x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Minnesota
|
41-1347235
|
|||
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
Yes
x
|
No
¨
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer x
|
Yes
¨
|
No
x
|
Class:
|
Outstanding
at August 2, 2006
|
|||
Common
stock, par value $.01
|
11,872,331
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
10
|
|
15
|
|
15
|
|
16
|
|
16
|
|
16
|
|
17
|
|
17
|
June
30,
|
March
31,
|
||||||
2006
|
2006
|
||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
8,143,946
|
$
|
8,947,777
|
|||
Accounts
receivable, net of allowance for uncollectible accounts of $75,529
at June
30, 2006 and $77,831 at March 31, 2006
|
2,104,804
|
1,892,483
|
|||||
Inventories
|
2,073,806
|
1,836,843
|
|||||
Prepaid
expenses and other
|
171,492
|
299,425
|
|||||
Total
current assets
|
12,494,048
|
12,976,528
|
|||||
Property,
plant and equipment, net
|
2,644,810
|
2,623,412
|
|||||
Other
assets:
|
|||||||
Bond
reserve funds
|
339,154
|
343,241
|
|||||
Goodwill
|
3,422,511
|
3,422,511
|
|||||
Other
|
249,621
|
227,879
|
|||||
4,011,286
|
3,993,631
|
||||||
Total
assets
|
$
|
19,150,144
|
$
|
19,593,571
|
|||
Liabilities
and shareholders’ equity
|
|||||||
Current
liabilities:
|
|||||||
Current
portion of long-term debt
|
$
|
1,256,678
|
$
|
1,342,481
|
|||
Accounts
payable
|
1,350,776
|
1,353,828
|
|||||
Accrued
compensation
|
620,869
|
815,046
|
|||||
Accrued
expenses
|
150,442
|
211,840
|
|||||
Total
current liabilities
|
3,378,765
|
3,723,195
|
|||||
Long-term
debt, net of current maturities
|
14,796
|
18,480
|
|||||
Deferred
income taxes
|
288,634
|
272,454
|
|||||
Total
liabilities
|
3,682,195
|
4,014,129
|
|||||
Shareholders’
equity:
|
|||||||
Undesignated
shares, 4,999,500 authorized shares; no shares issued and
outstanding
|
-
|
-
|
|||||
Preferred
stock, $.01 par value; 500 authorized shares; no shares issued
and
outstanding
|
-
|
-
|
|||||
Common
stock, $.01 par value; 50,000,000 authorized shares; 11,872,331
shares
issued and outstanding at June 30, 2006 and March 31, 2006
|
118,723
|
118,723
|
|||||
Additional
paid-in capital
|
51,987,991
|
51,968,366
|
|||||
Accumulated
foreign currency translation
|
(21,253
|
)
|
(2,153
|
)
|
|||
Accumulated
deficit
|
(36,617,512
|
)
|
(36,505,494
|
)
|
|||
Total
shareholders’ equity
|
15,467,949
|
15,579,442
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
19,150,144
|
$
|
19,593,571
|
Three
Months Ended
|
|||||||
June
30,
|
|||||||
2006
|
2005
|
||||||
Revenues
|
$
|
5,025,917
|
$
|
3,512,563
|
|||
Cost
of sales
|
3,695,930
|
2,787,453
|
|||||
Gross
profit
|
1,329,987
|
725,110
|
|||||
Operating
expenses
|
|||||||
Research
and development
|
153,787
|
323,598
|
|||||
Selling,
general and administrative
|
1,713,003
|
1,470,408
|
|||||
Gain
on disposal of asset
|
(345,000
|
)
|
(109,935
|
)
|
|||
1,521,790
|
1,684,071
|
||||||
Loss
from operations
|
(191,803
|
)
|
(958,961
|
)
|
|||
Other
income
|
119,379
|
91,787
|
|||||
Other
expense
|
(20,614
|
)
|
(22,882
|
)
|
|||
98,765
|
68,905
|
||||||
Loss
before income taxes
|
(93,038
|
)
|
(890,056
|
)
|
|||
Income
taxes
|
18,980
|
950
|
|||||
Net
loss
|
$
|
(112,018
|
)
|
$
|
(891,006
|
)
|
|
Net
loss per share:
|
|||||||
Basic
and diluted
|
$ |
(0.01
|
)
|
$ |
(0.08
|
)
|
|
Weighted
average shares outstanding:
|
|||||||
Basic
and diluted
|
11,872,331
|
11,872,331
|
Three
Months Ended
|
|||||||
June
30,
|
|||||||
2006
|
2005
|
||||||
Cash
Flow from operating activities
|
|||||||
Net
loss
|
$
|
(112,018
|
)
|
$
|
(891,006
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
154,416
|
269,847
|
|||||
Deferred
taxes
|
16,180
|
-
|
|||||
Gain
on sale of assets
|
(345,000
|
)
|
(109,935
|
)
|
|||
Stock
based compensation
|
19,625
|
3,199
|
|||||
Foreign
currency translation
|
(19,100
|
)
|
1,342
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable, net
|
(212,321
|
)
|
(2,923
|
)
|
|||
Inventories
|
(236,963
|
)
|
(110,977
|
)
|
|||
Prepaid
expenses and other
|
24,655
|
44,130
|
|||||
Accounts
payable and accrued expenses
|
(258,627
|
)
|
161,503
|
||||
Net
cash used in operating activities
|
(969,153
|
)
|
(634,820
|
)
|
|||
Cash
flow from investing activities
|
|||||||
Purchases
of property and equipment
|
(175,814
|
)
|
(121,259
|
)
|
|||
Proceeds
from sale of assets
|
345,000
|
1,500
|
|||||
Net
cash provided by (used in) investing activities
|
169,186
|
(119,759
|
)
|
||||
Cash
flow from financing activities
|
|||||||
Repayment
of long-term debt
|
(89,487
|
)
|
(96,624
|
)
|
|||
Decrease
in bond reserve funds
|
85,623
|
89,600
|
|||||
Net
cash used in financing activities
|
(3,864
|
)
|
(7,024
|
)
|
|||
Decrease
in cash and cash equivalents
|
(803,831
|
)
|
(761,603
|
)
|
|||
Cash
and cash equivalents at beginning of period
|
8,947,777
|
10,813,492
|
|||||
Cash
and cash equivalents at end of period
|
$
|
8,143,946
|
$
|
10,051,889
|
Three
Months Ended
|
|||||||
June
30,
|
|||||||
2006
|
2005
|
||||||
Numerator
for basic and diluted net loss per share
|
$
|
(112,018
|
)
|
$
|
(891,066
|
)
|
|
Denominator
for basic and diluted net loss per share - weighted average shares
outstanding
|
11,872,331
|
11,872,331
|
|||||
Basic
and diluted net loss per share
|
$ |
(0.01
|
)
|
$ |
(0.08
|
)
|
Optronics
|
Cables
& Networks
|
Eliminations
|
Consolidated
|
||||||||||
Three
months ended June 30, 2006
|
|||||||||||||
External
sales
|
$
|
51
|
$
|
4,975
|
$
|
-
|
$
|
5,026
|
|||||
Gross
profit (loss)
|
(102
|
)
|
1,432
|
-
|
1,330
|
||||||||
Operating
income (loss)
|
(362
|
)
|
170
|
-
|
(192
|
)
|
|||||||
Depreciation
and amortization
|
87
|
67
|
-
|
154
|
|||||||||
Capital
expenditures
|
175
|
1
|
-
|
176
|
|||||||||
Assets
|
18,855
|
8,000
|
(7,705
|
)
|
19,150
|
||||||||
Three
months ended June 30, 2005
|
|||||||||||||
External
sales
|
$
|
103
|
$
|
3,508
|
$
|
(98
|
)
|
$
|
3,513
|
||||
Gross
profit (loss)
|
(186
|
)
|
912
|
(1
|
)
|
725
|
|||||||
Operating
loss
|
(891
|
)
|
(68
|
)
|
-
|
(959
|
)
|
||||||
Depreciation
and amortization
|
210
|
60
|
-
|
270
|
|||||||||
Capital
expenditures
|
87
|
34
|
-
|
121
|
|||||||||
Assets
|
21,149
|
7,341
|
(7,358
|
)
|
21,132
|
Three
Months Ended
|
||||
June
30, 2005
|
||||
Net
loss to common shareholders - as reported
|
$
|
(891,006
|
)
|
|
Less:
Total stock-based employee compensation expense determined under
fair
value based method for all awards, net of related tax
effects
|
(31,565
|
)
|
||
Net
loss - pro forma
|
$
|
(922,571
|
)
|
|
Basic
and diluted net loss per common share - as reported
|
$ |
(0.08
|
)
|
|
Basic
and diluted net loss per common share - pro forma
|
$ |
(0.08
|
)
|
Number of
shares
|
Weighted
average exercise price
|
||||||
Outstanding
at March 31, 2006
|
276,470
|
$
|
2.80
|
||||
Granted
|
25,000
|
1.33
|
|||||
Canceled
|
(37,490
|
)
|
2.87
|
||||
Outstanding
at June 30, 2006
|
263,980
|
2.65
|
Options
outstanding
|
|||||||||||||
Range
of exercise
prices
|
Number outstanding
|
Weighted
average remaining contractual
life
|
Weighted
average exercise
price
|
Aggregate
intrinsic
value
|
|||||||||
$1.30-$2.91
|
228,980
|
4.29
years
|
$
|
1.88
|
$
|
430,482
|
|||||||
5.53-8.90
|
35,000
|
0.65
years
|
7.70
|
269,500
|
|||||||||
263,980
|
3.81
years
|
2.65
|
$
|
699,982
|
Options
exercisable
|
|||||||||||||
Range
of exercise
prices
|
Number
outstanding
|
Weighted
average remaining
contractual
life
|
Weighted
average exercise
price
|
Aggregate
intrinsic
value
|
|||||||||
$1.30-$2.91
|
67,820
|
3.21
years
|
$
|
2.21
|
$
|
149,882
|
|||||||
5.53-8.90
|
|
31,250
|
0.60
years
|
7.55
|
235,938
|
||||||||
99,070
|
2.39
years
|
3.89
|
$
|
385,820
|
Three
Months Ended June
30, 2006
|
||||
Expected
volatility
|
64
|
%
|
||
Expected
life (in years)
|
5
years
|
|||
Expected
dividends
|
0
|
%
|
||
Risk-free
interest rate
|
4.95
|
%
|
Total
|
Less
than 1 Year
|
1-3
years
|
4-5
years
|
After
5 years
|
||||||||||||
Long-term
debt (1)
|
$
|
1,272
|
$
|
1,257
|
$
|
15
|
$
|
-
|
$
|
-
|
||||||
Leases
|
2,124
|
223
|
679
|
506
|
716
|
|||||||||||
Total
Contractual Cash Obligations
|
$
|
3,396
|
$
|
1,480
|
$
|
694
|
$
|
506
|
$
|
716
|
·
|
Stock
Option Accounting;
|
·
|
Accounting
for income taxes; and
|
·
|
Valuation
and evaluating impairment of long-lived assets and
goodwill
|
(a)
|
Evaluation
of disclosure controls and procedures.
The Company’s chief executive officer and chief financial officer have
concluded that as of the end of the fiscal period covered by this
report
the Company’s disclosure controls and procedures (as defined in Exchange
Act Rule 13a-14(c)) were effective.
|
(b)
|
Changes
in internal controls.
There were no changes in the Company’s internal controls over financial
reporting during the fiscal period covered by this report that
materially
affected, or are likely to materially affect, the Company’s control over
financial reporting.
|
APA
ENTERPRISES, INC.
|
||
8/10/06
|
/s/
Anil K. Jain
|
|
Date
|
Anil
K. Jain
|
|
President,
|
||
Chief
Executive Officer and Chief Financial Officer (Principal Executive
and
Principal Financial and Accounting
Officer)
|