Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 OR 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended December 31, 2009
Commission file number 0-10976
MICROWAVE FILTER COMPANY, INC.
(Exact name of registrant as specified in its charter.)
New York 16-0928443
(State of Incorporation) (I.R.S. Employer Identification Number)
6743 Kinne Street, East Syracuse, N.Y. 13057
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (315) 438-4700
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
(Sec 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 ____ NO____ (The Registrant is not yet required to submit Interactive
Data)
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__
Common Stock, $.10 Par Value - 2,592,933 shares as of February 1, 2010.
PART I. - FINANCIAL INFORMATION
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December 31, 2009 September 30, 2009
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 1,270 $ 1,476
Accounts receivable-trade, net 353 248
Inventories 623 604
Prepaid expenses and other
current assets 96 107
------- -------
Total current assets 2,343 2,435
Property, plant and equipment, net 486 398
------- -------
Total assets $ 2,829 $ 2,833
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 146 $ 144
Customer deposits 44 33
Accrued federal and state income
taxes 2 2
Accrued payroll and related
expenses 39 61
Accrued compensated absences 269 278
Other current liabilities 35 34
------- -------
Total current liabilities 535 552
------- -------
Total liabilities 535 552
------- -------
Stockholders' Equity:
Common stock,$.10 par value 432 432
Additional paid-in capital 3,249 3,249
Retained earnings 298 284
------- -------
3,979 3,965
Common stock in treasury,
at cost (1,685) (1,685)
------- -------
Total stockholders' equity 2,294 2,281
------- -------
Total liabilities and
stockholders' equity $ 2,829 $ 2,833
======= =======
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS
ENDED DECEMBER 31, 2009 AND 2008
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended
December 31
2009 2008
Net sales $1,135 $1,250
Cost of goods sold 715 821
------ ------
Gross profit 420 429
Selling, general and
administrative expenses 408 442
------ ------
Income (loss)
from operations 12 (13)
Other income (net),
principally interest 2 6
------ ------
Income (loss) before
income taxes 14 (7)
Provision (benefit) for
income taxes 0 0
------ ------
NET INCOME (LOSS) $14 ($7)
====== ======
Per share data:
Basic earnings (loss)
per share $0.01 $0.00
====== ======
Shares used in computing net
earnings (loss) per share: 2,593 2,667
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2009 AND 2008
(Unaudited)
(Amounts in thousands)
Three months ended
December 31
2009 2008
Cash flows from operating
activities:
Net income (loss) $ 14 ($ 7)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 23 20
Change in assets and liabilities:
Accounts receivable - trade (105) 4
Inventories (19) (13)
Prepaid expenses and other
assets 10 (8)
Accounts payable and accrued
expenses (29) 14
Customer deposits 11 10
------ ------
Net cash (used in) provided by
operating activities (95) 20
------ ------
Cash flows from
investing activities:
Capital expenditures (111) (64)
------ ------
Net cash used in
investing activities (111) (64)
------ ------
Cash flows from
financing activities:
Purchase of treasury stock 0 (154)
----- -----
Net cash used in financing
activities 0 (154)
----- -----
Net (decrease) increase in
cash and cash equivalents (206) (198)
Cash and cash equivalents
at beginning of period 1,476 1,417
------ ------
Cash and cash equivalents
at end of period $1,270 $1,219
====== ======
See Accompanying Notes to Consolidated Financial Statements
MICROWAVE FILTER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
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, 2009 are not necessarily indicative of the results
that may be expected for the year ended September 30, 2010. 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, 2009.
Note 2. Industry Segment Data
The Company's primary business segment 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:
(thousands of dollars) December 31, 2009 September 30, 2009
Raw materials and stock parts $517 $500
Work-in-process 25 24
Finished goods 81 80
---- ----
$623 $604
==== ====
The Company's reserve for obsolescence equaled $401,321 at December 31,
2009 and September 30, 2009.
Note 4. Income Taxes
The Company accounts for income taxes under FASB ASC 740-10 (Prior
Authoritative Literature: Statement of Financial Accounting Standards (SFAS)
No. 109, Accounting for Income Taxes). 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.
The Company adopted FASB ASC 740-10 (Prior Authoritative Literature: FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An
Interpretation of FASB Statement No. 109 (FIN 48) as of October 1, 2007. 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. No adjustments were required
upon adoption.
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.
Note 6. Recent Pronouncements
In October 2009, the FASB issued ASU No. 2009-13, "Revenue Recognition
(Topic 605): Multiple-Deliverable Revenue Arrangements (a consensus of the
FASB Emerging Issues Task Force)," which amends ASC 605-25, "Revenue
Recognition: Multiple-Element Arrangements." ASU No. 2009-13 addresses how to
determine whether an arrangement involving multiple deliverables contains more
than one unit of accounting and how to allocate consideration to each unit of
accounting in the arrangement. This ASU replaces all references to fair value
as the measurement criteria with the term selling price and establishes a
hierarchy for determining the selling price of a deliverable. ASU No. 2009-13
also eliminates the use of the residual value method for determining the
allocation of arrangement consideration. Additionally, ASU No. 2009-13
requires expanded disclosures. This ASU will become effective for us for
revenue arrangements entered into or materially modified on or after October
1, 2010. Earlier application is permitted with required transition disclosures
based on the period of adoption. We are currently evaluating the application
date and the impact of this standard on our consolidated financial statements.
In October 2009, the FASB issued ASU No. 2009-14, "Software (Topic 985):
Certain Revenue Arrangements That Include Software Elements (a consensus of
the FASB Emerging Issues Task Force)." ASU No. 2009-14 amends ASC 985-605,
"Software: Revenue Recognition," such that tangible products, containing both
software and non-software components that function together to deliver the
tangible product's essential functionality, are no longer within the scope of
ASC 985-605. It also amends the determination of how arrangement consideration
should be allocated to deliverables in a multiple-deliverable revenue
arrangement. This ASU will become effective for us for revenue arrangements
entered into or materially modified on or after October 1, 2010. Earlier
application is permitted with required transition disclosures based on the
period of adoption. We are currently evaluating the application date and the
impact of this standard on our consolidated financial statements. Both ASU No.
2009-13 and ASU No. 2009-14 must be adopted in the same period and must use
the same transition disclosures.
In December 2009, the FASB issued ASU No. 2009-16, "Transfers and Servicing
(Topic 860): Accounting for Transfers of Financial Assets." ASU No. 2009-16 is
a revision to ASC 860, "Transfers and Servicing," and amends the guidance on
accounting for transfers of financial assets, including securitization
transactions, where entities have continued exposure to risks related to
transferred financial assets. ASU No. 2009-16 also expands the disclosure
requirements for such transactions. This ASU will become effective for us on
October 1, 2010. We are currently evaluating the impact of this standard on
our consolidated financial statements.
In December 2009, the FASB issued ASU No. 2009-17, "Consolidations (Topic
810): Improvements to Financial Reporting by Enterprises Involved with
Variable Interest Entities." ASU No. 2009-17 amends the guidance for
consolidation of VIEs primarily related to the determination of the primary
beneficiary of the VIE. This ASU will become effective for us on October 1,
2010. We are currently evaluating the impact of this standard on our
consolidated financial statements.
Note 7. 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 8. Subsequent Events
Management has evaluated and disclosed subsequent events up to and including
February 11, 2010, which is the date the financial statements were available.
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 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, 2009 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.
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 (Prior
Authoritative Literature: Statement of Financial Accounting Standards (SFAS)
No. 109, Accounting for Income Taxes). 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.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2009 vs. THREE MONTHS ENDED DECEMBER 31, 2008.
The following table sets forth the Company's net sales by major product
group for the three months ended December 31, 2009 and 2008.
Product group (in thousands) Fiscal 2010 Fiscal 2009
Microwave Filter (MFC):
Cable TV $ 406 $ 421
RF/Microwave 278 286
Satellite 372 489
Broadcast TV 76 50
Niagara Scientific (NSI) 3 4
------ ------
Total $1,135 $1,250
====== ======
Sales backlog at 12/31 $ 390 $ 421
====== ======
Net sales for the three months ended December 31, 2009 equaled $1,135,058, a
decrease of $114,645 or 9.2% when compared to net sales of $1,249,703 for the
three months ended December 31, 2008.
MFC's Cable TV product sales for the three months ended December 31, 2009
equaled $405,939, a decrease of $15,300 or 3.6%, when compared to sales of
$421,239 during the same period last year. 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. The
demand for these filters is unknown at this time but is expected to decline.
MFC's Satellite product sales for the three months ended December 31, 2009
equaled $371,799, a decrease of $117,099 or 24%, when compared to sales of
$488,898 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 the global economic conditions.
MFC's RF/Microwave product sales for the three months ended December 31,
2009 equaled $277,996, a decrease of $8,097 or 2.8%, when compared to
RF/Microwave product sales of $286,093 for the three months ended December 31,
2008. The Company's RF/Microwave products are primarily sold to original
equipment manufacturers (OEMs) that serve the mobile radio and commercial and
defense electronics markets. Typical customers include the U.S. Government,
General Dynamics, Motorola, Rockwell Collins, Lockheed Martin, Northrup Gruman
and Raytheon. 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.
MFC's Broadcast TV/Wireless Cable product sales for the three months ended
December 31, 2009 equaled $76,531, an increase of $26,647 or 53.4.%, when
compared to sales of $49,884 during the same period. The increase can be
attributed to an increase in demand for UHF Broadcast products which are
primarily sold to system integrators for rural communities.
The Company's sales order backlog equaled $389,684 at December 31, 2009
compared to sales order backlog of $479,861 at September 30, 2009. 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, 2009 is scheduled to ship by September 30, 2010.
The Company recorded a net income of $14,084 for the three months ended
December 31, 2009 compared to a net loss of $7,593 for the three months ended
December 31, 2008. The improvement in net income can primarily be attributed
to the lower SG&A expenses this year when compared to the same period last
year.
Gross profit for the three months ended December 31, 2009 equaled $420,599,
a decrease of $8,409 or 2%, when compared to gross profit of $429,008 for the
three months ended December 31, 2008. As a percentage of sales, gross profit
equaled 37.1% for the three months ended December 31, 2009 compared to 34.3%
for the three months ended December 31, 2008. The increase in gross profit as
a percentage of sales can be attributed to lower direct material costs
primarily due to product sales mix.
Selling, general and administrative (SGA) expenses for the three months
ended December 31, 2009 equaled $408,370, a decrease of $33,689 or 7.7%, when
compared to SG&A expenses of $442,239 for the three months ended December 31,
2008. The decrease in SG&A expenses can primarily be attributed to planned
decreases in payroll expenses and media advertising and lower sales commission
expenses during the three months ended December 31, 2009 when compared to the
same period last year. As a percentage of sales, SGA expenses increased to 36%
for the three months ended December 31, 2009 compared to 35.4% for the three
months ended December 31, 2008.
Other income is primarily interest income earned on invested cash balances.
Other income equaled $1,855 for the three months ended December 31, 2009
compared to $5,638 for the three months ended December 31, 2008. The decrease
is primarily due to lower market interest rates this year when compared to
last year. Other income may fluctuate based on market interest rates and
levels of invested cash balances.
The provision (benefit) for income taxes equaled $0 for both the three
months ended December 31, 2009 and 2008. Any benefit for losses have been
subject to a valuation allowance since the realization of the deferred tax
benefit is not considered more likely than not.
Off-Balance Sheet Arrangements
At December 31, 2009 and 2008, 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, 2009 September 30, 2009
Cash & cash equivalents $1,270,492 $1,476,318
Working capital $1,807,890 $1,882,933
Current ratio 4.38 to 1 4.41 to 1
Long-term debt $ 0 $ 0
Cash and cash equivalents decreased $205,826 to $1,270,492 at December 31,
2009 when compared to cash and cash equivalents of $1,476,318 at September 30,
2009. The decrease was a result of $94,087 in net cash used in operating
activities, $111,451 in net cash used for capital expenditures and $288 in net
cash used to purchase treasury stock.
The increase in accounts receivable of $105,158 at December 31, 2009 when
compared to September 30, 2009 can primarily be attributed to lower
collections on accounts receivables during the month ended December 31, 2009
when compared to the month ended September 30, 2009 and to higher sales during
December 2009 when compared to September 2009.
At December 31, 2009, 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.
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
may include 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 2009 Annual Report and Form 10-K for the fiscal
year ended September 30, 2009 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, 2009. For a detailed discussion of market
risk, see our Annual Report on Form 10-K for the fiscal year ended September
30, 2009, Part II, Item 7A, Quantitative and Qualitative Disclosures About
Market Risk.
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, 2009.
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 pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this Quarterly Report.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The State of New York Workers' Compensation Board 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. Submission of Matters to a Vote of Security Holders
None during this reporting period.
Item 6. Exhibits and Reports on Form 8-K
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
b. Reports on Form 8-K
None.
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 11, 2010 Carl F. Fahrenkrug
(Date) --------------------------
Carl F. Fahrenkrug
Chief Executive Officer
February 11, 2010 Richard L. Jones
(Date) --------------------------
Richard L. Jones
Chief Financial Officer