UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-Q/A
Amendment No. 1
Quarterly Report Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended
December 31, 2011
Commission file number 0-10976
MICROWAVE FILTER
COMPANY, INC.
(Exact name of registrant as
specified in its charter.)
New York
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16-0928443
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(State of Incorporation)
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(I.R.S. Employer Identification Number)
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6743 Kinne Street, East
Syracuse, N.Y.
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13057
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(Address of Principal Executive
Offices)
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(Zip Code)
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(315) 438-4700
Registrant's telephone number, including area code
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____
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 (Section 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____
Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company (as defined in Rule 12b-2 of
the Exchange Act).
Large accelerated filer ______
Accelerated filer ______
Non-accelerated filer ______ (Do not check if smaller reporting
company)
Smaller reporting company ____X____.
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
YES ____ NO__X__
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $.10 Par Value - 2,586,227 shares
as of February 1, 2012.
Explanatory Note
The sole purpose of this Amendment to the Registrant’s Quarterly
Report on Form 10-Q for the period ended December 31, 2011, as
filed with the Securities and Exchange Commission on February 13,
2012 (the “Original Filing”), is to furnish the XBRL Interactive
Data Files on Exhibit 101. The XBRL Interactive Data Files were
inadvertently filed on Exhibit 100 in the Original Filing.
No other changes have been made to the Form 10-Q. This Amendment
No. 1 on Form 10-Q speaks as of the original filing date of the
Form 10-Q and does not modify or update any related disclosures
made in the Form 10-Q.
MICROWAVE
FILTER COMPANY, INC.
Form 10-Q
Index
<PAGE>
2
PART I. - FINANCIAL INFORMATION
Microwave
Filter Company and Subsidiaries
Consolidated Balance Sheets
December
31, 2011 (unaudited) and September 30, 2011
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December 31, 2011
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September 30, 2011
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Assets
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Current Assets:
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Cash and cash
equivalents
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$
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1,298,693
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$
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1,258,885
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Accounts
receivable-trade, net of
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allowance
for doubtful accounts
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of $26,000 and $26,000
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221,686
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352,054
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Federal and state income
tax recoverable
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0
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24,828
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Inventories, net
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517,391
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567,261
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Prepaid
expenses and other current assets
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81,867
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94,114
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Total current assets
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2,119,637
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2,297,142
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Property, plant and equipment, net
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769,313
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617,818
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Total assets
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$
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2,888,950
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$
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2,914,960
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Liabilities
and
Stockholders' Equity
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Current
liabilities:
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Accounts payable
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$
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151,701
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$
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195,535
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Customer
deposits
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57,909
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51,886
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Accrued federal and state income taxes
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574
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0
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Accrued
payroll and related expenses
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39,421
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57,514
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Accrued compensated absences
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228,845
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250,443
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Other
current liabilities
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31,755
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83,654
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Total current liabilities
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510,205
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639,032
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Total liabilities
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510,205
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639,032
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Stockholders'
Equity:
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Common
stock, $.10 par value
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Authorized 5,000,000
shares, Issued
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4,324,140 shares in 2012
and 2011,
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Outstanding 2,586,227
shares in 2012
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and 2011
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432,414
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432,414
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Additional
paid-in
capital
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3,248,706
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3,248,706
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Retained earnings
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388,302
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285,485
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Common
stock in treasury, at cost
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1,737,913 shares in 2012
and 2011
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(
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1,690,677
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)
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(
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1,690,677
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)
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Total stockholders' equity
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2,378,745
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2,275,928
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Total liabilities and
stockholders' equity
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$
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2,888,950
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$
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2,914,960
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<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
3
Microwave Filter Company and
Subsidiaries
Consolidated Statements of
Operations
(unaudited)
For the Three Months
Ended
December 31, 2011 and 2010
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Three months ended
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December 31,
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2011
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2010
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Net sales
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$
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1,317,207
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$
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1,294,567
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Cost of goods sold
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813,995
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827,308
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Gross profit
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503,212
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467,259
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Selling,
general and
administrative
expenses
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421,970
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421,214
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Income from operations
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81,242
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46,045
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Other
income (net)
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21,575
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1,548
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Income before income taxes
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102,817
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47,593
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Provision (benefit) for income taxes
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0
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0
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NET INCOME
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$
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102,817
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$
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47,593
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Per share data:
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Basic and diluted earnings
per share
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$
|
0.04
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$
|
0.02
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Shares used in computing net
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earnings
per share:
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2,586,227
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2,589,885
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<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
4
Microwave Filter Company and Subsidiaries
Consolidated
Statements of Cash Flows
(unaudited)
For the Three
Months Ended December 31, 2011 and 2010
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Three months ended
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December 31
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2011
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2010
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Cash flows from operating activities:
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Net income
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$
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102,817
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$
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47,593
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Adjustments to reconcile net income
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to net cash
provided by (used in)
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operating
activities:
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Depreciation
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37,583
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22,759
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Gain on sale of fixed assets
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(
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20,000
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)
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0
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Change in assets and liabilities:
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Accounts receivable
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130,368
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67,268
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Federal and state income tax
recoverable
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25,402
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0
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Inventories
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49,870
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(
|
17,252
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)
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Prepaid expenses and other assets
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12,247
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20,292
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Accounts payable and customer deposits
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(
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37,811
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)
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91,436
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Accrued payroll, compensated absences
|
|
|
|
|
|
|
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and related
expenses
|
|
(
|
39,691
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)
|
|
|
(
|
36,128
|
)
|
Other current liabilities
|
|
(
|
51,899
|
)
|
|
|
|
5,375
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|
|
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|
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|
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Net cash provided by (used in)
|
|
|
|
|
|
|
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|
operating
activities
|
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|
208,886
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|
|
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|
201,343
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|
|
|
|
|
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|
|
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Cash flows from investing activities:
|
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|
|
|
|
|
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Capital expenditures
|
|
(
|
189,078
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)
|
|
|
(
|
4,470
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)
|
Proceeds
from sale of fixed assets
|
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|
20,000
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
|
|
|
|
|
|
|
|
|
|
investing
activities
|
|
(
|
169,078
|
)
|
|
|
(
|
4,470
|
)
|
|
|
|
|
|
|
|
|
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|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
0
|
|
|
|
(
|
1,912
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
|
|
|
|
|
|
|
|
|
|
financing
activities
|
|
|
0
|
|
|
|
(
|
1,912
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
|
|
|
|
|
|
|
and cash
equivalents
|
|
|
39,808
|
|
|
|
|
194,961
|
|
|
|
|
|
|
|
|
|
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|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
at
beginning of period
|
|
|
1,258,885
|
|
|
|
|
1,466,719
|
|
|
|
|
|
|
|
|
|
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|
Cash and cash equivalents
|
|
|
|
|
|
|
|
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|
at end of
period
|
$
|
|
1,298,693
|
|
|
$
|
|
1,661,680
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Schedule of Cash
Flow Information:
|
|
|
|
|
|
|
|
|
|
Income taxes paid
|
$
|
|
15,000
|
|
|
$
|
|
0
|
|
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
5
MICROWAVE
FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011
Note 1. Summary of Significant Accounting
Policies
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation
S-K. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The
operating results for the three month period ended December 31,
2011 are not necessarily indicative of the results that may be
expected for the year ended September 30, 2012. For further
information, refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10K
for the year ended September 30, 2011.
Note 2. Industry Segment Data
The Company's business involves the operations of
Microwave Filter Company, Inc. (MFC) which designs, develops,
manufactures and sells electronic filters, both for radio and
microwave frequencies, to help process signal distribution and to
prevent unwanted signals from disrupting transmit or receive
operations. Markets served include cable television, television
and radio broadcast, satellite broadcast, mobile radio, commercial
communications and defense electronics.
Note 3.
Inventories
Inventories are stated at the lower of cost determined on
the first-in, first-out method or market.
Inventories net of
reserve for obsolescence consisted of the following:
December
31, 2011
|
September
30, 2011
|
|
|
|
|
|
|
|
|
|
|
Raw
materials and stock parts
|
|
|
$
|
455,304
|
|
$
|
499,622
|
|
Work-in-process
|
|
|
|
15,521
|
|
|
14,056
|
|
Finished
goods
|
|
|
|
46,566
|
|
|
53,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
517,391
|
|
$
|
567,261
|
|
The Company's reserve for obsolescence equaled $392,703 at
December 31, 2011 and September 30, 2011.
<PAGE>
6
Note
4. Income Taxes
The Company accounts for income taxes under FASB ASC 740-10.
Deferred tax assets and liabilities are based on the difference
between the financial statement and tax basis of assets and
liabilities as measured by the enacted tax rates which are
anticipated to be in effect when these differences reverse. The
deferred tax provision is the result of the net change in the
deferred tax assets and liabilities. A valuation allowance is
established when it is necessary to reduce deferred tax assets to
amounts expected to be realized. The Company has provided a full
valuation allowance against its deferred tax assets.
FASB ASC 740-10 clarifies the accounting for uncertainty in
income taxes recognized in an entity’s financial statements
and prescribes a recognition threshold and measurement attributes
for financial statement disclosure of tax position taken or expected
to be taken on a tax return. Additionally, it provides guidance on
derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. The Company determined
it has no uncertain tax positions and therefore no amounts are
recorded.
Note 5. Legal Matters
The State of New York Workers’ Compensation Board has
commenced an action against Microwave Filter Company, Inc. to
recover for an underfunded self insured program that Microwave
Filter Company, Inc. participated in. Due to the relatively short
period of time Microwave Filter Company, Inc. participated in the
program and the limited amount of potential exposure, we do not
expect the resolution of this action will have a material adverse
effect on our financial condition, results of operations or cash
flows. The Company has accrued $12,000 for this action in other
current liabilities.
Note 6. Fair Value of Financial Instruments
The carrying values of the Company cash and cash equivalents,
accounts receivable and accounts payable approximate fair value
because of the short maturity of those instruments.
The Company currently does not trade in or utilize
derivative financial instruments.
Note 7. Significant Customers
Sales to one customer represented approximately 16% of
total sales for the three months ended December 31, 2011 compared
to 14% of total sales for the three months ended December 31,
2010.
<PAGE>
7
Note 8. Recent Accounting Pronouncements
In May 2011, the FASB issued
Accounting Standards Update No. 2011-04, topic 820,
Fair
Value Measurement
, to improve the comparability of fair
value measurements presented and disclosed in financial
statements prepared in accordance with United States GAAP and
International Financial Reporting Standards. Some of the
amendments clarify the Board’s intent about the application of
existing fair value measurement requirements. Other amendments
change a particular principle or requirement for measuring
fair value or for disclosing information about fair value
measurements. Specifically, the guidance requires additional
disclosures for fair value measurements that are based on
significant unobservable inputs. The updated guidance is to be
applied prospectively and is effective for the Company’s
interim and annual periods beginning January 1, 2012. The
adoption of this guidance is not expected to have a material
impact on the Company’s consolidated financial
statements.
FASB Accounting Standards Update
2011-05, "Presentation of Comprehensive Income," was issued in
June 2011 to be effective for fiscal years beginning after
December 15, 2011. Comprehensive income includes certain items
that are recognized as "other comprehensive income" ("OCI")
and are excluded from net income. Examples include unrealized
gains/losses on certain investments and gains/losses on
derivative instruments designated as hedges. Under provisions
of the update, the components of OCI must be presented in one
of two formats: either (i) together with net income in a
continuous statement of comprehensive income or (ii) in a
second statement of comprehensive income to immediately follow
the income statement. An existing option to present the
components of OCI as part of the statement of changes in
shareholders' equity is being eliminated. The Company expects
the update to have minimal effect on its financial statements.
In September 2011, the Financial Accounting Standards
Board, or FASB, amended existing guidance related to intangibles -
goodwill and other by giving an entity the option to first assess
qualitative factors to determine whether it is more likely than not
(that is, a likelihood of more than 50 percent) that the fair value
of a reporting unit is less than its carrying amount. If this is the
case, companies will need to perform a more detailed two-step
goodwill impairment test which is used to identify potential
goodwill impairments and to measure the amount of goodwill
impairment losses to be recognized, if any. This pronouncement is
effective for annual and interim goodwill impairment tests performed
for fiscal years beginning after December 15, 2011, with early
adoption permitted. We intend to adopt this guidance for our fiscal
year beginning October 1, 2012. We do not believe the adoption of
this guidance will have a material impact on our financial
statements.
<PAGE>
8
MICROWAVE
FILTER COMPANY, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Microwave Filter Company, Inc. operates primarily in
the United States and principally in one industry. The Company
extends credit to business customers based upon ongoing credit
evaluations. Microwave Filter Company, Inc. (MFC) designs,
develops, manufactures and sells electronic filters, both for
radio and microwave frequencies, to help process signal
distribution and to prevent unwanted signals from disrupting
transmit or receive operations. Markets served include cable
television, television and radio broadcast, satellite broadcast,
mobile radio, commercial communications and defense electronics.
Critical Accounting Policies
The Company's consolidated financial statements are based
on the application of United States generally accepted accounting
principles (GAAP). GAAP requires the use of estimates,
assumptions, judgments and subjective interpretations of
accounting principles that have an impact on the assets,
liabilities, revenue and expense amounts reported. The Company
believes its use of estimates and underlying accounting
assumptions adhere to GAAP and are consistently applied.
Valuations based on estimates are reviewed for reasonableness and
adequacy on a consistent basis throughout the Company. Primary
areas where financial information of the Company is subject to the
use of estimates, assumptions and the application of judgment
include revenues, receivables, inventories, and taxes. Note 1 to
the consolidated financial statements in our Annual Report on Form
10-K for the fiscal year ended September 30, 2011 describes the
significant accounting policies used in preparation of the
consolidated financial statements. The most significant areas
involving management judgments and estimates are described below
and are considered by management to be critical to understanding
the financial condition and results of operations of the Company.
Revenues from product sales are recorded as the
products are shipped and title and risk of loss have passed to the
customer, provided that no significant vendor or post-contract
support obligations remain and the collection of the related
receivable is probable. Billings in advance of the Company's
performance of such work are reflected as customer deposits in the
accompanying consolidated balance sheet.
Allowances for doubtful accounts are based on
estimates of losses related to customer receivable balances. The
establishment of reserves requires the use of judgment and
assumptions regarding the potential for losses on receivable
balances.
The Company's inventories are stated at the lower of
cost determined on the first-in, first-out method or market. The
Company uses certain estimates and judgments and considers several
factors including product demand and changes in technology to
provide for excess and obsolescence reserves to properly value
inventory.
<PAGE>
9
The Company established a warranty reserve which provides for
the estimated cost of product returns based upon historical
experience and any known conditions or circumstances. Our warranty
obligation is affected by product that does not meet specifications
and performance requirements and any related costs of addressing
such matters.
The Company accounts for income taxes under FASB ASC
740-10. Deferred tax assets and liabilities are based on the
difference between the financial statement and tax basis of assets
and liabilities as measured by the enacted tax rates which are
anticipated to be in effect when these differences reverse. The
deferred tax provision is the result of the net change in the
deferred tax assets and liabilities. A valuation allowance is
established when it is necessary to reduce deferred tax assets to
amounts expected to be realized. The Company has provided a full
valuation allowance against its deferred tax assets.
<PAGE>
10
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2011 vs.
THREE MONTHS ENDED DECEMBER 31, 2010.
The following table sets forth the
Company's net sales by major product group for the three months
ended December 31, 2011 and 2010.
|
|
Quarter ended
|
|
|
Quarter ended
|
|
Product group
|
Dec. 31, 2011
|
|
Dec. 31, 2010
|
|
Microwave Filter (MFC):
|
|
|
|
|
|
|
RF/Microwave
|
$
|
525,932
|
|
$
|
419,330
|
|
Cable TV
|
|
433,447
|
|
|
396,575
|
|
Satellite
|
|
331,354
|
|
|
447,352
|
|
Broadcast
TV
|
|
25,128
|
|
|
31,152
|
|
Niagara
Scientific (NSI):
|
|
1,346
|
|
|
158
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,317,207
|
|
$
|
1,294,567
|
|
|
|
|
|
|
|
|
Sales
backlog at December 31
|
$
|
303,666
|
|
$
|
672,366
|
|
Net sales for the three months ended December 31, 2011
equaled $1,317,207, an increase of $22,640 or 1.7%, when compared to
net sales of $1,294,567 for the three months ended December 31,
2010.
MFC’s RF/Microwave product sales increased $106,602 or 25.4%
to $525,932 for the three months ended December 31, 2011 when
compared to RF/Microwave product sales of $419,330 during the same
period last year. Management attributes the increase in sales to the
Company’s efforts to encourage Original Equipment Manufacturer (OEM)
relationships. MFC’s RF/Microwave products are sold primarily to
Original Equipment Manufacturers that serve the mobile radio,
commercial communications and defense electronics markets. The
Company continues to invest in production engineering and
infrastructure development to penetrate OEM market segments as they
become popular. MFC is concentrating its technical resources and
product development efforts toward potential high volume customers
as part of a concentrated effort to provide substantial long-term
growth. Sales to one OEM customer represented approximately 16% of
total sales for the quarter ended December 31, 2011 compared to
approximately 14% of total sales for the quarter ended December 31,
2010.
MFC’s Cable TV product sales increased $36,872 or 9.3%
to $433,447 for the three months ended December 31, 2011 when
compared to Cable TV product sales of $396,575 during the same
period last year. Despite the increase, management continues to
project a decrease in demand for Cable TV products due to the shift
from analog to digital television. Due to the inherent nature of
digital modulation versus analog modulation, fewer filters will be
required. The Company has developed filters for digital television
and there will still be requirements for analog filters for limited
applications in commercial and private cable systems.
<PAGE>
11
MFC’s Satellite product sales decreased $115,998 or
25.9% to $331,354 for the three months ended December 31, 2011
when compared to Satellite product sales of $447,352 during the
same period last year. The decrease can be attributed to a
decrease in demand for the Company’s filters which suppress strong
out-of-band interference caused by military and civilian radar
systems and other sources. Management attributes the decrease in
sales to global economic conditions. For the quarter ended
December 31, 2011, international sales were down $82,111 or 44.6%
to $102,197 when compared to international sales of $184,308 for
the quarter ended December 31, 2010. Although economic conditions
do impact sales, management expects demand for these types of
filters to continue with the proliferation of earth stations world
wide and increased sources of interference.
MFC’s Broadcast TV/Wireless
Cable product sales decreased $6,024 or 19.3% to $25,128 for the
three months ended December 31, 2011 when compared to sales of
$31,152 during the same period last year. The decrease can be
attributed to a decrease in demand for UHF Broadcast products
which are primarily sold to system integrators for rural
communities.
MFC's sales order backlog equaled $303,666 at December
31, 2011 compared to sales order backlog of $672,366 at December
31, 2010. However, backlog is not necessarily indicative of future
sales. Accordingly, the Company does not believe that its backlog
as of any particular date is representative of actual sales for
any succeeding period. The total sales order backlog at December
31, 2011 is scheduled to ship by September 30, 2012.
Gross profit for the three months ended December 31, 2011
equaled $503,212, an increase of $35,953 or 7.7%, when compared to
gross profit of $467,259 for the three months ended December 31,
2010. As a percentage of sales, gross profit increased to 38.2%
for the three months ended December 31, 2011 compared to 36.1% for
the three months ended December 31, 2010.The increase in gross
profit can be attributed to the higher sales volume, lower direct
material costs as a percentage of sales primarily due to product
sales mix and lower manufacturing overhead payroll and payroll
related expenses this year when compared to the same period last
year.
Selling, general and administrative (SGA) expenses for
the three months ended December 31, 2011 equaled $421,970, an
increase of $756 or 0.2%, when compared to SGA expenses of
$421,214 for the three months ended December 31, 2010. As a
percentage of sales, SGA expenses decreased to 32.0% for the three
months ended December 31, 2011 when compared to 32.5% for the
three months ended December 31, 2010 primarily due to the higher
sales volume this year when compared to the same period last year.
The Company recorded income from operations of $81,242
for the three months ended December 31, 2011 compared to income
from operations of $46,045 for the three months ended December 31,
2010. The improvement in operating income can primarily be
attributed to the higher sales volume, lower direct material costs
as a percentage of sales and lower manufacturing overhead payroll
and payroll related expenses this year when compared to the same
period last year.
Other income for the three months ended December 31, 2011
equaled $21,575, an increase of $20,027, when compared to other
income of $1,548 for the three months ended December 31, 2010. The
increase can be attributed to a $20,000 gain on the sale of a
fixed asset.
The provision (benefit) for income taxes equaled $0 for
the three months ended December 31, 2011 and December 31, 2010. We
have not recognized any provision for income taxes because taxable
income was reduced by bonus tax basis depreciation and offset by a
reduction in our deferred tax asset valuation reserve. Any benefit
for losses has been subject to a valuation allowance since the
realization of the deferred tax benefit is not considered more
likely than not. As required by FASB ASC 740, the Company has
determined that, at this time, it is more likely than not that the
Company will not realize all of the benefits of federal and state
deferred tax assets, and as a result, a valuation allowance was
established.
<PAGE>
12
Off-Balance Sheet Arrangements
At December 31, 2011 and 2010, the Company did not have
any unconsolidated entities or financial partnerships, such as
entities often referred to as structured finance or special purpose
entities, which might have been established for the purpose of
facilitating off-balance sheet arrangements.
LIQUIDITY and CAPITAL RESOURCES
|
|
|
|
|
December 31, 2011
|
September 30, 2011
|
|
|
|
|
|
Cash & cash equivalents
|
$1,298,693
|
$1,285,885
|
|
Working capital
|
$1,609,432
|
$1,658,110
|
|
Current ratio
|
4.15 to 1
|
3.59 to 1
|
|
Long-term debt
|
$0
|
$0
|
|
Cash and cash equivalents increased $39,808 to $1,298,693 at
December 31, 2011 when compared to cash and cash equivalents of
$1,258,885 at September 30, 2011. The increase was a result of
$228,886 in net cash provided by operating activities and $189,078
in net cash used for capital expenditures.
The decrease in accounts receivable of $130,368 at
December 31, 2011 when compared to September 30, 2011 can be
attributed to improved collections and lower shipments during the
month ended December 31, 2011 when compared to the month ended
September 30, 2011.
The decrease in inventories of $49,870 at December 31,
2011 when compared to September 30, 2011 can primarily be
attributed to the lower sales order backlog at December 31, 2011
when compared to September 30, 2011.
The decrease in accounts payable of $43,834 at December
31, 2011 when compared to September 30, 2011 can primarily be
attributed to the lower inventories at December 31, 2011 when
compared to September 30, 2011.
The decrease in other current liabilities of $51,889 at
December 31, 2011 when compared to September 30, 2011 can
primarily be attributed to the payment of a $50,000 profit sharing
contribution which was accrued at September 30, 2011.
Capital expenditures totaling $189,078 for the three
months ended December 31, 2011 consisted primarily of
machinery.
At December 31, 2011, the Company had unused aggregate
lines of credit totaling $750,000 collateralized by all inventory,
equipment and accounts receivable.
Management believes that its working capital requirements
for the forseeable future will be met by its existing cash
balances, future cash flows from operations and its current credit
arrangements.
<PAGE>
13
SAFE
HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
In an effort to provide investors a balanced view of the
Company's current condition and future growth opportunities, this
Quarterly Report on Form 10-Q includes comments by the Company's
management about future performance. These statements which are not
historical information are "forward-looking statements" pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These, and other forward-looking statements, are
subject to business and economic risks and uncertainties that could
cause actual results to differ materially from those discussed.
These risks and uncertainties include, but are not limited to: risks
associated with demand for and market acceptance of existing and
newly developed products as to which the Company has made
significant investments; general economic and industry conditions;
slower than anticipated penetration into the satellite
communications, mobile radio and commercial and defense electronics
markets; competitive products and pricing pressures; increased
pricing pressure from our customers; risks relating to governmental
regulatory actions in broadcast, communications and defense
programs; as well as other risks and uncertainties, including but
not limited to those detailed from time to time in the Company's
Securities and Exchange Commission filings. These forward-looking
statements are made only as of the date hereof, and the Company
undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise. You are encouraged to review Microwave Filter Company’s
2011 Annual Report and Form 10-K for the fiscal year ended September
30, 2011 and other Securities and Exchange Commission filings.
Forward looking statements may be made directly in this document or
“incorporated by reference” from other documents. You can find many
of these statements by looking for words like “believes,” “expects,”
“anticipates,” “estimates,” or similar expressions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in our exposures to
market risk during the three months ended December 31, 2011. For a
detailed discussion of market risk, see our Annual Report on Form
10-K for the fiscal year ended September 30, 2011, Part II, Item 7A,
Quantitative and Qualitative Disclosures About Market Risk.
<PAGE>
14
ITEM 4. CONTROLS AND
PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company’s management, with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of the Company’s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as
of the end of the period covered by this report. Based on such
evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period,
the Company’s disclosure controls and procedures were effective as
of the end of the period covered by this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in the Company’s internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the most recent fiscal quarter that
have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company’s management is responsible for establishing and
maintaining adequate internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the exchange act.
Under the supervision and with the participation of the
Company’s management, including our principal executive officer
and principal financial officer, the Company conducted an
evaluation of its internal control over financial reporting based
on criteria established in the framework in “Internal
Control-Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this
evaluation, the Company’s management concluded and certifies that
its internal control over financial reporting was effective as of
December 31, 2011.
This Quarterly Report does not include an attestation
report of the Company’s registered public accounting firm
regarding internal control over financial reporting. Management’s
report was not subject to attestation by the Company’s registered
public accounting firm.
<PAGE>
15
PART II -
OTHER INFORMATION
Item 1. Legal Proceedings
The State of New
York Workers’ Compensation Board has commenced an
action
against Microwave
Filter Company, Inc. to recover for an underfunded self
insured program
that Microwave Filter Company, Inc. participated in.
Due to the
relatively short period of time Microwave Filter Company, Inc.
participated in the
program and the limited amount of potential exposure,
we do not expect
the resolution of this action will have a material
adverse effect on
our financial condition, results of operations or
cash flows.
Item 1A. Risk Factors
Not applicable.
Item 2. Changes in Securities
None during this
reporting period.
Item 3. Defaults Upon Senior Securities
The Company has no
senior securities.
Item 4. (Removed and Reserved)
Item 5. Other Information
None.
Item 6. Exhibits
a. Exhibits
31.1 Section 13a-14(a)/15d-14(a) Certification of Carl F.
Fahrenkrug
31.2 Section 13a-14(a)/15d-14(a) Certification of Richard L.
Jones
32.1 Section 1350 Certification of Carl F. Fahrenkrug
32.2 Section 1350 Certification of Richard L. Jones
<PAGE>
16
Pursuant to the
requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MICROWAVE FILTER COMPANY, INC.
February 13, 2012
Carl F. Fahrenkrug
(Date)
--------------------------
Carl F. Fahrenkrug
Chief Executive Officer
February 13,
2012
Richard L. Jones
(Date)
--------------------------
Richard L. Jones
Chief Financial Officer
<PAGE>
17
Microwave Filter (PK) (USOTC:MFCO)
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Microwave Filter (PK) (USOTC:MFCO)
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