MISONIX INC - 10-Q Quarterly Report

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 the quarterly period ended December 31, 2004

o 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: 1-10986

(Exact name of registrant as specified in its charter)

New York	11-2148932
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1938 New Highway, Farmingdale, NY	11735
(Address of principal executive offices)	(Zip Code)

(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.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:

Class of Common Stock	Outstanding at February 1, 2005

Common Stock, $.01 par value	6,808,453

Part I - FINANCIAL INFORMATION		Page

Item 1. Financial Statements:

	Consolidated Balance Sheets as of
	December 31, 2004 (Unaudited) and June 30, 2004	3

	Consolidated Statements of Operations
	Six months ended December 31, 2004
	and 2003 (Unaudited)	4

	Consolidated Statements of Operations
	Three months ended December 31, 2004
	and 2003 (Unaudited)	5

	Consolidated Statements of Cash Flows
	Six months ended December 31, 2004	6
	and 2003 (Unaudited)

	Notes to Consolidated Financial Statements	7


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12


Item 3. Quantitative and Qualitative Disclosures About Market Risk		24

Item 4. Controls and Procedures		24

Part II - OTHER INFORMATION

Item 6. Exhibits		25

Signatures		26

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CONSOLIDATED BALANCE SHEETS

	December 31,			June 30,
	2004			2004
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	3,585,660		$	4,839,866
Accounts receivable, less allowance for doubtful accounts of $387,604 and $457,016, respectively		8,242,679			7,601,693
Inventories		12,148,091			10,944,572
Deferred income taxes		698,405			645,381
Prepaid expenses and other current assets		812,973			1,114,546
Total current assets		25,487,808			25,146,058

Property, plant and equipment, net		4,198,245			3,892,920
Deferred income taxes		381,376			412,201
Goodwill		4,473,713			4,473,713
Other assets		369,636			316,220
Total assets	$	34,910,778		$	34,241,112

Liabilities and stockholders’ equity
Current liabilities:
Revolving credit facilities	$	1,374,165		$	1,373,681
Accounts payable		4,220,668			4,507,476
Accrued expenses and other current liabilities		1,756,015			1,857,097
Income taxes payable		75,033			107,282
Current maturities of long-term debt and capital lease obligations		384,497			302,932
Total current liabilities		7,810,378			8,148,468

Long-term debt and capital lease obligations		1,440,936			1,264,480

Deferred income		618,149			769,033
Minority interest		343,201			315,955

Stockholders’ equity:
Common stock, $.01 par value—shares authorized 10,000,000; 6,871,253 and 6,816,253 issued and 6,793,453 and 6,738,453 outstanding, respectively		68,713			68,163
Additional paid-in capital		23,301,202			23,116,602
Retained earnings		1,260,064			665,461
Treasury stock, 77,800 shares		(412,424	)		(412,424	)
Accumulated other comprehensive income		480,559			305,374
Total stockholders’ equity		24,698,114			23,743,176

Total liabilities and stockholders’ equity	$	34,910,778		$	34,241,112

See Accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the six months ended December 31,
	2004			2003

Net sales	$	21,137,278		$	17,916,007

Cost of goods sold		12,279,880			10,272,094

Gross profit		8,857,398			7,643,913

Operating expenses:
Selling expenses		2,931,315			2,078,492
General and administrative expenses		3,742,125			3,890,046
Research and development expenses		1,621,958			1,063,646
Total operating expenses		8,295,398			7,032,184
Income from operations		562,000			611,729

Other income (expense):
Interest income		29,732			27,846
Interest expense		(112,722	)		(77,003	)
Option/license fees		12,156			13,125
Royalty income		435,140			838,588
Foreign exchange loss		(10,413	)		(8,941	)
Loss on impairment of Hearing Innovations, Inc.		-			(35,600	)
Total other income		353,893			758,015

Income before minority interest and income taxes		915,893			1,369,744

Minority interest in net income of consolidated subsidiaries		27,246			28,151

Income before income taxes		888,647			1,341,593

Income tax expense		294,044			558,565

Net income	$	594,603		$	783,028

Net income per share-Basic	$	.09		$	.12

Net income per share - Diluted	$	.09		$	.12