380
Corporate Assets - Cash
And Cash Equivalents 608 1,139 608 1,139
------ ------270 942
------ ------
Total $4,953 $4,292 $4,953 $4,292
====== ======$4,418 $5,322
====== ======
(a) Operating profit (loss) is total revenue less cost of goods sold and
operating expenses. In computing operating profit, none of the following items
have been added or deducted: interest expense, income taxes and miscellaneous
income. Expenses incurred on behalf of both Companies are allocated based upon
estimates of their relationship to each entity.
(b) Identifiable assets by industry are those assets that are used in the
Companies operations in each industry.
Note 3. Inventories
Inventories net of provision for obsolescence consisted of the following:
(thousands of dollars) June 30,December 31, 2002 September 30, 20012002
Raw materials and stock parts $630 $702$545 $636
Work-in-process 188 106202 257
Finished goods 69 7659 70
---- ----
$887 $884$806 $963
==== ====
The Company's provision for obsolescence equaled $297,634$345,161 at June 30,December 31,
2002 and September 30, 2001.2002.
Note 4. Cash Dividend Payable
On December 18, 2002, the Board of Directors of Microwave Filter Company,
Inc. declared a ten cents per share cash dividend to shareholders of record on
January 17, 2003 to be distributed on January 31, 2003.
Note 5. Recent Accounting Pronouncements
InSFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities," was issued June 2001, the Financial Accounting Standards Board ("FASB") approved
Statements of Financial Accounting Standards2002 and is effective for exit or disposal
activities initiated after December 31, 2002. SFAS No. 141 "Business Combinations"
("SFAS 141")146 addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 142 "Goodwill94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Intangible Assets" ("SFAS 142")
which are effective July 1, 2001 and October 1, 2002, respectively, for the
Corporation. SFAS 141 requires that the purchase methodCosts to Exit an Activity Including Certain Costs Incurred in a
Restructuring." The adoption of accounting be used
for all business combinations initiated after June 30, 2001. Thisthis standard has no
material impact on the financial
statements of the Company. Under SFAS 142,
amortization of goodwill, including goodwill recorded in past business
combinations, will discontinue upon adoption of this standard. The Company has
no goodwill or other intangibles as of June 30, 2002 or September 30, 2001.
In October 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 provides guidance on the accounting
for long-lived assets to be held and used and for assets to be disposed of
through sale or other means. SFAS 144 is effective for fiscal years beginning
after December 15, 2001. The Company does not expect the adoption of SFAS 144
to have a material impact on its financial statements.
MICROWAVE FILTER COMPANY, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Microwave Filter Company, Inc. operates primarily in the United States and
principally in two industries. The Company extends credit to business
customers based upon ongoing credit evaluations. Microwave Filter Company,
Inc. (MFC) designs, develops, manufactures and sells electronic filters, both
for radio and microwave frequencies, to help process signal distribution and
to prevent unwanted signals from disrupting transmit or receive operations.
Markets served include cable television, television and radio broadcast,
satellite broadcast, mobile radio, commercial and defense electronics. Niagara
Scientific, Inc. (NSI), a wholly owned subsidiary, custom designs case packing
machines to automatically pack products into shipping cases. Customers are
typically processors of food and other commodity products with a need to
reduce labor cost with a modest investment and quick payback.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30,DECEMBER 31, 2002 vs. THREE MONTHS ENDED JUNE 30,DECEMBER 31, 2001.
Net sales for the three months ended June 30,December 31, 2002 equaled $1,517,312,$1,489,157, a
decrease of $264,720$901,303 or 14.9%37.7% when compared to net sales of $1,782,032$2,390,460 for the
three months ended June 30,December 31, 2001.
MFC sales for the three months ended June 30,December 31, 2002 equaled $1,389,010, an
increase$1,301,163, a
decrease of $143,815$1,068,565 or 11.5%45.1% when compared to sales of $1,245,195$2,369,728 for the
three months ended JuneDecember 31, 2001. The increasedecrease in MFC sales can primarily
be attributed to an increasea decrease in the sales of the company's standard
cable/satellite TV products, which management attributes toproducts. Last year, the Company saw an increase in demand
for the company's filters which suppress strong out-of-band interference
caused by military and civilian radar systems. This increase in
demand cansystems, primarily be attributeddue to the increased
security measures beingthat were taken as a result of the September 11th terrorist
attacks. The Company is
uncertain how long thisThat demand will continuehas decreased resulting in the lower sales and what levels it will reach.
There can be no assurance thatdue to the
Company'scurrent economic climate, MFC has not seen an increase in sales levels or growth will
remain at, reach or exceed historical levels in any future period. MFC
continues to experience a decrease in demand in other
product areas primarily
due to the economy.areas.
MFC's sales order backlog equaled $317,382$298,317 at June 30,December 31, 2002, a decrease
of $82,386$101,323, when compared to sales order backlog of $399,768$399,640 at March 31,September 30,
2002. However, backlog is not necessarily indicative of future sales.
Accordingly, the Company does not believe that its backlog as of any
particular date is representative of actual sales for any succeeding period.
Approximately 85% ofThe total MFC's sales order backlog at June 30,December 31, 2002 is scheduled to ship
by September 30, 2002.2003.
The Company continues to invest in production engineering and infrastructure
development to penetrate OEM (Original Equipment Manufacturer) market segments
as they become popular. MFC is concentrating its technical resources and
product development efforts toward potential high volume customers as part of
a concentrated effort to provide substantial long-term growth.
NSI sales for the three months ended June 30,December 31, 2002 equaled $128,302, a
decrease$187,994, an
increase of $408,535 or 76%$167,262 when compared to sales of $536,837$20,732 for the three months
ended June 30,December 31, 2001. Despite the increase in sales, NSI's sales order
levels have also been impacted negatively by the sluggish economy and reduced
capital spending. Sales of NSI related equipment, on a quarter to quarter
basis, can also be impacted by the timing of the shipment of the custom
designed equipment and the customer's scheduled delivery dates. At June 30,December
31, 2002, NSI's sales order backlog equaled $138,600$394,600 compared to $245,600$305,938, at
March 31,September 30, 2002. Approximately 65% of NSI's total backlog of orders is
scheduled to ship during fiscalby September 30, 2003.
The Company recorded a net loss of $80,194,$86,168, or a loss of $.03 per share, for
the three months ended June 30,December 31, 2002 compared to a net lossincome of $24,696,$375,492,
or a
loss of $.01$.13 per share, for the three months ended June 30,December 31, 2001. The decrease
in net income can primarily be attributed to the decrease in sales.
Gross profit for the three months ended June 30,December 31, 2002 equaled $413,019,$449,686,
a decrease of $82,814$720,405 or 16.7%61.6%, when compared to gross profit of $495,833$1,170,091
for the three months ended June 30,December 31, 2001. As a percentage of sales, gross
profit equaled 27.2%30.2% for the three months ended June 30,December 31, 2002 compared to
27.8%48.9% for the three months ended June 30,December 31, 2001. The dollar decrease in gross
profit can primarily be attributed to the decrease in sales.
Selling, general and administrative (SGA) expenses for the three months
ended June 30,December 31, 2002 equaled $544,440,$589,197, a decrease of $7,956$20,476 or 1.4%3.4%, when
compared to SG&A expenses of $552,396$609,673 for the three months ended June 30,December 31,
2001. SGA expenses increased to 35.9%39.6% of sales for the three months ended
June
30,December 31, 2002 when compared to 31.0%25.5% of sales for the three months ended
June 30,December 31, 2001, primarily due to the decrease in sales this year when
compared to the same period last year.
Due to the uncertain economic climate, the Company is
emphasizing cost controls and cost cutting measures to minimize operating
expenses.
On an industry segment basis, MFC recorded a loss from operations of $32,397$10,600
for the three months ended June 30,December 31, 2002 compared to a lossincome from
operations of $41,668$614,418 for the three months ended June 30,December 31, 2001. The
improvementdecrease can primarily be attributed to the increasedecrease in MFC's sales. NSI
recorded a loss from operations of $99,024$128,911 for the three months ended
June 30,December 31, 2002 compared to a loss from operations of $14,895$53,931 for the three
months ended June 30,December 31, 2001. The increase in NSI's operating losslosses can primarily be attributed to
the
decreaselow sales volume, fixed overhead expenses and an increase in NSI salespromotional
expenses this year when compared to the same period last year.
NINE MONTHS ENDED JUNE 30, 2002 vs. NINE MONTHS ENDED JUNE 30, 2001.
Net sales
Critical Accounting Policies
The Company's consolidated financial statements are based on the application
of generally accepted accounting principles (GAAP). GAAP requires the use of
estimates, assumptions, judgments and subjective interpretations of accounting
principles that have an impact on the assets, liabilities, revenue and expense
amounts reported. The Company believes its use of estimates and underlying
accounting assumptions adhere to GAAP and are consistently applied. Valuations
based on estimates are reviewed for reasonableness and adequacy on a
consistent basis throughout the nine months ended June 30, 2002 equaled $6,018,723, an
increaseCompany. Primary areas where financial
information of $627,619 or 11.6% when compared to net sales of $5,391,104 for
the nine months ended June 30, 2001.
MFC sales for the nine months ended June 30, 2002 equaled $5,480,330, an
increase of $1,035,032 or 23.3% when compared to sales of $4,445,298 for the
nine months ended June 30, 2001. The increase in MFC salesCompany is primarily duesubject to the increaseuse of estimates, assumptions and
the application of judgment include revenues, receivables, inventories, and
taxes.
Revenues from product sales are recorded as the products are shipped and
title and risk of loss have passed to the customer, provided that no
significant vendor or post-contract support obligations remain and the
collection of the related receivable is probable. Billings in advance of the
Company's performance of such work are reflected as customer deposits in the
salesaccompanying consolidated balance sheet.
Allowances for doubtful accounts are based on estimates of losses related to
customer receivable balances. The establishment of reserves requires the company's standard cable/satellite TV
products, which management attributesuse
of judgment and assumptions regarding the potential for losses on receivable
balances.
The Company's inventories are valued at the lower of cost or market. The
Company uses certain estimates and judgments and considers several factors
including product demand and changes in technology to the increase in demandprovide for the
company's filters which suppress strong out-of-band interference causedexcess and
obsolescence reserves to properly value inventory.
The Company has deferred tax assets that are reviewed for recoverability and
valued accordingly. These assets are evaluated by militaryusing estimates of future
taxable income streams. Valuations related to tax accruals and civilian radar systems.
NSI sales for the nine months ended June 30, 2002 equaled $538,393, a
decrease of $407,413 when compared to sales of $945,806 for the nine months
ended June 30, 2001. Sales of NSI related equipment, on a quarter to quarter
basis,assets can be
impacted by the timing of the shipment of the custom designed
equipmentchanges to tax codes, changes in statutory tax rates and the
customer's scheduled delivery dates. NSI sales have also
been impacted by the unfavorable economic climate and reduced capital
spending.
NetCompany's future taxable income for the nine months ended June 30, 2002 equaled $454,078, or $.16
per share, an increase of $392,108 or 633% when compared to net income of
$61,970, or $.02 per share, for the nine months ended June 30, 2001. The
increase in net income is primarily due to the higher sales volume and
improved profit margins when compared to the same period last year.
Gross profit for the nine months ended June 30, 2002 equaled $2,376,716 or
39.5% of sales, an increase of $639,217 or 36.8%, when compared to gross
profit of $1,737,499 or 32.2% of sales for the nine months ended June 30,
2001. The improvements can primarily be attributed to the increase in sales,
product sales mix, operational efficiencies and economies of scale due to the
higher sales volume.
SG&A expenses for the nine months ended June 30, 2002 equaled $1,716,102, an
increase of $7,780 or 0.5% when compared to SG&A expenses of $1,708,322 for
the nine months ended June 30, 2001. Due to the uncertain economic climate,
the Company is emphasizing cost controls and cost cutting measures to minimize
operating expenses.
levels.
LIQUIDITY and CAPITAL RESOURCES
Cash and cash equivalents increased $234,400decreased $378,898 to $607,542$270,298 at June 30,
2002December 31,2002
when compared to $373,142$649,196 at September 30, 2001.2002. The increasedecrease was a result of
$1,133,811$374,425, in net cash provided byused in operating activities $696,077and $4,473 in net cash used
in investing activities and $203,334 in net cash used in
financing activities.
The decreaseincrease of $82,781$166,511 in accounts receivable at June 30,December 31, 2002, when
compared to September 30, 2001, is2002, can primarily be attributable to the decreaseincrease
in shipments during the month ended June 30,December 31, 2002 when compared to the
month ended September 30, 2001.2002.
The increasedecrease of $122,366$157,359 in customer depositsinventories at June 30,December 31, 2002, when compared
to September 30, 2001,2002, can primarily be attributable to the increasedecrease in MFC's
sales orders and the scheduled delivery of NSI's sales order backlog at June 30, 2002 when compared to September 30,
2001.backlog.
The increasedecrease in accrued federal and state income taxes payable of $236,791$233,846
at June 30,December 31, 2002, when compared to September 30, 2001,2002, can primarily be
attributed to the increasedecrease in pre-tax income.
The decrease in other current liabilities of $99,287 at December 31, 2002,
when compared to September 30, 2002, can primarily be attributed to the
payment of the Company's fiscal 2002 discretionary profit sharing contribution
during the quarter ended December 31, 2002.
Cash used in investing activities during the ninethree months ended June 30,December 31,
2002 consisted of funds used to purchaseprovided by the sale of investments ($482,769)10,147) and
funds used for capital expenditures ($213,308)14,620).
Capital expenditures consisted primarily of
test equipment and engineering design software.
Cash used in financing activities during the nine months ended June 30, 2002
consisted of funds used to pay a cash dividend ($203,334) on March 13, 2002.
At June 30,December 31, 2002, the Company had unused aggregate lines of credit
totaling $600,000. Of these lines, $100,000 is for the purchase of equipment
and is collateralized by equipment and $500,000 is for working capital and is
collateralized by accounts receivable, inventories and equipment.
Management believes that its working capital requirements for the
forseeable future will be met by its existing cash balances, future cash
flows from operations and its current credit arrangements.
RECENT ACCOUNTING PRONOUNCEMENTS
In- ----------------------
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities," was issued June 2001, the Financial Accounting Standards Board ("FASB") approved
Statements of Financial Accounting Standards2002 and is effective for exit or disposal
activities initiated after December 31, 2002. SFAS No. 141 "Business Combinations"
("SFAS 141")146 addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 142 "Goodwill94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Intangible Assets" ("SFAS 142")
which are effective July 1, 2001 and October 1, 2002, respectively, for the
Corporation. SFAS 141 requires that the purchase methodCosts to Exit an Activity Including Certain Costs Incurred in a
Restructuring." The adoption of accounting be used
for all business combinations initiated after June 30, 2001. Thisthis standard has no
material impact on the financial
statements of the Company. Under SFAS 142,
amortization of goodwill, including goodwill recorded in past business
combinations, will discontinue upon adoption of this standard. The Company has
no goodwill or other intangibles as of June 30, 2002 or September 30, 2001.
In October 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 provides guidance on the accounting
for long-lived assets to be held and used and for assets to be disposed of
through sale or other means. SFAS 144 is effective for fiscal years beginning
after December 15, 2001. The Company does not expect the adoption of SFAS 144
to have a material impact on its financial statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Any statements contained in this report which are not historical facts are
forward looking statements; and, therefore, many important factors could cause
actual results to differ materially from those in the forward looking
statements. Such factors include, but are not limited to, changes
(legislative, regulatory and otherwise) in the MMDS, LPTV or Cable industry,
demand for the Company's products (both domestically and internationally), the
development of competitive products, competitive pricing, market acceptance of
new product introductions, technological changes, general economic conditions,
litigation and other factors, risks and uncertainties which may be identified
in the Company's Securities and Exchange Commission filings.
ITEM 4. CONTROLS AND PROCEDURES
During the 90-day period prior to the filing date of this report,
management, including the Company's Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based upon, and as of the
date of that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the disclosure controls and procedures were effective,
in all material respects, to ensure that information required to be disclosed
in the reports the Company files and submits under the Exchange Act is
recorded, processed, summarized and reported as and when required.
There have been no significant changes in the Company's internal controls or
in other factors that could significantly affect internal controls subsequent
to the date the Company carried out its evaluation. There were no significant
deficiencies or material weaknesses identified in the evaluation and,
therefore, no corrective actions were taken.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is unaware of any material threatened or pending
litigation against the Company.
Item 2. Changes in Securities
None during this reporting period.
Item 3. Defaults Upon Senior Securities
The Company has no senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
None during this reporting period.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
b. Reports on Form 8-K
None.
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.
MICROWAVE FILTER COMPANY, INC.
August 14, 2002February 13, 2003 Carl F. Fahrenkrug
(Date) --------------------------
Carl F. Fahrenkrug
Chief Executive Officer
August 14, 2002February 13, 2003 Richard L. Jones
(Date) --------------------------
Richard L. Jones
Chief Financial Officer
CERTIFICATION
I, Carl F. Fahrenkrug, Chief Executive Officer of Microwave Filter Company,
Inc. ("Company"), certify that:
1. I have reviewed this Form 10-Q of the Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this
quarterly report;
4. The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the Company, including it's consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Company's other certifying officers and I have disclosed, based on our
most recent evaluation, to the Company's auditors and the audit committee
of Company's board of directors ( or persons performing the equivalent
function):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize and report financial data and have identified for the
Company's auditors any material weakness in internal controls, and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls; and
6. The Company's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 13, 2003 /s/ Carl F. Fahrenkrug
Carl F. Fahrenkrug
CERTIFICATION
I, Richard L. Jones, Chief Financial Officer of Microwave Filter Company,
Inc. ("Company"), certify that:
1. I have reviewed this Form 10-Q of the Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this
quarterly report;
4. The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the Company, including it's consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the Company's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date:
5. The Company's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit
committee of Company's board of directors ( or persons performing the
equivalent function):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize and report financial data and have identified for the
Company's auditors any material weakness in internal controls, and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal controls;
and
6. The Company's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 13, 2003 /s/ Richard L. Jones
Richard L. Jones
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C SECTION1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Microwave Filter Company, Inc. (the
Company) on Form 10-Q for the period ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the Report), I,
Carl F. Fahrenkrug, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
/s/Carl F. Fahrenkrug
Carl F. Fahrenkrug
Chief Executive Officer
February 13, 2003
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C SECTION1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Microwave Filter Company, Inc. (the
Company) on Form 10-Q for the period ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the Report), I,
Richard L. Jones, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
/s/Richard L. Jones
Richard L. Jones
Chief Financial Officer
February 13, 2003