UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.WASHINGTON, D.C 20549
FORM 10-Q
Quarterly Report Pursuant to Section10-Q/A
(Amendment No. 1)
(Mark one)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) of the Securities Exchange
Act of 1934.OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the quarterly period ended June 30, 2009ended_______December 31, 2009__________________________
Commission file number 0-10976
MICROWAVE FILTER COMPANY, INC.number__________________0-10976________________________________
______________________Microwave Filter Company, Inc____________________________
(Exact name of registrant as specified in its charter.)
New York 16-0928443charter)
__________New York__________________________16-0928443_________________________
(State or other jurisdiction of Incorporation) (I.R.S.incorporation or organization)(I.R.S. Employer
Identification Number)
6743No.)
_____6743 Kinne Street, East Syracuse, N.Y. 13057NY________13057________________________
(Address of Principal Executive Offices)principal executive offices) (Zip Code)code)
Registrant's telephone number including area code: (315) 438-4700code____(315) 438-4700_____________
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 by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(232.405(Section 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
YES ____ NO____ (The Registrant is not yet required to submit Interactive
Data)
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer or a smaller reporting company
(as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer ______ Accelerated filer ______
Non-accelerated filer ______ (Do not check if smaller reporting company)
Smaller reporting company ____X____.
Indicate by check mark whether the registrant is a shell company (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 practicable date.
Common Stock, $.10 Par Value - 2,593,4272,592,933 shares as of August 12, 2009.outstanding at February 1,
2010.
PART I. - FINANCIAL INFORMATION
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, 2009 September 30, 2008
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 1,388 $ 1,417
Accounts receivable-trade, net 311 306
Inventories 578 601
Prepaid expenses and other
current assets 86 100
------- -------
Total current assets 2,363 2,424
Property, plant and equipment, net 419 393
------- -------
Total assets $ 2,782 $ 2,817
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 168 $ 152
Customer deposits 34 21
Accrued federal and state income
taxes payableEXPLANATORY NOTE
We are filing this Amendment No. 1 1
Accrued payroll and related
expenses 45 61
Accrued compensated absences 241 196
Other current liabilities 28 31
------- -------
Total current liabilities 517 462
------- -------
Total liabilities 517 462
------- -------
Stockholders' Equity:
Common stock,$.10 par value 432 432
Additional paid-in capital 3,249 3,249
Retained earnings 268 203
------- -------
3,949 3,884
Common stock in treasury,
at cost (1,684) (1,529)
------- -------
Total stockholders' equity 2,265 2,355
------- -------
Total liabilities and
stockholders' equity $ 2,782 $ 2,817
======= =======
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, 2009 AND 2008
(Unaudited)
(Amounts in thousands, except earnings per share)
Three months ended Nine months ended
June 30 June 30
2009 2008 2009 2008
Net sales $1,021 $1,362 $3,494 $3,922
Cost of goods sold 635 819 2,263 2,465
------ ------ ------ ------
Gross profit 386 543 1,231 1,457
Selling, general and
administrative expenses 355 500 1,180 1,479
------ ------ ------ ------
Income (loss) from
operations 31 43 51 (22)
Other income (net),
principally interest 4 11 14 35
------ ------ ------ ------
Income before income
taxes 35 54 65 13
Provision for income
taxes 0 0 0 0
------ ------ ------ ------
NET INCOME $35 $54 $65 $13
====== ====== ====== ======
Per share data:
Basic and Diluted
earnings per share $0.01 $0.02 $0.02 $0.00
====== ====== ====== ======
Shares used in computing
net earnings per share:
Basic and Diluted 2,594 2,894 2,619 2,895
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 2009 AND 2008
(Unaudited)
(Amounts in thousands)
Nine months ended
June 30
2009 2008
Cash flows from operating
activities:
Net income $ 65 $ 13
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation and amortization 62 58
Change in assets and liabilities:
Accounts receivable (5) 65
Inventories 22 (17)
Prepaid expenses & other
assets 14 0
Accounts payable & accrued
expenses 43 23
Customer deposits 12 (28)
----- ----
Net cash provided by
operating activities 213 114
----- ----
Cash flows from investing
activities:
Capital expenditures (87) (22)
----- ----
Net cash (used in)
investing activities (87) (22)
----- ----
Cash flows from financing
activities:
Purchase of treasury stock (155) (2)
----- ----
Net cash used in financing
activities (155) (2)
----- ----
(Decrease) increase in cash
and cash equivalents (29) 90
Cash and cash equivalents
at beginning of period 1,417 1,267
----- -----
Cash and cash equivalents
at end of period $1,388 $1,357
===== =====
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2009
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
Regulation S-K. 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 nine month
period ended June 30, 2009 are not necessarily indicative of the results that
may be expected for the year ended September 30, 2009. 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, 2008.
Note 2. Industry Segment Data
The Company's primary business segment involves the operations of Microwave
Filter Company, Inc. (MFC) which designs, develops, manufactures and sells
electronic filters, both for radio and microwave frequencies,10-Q/A 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 communications
and defense electronics.
Note 3. Inventories
Inventories are stated at the lower of cost determined on the first-in,
first-out method or market.
Inventories net of reserve for obsolescence consisted of the following:
(thousands of dollars) June 30, 2009 September 30, 2008
Raw materials and stock parts $517 $472
Work-in-process 15 19
Finished goods 46 110
---- ----
$578 $601
==== ====
The Company's reserve for obsolescence equaled $404,457 at June 30,
2009 and September 30, 2008.
Note 4. Income Taxes
The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109. Deferred tax assets and liabilities are
based on the difference between the financial statement and tax basis of
assets and liabilities as measured by the enacted tax rates which are
anticipated to be in effect when these differences reverse. The deferred tax
provision is the result of the net change in the deferred tax assets and
liabilities. A valuation allowance is established when it is necessary to
reduce deferred tax assets to amounts expected to be realized. The Company has
provided a full valuation allowance against its deferred tax assets.
The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48) as of
October 1, 2007. FIN 48 clarifies the accounting for uncertainty in income
taxes recognized in an entity's financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes, and prescribes a recognition
threshold and measurement attributes for financial statement disclosure of tax
position taken or expected to be taken on a tax return. Additionally, FIN 48
provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. No adjustments were
required upon adoption of FIN 48.
Note 5. Legal Matters
The State of New York Workers' Compensation Board has commenced an action
against Microwave Filter Company, Inc. to recover for an underfunded self
insured program that Microwave Filter Company, Inc. participated in. Due to
the relatively short period of time Microwave Filter Company, Inc.
participated in the program and the limited amount of potential exposure, we
do not expect the resolution of this action will have a material adverse
effect onamend our financial condition, results of operations or cash flows.
Note 6. Recent Pronouncements
In May 2009, the Financial Accounting Standards Board ("FASB"} issued FASB
No. 165, "Subsequent Events" ("SFAS 165"}. SFAS 165 establishes general
standards of accounting for disclosing events that occur after the balance
sheet date but before financial statements are issued or are available to be
issued. It requires the disclosure of the date through which an entity has
evaluated subsequent events and the basis for selecting that date, that is,
whether that date represents the date the financial statements were issued or
were available to be issued. SFAS 165 is effective for interim or annual
financial periods ending after June 15, 2009 and has been adopted by the
Company.
In June 2009, the Financial Accounting Standards Board ("FASB"} issued FASB
No. 168, "The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles - a replacement of FASB Statement No.
162" ("SFAS 168"}. SFAS 168 establishes the FASB Accounting Standards
Codification as the source of authoritative accounting principles recognized
by the FASB to be applied by non-government entities in the preparation of
financial statements in conformity with GAAP in the United States. SFAS 168 is
effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The Codification is not intended to change or
alter existing U.S. GAAP.
Note 7. Subsequent Events
Management has evaluated and disclosed subsequent events up to and including
August 13, 2009, which is the date the financial statements were available.
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 one industry. 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 communications 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. For the last
four years, NSI's sales have consisted of spare parts orders.
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 Company. Primary areas where financial
information of the Company is subject to the use of estimates, assumptions and
the application of judgment include revenues, receivables, inventories, and
taxes. Note 1 to the consolidated financial statements in our Annual Report on
Form 10-K for the fiscal year ended September 30, 2008 describes the
significant accounting policies used in preparation of the consolidated
financial statements. The most significant areas involving management
judgments and estimates are described below and are considered by management
to be critical to understanding the financial condition and results of
operations of the Company.
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
accompanying consolidated balance sheet.
Allowances for doubtful accounts are based on estimates of losses related to
customer receivable balances. The establishment of reserves requires the use
of judgment and assumptions regarding the potential for losses on receivable
balances.
The Company's inventories are stated at the lower of cost determined on the
first-in, first-out method or market. The Company uses certain estimates and
judgments and considers several factors including product demand and changes
in technology to provide for excess and obsolescence reserves to properly
value inventory.
The Company established a warranty reserve which provides for the estimated
cost of product returns based upon historical experience and any known
conditions or circumstances. Our warranty obligation is affected by product
that does not meet specifications and performance requirements and any related
costs of addressing such matters.
The Company accounts for income taxes under Statement of Financial
Accounting Standards (SFAS) No. 109. Deferred tax assets and liabilities are
based on the difference between the financial statement and tax basis of
assets and liabilities as measured by the enacted tax rates which are
anticipated to be in effect when these differences reverse. The deferred tax
provision is the result of the net change in the deferred tax assets and
liabilities. A valuation allowance is established when it is necessary to
reduce deferred tax assets to amounts expected to be realized. The Company has
provided a full valuation allowance against its deferred tax assets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2009 vs. THREE MONTHS ENDED JUNE 30, 2008
The following table sets forth the Company's net sales by major product
group for the three months ended June 30, 2009 and 2008.
Product group (in thousands) Fiscal 2009 Fiscal 2008
Microwave Filter (MFC):
Cable TV $ 323 $ 524
Satellite 400 461
RF/Microwave 263 353
Broadcast TV 31 23
Niagara Scientific (NSI) 4 1
------ ------
Total $1,021 $1,362
====== ======
Sales backlog at 6/30 $ 376 $ 384
====== ======
Net sales for the three months ended June 30, 2009 equaled $1,021,215, a
decrease of $341,144 or 25%, when compared to net sales of $1,362,359 for the
three months ended June 30, 2008. The decrease can be attributed to the
current economic slowdown and a decrease in Cable TV product sales due to the
transition from analog to digital television.
MFC's Cable TV product sales decreased $201,144 or 38.3% to $323,511 for the
three months ended June 30, 2009 when compared to Cable TV product sales of
$524,655 during the same period last year. Management continues to project a
decrease in demand for Cable TV products due to the shift from analog to
digital television. Due to the inherent nature of digital modulation versus
analog modulation, fewer filters will be required. The Company has developed
filters for digital television and there will still be requirements for analog
filters for limited applications in commercial and private cable systems. The
demand for these filters is unknown at this time but is expected to decline.
MFC's Satellite product sales decreased $60,800 or 13.2% to $399,939 for the
three months ended June 30, 2009 when compared to Satellite product sales of
$460,739 during the same period last year. The decrease can be attributed to a
decrease in demand for the Company's filters which suppress strong out-of-band
interference caused by military and civilian radar systems and other sources.
Management does expect demand for these types of filters to continue with the
proliferation of earth stations world wide and increased sources of
interference.
MFC's RF/Microwave product sales decreased $90,131 or 25.5% to $263,313 for
the three months ended June 30, 2009 when compared to RF/Microwave product
sales of $353,444 during the same period last year. MFC's RF/Microwave
products are sold primarily to original equipment manufacturers (OEMs) that
serve the mobile radio, commercial communications and defense electronics
markets. 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.
MFC's Broadcast TV/Wireless Cable product sales increased $7,745 or 33.9% to
$30,612 for the three months ended June 30, 2009 when compared to sales of
$22,867 during the same period last year. The increase can be attributed to an
increase in demand for UHF Broadcast products. These products are primarily
sold to system integrators for rural communities.
MFC's sales order backlog equaled $375,936 at June 30, 2009 compared to
sales order backlog of $384,252 at June 30, 2008. 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 70% of the sales order backlog
at June 30, 2009 is scheduled to ship by September 30, 2009.
Gross profit for the three months ended June 30, 2009 equaled $386,155, a
decrease of $156,699 or 28.9%, when compared to gross profit of $542,854 for
the three months ended June 30, 2008. As a percentage of sales, gross profit
equaled 37.8% for the three months ended June 30, 2009 compared to 39.8% for
the three months ended June 30, 2008. The decreases in gross profit can
primarily be attributed to the lower sales volume this year providing a lower
base to absorb fixed overhead expenses.
Selling, general and administrative (SGA) expenses for the three months
ended June 30, 2009 equaled $354,910, a decrease of $144,639 or 29%, when
compared to SG&A expenses of $499,549 for the three months ended June 30,
2008. As a percentage of sales, SGA expenses decreased to 34.8% for the three
months ended June 30, 2009 compared to 36.7% for the three months ended June
30, 2008. The decreases can primarily be attributed to planned decreases in
payroll and payroll related expenses and printing costs this year when
compared to the same period last year. Due to the lower sales volume, the
Company has been participating in the New York State Shared Work Program which
allows employers to reduce the hours of all or a particular group of
employees. The employees whose hours are reduced can receive partial
unemployment insurance benefits to supplement their lost wages.
The Company recorded income from operations of $31,245 for the second
quarter ended June 30, 2009 compared to income from operations of $43,305 for
the three months ended June 30, 2008. The decrease in operating income can
primarily be attributed to the lower sales volume this year when compared to
the same period last year.
Other income for the three months ended June 30, 2009 equaled $4,101, a
decrease of $6,850 when compared to other income of $10,951 for the three
months ended June 30, 2008. Other income is primarily interest income earned
on invested cash balances. The decrease in other income can primarily be
attributed to lower market interest rates when compared to last year. Other
income may fluctuate based on market interest rates and levels of invested
cash balances.
The provision (benefit) for income taxes equaled $0 for the three months
ended June 30, 2009 and June 30, 2008. Any benefit for losses has been subject
to a valuation allowance since the realization of the deferred tax benefit is
not considered more likely than not.
NINE MONTHS ENDED June 30, 2009 vs. NINE MONTHS ENDED JUNE 30, 2008
The following table sets forth the Company's net sales by major product
group for the nine months ended June 30, 2009 and 2008.
Product group (in thousands) Fiscal 2009 Fiscal 2008
Microwave Filter (MFC):
Cable TV $1,151 $1,510
Satellite 1,281 1,145
RF/Microwave 943 1,166
Broadcast TV 110 96
Niagara Scientific (NSI) 9 5
------ ------
Total $3,494 $3,922
====== ======
Sales backlog at 6/30 $ 376 $ 384
====== ======
Net sales for the nine months ended June 30, 2009 equaled $3,494,319, a
decrease of $428,015 or 10.9%, when compared to net sales of $3,922,334 for
the nine months ended June 30, 2008.
MFC's Cable TV product sales decreased $359,022 or 23.8% to $1,150,863 for
the nine months ended June 30, 2009 when compared to Cable TV product sales of
$1,509,885 during the nine months ended June 30, 2008. Management continues to
project a decrease in demand for Cable TV products due to the shift from
analog to digital television. Due to the inherent nature of digital modulation
versus analog modulation, fewer filters will be required. The Company has
developed filters for digital television and there will still be requirements
for analog filters for limited applications in commercial and private cable
systems. The demand for these filters is unknown at this time but is expected
to decline.
MFC's Satellite product sales increased $136,754 or 11.9% to $1,281,262 for
the nine months ended June 30, 2009 when compared to satellite product sales
of $1,144,508 during the same period last year. The increase can be attributed
to an increase in demand for the Company's filters which suppress strong out-
of-band interference caused by military and civilian radar systems and other
sources. Management expects demand for these types of filters to continue with
the proliferation of earth stations world wide and increased sources of
interference.
MFC's RF/Microwave product sales decreased $223,172 or 19.1% to $943,085 for
the nine months ended June 30, 2009 when compared to RF/Microwave product
sales of $1,166,257 during the same period last year. MFC's RF/Microwave
products are sold primarily to original equipment manufacturers (OEMs) that
serve the mobile radio, commercial communications and defense electronics
markets. 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.
MFC's Broadcast TV/Wireless Cable product sales increased $13,901 or 14.4%
to $110,291 for the nine months ended June 30, 2009 when compared to sales of
$96,390 during the same period last year. The increase can be attributed to an
increase in demand for UHF Broadcast products. These products are primarily
sold to system integrators for rural communities.
NSI sales for the nine months ended June 30, 2009 equaled $8,818 when
compared to sales of $5,294 for the nine months ended June 30, 2008. NSI sales
consist primarily of spare parts orders.
Gross profit for the nine months ended June 30, 2009 equaled $1,230,856, a
decrease of $226,841 or 15.6%, when compared to gross profit of $1,457,697 for
the nine months ended June 30, 2008. As a percentage of sales, gross profit
equaled 35.2% for the nine months ended June 30, 2009 compared to 37.2% for
the nine months ended June 30, 2008. The decreases in gross profit can
primarily be attributed to the lower sales volume this year when compared to
the same period last year providing a lower base to absorb fixed overhead
expenses.
SG&A expenses for the nine months ended June 30, 2009 equaled $1,180,037, a
decrease of $299,379 or 20.2%, when compared to SG&A expenses of $1,479,416
for the nine months ended June 30, 2008. The decrease can primarily be
attributed to planned decreases in payroll and payroll related expenses and
printing costs this year when compared to the same period last year. As a
percentage of sales, SGA expenses decreased to 33.8% for the nine months ended
June 30, 2009 compared to 37.7% for the nine months ended June 30, 2008.
The Company recorded income from operations of $50,819 for the nine months
ended June 30, 2009 compared to a loss from operations of $21,719 for the nine
months ended June 30, 2008. The improvement can primarily be attributed to the
lower SGA expenses this year when compared to the same period last year.
Other income for the nine months ended June 30, 2009 equaled $14,072, a
decrease of $20,531, when compared to other income of $34,603 for the nine
months ended June 30, 2008. Other income is primarily interest income earned
on invested cash balances. The decrease in other income can primarily be
attributed to lower market interest rates when compared to last year. Other
income may fluctuate based on market interest rates and levels of invested
cash balances.
The provision (benefit) for income taxes equaled $0 for the nine months
ended June 30, 2009 and June 30, 2008. Any benefit for losses has been subject
to a valuation allowance since the realization of the deferred tax benefit is
not considered more likely than not.
Off-Balance Sheet Arrangements
At June 30, 2009 and 2008, the Company did not have any unconsolidated
entities or financial partnerships, such as entities often referred to as
structured finance or special purpose entities, which might have been
established for the purpose of facilitating off-balance sheet arrangements.
LIQUIDITY and CAPITAL RESOURCES
Jun. 30, 2009 Sep. 30, 2008
Cash & cash equivalents $1,387,741 $1,417,271
Working capital $1,846,277 $1,961,413
Current ratio 4.57 to 1 5.24 to 1
Long-term debt $ 0 $ 0
Cash and cash equivalents decreased $29,530 to $1,387,741 at June 30, 2009
when compared to cash and cash equivalents of $1,417,271 at September 30,
2008. The decrease was a result of $212,119 in net cash provided by operating
activities, $87,123 in net cash used for capital expenditures and $154,526 in
net cash used to purchase treasury stock.
The increase of $45,575 in accrued compensated absences at June 30, 2009
when compared to September 30, 2008 can be attributed to additional vacation
days awarded to employees.
At June 30, 2009, the Company had unused aggregate lines of credit totaling
$750,000 collateralized by all inventory, equipment and accounts receivable.
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.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
- --------------------------------------------------------------------------------
In an effort to provide investors a balanced view of the Company's current
condition and future growth opportunities, this Quarterly Reportquarterly
report on Form 10-Q includes commentsfor the period ended December 31, 2009, filed with the SEC
on February 11, 2010, solely to amend management's internal control report as
required by Item 308T of Regulation S-K. As such, our certifications should
include the Company's management about future performance. These
statements which are not historical information are "forward-looking
statements" pursuantintroductory language in paragraph 4 of the certification that
refers to the safe harbor provisions ofcertifying officer's responsibility for establishing and
maintaining internal control over financial reporting for the Private Securities
Litigation Reform Act of 1995. These, and other forward-looking statements,
are subject to business and economic risks and uncertainties that could cause
actual results to differ materially from those discussed. These risks and
uncertainties include, but are not limited to: risks associated with demand
for and market acceptance of existing and newly developed products as to which
the Company has made significant investments; general economic and industry
conditions; slower than anticipated penetration into the satellite
communications, mobile radio and commercial and defense electronics markets;
competitive products and pricing pressures; increased pricing pressure from
our customers; risks relating to governmental regulatory actions in broadcast,
communications and defense programs;company as well
as other risks and uncertainties,
including but not limited to those detailed from time to time in the Company's
Securities and Exchange Commission filings. These forward-looking statements
are made only aslanguage of the date hereof, and the Company undertakes no obligation
to update or revise the forward-looking statements, whether as a resultparagraph 4(b) of new
information, future events or otherwise. You are encouraged to review
Microwave Filter Company's 2008 Annual Report and Form 10-K for the fiscal
year ended September 30, 2008 and other Securities and Exchange Commission
filings. Forward looking statements may be made directly in this document or
"incorporated by reference" from other documents. You can find manyItem 601(b)(31) of these
statements by looking for words like "believes," "expects," "anticipates,"
"estimates," or similar expressions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in our exposures to market risk during
the nine months ended June 30, 2009. For a detailed discussion of market risk,
see our Annual Report on Form 10-K for the fiscal year ended September 30,
2008, PartRegulation S-K.
PART II
Item 7A, Quantitative and Qualitative Disclosures About Market
Risk.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company's management, with the participation6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
31.1 Certification of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectivenessPursuant to Rule 13a-14(a)/15d-
14(a) of the Company's disclosure controls and procedures (as defined in Rules 13a-
15(e) and 15d-15(e) under theThe Securities Exchange Act of 1934
as amended (the
"Exchange Act")) as31.2 Certification of the end of the period covered by this report. Based on
such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, asPursuant to Rule 13a-14(a)/15d-
14(a) of the endThe Securities Exchange Act of such period, the Company's
disclosure controls and procedures were effective as of the end of the period
covered by this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in the Company's internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules
13a-15(f) and 15d-15(f) under the exchange act.
Under the supervision and with the participation of the Company's
management, including our principal executive officer and principal financial
officer, the Company conducted an evaluation of its internal control over
financial reporting based on criteria established in the framework in
"Internal Control-Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, the
Company's management concluded and certifies that its internal control over
financial reporting was effective as of June 30, 2009.
This Quarterly Report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this Quarterly Report.1934
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The State of New York Workers' Compensation Board has commenced an
action against Microwave Filter Company, Inc. to recover for an
underfunded self insured program that Microwave Filter Company, Inc.
participated in. Due to the relatively short period of time
Microwave Filter Company, Inc. participated in the program and the
limited amount of potential exposure, we do not expect the resolution
of this action will have a material adverse effect on our financial
condition, results of operations or cash flows.
Item 1A. Risk Factors
Not applicable.
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
a. Exhibits
31.1 Section 13a-14(a)/15d-14(a) Certification of Carl F. Fahrenkrug
31.2 Section 13a-14(a)/15d-14(a) Certification of Richard L. Jones
32.1 Section 1350 Certification of Carl F. Fahrenkrug
32.2 Section 1350 Certification of Richard L. JonesSIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 12, 2009Dated: March 2, 2010 BY: /s/ Carl F. Fahrenkrug
(Date) --------------------------
Carl F. Fahrenkrug
Chief Executive Officer
August 12, 2009 Richard L. Jones
(Date) --------------------------
Richard L. Jones
Exhibit
Number Description
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-
14(a) of the Securities Exchange Act of 1934
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-
14(a) of the Securities Exchange Act of 1934