- Quarterly Report (10-Q)
17 11월 2009 - 5:14AM
Edgar (US Regulatory)
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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
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WASHINGTON, D.C. 20549
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FORM 10-Q
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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2009
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OR
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o
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________to ____________
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Commission file number
1-11916
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WIRELESS TELECOM GROUP, INC.
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(Exact name of registrant as specified in
its charter)
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New Jersey
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22-2582295
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(State or Other Jurisdiction
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(I.R.S. Employer
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of Incorporation or Organization)
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Identification No.)
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25 Eastmans Road
Parsippany, New Jersey
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07054
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(Address of Principal Executive Offices)
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(Zip Code)
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(973) 386-9696
(Registrants Telephone Number, Including
Area Code)
Not Applicable
(Former Name, Former Address and
Former Fiscal Year, if Changed Since Last Report)
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
o
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 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
x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (see
the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act). (Check one):
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Large
accelerated filer
o
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Accelerated
filer
o
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Non-accelerated
filer
o
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Smaller
reporting company
x
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
o
No
x
Number of shares of Common
Stock outstanding as of November 12, 2009: 25,658,203
WIRELESS TELECOM GROUP, INC.
Table of Contents
2
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30,
2009
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December 31,
2008
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(unaudited)
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- ASSETS -
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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12,785,143
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$
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6,627,397
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Investment in short-term U.S. Treasury securities, at cost
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1,036,205
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5,016,092
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Accounts receivable - net of allowance for doubtful
accounts of $272,113 and $156,913 for 2009 and 2008, respectively
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6,789,764
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7,278,561
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Income taxes recoverable
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1,551,000
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Inventories
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8,950,913
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10,028,314
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Deferred income taxes-current
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385,162
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198,216
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Prepaid expenses and other current assets
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677,588
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1,147,999
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TOTAL CURRENT ASSETS
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30,624,775
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31,847,579
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PROPERTY, PLANT AND EQUIPMENT - NET
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5,465,357
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5,835,178
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OTHER ASSETS:
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Goodwill
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1,351,392
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1,351,392
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Deferred income taxes - non-current
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353,518
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527,599
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Cash surrender value of foreign pension insurance and
other assets
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4,091,178
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3,970,861
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TOTAL OTHER ASSETS
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5,796,088
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5,849,852
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TOTAL ASSETS
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$
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41,886,220
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$
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43,532,609
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- LIABILITIES AND SHAREHOLDERS EQUITY -
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CURRENT LIABILITIES:
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Accounts payable
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$
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2,163,474
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$
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3,893,436
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Accrued expenses and other current liabilities
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2,760,335
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2,732,454
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Current portion of note payable - bank
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382,017
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369,059
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Current portion of mortgage payable
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62,203
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58,784
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TOTAL CURRENT LIABILITIES
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5,368,029
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7,053,733
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LONG TERM LIABILITIES:
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Note payable - bank
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1,528,075
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1,660,768
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Mortgage payable
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2,787,556
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2,834,645
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Deferred rent payable
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101,308
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101,666
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Provision for pension liability and other long term
liabilities
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1,246,639
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1,204,350
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TOTAL LONG TERM LIABILITIES
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5,663,578
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5,801,429
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COMMITMENTS AND CONTINGENCIES
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SHAREHOLDERS EQUITY:
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Preferred stock, $.01 par value, 2,000,000 shares
authorized, none issued
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Common stock, $.01 par value, 75,000,000 shares
authorized, 28,753,861 shares issued, 25,658,203 shares outstanding
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287,539
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287,539
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Additional paid-in-capital
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37,461,477
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37,259,386
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Retained (deficit)
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(247,461
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)
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(47,072
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)
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Accumulated other comprehensive income
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899,872
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724,408
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Treasury stock at cost, 3,095,658 shares
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(7,546,814
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)
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(7,546,814
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)
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TOTAL SHAREHOLDERS EQUITY
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30,854,613
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30,677,447
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TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
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$
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41,886,220
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$
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43,532,609
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See accompanying notes
3
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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For the Three Months
Ended September 30,
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For the Nine Months
Ended September 30,
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2009
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2008
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2009
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2008
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NET SALES
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$
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13,124,100
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$
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13,608,518
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$
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35,988,732
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$
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39,604,945
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COST OF SALES
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6,754,432
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6,732,605
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18,432,119
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20,348,778
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GROSS PROFIT
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6,369,668
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6,875,913
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17,556,613
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19,256,167
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OPERATING EXPENSES
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Research and development
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1,641,889
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1,804,631
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5,199,557
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5,724,712
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Sales and marketing
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2,613,565
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2,902,771
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7,621,380
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8,686,499
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General and administrative
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1,797,282
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2,260,001
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5,243,642
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6,561,162
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TOTAL OPERATING EXPENSES
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6,052,736
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6,967,403
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18,064,579
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20,972,373
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OPERATING INCOME (LOSS)
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316,932
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(91,490
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)
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(507,966
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)
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(1,716,206
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)
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OTHER (INCOME) EXPENSE
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Interest (income)
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(10,199
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)
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(51,831
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)
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(42,203
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)
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(243,043
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)
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Interest expense
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54,052
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55,128
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162,981
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166,150
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Other (income) expense - net
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28,565
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254,281
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(111,173
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)
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(208,880
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)
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TOTAL OTHER (INCOME) EXPENSE
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72,418
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257,578
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9,605
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(285,773
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)
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INCOME (LOSS) BEFORE INCOME TAXES
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244,514
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(349,068
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)
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(517,571
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)
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(1,430,433
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)
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PROVISION (BENEFIT) FOR INCOME TAXES
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81,525
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161,080
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(317,182
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)
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598,508
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NET INCOME (LOSS)
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$
|
162,989
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$
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(510,148
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)
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$
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(200,389
|
)
|
$
|
(2,028,941
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)
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NET INCOME (LOSS) PER COMMON SHARE:
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BASIC
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$
|
0.01
|
|
$
|
(0.02
|
)
|
$
|
(0.01
|
)
|
$
|
(0.08
|
)
|
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|
|
|
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|
|
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DILUTED
|
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$
|
0.01
|
|
$
|
(0.02
|
)
|
$
|
(0.01
|
)
|
$
|
(0.08
|
)
|
|
|
|
|
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See accompanying notes
4
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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For the Nine Months
Ended September 30,
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2009
|
|
2008
|
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net (loss)
|
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$
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(200,389
|
)
|
$
|
(2,028,941
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)
|
Adjustments to reconcile net (loss) to net cash provided
by operating activities:
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Depreciation and amortization
|
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682,266
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1,425,021
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Stock compensation expense
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|
202,091
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355,557
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Realized loss on sale of investment securities
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158,249
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Deferred rent
|
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(358
|
)
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(2,981
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)
|
Deferred income taxes
|
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|
(12,865
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)
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(43,941
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)
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Provision for losses on accounts receivable
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|
109,160
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|
12,362
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Changes in assets and liabilities:
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Accounts receivable
|
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|
746,420
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|
461,780
|
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Inventory
|
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|
1,188,582
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|
2,531,620
|
|
Prepaid expenses and other assets
|
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|
1,798,560
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|
|
(10,313
|
)
|
Accounts payable, accrued expenses and other current
liabilities
|
|
|
(2,068,287
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)
|
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(911,368
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)
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Pension liability and other long-term liabilities
|
|
|
|
|
|
12,714
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|
|
|
|
|
|
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Net cash provided by operating activities
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|
2,445,180
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|
1,959,759
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CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
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|
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Capital expenditures
|
|
|
(230,026
|
)
|
|
(299,312
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)
|
Proceeds from dispositions of property, plant and
equipment
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|
|
|
|
|
15,243
|
|
Purchase of investment securities
|
|
|
|
|
|
(871,352
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)
|
Proceeds from sale of short term securities - net
|
|
|
3,979,887
|
|
|
713,103
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) investing
activities
|
|
|
3,749,861
|
|
|
(442,318
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
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CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Payments of mortgage note
|
|
|
(43,670
|
)
|
|
(40,500
|
)
|
Payments of bank note payable
|
|
|
(178,920
|
)
|
|
|
|
Acquisition of treasury stock
|
|
|
|
|
|
(477,885
|
)
|
|
|
|
|
|
|
|
|
Net cash (used for) financing activities
|
|
|
(222,590
|
)
|
|
(518,385
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency on cash and cash equivalents
|
|
|
185,295
|
|
|
(24,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
6,157,746
|
|
|
974,710
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, at beginning of period
|
|
|
6,627,397
|
|
|
10,387,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, AT END OF
PERIOD
|
|
$
|
12,785,143
|
|
$
|
11,361,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
Taxes
|
|
$
|
257,850
|
|
$
|
975,543
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
203,881
|
|
$
|
166,898
|
|
|
|
|
|
|
|
|
|
See accompanying notes
5
WIRELESS TELECOM GROUP, INC.
N
OTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
|
|
|
The condensed
consolidated balance sheet as of September 30, 2009 and the condensed
consolidated statements of operations for the three and nine month periods
ended September 30, 2009 and 2008 and the condensed consolidated statements
of cash flows for the nine month periods ended September 30, 2009 and 2008
have been prepared by the Company without audit. The condensed consolidated
financial statements include the accounts of Wireless Telecom Group, Inc. and
its wholly-owned subsidiaries Boonton Electronics Corporation, Microlab/FXR,
Willtek Communications GmbH, WTG Foreign Sales Corporation and NC Mahwah,
Inc., collectively the Company. All significant intercompany transactions
and balances have been eliminated in consolidation.
|
|
|
|
In the opinion of
management, the accompanying condensed, consolidated financial statements
referred to above contain all necessary adjustments, consisting of normal
accruals and recurring entries, which are necessary to present fairly the
Companys results for the interim periods being presented.
|
|
|
|
The preparation of
financial statements in conformity with accounting principles generally
accepted in the United States of America (US GAAP) requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities (including inventory valuation, accounts receivable valuation,
valuation of deferred tax assets, accrued warranty expense and estimated fair
values of stock options) and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of net revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
|
|
|
|
The accounting
policies followed by the Company are set forth in Note 1 to the Companys
financial statements included in its annual report on Form 10-K for the year
ended December 31, 2008. Specific reference is made to that report since
certain information and footnote disclosures normally included in financial
statements in accordance with US GAAP have been condensed or omitted from
this report.
|
|
|
|
The results of
operations for the three and nine-month periods ended September 30, 2009 and
2008 are not necessarily indicative of the results to be expected for the
full year.
|
|
|
|
Financial
instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash and U.S. Treasury investments and accounts
receivable.
|
|
|
|
The Company
maintains significant cash investments primarily with three financial
institutions, which at times may exceed federally insured limits. The Company
performs periodic evaluations of the relative credit rating of these
institutions as part of its investment strategy.
|
|
|
|
Concentrations of
credit risk with respect to accounts receivable are limited due to the
Companys large customer base. However, at September 30, 2009, primarily all
of the Companys receivables do pertain to the telecommunications industry.
Additionally, for the three and nine-months ended September 30, 2009, an
unrelated customer accounted for approximately 17% and 24% of sales,
respectively. For the three and nine-months ended September 30, 2008, this
same unrelated customer accounted for approximately 15% and 11% of sales,
respectively. Cash relating to this sales activity was collected on a timely
basis, and at September 30, 2009 and December 31, 2008, the aforementioned
unrelated customers accounts receivable balance was 1% and less than 1% of
the Companys overall accounts receivable balance, respectively.
|
|
|
|
The carrying
amounts of cash and cash equivalents, short-term investments, trade
receivables, other current assets and accounts payable approximate fair value
due to the short-term nature of these instruments. The carrying value of
mortgage and notes payable approximate fair value based on their terms which
reflect market conditions existing as of September 30, 2009. At September 30,
the fair value (estimated based upon expected cash outflows discounted at
current market rates) and carrying value of fixed rate mortgage and notes
payable amounted to $4,853,458 and $4,759,851, respectively.
|
|
|
|
The Company
considers all highly liquid investments purchased with an original maturity
of three months or less to be cash equivalents. Cash and cash equivalents
consist of bank and money market accounts.
|
6
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
PRINCIPLES AND POLICIES (Continued)
|
|
|
The Company classifies
investments as short-term investments if their original or remaining
maturities are greater than three months and their remaining maturities are
one year or less. As of September 30, 2009, the Company is invested in U.S.
treasury bills with a maturity date November 19, 2009.
|
|
|
|
The Company has evaluated
subsequent events through November 16, 2009, which is the date on which these
condensed consolidated financial statements were issued and has determined
that there were no subsequent events or transactions requiring recognition or
disclosure in the condensed consolidated financial statements.
|
|
|
|
Certain prior period information
has been reclassified to conform to the current periods reporting
presentation.
|
|
|
NOTE
2 RECENT ACCOUNTING PRONOUNCEMENTS
|
|
|
In October 2009, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Updates
(ASU) 2009-13, Revenue Recognition (Topic 605): Multiple Deliverable
Revenue Arrangements A Consensus of the FASB Emerging Issues Task Force.
This update provides application guidance on whether multiple deliverables
exist, how the deliverables should be separated and how the consideration
should be allocated to one or more units of accounting. This update
establishes a selling price hierarchy for determining the selling price of a
deliverable. The selling price used for each deliverable will be based on
vendor-specific objective evidence, if available, third-party evidence if
vendor-specific evidence is not available, or estimated selling price if
neither vendor-specific nor third-party evidence is available. The Company will
be required to apply this guidance prospectively for revenue arrangements
entered into or materially modified after January 1, 2011; however, earlier
application is permitted. The Company is in the process of evaluating the
impact of adopting this ASU on its condensed consolidated financial
statements.
|
|
|
|
In August 2009, the FASB issued
ASU 2009-05, Fair Value Measurements and Disclosures (Topic 820) Measuring
Liabilities at Fair Value. This ASU clarifies how an entity should measure
the fair value of liabilities and that restrictions on the transfer of a
liability should not be included in its fair value measurement. The effective
date of this ASU is the first reporting period after issuance date, August
26, 2009. The Company adopted this ASU for the quarter ended September 30,
2009. The adoption of this ASU did not have an impact on the Companys
condensed consolidated financial statements.
|
|
|
|
In June 2009, the FASB issued
Accounting Standards Codification (ASC) 105, Generally Accepted Accounting
Principles. ASC 105 establishes the FASB Accounting Standards Codification
(Codification) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with US GAAP for Securities
and Exchange Commission (SEC) registrants. All guidance contained in the
Codification carries an equal level of authority. The Codification supersedes
all existing non-SEC accounting and reporting standards. The FASB will now
issue new standards in the form of Accounting Standards Updates (ASUs). The
FASB will not consider ASUs as authoritative in their own right. ASUs will
serve only to update the Codification, provide background information about
the guidance and provide the basis for conclusions on the changes in the
Codification. References made to FASB guidance have been updated for the
Codification throughout this document. The Codification did not have an
impact on the Companys condensed consolidated financial statements.
|
|
|
|
In June 2009, the Company adopted
guidance issued by the FASB and included in ASC 855, Subsequent Events,
which establishes general standards of accounting for and disclosures of
events that occur after the balance sheet date but before the 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. The additional disclosures required by this ASC are included in Note
1.
|
|
|
|
In April 2009, the Company
adopted guidance issued by the FASB that requires disclosure about the fair
value of financial instruments for interim financial statements of publicly
traded companies, which is included in the Codification in ASC 825,
Financial Instruments. The adoption of ASC 825 did not have an impact on
the Companys condensed consolidated financial statements. See Note 1 for
additional disclosures included in accordance with ASC 825.
|
7
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
|
|
|
In January 2009, the Company
adopted guidance issued by the FASB that requires enhanced disclosures
regarding derivative instruments and hedging activities, enabling a better
understanding of their effects on an entitys financial position, financial
performance and cash flows. The guidance is included in the Codification in
ASC 815, Derivatives and Hedging. The adoption of ASC 815 did not have an impact
on the Companys condensed consolidated financial statements.
|
|
|
|
In January 2009, the Company
adopted guidance issued by the FASB and included in (a.) ASC 805, Business
Combinations, and (b.) ASC 810, Non controlling Interests in Consolidated
Financial Statements. The application of these ASCs is intended to improve,
simplify and converge internationally the accounting for business
combinations and the reporting of non-controlling interests in consolidated
financial statements. The adoption of these ASCs did not have any impact on
its condensed consolidated financial statements.
|
|
|
|
(a.) ASC 805 requires an
acquiring entity in a business combination to: (i) recognize all (and only)
the assets acquired and the liabilities assumed in the transaction, (ii)
establish an acquisition-date fair value as the measurement objective for all
assets acquired and the liabilities assumed, and (iii) disclose to investors
and other users all of the information they will need to evaluate and
understand the nature of, and the financial effect of, the business
combination, and, (iv) recognize and measure the goodwill acquired in the
business combination or a gain from bargain purchase.
|
|
|
|
(b.) ASC 810 is intended to
improve the relevance, comparability and transparency of financial
information provided to investors by requiring all entities to: (i) report
non-controlling (minority) interests in subsidiaries in the same manner, as
equity but separate from the parents equity, in consolidated financial
statements, (ii) net income attributable to the parent and to the
non-controlling interest must be clearly identified and presented on the face
of the consolidated statement of income, and (iii) any changes in the
parents ownership interest while the parent retains the controlling
financial interest in its subsidiary be accounted for consistently.
|
|
|
NOTE 3 INCOME
TAXES
|
|
|
The Company records deferred
taxes in accordance with ASC 740, Accounting for Income Taxes. This ASC
requires recognition of deferred tax assets and liabilities for temporary
differences between the tax basis of assets and liabilities and the amounts
at which they are carried in the financial statements, based upon the enacted
tax rates in effect for the year in which the differences are expected to
reverse. The Company establishes a valuation allowance when necessary to
reduce deferred tax assets to the amount expected to be realized.
|
|
|
|
The Company periodically assesses
the value of its deferred tax asset, which has been generated by a history of
net operating losses and determines the necessity for a valuation allowance.
The Company evaluates which portion, if any, will more likely than not be
realized by offsetting future taxable income, taking into consideration any
limitations that may exist on its use of its net operating loss
carry-forwards.
|
|
|
|
The income tax provision for the
three-months ended September 30, 2009 results from operating income derived
from the Companys U.S. business entities and the net reduction of certain
deferred tax benefits. For the nine-months ended September 30, 2009, the
Company recognized an income tax benefit primarily due to adjustments
recorded for the recoverability of taxes paid in prior periods. The income
tax provision for the three and nine-months ended September 30, 2008 also
results from operating income derived from the Companys U.S. business
entities and the net reduction of certain deferred tax benefits.
|
8
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 4 - INCOME (LOSS) PER COMMON SHARE
|
|
|
Basic earnings (loss) per share
is calculated by dividing income (loss) available to common shareholders by
the weighted average number of shares of common stock outstanding during the
period. Diluted earnings (loss) per share are calculated by using the
weighted average number of shares of common stock outstanding and, when
dilutive, potential shares from stock options and warrants to purchase common
stock, using the treasury stock method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
25,658,203
|
|
|
25,658,203
|
|
|
25,658,203
|
|
|
25,730,629
|
|
Potentially dilutive stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding,
assuming dilution
|
|
|
25,658,203
|
|
|
25,658,203
|
|
|
25,658,203
|
|
|
25,730,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None of the Companys common
stock options were included in the diluted earnings (loss) per share
calculation due to all option exercise prices being greater than the average
market price of the common shares for the periods presented. The weighted
average number of potentially dilutive shares not included in diluted earnings
(loss) per share for the three-months ended September 30, 2009 and 2008 was
2,805,141 and 3,488,967, respectively. For the nine-months ended September
30, 2009 and 2008, the weighted average number of potentially dilutive shares
not included in diluted earnings (loss) per share was 3,157,744 and
3,517,092, respectively.
|
NOTE 5 SHAREHOLDERS EQUITY
|
|
|
On January 17,
2008 the Board of Directors authorized the repurchase of up to 5% of the
Companys outstanding common stock. The stock repurchase authorization does
not have an expiration date and the timing and amount of shares repurchased
will be determined by a number of factors including the levels of cash
generation from operations, cash requirements for investments, and current
share price. During the first nine-months ended September 30, 2008, the
Company repurchased 295,958 shares at a cost of $477,885. The Company did not
repurchase shares during the nine-months ended September 30, 2009. The stock
repurchase program is still active and may be modified or discontinued at any
time.
|
|
|
|
Comprehensive
income (loss) represents changes in equity during a period, except those
resulting from investments by owners and distributions to owners. During the
nine-months ended September 30, 2009 and 2008, other comprehensive income
(loss) consisted of foreign currency translation gains and losses. The net
amounts recognized in other comprehensive income (loss) was $150,303 and
$95,563 for the three-months ended September 30, 2009 and 2008, respectively,
and $175,464 and $74,883 for the nine-months ended September 30, 2009 and
2008, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
162,989
|
|
$
|
(510,148
|
)
|
$
|
(200,389
|
)
|
$
|
(2,028,941
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency gain
|
|
|
150,303
|
|
|
95,563
|
|
|
175,464
|
|
|
74,883
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss)
|
|
$
|
313,292
|
|
$
|
(414,585
|
)
|
$
|
(24,925
|
)
|
$
|
(1,954,058
|
)
|
|
|
|
|
|
|
|
|
|
|
9
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 6 INVENTORIES
|
|
|
Inventory carrying
value is net of inventory reserves of $2,867,007 and $2,729,259 at September
30, 2009 and December 31, 2008, respectively.
|
|
|
|
Inventories
consist of:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2009
|
|
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
4,756,356
|
|
$
|
4,969,592
|
|
Work-in-process
|
|
|
2,150,616
|
|
|
2,223,859
|
|
Finished goods
|
|
|
2,043,941
|
|
|
2,834,863
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,950,913
|
|
$
|
10,028,314
|
|
|
|
|
|
|
|
|
|
|
|
NOTE
7 - GOODWILL
|
|
|
|
The Company
reviews its goodwill for impairment whenever events or changes in
circumstances indicate that the carrying amount of these assets may not be
recoverable, and also reviews goodwill annually in accordance with ASC 350,
Accounting for Business Combinations, Goodwill, and Other Intangible
Assets. The process of evaluating the potential impairment of goodwill is
ongoing, subjective and requires significant judgment and estimates regarding
future cash flows and forecasts. Goodwill represents the excess of the cost
of an acquisition over fair value of net assets acquired. Testing for the
impairment of goodwill involves a two step process. The first step of the
impairment test requires the comparing of a reporting units fair value to its
carrying value. If the carrying value is less than the fair value, no
impairment exists and the second step is not performed. If the carrying value
is higher than the fair value, there is an indication that impairment may
exist and the second step must be performed to compute the amount of the
impairment. In the second step, the impairment is computed by estimating the
fair values of all recognized and unrecognized assets and liabilities of the
reporting unit and comparing the implied fair value of reporting unit
goodwill with the carrying amount of that units goodwill. At September 30,
2009 and December 31, 2008, goodwill is attributable to one of the Companys
reporting units, Microlab/FXR.
|
|
|
NOTE
8 - ACCOUNTING FOR STOCK OPTIONS
|
|
|
|
The Company
follows the provisions of ASC 718, Share-Based Payment. The Companys
results for the three and nine-month periods ended September 30, 2009 include
share-based compensation expense totaling $23,543 and $202,091, respectively.
Results for the three and nine-month periods ended September 30, 2008 include
share-based compensation expense of $118,519 and $355,557, respectively. Such
amounts have been included in the Condensed Consolidated Statements of Operations
within operating expenses.
|
|
|
|
Stock option
compensation expense relative to serviced-based options is the estimated fair
value of options granted, amortized on a straight-line basis over the
requisite service period. Stock option compensation expense relating to
performance-based options is the estimated fair value of options granted,
recognized when stated performance targets are achieved.
|
|
|
|
The fair value of
options is estimated at the date of grant using the Black-Scholes option
pricing model. For the options granted, the Company took into consideration
guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107)
when reviewing and updating assumptions. The expected option life is derived
from assumed exercise rates based upon historical exercise patterns and
represents the period of time that options granted are expected to be
outstanding. The expected volatility is based upon historical volatility of
our shares using weekly price observations over an observation period of
three years. The risk-free rate is based on the U.S. treasury yield curve
rate in effect at the time of grant for periods similar to the expected
option life.
|
10
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
|
|
NOTE
8 - ACCOUNTING FOR STOCK OPTIONS (Continued)
|
|
|
|
The Company did
not grant stock options during the nine-months ended September 30, 2009.
However, during the nine-months ended September 30, 2008, the Company granted
880,000 performance-based options at an exercise price of $1.42. During the
nine-months ended September 30, 2009, no stock options were exercised or
canceled, and 1,528,000 stock options were forfeited, primarily due to the
departure of two of the Companys officers in the third quarter. During the
nine-months ended September 30, 2008, no stock options were exercised, 22,500
options were forfeited and 37,520 options were canceled. At September 30,
2009, the total number of stock option shares outstanding, which includes
both service-based and performance-based options, was 1,808,967.
|
|
|
|
The following
table represents our service-based stock options granted, exercised,
forfeited and canceled during the first nine months of 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price per share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
|
|
|
|
|
|
Service-based Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1, 2009
|
|
|
2,456,967
|
|
$
|
2.55
|
|
|
|
|
|
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(868,000
|
)
|
|
2.57
|
|
|
|
|
|
|
|
Canceled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2009
|
|
|
1,588,967
|
|
$
|
2.54
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at September 30, 2009
|
|
|
1,337,467
|
|
$
|
2.52
|
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table represents our performance-based stock options granted, exercised,
forfeited and canceled during the first nine months of 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price per share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
|
|
|
|
|
|
Performance-based Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1, 2009
|
|
|
880,000
|
|
$
|
1.42
|
|
|
|
|
|
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(660,000
|
)
|
|
1.42
|
|
|
|
|
|
|
|
Canceled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2009
|
|
|
220,000
|
|
$
|
1.42
|
|
|
8.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The unearned
compensation related to Company granted service-based and performance-based
incentive stock options as of September 30, 2009, is $280,730 and $139,191,
respectively.
|
11
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 9 SEGMENT INFORMATION: REGIONAL ASSETS
AND SALES
|
|
|
The Company, in
accordance with ASC 280, Disclosures about Segments of an Enterprise and
Related Information, has disclosed the following segment information:
|
|
|
|
|
|
|
|
|
Property, Plant
and Equipment - net
|
|
As of September 30,
2009
|
|
As of December 31,
2008
|
|
|
|
|
|
|
|
United States
|
|
$
|
4,567,450
|
|
$
|
4,858,059
|
|
Europe
|
|
|
897,907
|
|
|
977,119
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,465,357
|
|
$
|
5,835,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
|
Revenues by
region
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
7,658,810
|
|
$
|
7,207,177
|
|
$
|
22,425,227
|
|
$
|
21,060,990
|
|
Europe, Middle East, Africa
(EMEA)
|
|
|
3,430,071
|
|
|
4,945,386
|
|
|
9,763,479
|
|
|
14,411,268
|
|
Asia Pacific (APAC)
|
|
|
2,035,219
|
|
|
1,455,955
|
|
|
3,800,026
|
|
|
4,132,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13,124,100
|
|
$
|
13,608,518
|
|
$
|
35,988,732
|
|
$
|
39,604,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales are
attributable to a geographic area based on the destination of the product
shipment.
|
|
|
NOTE
10 - COMMITMENTS AND CONTINGENCIES
|
|
|
|
Following an
investigation by the New Jersey Department of Environmental Protection
(NJDEP) in 1982, of the waste disposal practices at a certain site formerly
leased by Boonton, the Company put a ground water management plan into effect
as approved by the NJDEP. Costs associated with this site are charged
directly to income as incurred. The owner of this site has notified the
Company that if the NJDEP investigation proves to have interfered with a sale
of the property, the owner may seek to hold the Company liable for any loss
it suffers as a result. However, corporate counsel has informed management
that, in their opinion, the owner would not prevail in any lawsuit filed due
to the imposition by law of the statute of limitations. The Company will
continue to be liable under the plan, in all future years, until such time as
the NJDEP releases it from all obligations applicable thereto.
|
|
|
|
The Company is
subject to contingent liabilities for employee notice and severance payments
for any actions taken by management to restructure or reduce employees in
Germany, the United States or other worldwide locations. These payments could
have a significantly negative impact on the Companys cash flow and results
of operations.
|
|
|
|
In September 2009,
the Company secured a line of credit with its investment bank. The credit
facility provides borrowing availability of up to 100% of the Companys money
market account balance and 99% of the Companys short-term investment
securities (U.S. Treasury bills) and, under the terms and conditions of the
loan agreement, is fully secured by said money fund account and short-term
investment holdings. Advances under the facility will bear interest at a variable
rate equal to the London InterBank Offered Rate (LIBOR) in effect at time
of borrowing. Additionally, under the terms and conditions of the loan
agreement, there is no annual fee and any amount outstanding under the loan
facility may be paid at any time in whole or in part without penalty. As of
September 30, 2009, the Company had no borrowings outstanding under the
facility and approximately $6,400,000 of borrowing availability. The Company
has no current plans to borrow from this credit facility as it believes cash
generated from operations will adequately meet near-term working capital
requirements.
|
12
|
I
TEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|
|
INTRODUCTION
|
|
Wireless Telecom Group, Inc., and
its operating subsidiaries, Boonton Electronics Corporation, Microlab/FXR and
Willtek Communications GmbH, (collectively, the Company), develop,
manufacture and market a wide variety of electronic noise sources, electronic
testing and measuring instruments including power meters, voltmeters and
modulation meters, high-power passive microwave components and handset
production testers for wireless products. The Companys products have
historically been primarily used to test the performance and capability of
cellular/PCS and satellite communication systems and to measure the power of
RF and microwave systems. Other applications include radio, radar, wireless
local area network (WLAN) and digital television.
|
|
The financial information
presented herein includes:
|
|
(i) Condensed Consolidated
Balance Sheets as of September 30, 2009 (unaudited) and as of December 31,
2008 (ii) Condensed Consolidated Statements of Operations for the three and
nine-month periods ended September 30, 2009 (unaudited) and 2008 (unaudited)
and (iii) Condensed Consolidated Statements of Cash Flows for the nine-month
periods ended September 30, 2009 (unaudited) and 2008 (unaudited).
|
|
FORWARD
LOOKING STATEMENTS
|
|
The statements contained in this
Quarterly Report on Form 10-Q that are not historical facts, including,
without limitation, the statements under Managements Discussion and Analysis
of Financial Condition and Results of Operations, are forward-looking
statements as defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements may be identified by, among other
things, the use of forward-looking terminology such as believes, expects,
intends, plans, may, will, should, anticipates or continues or
the negative thereof of other variations thereon or comparable terminology,
or by discussions of strategy that involve risks and uncertainties. These
statements are based on the Companys current expectations of future events
and are subject to a number of risks and uncertainties that may cause the
Companys actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties include, but are
not limited to, product demand and development of competitive technologies in
our market sector, the impact of competitive products and pricing, the loss
of any significant customers, the effects of adoption of newly announced
accounting standards, the effects of economic conditions and trade, legal and
other economic risks, among others. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. These risks and uncertainties are disclosed from time to time in
the Companys filings with the Securities and Exchange Commission, the
Companys press releases and in oral statements made by or with the approval
of authorized personnel. The Company assumes no obligation to update any
forward-looking statements as a result of new information or future events or
developments.
|
|
CRITICAL
ACCOUNTING POLICIES
|
|
Managements discussion and
analysis of the financial condition and results of operations are based upon
the Companys condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount
of revenues and expenses for each period. The following represents a summary
of the Companys critical accounting policies, defined as those policies that
the Company believes are: (a) the most important to the portrayal of its
financial condition and results of operations, and (b) that require
managements most difficult, subjective or complex judgments, often as a
result of the need to make estimates about the effects of matters that are
inherently uncertain.
|
13
|
ITEM
2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
|
|
Share-Based
Compensation
|
|
The Company
follows the provisions of Accounting Standards Codification (ASC) 718,
Share-Based Payment.
The fair value of options at the date of grant was
estimated using the Black-Scholes option pricing model. For the
performance-based options granted in 2008, the Company took into
consideration guidance under ASC 718 and SEC Staff Accounting Bulletin
No. 107 (SAB 107) when reviewing and updating assumptions. The expected
option life is derived from assumed exercise rates based upon historical
exercise patterns and represents the period of time that options granted are
expected to be outstanding. The expected volatility is based upon historical
volatility of our shares using weekly price observations over an observation
period of three years. The risk-free rate is based on the U.S. treasury yield
curve rate in effect at the time of grant for periods similar to the expected
option life. Due to the Companys history with respect to incentive stock
options, the estimate of forfeitures included in the option valuation was
zero.
|
|
Revenue
Recognition
|
|
Revenue from product shipments,
including shipping and handling fees, is recognized once delivery has
occurred provided that persuasive evidence of an arrangement exists, the
price is fixed or determinable, and collectibility is reasonably assured.
Delivery is considered to have occurred when title and risk of loss have
transferred to the customer. Sales to international distributors are
recognized in the same manner. If title does not pass until the product
reaches the customers delivery site, then recognition of revenue is deferred
until that time. There are no formal sales incentives offered to any of the
Companys customers. Volume discounts may be offered from time to time to
customers purchasing large quantities on a per transaction basis. There are
no special post shipment obligations or acceptance provisions that exist with
any sales arrangements.
|
|
Valuation of
Inventory
|
|
Raw material inventories are
stated at the lower of cost (first-in, first-out method) or market. Finished
goods and work-in-process are valued at average cost of production, which
includes material, labor and manufacturing expenses.
|
|
Allowances for Doubtful Accounts
|
|
The Company maintains allowances
for doubtful accounts for estimated losses resulting from the inability of
its customers to make required payments. A key consideration in estimating
the allowance for doubtful accounts has been, and will continue to be, our
customers payment history and aging of its accounts receivable balance. If
the financial condition of any of its customers were to decline, additional
allowances might be required.
|
|
Income Taxes
|
|
As part of the process of
preparing the condensed consolidated financial statements, the Company is
required to estimate its income taxes in each of the jurisdictions in which
it operates. The process incorporates an assessment of the current tax
exposure together with temporary differences resulting from different
treatment of transactions for tax and financial statement purposes. Such
differences result in deferred tax assets and liabilities, which are included
within the condensed consolidated balance sheet. The recovery of deferred tax
assets from future taxable income must be assessed and, to the extent that
recovery is not likely, the Company establishes a valuation allowance.
Increases in valuation allowances result in the recording of additional tax
expense. Further, if the ultimate tax liability differs from the periodic tax
provision reflected in the condensed consolidated statements of operations,
additional tax expense may be recorded.
|
14
|
ITEM
2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
|
|
Valuation of goodwill
|
|
The Company reviews its goodwill
for impairment whenever events or changes in circumstances indicate that the
carrying amount of these assets may not be recoverable, and also reviews
goodwill annually in accordance with ASC 350. The process of evaluating the
potential impairment of goodwill is ongoing, subjective and requires
significant judgment and estimates regarding future cash flows and forecasts.
Goodwill represents the excess of the cost of an acquisition over fair value
of net assets acquired. Testing for the impairment of goodwill involves a two
step process. The first step of the impairment test requires the comparing of
a reporting units fair value to its carrying value. If the carrying value is
less than the fair value, no impairment exists and the second step is not
performed. If the carrying value is higher than the fair value, there is an
indication that impairment may exist and the second step must be performed to
compute the amount of the impairment. In the second step, the impairment is
computed by estimating the fair values of all recognized and unrecognized
assets and liabilities of the reporting unit and comparing the implied fair
value of reporting unit goodwill with the carrying amount of that units
goodwill. At September 30, 2009 and December 31, 2008, goodwill is
attributable to one of the Companys reporting units, Microlab/FXR.
|
|
RESULTS
OF OPERATIONS
|
|
The
following discussion of our financial condition and results of operations
should be read in conjunction with our interim condensed consolidated
financial statements and the notes to those statements included in Part I,
Item I of this Quarterly Report on Form 10-Q and in conjunction with the
consolidated financial statements contained in our Annual Report on Form 10-K
for the year ended December 31, 2008.
|
|
For the nine-months ended
September 30, 2009 as compared to the corresponding period of the previous
year, net sales decreased to approximately $35,989,000 from approximately
$39,605,000 a decrease of approximately $3,616,000 or 9.1%. For the
three-months ended September 30, 2009 as compared to the corresponding period
of the previous year, net sales decreased to approximately $13,124,000 from
approximately $13,609,000 a decrease of approximately $485,000 or 3.6%. These
decreases are primarily due to an overall softness in the wireless handset
market. Further, for the periods presented herein, a significant percentage
of the resulting sales are attributable to an unrelated customer. Sales to
this unrelated customer accounted for approximately 17% and 24% of sales,
respectively, for the three and nine-months ended September 30, 2009 and
approximately 15% and 11% of sales, respectively, for the three and
nine-months ended September 30, 2008.
|
|
Gross profit on net sales for the
nine-months ended September 30, 2009 was approximately $17,557,000 or 48.8%
as compared to approximately $19,256,000 or 48.6% of net sales for the
nine-months ended September 30, 2008. Gross profit on net sales for the
three-months ended September 30, 2009 was approximately $6,370,000 or 48.5%
as compared to approximately $6,876,000 or 50.5% of net sales for the
three-months ended September 30, 2008. Gross profit margins are lower for the
quarter ended September 30, 2009 as compared to the corresponding period of
the previous year primarily due to lower sales volumes and less favorable
product mix, particularly in the Companys foreign subsidiary, partially
off-set by lower manufacturing labor and overhead costs. The Company can
experience variations in gross profit based upon the mix of products sold as
well as variations due to revenue volume and economies of scale. The Company
continues to carefully monitor costs associated with material acquisition,
manufacturing and production.
|
|
Operating expenses for the
nine-months ended September 30, 2009 were approximately $18,065,000 or 50% of
net sales as compared to approximately $20,972,000 or 53% of net sales for
the nine-months ended September 30, 2008. Operating expenses for the quarter
ended September 30, 2009 were approximately $6,053,000 or 46% as compared to
approximately $6,967,000 or 51% of net sales for the quarter ended September
30, 2008. Operating expenses are lower during the first nine months of 2009
primarily due to a reduction in headcount, reduced overall spending on
research and development outsourcing projects, lower professional and
consulting fees and positive effects on the Companys expenses due to lower
average foreign currency exchange rates. Additionally, due to the Companys
decision to write-off of its intangible assets at December 31, 2008, no
intangible amortization expense was incurred during 2009. The Company
continues to adhere to its cost reduction plan, implemented in 2008, which
effectively lowered operations spending to be more in alignment with current
market conditions.
|
15
|
ITEM
2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
|
|
Interest income decreased by
approximately $42,000 for the three-months ended September 30, 2009 as
compared to the corresponding period of the previous year. For the nine-month
period ended September 30, 2009, interest income decreased by approximately
$201,000 as compared to the corresponding period of the previous year. These
decreases were primarily due to lower interest rates and lower average cash
and short-term investment balances, and consequently lower returns, in a
working capital management account.
|
|
For the three-months ended
September 30, 2009, other expenses-net were approximately $29,000 as compared
to approximately $254,000 for the corresponding period of the previous year.
These net expenses were lower primarily due to non-operating income,
partially off-set by currency gains and losses and
a realized loss from the sale of
investment securities
recorded in the third quarter of 2008. For the
nine-months ended September 30, 2009, other income-net was approximately
$111,000 as compared to approximately $209,000 for the corresponding period
of the previous year. Other non-operating income-net was lower in 2009
primarily due to non-operating income realized in the second quarter of 2008
relating to the partial recovery of a preferred stock investment previously
written-off in a prior period.
|
|
For the three and nine-months
ended September 30, 2009, included in the Companys provision for income
taxes was an adjustment to realize additional income taxes recoverable, in
the amount of approximately $310,000, from prior tax reporting periods. This
adjustment was due to the true-up of previously estimated income taxes
recoverable as the Company finalized its 2008 tax return during the third
quarter of 2009.
|
|
For the nine-months ended
September 30, 2009, the Company incurred a net (loss) of approximately
$(200,000), or $(.01) per share basic and diluted, as compared to a net
(loss) of approximately $(2,029,000), or $(.08) per share basic and diluted
for the nine-months ended September 30, 2008. For the three-months ended
September 30, 2009, the Company realized net income of approximately
$163,000, or $.01 per share basic and diluted, as compared to a net (loss) of
approximately $(510,000), or $(.02) per share basic and diluted for the
three-months ended September 30, 2008. The explanation of the change in net
income (loss) can be derived from the operations analysis given above for the
three and nine-month periods ending September 30, 2009 and 2008,
respectively.
|
|
LIQUIDITY
AND CAPITAL RESOURCES
:
|
|
The Companys working capital has
increased by approximately $463,000 to approximately $25,257,000 at September
30, 2009, from approximately $24,794,000 at December 31, 2008. At September
30, 2009 the Company had a current ratio of 5.7 to 1, and a ratio of debt to
tangible net worth of .4 to 1. At December 31, 2008, the Company had a
current ratio of 4.6 to 1, and ratio of debt to tangible net worth of .4 to
1.
|
|
The Company had a combined cash
and short-term investment balance of approximately $13,821,000 at September
30, 2009, compared to approximately $11,643,000 at December 31, 2008. The
Company believes its current level of cash and short-term investments is
sufficient enough to fund the current operating, investing and financing
activities.
|
|
The Company realized cash from
operating activities of approximately $2,445,000 for the nine-month period
ending September 30, 2009. The primary source of this cash was due to a
decrease in prepaid expenses and other assets, a decrease in inventory, and a
decrease in accounts receivable, partially off-set by a decrease in accounts
payable, accrued expenses and other current liabilities.
|
|
The Company has historically been
able to collect its account receivables approximately every two months. This
average collection period has been sufficient to provide the working capital
and liquidity necessary to operate the Company. The Company continues to
monitor production requirements and delivery times while maintaining
manageable levels of goods on hand.
|
|
The Company realized cash from
operating activities of approximately $1,960,000 for the nine-month period
ending September 30, 2008. The primary source of this cash was due to a
decrease in inventory and a decrease in accounts receivable, partially
off-set by a decrease in accounts payable, accrued expenses and other current
liabilities, and an increase in prepaid expenses and other assets.
|
16
|
ITEM
2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
|
|
Net cash provided by investing
activities for the nine-months ended September 30, 2009 was approximately
$3,750,000. The primary source of these funds was from the sale of short-term
securities, off-set by capital expenditures. For the nine-months ended 2008, net
cash used for investing activities was approximately $442,000. The use of
these funds was for the purchase of investment securities and for capital
expenditures, off-set by proceeds from the sale of short-term securities and
proceeds from the dispositions of property, plant and equipment.
|
|
Cash used for financing
activities for the nine-months ended September 30, 2009 was approximately
$223,000. The use of these funds was for the periodic payments of a bank loan
and a mortgage note. Cash used for financing activities for the nine-months
ended September 30, 2008 was approximately $518,000. The use of these funds
was for the acquisition of treasury stock and the periodic payment of a
mortgage note.
|
|
On January 17, 2008, the
Companys Board of Directors authorized the repurchase of up to 5% of the
Companys common stock. The stock repurchase authorization does not have an
expiration date and the timing and amount of shares will be determined by a
number of factors including the levels of cash generation from operations,
cash requirements for investments, and current share price. During the first
nine-months ended September 30, 2008, the Company repurchased 295,958 shares
at a cost of $477,885. The Company did not repurchase shares during the
nine-months ended September 30, 2009. The stock repurchase program may be
modified or discontinued at any time.
|
|
In light of on-going market
challenges facing the Companys foreign subsidiary, Willtek Communications,
including significant technology research and development expenses required
to remain competitive, management is currently evaluating several strategic
alternatives and opportunities. These include, among others, a significant
restructuring of the existing business, finding a strategic partner, making
additional investments in technology research and development or a sale of
some or all of the Willtek assets.
|
|
In September 2009, the Company
secured a line of credit with its investment bank. The credit facility
provides borrowing availability of up to 100% of the Companys money market
account balance and 99% of the Companys short-term investment securities
(U.S. Treasury bills) and, under the terms and conditions of the loan
agreement, is fully secured by said money fund account and short-term
investment holdings. Advances under the facility will bear interest at a
variable rate equal to the London InterBank Offered Rate (LIBOR) in effect
at time of borrowing. Additionally, under the terms and conditions of the
loan agreement, there is no annual fee and any amount outstanding under the
loan facility may be paid at any time in whole or in part without penalty. As
of September 30, 2009, the Company had no borrowings outstanding under the
facility and approximately $5,400,000 of borrowing availability.
|
|
The Company believes that its
financial resources from working capital provided by operations are adequate
to meet its current needs and therefore does not anticipate the need to
borrow from its available line of credit. However, the loss of a major customer
and/or the effects of the current global economic conditions may require
additional working capital funding.
|
|
INFLATION AND SEASONALITY
|
|
The Company does not anticipate
that inflation will significantly impact its business or its results of
operations nor does it believe that its business is seasonal.
|
17
|
I
TEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
|
Not applicable.
|
|
I
TEM 4T - CONTROLS AND PROCEDURES
|
|
(a) Evaluation of Disclosure
Controls and Procedures
|
|
Under the supervision and with
the participation of our management, including our principal executive
officer and principal financial officer, as of the end of the period covered
by this report, we conducted an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Act of 1934. Our disclosure
controls and procedures are designed to provide reasonable assurance that the
information required to be included in our Securities and Exchange Commission
(SEC) reports is recorded, processed, summarized and reported within the
time periods specified in SEC rules and forms, relating to Wireless Telecom
Group, Inc., including our consolidated subsidiaries, and was made known to
them by others within those entities, particularly during the period when
this report was being prepared. Based on this evaluation, our principal
executive officer and principal financial officer concluded that, as of the
period covered by this report, our disclosure controls and procedures are
effective at these reasonable assurance levels.
|
|
(b) Changes in Internal Controls
over Financial Reporting
|
|
In connection with the evaluation
required by paragraph (d) of Rule 13a-15 under the Exchange Act, there
was no change identified in our internal control over financial reporting
that occurred during the last fiscal quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over
financial reporting.
|
18
|
|
P
ART II - OTHER
INFORMATION
|
|
|
I
tem 1. LEGAL
PROCEEDINGS
|
|
|
|
The Company is not aware of any
material legal proceeding against the Company or in which any of their
property is subject.
|
|
|
I
tem 1A. RISK
FACTORS
|
|
|
|
The Company is not aware of any material
changes from risk factors as previously disclosed in its Form 10-K for the
year ended December 31, 2008.
|
|
|
I
tem 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
|
None.
|
|
|
I
tem 3. DEFAULTS
UPON SENIOR SECURITIES
|
|
|
|
None.
|
|
|
I
tem 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
|
|
|
None.
|
|
|
I
tem 5. OTHER
INFORMATION
|
|
|
|
None.
|
|
|
I
tem 6. EXHIBITS
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
10.1
|
|
Credit Line Agreement
|
|
|
|
31.1
|
|
Certification Pursuant to Section
302 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer and
Principal Financial Officer)
|
|
|
|
32.1
|
|
Certification Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley
Act of 2002 (Principal Executive Officer and Principal Financial Officer)
|
19
|
|
S
IGNATURES
|
|
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
|
|
|
WIRELESS TELECOM
GROUP, INC.
|
|
|
|
(Registrant)
|
|
|
Date: November 16,
2009
|
/S/Paul Genova
|
|
|
|
Paul Genova
|
|
Chief Executive
Officer, President and Chief Financial Officer
|
20
EXHIBIT LIST
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
10.1
|
|
Credit Line Agreement
|
|
|
|
31.1
|
|
Certification
Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal
Executive Officer and Principal Financial Officer)
|
|
|
|
32.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002 (Principal Executive Officer and Principal
Financial Officer)
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Wireless Telecom (AMEX:WTT)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Wireless Telecom (AMEX:WTT)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024