FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended
September 30, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_____ to ______
Commission file number
1-11916
WIRELESS TELECOM GROUP, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2582295
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 Eastmans Road
Parsippany , New Jersey 07054
- ---------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
(201) 261-8797
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Registrant's telephone number, including area code
East 64 Midland Avenue, Paramus, NJ 07652
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(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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the most recent practicable date.
Common Stock - Par Value $.01 16,909,878
- ------------------------------ ------------------
Class Outstanding Shares
At November 5, 2002
1
WIRELESS TELECOM GROUP, INC.
Table of Contents
PART I. FINANCIAL INFORMATION Page(s)
Item 1 -- Consolidated Financial Statements:
Condensed Balance Sheets as of September 30, 2002
(unaudited) and December 31, 2001 3
Condensed Statements of Operations for the Three and Nine
Months Ended September 30, 2002 and 2001 (unaudited) 4
Condensed Statements of Cash Flows for the Nine Months
Ended September 30, 2002 and 2001 (unaudited) 5
Notes to Interim Condensed Financial Statements (unaudited) 6 - 8
Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 11
Item 3 -- Quantitative and Qualitative Disclosures About Market Risk 12
Item 4 -- Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings 13
Item 2 -- Changes in Securities 13
Item 3 -- Defaults upon Senior Securities 13
Item 4 -- Submission of Matters to a Vote of Security Holders 13
Item 5 -- Other Information 13
Item 6 -- Exhibits and Reports on Form 8-K 13
Signatures 14 - 16
Exhibit 11.1 17
Exhibit 99.1 18
Exhibit 99.2 19
2
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
- ASSETS -
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------------ ------------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 15,273,389 $ 15,138,640
Accounts receivable -- net of allowance for doubtful accounts of
$211,710 and $113,950 for 2002 and 2001, respectively 3,181,181 2,867,538
Inventories 5,514,713 6,316,085
Current portion of deferred tax asset 123,000 140,000
Prepaid expenses and other current assets 481,574 476,454
------------------ ------------------
TOTAL CURRENT ASSETS 24,573,857 24,938,717
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PROPERTY, PLANT AND EQUIPMENT - NET 5,619,977 5,499,540
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OTHER ASSETS:
Goodwill (Note 4) 1,351,392 1,351,392
Deferred tax asset 381,927 364,927
Other assets 684,072 750,682
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TOTAL OTHER ASSETS 2,417,391 2,467,001
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TOTAL ASSETS $ 32,611,225 $ 32,905,258
================== ==================
- LIABILITIES AND SHAREHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable $ 550,653 $ 660,249
Accrued expenses and other current liabilities 576,281 760,868
Current portion of mortgage payable 36,703 34,686
Income taxes payable 303,250 164,650
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TOTAL CURRENT LIABILITIES 1,466,887 1,620,453
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LONG TERM LIABILITIES:
Mortgage payable 3,138,825 3,166,609
Other long term liabilities - 11,096
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TOTAL LONG TERM LIABILITIES 3,138,825 3,177,705
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (Note 3):
Preferred stock, $.01 par value, 2,000,000 shares authorized,
none issued - -
Common stock, $.01 par value, 75,000,000 shares authorized,
19,875,378 and 19,807,677 shares issued, in 2002 and 2001, respectively 198,754 198,077
Additional paid-in-capital 12,904,589 12,792,657
Retained earnings 22,286,867 21,979,416
Treasury stock at cost, - 2,886,800 and 2,654,400, in 2002 and 2001,
respectively (7,384,697) (6,863,050)
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TOTAL SHAREHOLDERS' EQUITY 28,005,513 28,107,100
------------------ ------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 32,611,225 $ 32,905,258
================== ==================
See accompanying notes
3
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
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2002 2001 2002 2001
NET SALES $ 5,105,392 $ 4,264,986 $ 15,728,595 $ 15,379,806
----------- ----------- ------------ ------------
COSTS AND EXPENSES:
Cost of sales 2,709,373 1,797,544 8,460,110 7,012,238
Operating expenses 1,770,358 1,510,673 5,350,589 4,637,082
Interest and other income (137,260) (250,114) (447,538) (945,439)
Interest expense 60,132 60,768 185,326 182,754
----------- ----------- ------------ ------------
TOTAL COSTS AND EXPENSES 4,402,603 3,118,871 13,548,487 10,886,635
----------- ----------- ------------ ------------
INCOME BEFORE INCOME TAXES 702,789 1,146,115 2,180,108 4,493,171
PROVISION FOR INCOME TAXES 270,985 427,626 843,786 1,678,123
----------- ----------- ------------ ------------
NET INCOME $ 431,804 $ 718,489 $ 1,336,322 $ 2,815,048
=========== ========== =========== ===========
NET INCOME PER COMMON
SHARE (Note 2):
BASIC $ 0.03 $ 0.04 $ 0.08 $ 0.16
----------- ----------- ------------ ------------
DILUTED $ 0.03 $ 0.04 $ 0.08 $ 0.15
----------- ----------- ------------ ------------
See accompanying notes
4
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Nine Months
Ended September 30,
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2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,336,322 $ 2,815,048
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 463,084 393,284
Provision for losses on accounts receivable 97,760 73,711
Other income (11,096) (50,004)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (411,403) 223,057
Decrease (increase) in inventories 801,372 (483,814)
Decrease (increase) in prepaid expenses and other current assets 69,080 (9,959)
(Decrease) in accounts payable and accrued expenses (294,183) (996,134)
Increase in income taxes payable 138,600 470,561
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Net cash provided by operating activities 2,189,536 2,435,750
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (584,006) (213,776)
Increase in real estate escrow (7,104) (7,104)
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Net cash (used for) investing activities (591,110) (220,880)
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CASH FLOWS FROM FINANCING ACTIVITIES
Payments of mortgage note (25,767) (23,897)
Acquisition of treasury stock (521,647) (4,011,890)
Cash dividends paid (1,028,872) (354,456)
Proceeds from exercise of stock options 112,609 37,313
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Net cash (used for) financing activities (1,463,677) (4,352,930)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 134,749 (2,138,060)
Cash and cash equivalents, at beginning of year 15,138,640 21,451,256
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CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 15,273,389 $ 19,313,196
============= ============
SUPPLEMENTAL INFORMATION:
Cash paid during the period for:
Taxes $ 539,580 $ 1,105,480
Interest $ 180,883 $ 182,754
See accompanying notes
5
WIRELESS TELECOM GROUP, INC.
NOTES 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, 2002 and the
condensed, consolidated statements of operations for the three and nine month
periods ended September 30, 2002 and 2001 and the condensed, consolidated
statements of cash flows for the nine month periods ended September 30, 2002 and
2001 have been prepared by the Company without audit. The consolidated financial
statements include the accounts of Wireless Telecom Group, Inc. and its
wholly-owned subsidiaries Boonton Electronics Corporation, Microlab/FXR, WTG
Foreign Sales Corporation and NC Mahwah, Inc.
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 only, which are necessary to
present fairly the Company's results for the interim periods being presented.
The balances of certain accounts have been reclassified to improve the ease of
reading and understanding of the financial statements. Such reclassifications
have absolutely no effect on the Company's Total Shareholders' Equity, Net
Income, Net Income Per Common Share or Cash and Cash Equivalents.
The accounting policies followed by the Company are set forth in Note 1 to
the Company's financial statements included in its annual report on Form 10-K
for the year ended December 31, 2001, which is incorporated herein by reference.
Specific reference is made to this report for a description of the Company's
securities and the notes to financial statements included therein, since certain
information and footnote disclosures normally included in financial statements
in accordance with accounting principles generally accepted in the United States
of America have been condensed or omitted from this report.
The results of operations for the three and nine month periods ended
September 30, 2002 and 2001 are not necessarily indicative of the results to be
expected for the full year.
On December 21, 2001, the Company acquired Microlab/FXR, a private entity,
for the net purchase price of $3,800,000. The acquisition of Microlab/FXR was
recorded under the purchase method of accounting for financial statement
purposes. Microlab/FXR's Balance Sheets are included in the Condensed
Consolidated Balance Sheets at September 30, 2002 and December 31, 2001.
Microlab/FXR's results of operations for the three and nine month periods ended
September 30, 2002 and cash flows for the nine months ended September 30, 2002
are included in the Condensed Consolidated Statements of Operations and Cash
Flows, but their results of operations for the three and nine month periods
ended September 30, 2001 and cash flows for the nine months ended September 30,
2001 are not included.
The following pro forma results were developed assuming the acquisition had
occurred on January 1, 2001. Intercompany transactions would have been
eliminated had there been any, but there were none.
6
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Unaudited Pro Forma Information for the Three and Nine Months
Ended September 30, 2001
Three Months Nine Months
------------ -----------
Net Sales $6,114,986 $20,853,486
Net Income $ 909,489 $ 3,183,880
Earnings Per Share:
Basic $ .05 $ .18
Diluted $ .05 $ .17
NOTE 2 - INCOME PER COMMON SHARE
Income per common share is computed by dividing the net income by the
weighted average number of common shares and common equivalent shares
outstanding during each period as promulgated in SFAS 128 "Earnings Per Share"
("SFAS 128"). SFAS 128 requires the presentation of "basic" and "diluted"
earnings per share on the face of the income statement.
NOTE 3 - SHAREHOLDERS' EQUITY
During the nine months ended September 30, 2002, the Company repurchased
232,400 shares (119,000 shares for the quarter ended September 30, 2002) of its
common stock, pursuant to a stock repurchase program authorized by the Board of
Directors on November 27, 2000 and as amended on October 5, 2001.
NOTE 4 - GOODWILL AND OTHER INTANGIBLE ASSETS
Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets".
In accordance with SFAS No. 142, intangible assets, including purchased
goodwill, must be evaluated for impairment. Those intangible assets that will
continue to be classified as goodwill or as other intangibles with indefinite
lives are no longer amortized. Prior to June 30, 2002, the Company, through the
assistance of an independent valuation company, performed the first of the
required impairment tests of goodwill as of January 1, 2002. The results of this
valuation showed that there was in fact no impairment of the Company's goodwill.
Pursuant to SFAS No. 142, goodwill cannot be written up, even if the value has
increased. Since there was no impairment of the goodwill, there is no effect of
this test on the earnings and financial position of the Company for the three
and nine month periods ended September 30, 2002. Additional testing will be done
at the end of this year and each year going forward to continue to test for
impairment of goodwill.
7
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The following table presents pro forma net income and earnings per share
data restated to include the retroactive impact of the adoption of SFAS No. 142.
Unaudited Pro Forma Information for the Three and Nine Months
Ended September 30, 2001
Three Months Nine Months
------------ -----------
Reported net income $ 718,489 $ 2,815,048
Add back: goodwill amortization, net of tax 26,000 78,000
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Pro forma net income $ 744,489 $ 2,893,048
========== ===========
Reported earnings per share - basic $ . 04 $ .16
SFAS No. 142 effect, net of tax - -
---------- ----------
Pro forma earnings per share - basic $ .04 $ .16
========== ===========
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
Wireless Telecom Group, Inc., and its operating subsidiaries, Boonton
Electronics Corporation and Microlab/FXR (collectively, the "Company"), develop,
manufacture and market a wide variety of electronic noise sources and electronic
testing and measuring instruments including power meters, voltmeters and
modulation meters. The Company's 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.
On December 21, 2001, the Company acquired Microlab/FXR. The acquisition of
Microlab/FXR was recorded under the purchase method of accounting for financial
statement purposes. Microlab/FXR designs and manufactures high-power, passive
microwave components for the wireless infrastructure market and for other
commercial, aerospace and military markets. The Company's products are used in
microwave systems, Universal Mobile Telecommunications Systems (UMTS), Personal
Communications Service (PCS) and cellular communications base stations,
television transmitters, avionic systems and medical electronics. Microlab/FXR
is one of the leaders in serving the needs of the in-building distributed
antenna system market, which facilitates wireless coverage throughout the
insides of buildings and building complexes.
On July 7, 2000, Wireless Telecom Group, Inc. and Boonton Electronics Corp.
closed on a merger under an agreement dated March 2, 2000. A newly formed,
wholly-owned subsidiary of the Company, WTT Acquisition Corp., merged with and
into Boonton, a public entity, in a transaction accounted for as a pooling of
interests.
8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The financial information presented herein includes:
(i) Condensed Consolidated Balance Sheets as of September 30, 2002 and as
of December 31, 2001 (ii) Condensed Consolidated Statements of Operations for
the three and nine month periods ended September 30, 2002 and 2001 and (iii)
Condensed Consolidated Statements of Cash Flows for the nine month periods ended
September 30, 2002 and 2001.
Microlab/FXR's Balance Sheets are included in the Condensed Consolidated
Balance Sheets at September 30, 2002 and December 31, 2001. Microlab/FXR's
results of operations for the three and nine months ended September 30, 2002 and
cash flows for the nine months ended September 30, 2002 are included in the
Condensed Consolidated Statements of Operations and Cash Flows respectively, but
their results of operations and cash flows for the respective three and nine
month periods ended September 30, 2001 are not included.
CRITICAL ACCOUNTING POLICIES
The Company has provided, through its Notes to Interim Condensed
Consolidated Financial Statements above and the Notes to Consolidated Financial
Statements included in its annual report on Form 10-K previously filed and
incorporated herein by reference, all significant information addressing the
accounting measurements that would have a material impact on the reported
financial statements. The policies used, including accounting for uncollectible
accounts under the allowance method and valuing raw material inventories at the
lower of cost (first-in, first-out method) or market, are policies that the
Company has used for many years and believes to be the appropriate methods for
our business and in our industry. The Company continues to apply these policies
fairly and consistently.
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, 2001. Microlab/FXR's results of operations are included in
Condensed Consolidated Statements of Operations for the three and nine months
ended September 30, 2002, but not for the three and nine months ended September
30, 2001.
For the nine months ended September 30, 2002 as compared to the
corresponding period of the previous year, net sales increased to $15,729,000
from $15,380,000, an increase of $349,000 or 2.3%. For the quarter ended
September 30, 2002 as compared to the corresponding quarter of the previous
year, net sales increased to $5,105,000 from $4,265,000, an increase of $840,000
or 19.7%. The increase for the quarter and nine months ended September 30, 2002
is reflective of additional Microlab/FXR revenue of $1,994,000 and $5,784,000,
respectively.
9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The Company's gross profit on net sales for the nine months ended September
30, 2002 was $7,268,000 or 46.2% as compared to $8,368,000 or 54.4% for the nine
months ended September 30, 2001. Gross profit on net sales for the quarter ended
September 30, 2002 was $2,396,000 or 46.9% as compared to $2,467,000 or 57.9%
for the three months ended September 30, 2001. For the nine months and three
months ended September 30, 2002, Microlab/FXR contributed $2,148,000 and
$792,000, respectively, of gross profit to the Company. Gross profits and
margins are lower in 2002 than in 2001 primarily due to lower sales volume, and
proportionally higher fixed manufacturing costs. In addition, gross margins at
Microlab/FXR are somewhat lower than at other operating units. The Company can
experience variations in gross profit based upon the mix of product sales as
well as variations due to revenue volume and economies of scale. The Company
continues to rigidly monitor costs associated with material acquisition,
manufacturing and production.
Operating expenses for the nine months ended September 30, 2002 were
$5,350,000 or 34.0% of net sales as compared to $4,637,000 or 30.1% of net sales
for the nine months ended September 30, 2001. Operating expenses for the quarter
ended September 30, 2002 were $1,770,000 or 34.7% of net sales as compared to
$1,511,000 or 35.4% of net sales for the quarter ended September 30, 2001.
For the three and nine months ended September 30, 2002 as compared to the
same period of the prior year, operating expenses increased in dollars by
$260,000 and $713,000, respectively. These increases are virtually all due to
the additional expenses incurred by Microlab/FXR ($374,000 for the three months
ended September 30, 2002 and $1,121,000 for the nine months ended September 30,
2002) as a new subsidiary of Wireless Telecom Group, Inc. in 2002. These
increases were partially offset by the elimination of goodwill amortization in
2002 and decreases in sales commissions, advertising expenses and professional
fees.
Interest and other income decreased by $498,000 for the nine months ended
September 30, 2002 and by $113,000 for the quarter ended September 30, 2002.
These decreases were primarily due to declining interest rates on short-term
investments in 2002.
Net income decreased to $1,336,000, or $.08 per share (diluted), for the
nine months ended September 30, 2002 as compared to $2,815,000, or $.15 per
share (diluted) for the nine months ended September 30, 2001.
The Company realized net income for the quarter ended September 30, 2002 of
$432,000 or $.03 per share (diluted) as compared to net income of $718,000 or
$.04 per share (diluted) for the three months ended September 30, 2001. The
explanation of these changes can be derived from the analysis given above of
operations for the three and nine month periods ending September 30, 2002 and
2001, respectively.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's working capital has decreased by $211,000 to $23,107,000 at
September 30, 2002, from $23,318,000 at December 31, 2001. At September 30, 2002
the Company had a current ratio of 16.8 to 1, and a ratio of debt to net worth
of .16 to 1. At December 31, 2001 the Company had a current ratio of 15.4 to 1,
and a ratio of debt to net worth of .17 to 1. Microlab/FXR's cash flows are
included in the Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2002, but not for the nine months ended September 30,
2001.
10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The Company realized cash provided by operations of $2,190,000 for the nine
month period ending September 30, 2002. The primary source of these funds was
cash provided by net income of $1,336,000, a decrease in inventories of
$801,000, and a non-cash adjustment for depreciation and amortization of
$463,000, offset by an increase in accounts receivable of $411,000 and a
decrease in accounts payable and accrued expenses of $294,000. For the nine
month period ending September 30, 2002, Microlab/FXR's inventory decreased by
$174,000 and accounts receivable increased by $706,000.
The Company has historically been able to turn over its accounts receivable
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.
Operating activities provided $2,436,000 in cash flows for the comparable
period in 2001. The primary source of these funds was cash provided by net
income of $2,815,000 and an increase in income taxes payable of $471,000, offset
by a decrease in accounts payable and accrued expenses of $996,000 and an
increase in inventories of $484,000.
Net cash used for investing activities for the nine months ended September
30, 2002 was $591,000. The primary use of these funds was capital expenditures
of $584,000. For the nine months ended September 30, 2001, net cash used for
investing activities was $221,000. The primary use of these funds was capital
expenditures of $214,000.
Net cash used for financing activities for the nine months ended September
30, 2002 was $1,464,000. The primary use of these funds was for dividends paid
in the amount of $1,029,000 and acquisition of treasury stock in the amount of
$522,000. Net cash used for financing activities in the same period of 2001 was
$4,353,000. The primary use of these funds was for the acquisition of treasury
stock in the amount of $4,012,000.
The Company believes that its financial resources from working capital
provided by operations are adequate to meet current requirements.
INFLATION AND SEASONALITY
The Company does not anticipate that inflation will significantly impact
its business nor does it believe that its business is seasonal.
FORWARD LOOKING STATEMENTS
The statements contained in this Quarterly Report on Form 10-Q that are not
historical facts are forward-looking statements. 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," or
"anticipates," or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and uncertainties.
These forward-looking statements involve predictions. Our actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements.
11
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has a credit facility with one of its major banks for the
express purpose of purchasing components from an Asian supplier under a letter
of credit. The Company expects to pay for these components upon shipment in
2003. Should the Company not make payment directly, the credit facility would be
utilized. The credit facility bears interest based on interest rates tied to the
prime rate, which may fluctuate over time based on economic conditions.
ITEM 4 - CONTROLS AND PROCEDURES
a) On October 11, 2002, our Chief Executive Officer and Chief Financial
Officer participated in a meeting during which there was an evaluation of our
disclosure controls and procedures. They have advised us that based on such
evaluation, they believe such controls and procedures are effective.
b) Our Chief Executive Officer and Chief Financial Officer are involved in
ongoing evaluations of internal controls. In November 2002, in anticipation of
the filing of this Form 10-Q, they reviewed the evaluation of our internal
controls prepared by our independent auditors in connection with their audit of
our fiscal year ended December 31, 2001. Our Chief Executive Officer and Chief
Financial Officer have advised us that, based on such review, they determined
that, since the date of the auditor's evaluation, there have been no significant
changes in our internal controls or in other factors that would significantly
affect our internal controls subsequent to such evaluation.
12
PART II - OTHER INFORMATION
Item 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.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11.1 Computation of per share earnings
99.1 Certification pursuant to 18 U.S.C. section 1350
99.2 Certification pursuant to 18 U.S.C. section 1350
(b) Reports on Form 8-K:
None.
13
SIGNATURES
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 5, 2002 /S/Edward Garcia
---------------------------
Edward Garcia
Chairman and Chief Executive Officer
Date: November 5, 2002 /S/Marc Wolfsohn
---------------------------
Marc Wolfsohn
Chief Financial Officer
14
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Edward Garcia, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wireless Telecom
Group, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 5, 2002
/s/Edward Garcia
------------------
Edward Garcia
President and Chief Executive Officer
(Principal Executive Officer)
15
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Marc Wolfsohn, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Wireless Telecom
Group, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 5, 2002
/s/ Marc Wolfsohn
---------------------------
Marc Wolfsohn
Chief Financial Officer
(Principal Financial Officer)
16
Exhibit 11.1
WIRELESS TELECOM GROUP, INC.
COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
--------- --------- ---------- ----------
Net Income $ 431,804 $718,489 $ 1,336,322 $ 2,815,048
========= ========= =========== ===========
BASIC EARNINGS:
Weighted average number of common shares outstanding 17,052,347 17,634,569 17,134,464 17,913,315
========== ========== ========== ==========
Basic earnings per common share $0.03 $ 0.04 $0.08 $ 0.16
DILUTED EARNINGS:
Weighted average number of common shares outstanding 17,052,347 17,634,569 17,134,464 17,913,315
Stock options 98,507 266,656 325,133 290,440
---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding, as adjusted 17,150,854 17,901,225 17,459,597 18,203,755
========== ========== ========== ==========
Diluted earnings per common share $0.03 $ 0.04 $0.08 $ 0.15
17
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Wireless Telecom Group, Inc.
(the "Company") on Form 10-Q for the period ending September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Edward Garcia, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Edward Garcia
------------------------
Edward Garcia
Chief Executive Officer
November 5, 2002
18
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Wireless Telecom Group, Inc.
(the "Company") on Form 10-Q for the period ending September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Marc Wolfsohn, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Marc Wolfsohn
---------------------------
Marc Wolfsohn
Chief Financial Officer
November 5, 2002
19