The following discussion and analysis of factors which have affected the
Company's financial position and operating results during the periods included
in the accompanying unaudited condensed financial statements should be read in
conjunction with the Financial Statements and the related Notes to Financial
Statements and Management's Discussion and Analysis of Financial Condition and
Results of Operations included in the Company's Annual Report on Form 10-K for
the year ended
Critical Accounting Estimates:
The discussion and analysis of our financial condition and results of operations
are based upon the unaudited condensed financial statements included elsewhere
in this Quarterly Report on Form 10-Q which are prepared in accordance with
GAAP. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. See Note 2 in the financial statements for
the Company's significant accounting policies. Of the Company's accounting
policies, the following are considered to be critical - Revenue Recognition and
Inventories. A discussion of these critical accounting policies are included in
Note 2 of the "Notes To Financial Statements" in Item 8 of our Annual Report on
Form 10-K for the fiscal year ended
See Note 2, "Summary of Significant Accounting Policies", to the accompanying notes to the financial statements included in this Quarterly Report on 10-Q.
Results of Operations-Three Months Ended
Net bookings for the three months ended
Cost of Sales. Cost of sales for the three months ended
Gross Profit. Gross profit for the three months ended
For the three months ended
Selling, General & Administrative Expenses. Selling, general, and administrative
expenses decreased to
Operating Income. Operating income for the three months ended
Other Income. Interest expense increased to (
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Net Income. Net income for the three months ended
Liquidity and Capital Resources:
Operating Activities:
Net cash provided by operating activities was
Net cash provided by operating activities was
Investing Activities:
Net cash used in investing activities was (
Net cash used in investing activities was (
Financing Activities:
Net cash used in financing activities was (
Net cash provided by financing activities was
We expect our sole sources of liquidity over the next twelve months to be cash
from operations and cash and cash equivalents, if necessary. We anticipate that
our capital expenditures required to sustain operations and complete the
renovations to our new facility will be approximately
At
At
At
Based on various factors, including the Company's desire to fully utilize its current net operating loss carryforwards, the Company may seek out acquisitions, additional product lines, and/or invest a portion of its cash into common stocks or higher yielding debt instruments. The Company will continue to consider additional share repurchases under the Company's stock repurchase program subject to market conditions, corporate liquidity requirements and priorities and other factors as may be considered in the Company's sole discretion.
Off-Balance Sheet Arrangements:
The Company has not engaged in any off-balance sheet arrangements.
FORWARD-LOOKING STATEMENTS
Some of the statements in this Quarterly Report on Form 10-Q are
"forward-looking statements". These forward-looking statements include
statements regarding our business, financial condition, results of operations,
strategies or prospects. You can identify forward-looking statements by the fact
that these statements do not relate strictly to historical or current matters.
Rather, forward-looking statements relate to anticipated or expected events,
activities, trends or results. Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to
risks and uncertainties. Many factors could cause our actual activities or
results to differ materially from the activities and results anticipated in
forward-looking statements. These factors include those described under the
caption "Risk Factors" in our Annual Report on Form 10-K for the year ended
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Some of the factors that may impact our business, financial condition, results of operations, strategies or prospects include:
· Loss of, or reduction of business from, substantial clients could hurt our business by reducing our revenues, profitability and cash flow. · Our complex manufacturing processes may lower yields and reduce our revenues. · Our business could be materially and adversely affected if we are unable to obtain qualified supplies of raw materials, parts and finished components on a timely basis and at a cost-effective price. · Our inventories may become obsolete and other assets may be subject to risks. · Environmental regulations could require us to incur significant costs. · Our business is highly competitive and increased competition could reduce gross profit margins and the value of an investment in our Company. · Our operating results may decrease due to the decline of profitability in the semiconductor industry. · We may not achieve the intended effects of our business strategy, which could adversely impact our business, financial condition and results of operations. · Our inability to introduce new products could result in decreased revenues and loss of market share to competitors; new technologies could also reduce the demand for our products. · The nature of our products exposes us to potentially significant product liability risk. · We depend on the recruitment and retention of qualified personnel and our failure to attract and retain such personnel could seriously harm our business. · Failure to protect our proprietary technologies or maintain the right to use certain technologies may negatively affect our ability to compete. · We cannot guarantee that we will have sufficient capital resources to make necessary investments in manufacturing technology and equipment. · We may make substantial investments in plant and equipment that may become impaired. · While we attempt to monitor the credit worthiness of our customers, we may be at risk due to the adverse financial condition of one or more customers. · Our international operations expose us to material risks, including risks underU.S. export laws. · Compliance with regulations regarding the use of "conflict minerals" could limit the supply and increase the cost of certain metals used in manufacturing our products. · We are dependent on government contracts, which are subject to termination, price renegotiations and regulatory compliance, which can increase the cost of doing business and negatively impact our revenues. · Changes in government policy or economic conditions could negatively impact our results. · Changes in Defense related programs and priorities could reduce the revenues and profitability of our business. · The COVID-19 pandemic may have a material adverse effect on our business, cash flows and results of operations. · Security breaches and other disruptions could compromise the integrity of our information and expose us to liability, which would cause our business and reputation to suffer. · Our failure to remediate the material weakness in our internal control over financial reporting or our identification of any other material weaknesses in the future may adversely affect the accuracy and timing of our financial reporting. · Provisions in our charter documents could make it more difficult to acquire our Company and may reduce the market price of our stock. · The price of our common stock has fluctuated widely in the past and may fluctuate widely in the future. · We cannot guarantee that we will declare future cash dividend payments, nor repurchase any shares of our common stock pursuant to our stock repurchase program. · Uncertainty of current economic conditions, domestically and globally, could continue to affect demand for our products and negatively impact our business. · Natural disasters, like hurricanes, or occurrences of other natural disasters whether inthe United States or internationally may affect the markets in which our common stock trades, the markets in which we operate and our profitability.
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