Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | MICROWAVE FILTER CO INC /NY/ | |
Entity Central Index Key | 0000716688 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,579,238 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 537,967 | $ 674,045 |
Accounts receivable-trade, net of allowance for doubtful accounts of $4,000 and $4,000 | 391,186 | 402,760 |
Inventories, net | 496,027 | 377,603 |
Prepaid expenses and other current assets | 33,876 | 54,416 |
Total current assets | 1,459,056 | 1,508,824 |
Property, plant and equipment, net | 283,561 | 261,474 |
Total assets | 1,742,617 | 1,770,298 |
Current liabilities: | ||
Accounts payable | 107,448 | 116,938 |
Customer deposits | 52,373 | 35,278 |
Accrued payroll and related expenses | 43,960 | 38,711 |
Accrued compensated absences | 87,075 | 90,449 |
Notes payable - short term | 52,846 | 51,101 |
Other current liabilities | 17,498 | 28,838 |
Total current liabilities | 361,200 | 361,315 |
Notes payable - long term | 179,198 | 219,071 |
Total other liabilities | 179,198 | 219,071 |
Total liabilities | 540,398 | 580,386 |
Stockholders' Equity: | ||
Common stock, $.10 par value Authorized 5,000,000 shares, Issued 4,324,140 shares in 2019 and 2018, Outstanding 2,579,238 shares in 2019 and 2,579,680 in 2018 | 432,414 | 432,414 |
Additional paid-in capital | 3,248,706 | 3,248,706 |
Accumulated deficit | (783,911) | (796,444) |
Common stock in treasury, at cost 1,744,902 shares in 2019 and 1,744,460 shares in 2018 | (1,694,990) | (1,694,764) |
Total stockholders' equity | 1,202,219 | 1,189,912 |
Total liabilities and stockholders' equity | $ 1,742,617 | $ 1,770,298 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 4,000 | $ 4,000 |
Common stock, par value | $ .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 | 2,579,238 | 2,579,680 |
Treasury stock, shares | 1,744,902 | 1,744,460 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 841,310 | $ 802,140 | $ 2,746,029 | $ 2,323,571 |
Cost of goods sold | 509,436 | 475,250 | 1,619,110 | 1,446,505 |
Gross profit | 331,874 | 326,890 | 1,126,919 | 877,066 |
Selling, general and administrative expenses | 344,736 | 345,188 | 1,113,767 | 1,005,301 |
Income (loss) from operations | (12,862) | (18,298) | 13,152 | (128,235) |
Other income (expense), net | 389 | (2,665) | (569) | (6,461) |
Income (loss) before income taxes | (12,473) | (20,963) | 12,583 | (134,696) |
Provision for income taxes | 50 | 50 | ||
Net income (loss) income | $ (12,473) | $ (20,963) | $ 12,533 | $ (134,746) |
Per share data: Basic and diluted earnings (loss) per common share | $ 0 | $ (0.01) | $ 0 | $ (0.05) |
Shares used in computing net income (loss) per common share: Basic and diluted | 2,579,238 | 2,579,680 | 2,579,451 | 2,579,682 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Balance at Sep. 30, 2017 | $ 432,414 | $ 3,248,706 | $ (780,385) | $ (1,694,761) | $ 1,205,974 |
Net income (loss) | (40,807) | (40,807) | |||
Balance at Dec. 31, 2017 | 432,414 | 3,248,706 | (821,192) | (1,694,761) | 1,165,167 |
Balance at Sep. 30, 2017 | 432,414 | 3,248,706 | (780,385) | (1,694,761) | 1,205,974 |
Net income (loss) | (134,746) | ||||
Balance at Jun. 30, 2018 | 432,414 | 3,248,706 | (915,131) | (1,694,764) | 1,071,225 |
Balance at Dec. 31, 2017 | 432,414 | 3,248,706 | (821,192) | (1,694,761) | 1,165,167 |
Net income (loss) | (72,976) | (72,976) | |||
Purchase of treasury stock | (3) | (3) | |||
Balance at Mar. 31, 2018 | 432,414 | 3,248,706 | (894,168) | (1,694,764) | 1,092,188 |
Net income (loss) | (20,963) | (20,963) | |||
Balance at Jun. 30, 2018 | 432,414 | 3,248,706 | (915,131) | (1,694,764) | 1,071,225 |
Balance at Sep. 30, 2018 | 432,414 | 3,248,706 | (796,444) | (1,694,764) | 1,189,912 |
Net income (loss) | (60,224) | (60,224) | |||
Balance at Dec. 31, 2018 | 432,414 | 3,248,706 | (856,668) | (1,694,764) | 1,129,688 |
Balance at Sep. 30, 2018 | 432,414 | 3,248,706 | (796,444) | (1,694,764) | 1,189,912 |
Net income (loss) | 12,533 | ||||
Balance at Jun. 30, 2019 | 432,414 | 3,248,706 | (783,911) | (1,694,990) | 1,202,219 |
Balance at Dec. 31, 2018 | 432,414 | 3,248,706 | (856,668) | (1,694,764) | 1,129,688 |
Net income (loss) | 85,230 | 85,230 | |||
Purchase of treasury stock | (226) | (226) | |||
Balance at Mar. 31, 2019 | 432,414 | 3,248,706 | (771,438) | (1,694,990) | 1,214,692 |
Net income (loss) | (12,473) | (12,473) | |||
Balance at Jun. 30, 2019 | $ 432,414 | $ 3,248,706 | $ (783,911) | $ (1,694,990) | $ 1,202,219 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 12,533 | $ (134,746) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 39,233 | 54,375 |
Change in operating assets and liabilities: | ||
Accounts receivable-trade | 11,574 | 40,826 |
Inventories | (118,424) | 35,134 |
Prepaid expenses and other assets | 20,540 | (4,918) |
Accounts payable and customer deposits | 7,605 | (59,037) |
Accrued payroll and related expenses and compensated absences | 1,875 | (2,843) |
Other current liabilities | (11,340) | (2,890) |
Net cash used in operating activities | (36,404) | (74,099) |
Cash flows from investing activities: | ||
Property, plant and equipment purchased | (61,320) | (7,348) |
Net cash used in investing activities | (61,320) | (7,348) |
Cash flows from financing activities: | ||
Repayment of note payable | (38,128) | (36,436) |
Purchase of treasury stock | (226) | (3) |
Net cash used in financing activities | (38,354) | (36,439) |
Decrease in cash and cash equivalents | (136,078) | (117,886) |
Cash and cash equivalents at beginning of period | 674,045 | 667,940 |
Cash and cash equivalents at end of period | 537,967 | 550,054 |
Supplemental Schedule of Cash Flow Information: | ||
Interest paid | 8,645 | 10,337 |
Income taxes paid | $ 50 | $ 50 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2019 | |
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, 2018, 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, 2019 are not necessarily indicative of the results that may be expected for the year ended September 30, 2019. 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, 2019 | |
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, 2019 | |
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, 2019 September 30, 2018 Raw materials and stock parts $ 403,659 $ 306,658 Work-in-process 10,696 37,062 Finished goods 81,672 33,883 $ 496,027 $ 377,603 The Company’s reserve for obsolescence equaled $463,286 at June 30, 2019 and September 30, 2018. 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, 2019 | |
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. The Company follows FASB ASC 740-10, which 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 will include interest on income tax liabilities in interest expense and penalties in operations if such amounts arise. The Company determined it has no uncertain tax positions and therefore no amounts are recorded. There is no provision for Federal income taxes for the three and nine months ended June 30, 2019 and 2018 as net operating loss carryforwards were used to reduce taxable income tax to zero. |
Legal Matters
Legal Matters | 9 Months Ended |
Jun. 30, 2019 | |
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, 2019 | |
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 carrying value of the Company’s note payable approximates is fair value. The Company currently does not trade in or utilize derivative financial instruments. |
Significant Customers
Significant Customers | 9 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Significant Customers | Note 7. Significant Customers Net sales to two significant customers represented 54.0% of the Company’s total sales for the nine months ended June 30, 2019 and net sales to two significant customer represented 42.1% of the Company’s total sales for the nine months ended June 30, 2018. 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, 2019 | |
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, 2019 and September 30, 2018 was $232,044 and $270,172, respectively. Interest accrued as of June 30, 2019 and September 30, 2018 was $812 and $946, respectively. The Company has secured this Note by: (a) a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing which creates a 1st lien on real property situated in the Town of Dewitt, County of Onondaga, and State of New York and known as 6743 Kinne Street, East Syracuse, New York; (b) a General Assignment of Rents and Leases; (c) an Environmental Compliance and Indemnification; and (d) such other security as may now or hereafter be given to Lender as collateral for the loan. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
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, 2019 and 2018. 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, 2019 and 2018. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 10. Recent Accounting Pronouncements In February 2016, the FASB issued FASB ASU No. 2016-02, Leases (Topic 842) |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 11. Revenue Recognition Revenue Recognition Effective October 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Pursuant to Topic 606, revenues are recognized upon the application of the following steps: ● Identification of the contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenues when, or as, the contractual performance obligations are satisfied. The Company accounts for a contract with a client when it has written approval, the contract (or customer sales order) is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. The Company allocates the transaction price to each performance obligation on a standalone selling price basis, as agreed-upon between the customer and the Company in the related customer sales order. Revenue is recognized when the performance obligation has been satisfied: at the time products are shipped and title and risk of loss have passed to the customer, 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 condensed consolidated balance sheet. Product Warranty The Company has established a warranty reserve which provides for the estimated cost of product returns based upon historical experience and any known conditions or circumstances. No revenues are recognized in connection with the performance of the warranty repair or fulfillment function. The warranty obligation is affected by product that does not meet specifications and performance requirements and any related costs of addressing such matters. Products must be returned within one year of the date of purchase. The warranty liability was insignificant at June 30, 2019 and September 30, 2018. Disaggregation of Revenue The following tables provide details of revenue by major products group: Product group Fiscal 2019 Fiscal 2018 Microwave Filter (MFC): RF/Microwave $ 1,115,731 $ 950,099 Satellite 632,505 877,520 Cable TV 361,551 246,854 Broadcast TV 636,158 244,261 Niagara Scientific (NSI): 84 4,837 Total $ 2,746,029 $ 2,323,571 Sales backlog at June 30 $ 741,835 $ 1,193,829 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories Net of Reserve for Obsolescence | Inventories net of the reserve for obsolescence consisted of the following: June 30, 2019 September 30, 2018 Raw materials and stock parts $ 403,659 $ 306,658 Work-in-process 10,696 37,062 Finished goods 81,672 33,883 $ 496,027 $ 377,603 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables provide details of revenue by major products group: Product group Fiscal 2019 Fiscal 2018 Microwave Filter (MFC): RF/Microwave $ 1,115,731 $ 950,099 Satellite 632,505 877,520 Cable TV 361,551 246,854 Broadcast TV 636,158 244,261 Niagara Scientific (NSI): 84 4,837 Total $ 2,746,029 $ 2,323,571 Sales backlog at June 30 $ 741,835 $ 1,193,829 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Reserve for obsolescence | $ 463,286 | $ 463,286 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories Net of Reserve for Obsolescence (Details) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and stock parts | $ 403,659 | $ 306,658 |
Work-in-process | 10,696 | 37,062 |
Finished goods | 81,672 | 33,883 |
Inventories, net | $ 496,027 | $ 377,603 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Uncertain tax positions | ||||
Provision for federal income taxes | ||||
Operating loss carryforwards | There is no provision for Federal income taxes for the three and nine months ended June 30, 2019 and 2018 as net operating loss carryforwards were used to reduce taxable income tax to zero. |
Significant Customers (Details
Significant Customers (Details Narrative) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Two Customers [Member] | ||
Percentage of sales | 54.00% | 42.10% |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jul. 02, 2013 | Jun. 30, 2019 | Sep. 30, 2018 |
Outstanding total amount | $ 232,044 | $ 270,172 | |
Interest accrued | $ 812 | $ 946 | |
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 ($) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Dividends | ||
Dilutive potential shares outstanding |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Total | $ 841,310 | $ 802,140 | $ 2,746,029 | $ 2,323,571 | |
Fiscal Year 2019 [Member] | |||||
Total | 2,746,029 | ||||
Sales backlog | $ 741,835 | 741,835 | |||
Fiscal Year 2019 [Member] | RF/Microwave [Member] | |||||
Total | 1,115,731 | ||||
Fiscal Year 2019 [Member] | Satellite [Member] | |||||
Total | 632,505 | ||||
Fiscal Year 2019 [Member] | Cable TV [Member] | |||||
Total | 361,551 | ||||
Fiscal Year 2019 [Member] | Broadcast TV [Member] | |||||
Total | 636,158 | ||||
Fiscal Year 2019 [Member] | Niagara Scientific (NSI) [Member] | |||||
Total | $ 84 | ||||
Fiscal Year 2018 [Member] | |||||
Total | $ 2,323,571 | ||||
Sales backlog | 1,193,829 | ||||
Fiscal Year 2018 [Member] | RF/Microwave [Member] | |||||
Total | 950,099 | ||||
Fiscal Year 2018 [Member] | Satellite [Member] | |||||
Total | 877,520 | ||||
Fiscal Year 2018 [Member] | Cable TV [Member] | |||||
Total | 246,854 | ||||
Fiscal Year 2018 [Member] | Broadcast TV [Member] | |||||
Total | 244,261 | ||||
Fiscal Year 2018 [Member] | Niagara Scientific (NSI) [Member] | |||||
Total | $ 4,837 |