Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | MICROWAVE FILTER CO INC /NY/ | |
Entity Central Index Key | 716,688 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,579,680 | |
Trading Symbol | MFCO | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 550,054 | $ 667,940 |
Accounts receivable-trade, net of allowance for doubtful accounts of $4,000 and $4,000 | 309,877 | 350,703 |
Inventories, net | 423,024 | 458,158 |
Prepaid expenses and other current assets | 32,776 | 27,858 |
Total current assets | 1,315,731 | 1,504,659 |
Property, plant and equipment, net | 279,751 | 326,778 |
Total assets | 1,595,482 | 1,831,437 |
Current liabilities: | ||
Accounts payable | 57,319 | 104,349 |
Customer deposits | 31,886 | 43,893 |
Accrued payroll and related expenses | 40,850 | 39,710 |
Accrued compensated absences | 92,507 | 96,490 |
Notes payable - short term | 50,707 | 48,826 |
Other current liabilities | 19,133 | 22,023 |
Total current liabilities | 292,402 | 355,291 |
Notes payable - long term | 231,855 | 270,172 |
Total other liabilities | 231,855 | 270,172 |
Total liabilities | 524,257 | 625,463 |
Stockholders' Equity: | ||
Common stock, $.10 par value Authorized 5,000,000 shares, Issued 4,324,140 shares in 2018 and 2017, Outstanding 2,579,680 shares in 2018 and 2,579,684 in 2017 | 432,414 | 432,414 |
Additional paid-in capital | 3,248,706 | 3,248,706 |
Retained deficit | (915,131) | (780,385) |
Common stock in treasury, at cost 1,744,460 shares in 2018 and 1,744,456 shares in 2017 | (1,694,764) | (1,694,761) |
Total stockholders' equity | 1,071,225 | 1,205,974 |
Total liabilities and stockholders' equity | $ 1,595,482 | $ 1,831,437 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 4,000 | $ 4,000 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares issued | 4,324,140 | 4,324,140 |
Common stock, shares outstanding | 2,579,680 | 2,579,684 |
Treasury stock, shares | 1,744,460 | 1,744,456 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 802,140 | $ 702,648 | $ 2,323,571 | $ 2,307,198 |
Cost of goods sold | 475,250 | 476,926 | 1,446,505 | 1,559,665 |
Gross profit | 326,890 | 225,722 | 877,066 | 747,533 |
Selling, general and administrative expenses | 345,188 | 293,862 | 1,005,301 | 953,485 |
Loss from operations | (18,298) | (68,140) | (128,235) | (205,952) |
Other expense, net | (2,665) | (2,658) | (6,461) | (8,422) |
Loss before income taxes | (20,963) | (70,798) | (134,696) | (214,374) |
Provision for income taxes | 0 | 0 | 50 | 0 |
Net loss | $ (20,963) | $ (70,798) | $ (134,746) | $ (214,374) |
Per share data: | ||||
Basic and diluted loss per common share | $ (0.01) | $ (0.03) | $ (0.05) | $ (0.08) |
Shares used in computing net loss per common share: | ||||
Basic and diluted | 2,579,680 | 2,579,928 | 2,579,682 | 2,580,459 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (134,746) | $ (214,374) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 54,375 | 60,495 |
Change in operating assets and liabilities: | ||
Accounts receivable-trade | 40,826 | 43,841 |
Inventories | 35,134 | (8,982) |
Prepaid expenses and other assets | (4,918) | 12,553 |
Accounts payable and customer deposits | (59,037) | (3,980) |
Accrued payroll and related expenses and compensated absences | (2,843) | (39,261) |
Other current liabilities | (2,890) | 1,033 |
Net cash used in operating activities | (74,099) | (148,675) |
Cash flows from investing activities: | ||
Property, plant and equipment purchased | (7,348) | (56,335) |
Net cash used in investing activities | (7,348) | (56,335) |
Cash flows from financing activities: | ||
Repayment of note payable | (36,436) | (34,819) |
Purchase of treasury stock | (3) | (662) |
Net cash used in financing activities | (36,439) | (35,481) |
Net decrease in cash and cash equivalents | (117,886) | (240,491) |
Cash and cash equivalents at beginning of period | 667,940 | 923,117 |
Cash and cash equivalents at end of period | 550,054 | 682,626 |
Supplemental Schedule of Cash Flow Information: | ||
Interest paid | 10,337 | 11,953 |
Income taxes paid | $ 50 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies In these notes, the terms “MFC” and “Company” mean Microwave Filter Company, Inc. and its subsidiary companies. The following condensed balance sheet as of September 30, 2017, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. 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, 2018 are not necessarily indicative of the results that may be expected for the year ended September 30, 2018. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest shareholders’ annual report (Form 10-K). |
Industry Segment Data
Industry Segment Data | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Industry Segment Data | Note 2. Industry Segment Data The Company’s primary business segment involves the operations of Microwave Filter Company, Inc. which 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. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories Inventories are stated at the lower of cost determined on the first-in, first-out method or net realizable value. Net realizable value is determined as the estimated selling price in the normal course of business minus the cost of completion, disposal and transportation. Inventories net of the reserve for obsolescence consisted of the following: June 30, 2018 September 30, 2017 Raw materials and stock parts $ 308,831 $ 337,462 Work-in-process 23,139 21,861 Finished goods 91,054 98,835 $ 423,024 $ 458,158 The Company’s reserve for obsolescence equaled $445,158 at June 30, 2018 and September 30, 2017. The Company provides for a valuation reserve for certain inventory that is deemed to be obsolete, of excess quantity or otherwise impaired. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 4. Income Taxes The Company accounts for income taxes under FASB ASC 740-10. 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 net deferred tax assets. FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements 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, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company determined it has no uncertain tax positions and therefore no amounts are recorded. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted, the Act which among other changes, reduces the Federal statutory corporate income tax rate from 35% to 21% effective January 1, 2018. Based on the provisions of the Act, the Company remeasured their net deferred tax assets applying the new lower income tax rates to the Company’s net long term deferred tax assets. As stated above, the Company has provided a full valuation allowance against its net deferred tax assets. The actual impact of the Act may differ due to changes in interpretations, assumptions and the issuance of additional guidance. |
Legal Matters
Legal Matters | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Note 5. Legal Matters None. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 6. Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of those instruments. The Company currently does not trade in or utilize derivative financial instruments. |
Significant Customers
Significant Customers | 9 Months Ended |
Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Significant Customers | Note 7. Significant Customers Net sales to two significant customers represented 42.1% of the Company’s total sales for the nine months ended June 30, 2018 and net sales to one significant customer represented 43.1% of the Company’s total sales for the nine months ended June 30, 2017. A loss of one of these customers or programs related to these customers could significantly impact the Company. |
Notes Payable
Notes Payable | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8. Notes Payable On July 2, 2013, Microwave Filter Company, Inc. (the “Company”) entered into a Ten Year Term Loan with KeyBank National Association in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00). The amount of all advances outstanding together with accrued interest thereon shall be due and payable on July 2, 2023 (“Maturity”). The Company shall pay interest on the outstanding principal balance of this Note at the rate per annum equal to 4.5%. The net proceeds from the Term Loan will be available to provide working capital as needed. The total amount outstanding as of June 30, 2018 and September 30, 2017 was $282,562 and $318,998 respectively. Interest accrued as of June 30, 2018 and September 30, 2017 was $989 and $1,113, respectively. The Company has secured this Note by: (a) a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing which creates a 1 st |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2018 | |
Per share data: | |
Earnings Per Share | Note 9. Earnings Per Share The Company presents basic earnings per share (“EPS”), computed based on the weighted average number of common shares outstanding for the period, and when applicable diluted EPS, which gives the effect to all dilutive potential shares outstanding (i.e. options) during the period after restatement for any stock dividends. There were no dividends declared during the quarters ended June 30, 2018 and 2017. Income (loss) used in the EPS calculation is net income (loss) for each period. There were no dilutive potential shares outstanding for the periods ended June 30, 2018 and 2017. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 10. Recent Accounting Pronouncements Update 2015-14- Revenue from Contracts with Customers (Topic 606) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories Net of Reserve for Obsolescence | Inventories net of the reserve for obsolescence consisted of the following: June 30, 2018 September 30, 2017 Raw materials and stock parts $ 308,831 $ 337,462 Work-in-process 23,139 21,861 Finished goods 91,054 98,835 $ 423,024 $ 458,158 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Reserve for obsolescence | $ 445,158 | $ 445,158 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories Net of Reserve for Obsolescence (Details) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials and stock parts | $ 308,831 | $ 337,462 |
Work-in-process | 23,139 | 21,861 |
Finished goods | 91,054 | 98,835 |
Inventory net | $ 423,024 | $ 458,158 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - January 1, 2018 [Member] | 9 Months Ended |
Jun. 30, 2018 | |
Federal statutory corporate income tax rate | 21.00% |
Income tax reconciliation description | On December 22, 2017, the Tax Cuts and Jobs Act (the Act) was enacted, the Act which among other changes, reduces the Federal statutory corporate income tax rate from 35% to 21% effective January 1, 2018. |
Significant Customers (Details
Significant Customers (Details Narrative) | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Two Customers [Member] | ||
Percentage of sales | 42.10% | |
One Customer [Member] | ||
Percentage of sales | 43.10% |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jul. 02, 2013 | Jun. 30, 2018 | Sep. 30, 2017 |
Outstanding total amount | $ 282,562 | $ 318,998 | |
Interest accrued | $ 989 | $ 1,113 | |
KeyBank National Association [Member] | |||
Loan term | 10 years | ||
Loan amount | $ (500,000) | ||
Loan maturity date | Jul. 2, 2023 | ||
Percentage of interest rate | 4.50% |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Per share data: | ||||
Dividends | ||||
Dilutive potential shares outstanding |