UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended August 31, 2012
OR
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number 0-22183
MEADE
INSTRUMENTS CORP.
(Exact name of registrant as specified in its charter)
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Delaware
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95-2988062
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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27 Hubble
Irvine, California
92618
(Address of principal executive offices)
(Zip Code)
(949) 451-1450
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if 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 (§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, a non-accelerated filer, or a smaller reporting company. See definition of
large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Securities Exchange Act of 1934.
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Large Accelerated Filer
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¨
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Accelerated Filer
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¨
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Non-Accelerated Filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).
Yes
¨
No
x
As of October 11, 2012, there were 1,306,017 outstanding shares of the Registrants common stock issued, par value $0.01 per share.
Table of Contents
TABLE OF CONTENTS
ITEM 1.
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FINANCIAL STATEMENTS.
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MEADE INSTRUMENTS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
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August 31,
2012
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February 29,
2012
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ASSETS
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Current assets:
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Cash
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$
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668
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$
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3,904
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Accounts receivable, less allowance for doubtful accounts of $85 at August 31, 2012 and $139 at February 29,
2012
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2,535
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1,668
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Inventories
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9,219
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6,633
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Prepaid expenses and other current assets
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323
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208
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Total current assets
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12,745
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12,413
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Property and equipment, net
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232
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170
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Intangible assets, net
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619
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705
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Other assets, net
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104
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105
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$
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13,700
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$
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13,393
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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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3,446
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$
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1,498
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Accrued liabilities
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1,425
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1,686
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Total current liabilities
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4,871
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3,184
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Deferred rent
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21
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25
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Commitments and contingencies
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Stockholders equity:
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Common Stock; $0.01 par value; 2,500 shares authorized; 1,173 shares issued and outstanding at August 31, 2012 and 1,167
shares issued and outstanding at February 29, 2012
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12
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12
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Additional paid-in capital
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52,693
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52,670
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Accumulated deficit
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(43,897
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)
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(42,498
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)
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Total Stockholders equity
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8,808
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10,184
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$
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13,700
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$
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13,393
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See accompanying notes to consolidated financial statements
2
MEADE INSTRUMENTS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, expect per share data)
(Unaudited)
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Three Months Ended
August 31,
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Six Months Ended
August 31,
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2012
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2011
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2012
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2011
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Net sales
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$
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3,984
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$
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6,140
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$
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8,088
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$
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10,313
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Cost of sales
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3,440
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4,770
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6,677
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7,574
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Gross profit
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544
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1,370
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1,411
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2,739
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Selling expenses
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361
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584
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776
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1,043
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General and administrative expenses
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895
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821
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1,799
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1,766
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Research and development expenses
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261
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218
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533
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417
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Release of warranty liability
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(294
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Operating loss
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(973
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(253
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)
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(1,403
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(487
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Interest income
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1
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2
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Loss before income taxes
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(973
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(252
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(1,403
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)
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(485
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)
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Income tax expense (benefit)
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15
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15
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Net loss
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$
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(973
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$
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(267
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$
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(1,403
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$
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(500
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Net loss per sharebasic and diluted
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$
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(0.83
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$
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(0.23
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$
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(1.20
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$
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(0.43
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Weighted average common shares outstandingbasic and diluted
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1,171
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1,167
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1,169
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1,167
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See accompanying notes to consolidated financial statements
3
MEADE INSTRUMENTS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Six Months Ended
August 31,
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2012
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2011
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Cash flows from operating activities:
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Net loss
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$
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(1,403
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)
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$
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(500
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)
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Adjustments to reconcile loss from continuing operations to net cash used in operating activities:
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Release of warranty liability
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(293
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)
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Depreciation and amortization
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144
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171
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Bad debt (recovery) expense
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(26
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)
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2
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Stock-based compensation
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23
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81
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Deferred rent amortization
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(4
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Gain on sale of fixed assets
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(5
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)
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Changes in assets and liabilities:
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Accounts receivable
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(841
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)
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(1,231
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)
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Inventories
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(2,586
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)
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(976
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)
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Prepaid expenses and other current assets
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(119
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)
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(36
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Accounts payable
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1,949
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400
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Accrued liabilities
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35
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(351
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)
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Net cash used in operating activities
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(3,126
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)
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(2,440
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)
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Cash flows from investing activities:
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Capital expenditures
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(115
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)
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(20
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Proceeds from sale of fixed assets
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5
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Net cash used in investing activities
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(110
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)
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(20
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)
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Cash flows from financing activities
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Net decrease in cash
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(3,236
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)
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(2,460
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)
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Cash at beginning of period
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3,904
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5,076
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Cash at end of period
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$
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668
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$
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2,616
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See accompanying notes to consolidated financial statements
4
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. The Consolidated Financial Statements Have Been Prepared by the Company and are Unaudited.
Meade Instruments Corp. (the Company) is engaged in the design, manufacture, marketing and sale of consumer
products, primarily telescopes, telescope accessories and binoculars. The Company designs its products in-house or with the assistance of external consultants. Most of the entry level products are manufactured overseas by contract manufacturers in
Asia, while the high-end telescopes are manufactured and assembled at the Companys Mexico facility. Sales of the Companys products are driven by an in-house sales force as well as a network of sales representatives throughout the U.S.
and through distributors internationally. The Company currently operates out of two primary locations: Irvine, California and Tijuana, Mexico. The California facility serves as the Companys corporate headquarters, research and development
facility; the Mexico facility contains the Companys manufacturing, assembly, repair, packaging, distribution and other general and administrative functions. The Companys business is highly seasonal and the financial results have
historically varied significantly on a quarter-by-quarter basis throughout each year.
In the opinion of the management of the
Company, the information and amounts furnished in this report reflect all adjustments (consisting of normal recurring adjustments) considered necessary for the fair statement of the financial position and results of operations for the interim
periods presented. These financial statements should be read in conjunction with the Companys Annual Report on Form 10-K for the fiscal year ended February 29, 2012.
The Company has experienced, and expects to continue to experience, substantial fluctuations in its sales, gross margins and
profitability from quarter to quarter. Factors that influence these fluctuations include the volume and timing of orders received, changes in the mix of products sold, market acceptance of the Companys products, competitive pricing pressures,
the Companys ability to meet fluctuating demand and delivery schedules, the timing and extent of research and development expenses, the timing and extent of product development costs and the timing and extent of advertising expenditures.
B. Liquidity
At August 31, 2012, the Company had cash of $0.7 million, as compared to $3.9 million at February 29, 2012
and $2.6 million at August 31, 2011. Net cash used in operating activities was approximately $3.1 million during the six months ended August 31, 2012 and $2.4 million during the six months ended August 31, 2011, an increase in net
cash used of approximately $0.7 million compared to the prior year. This increase in cash used in operating activities was attributed primarily to the increase in the Companys net loss of approximately $0.9 million from a loss of approximately
$0.5 million during the six months ended August 31, 2011 compared to a loss of approximately $1.4 million during the six months ended August 31, 2012, offset slightly by favorable net fluctuations in working capital.
The Company typically experiences increases in accounts receivable and inventories and a corresponding decrease in cash beginning with
the end of its first fiscal quarter and culminating with the end of its third fiscal quarter. Receivables and inventories then typically decrease, and cash increases, at the end of the Companys fiscal year.
The Company currently has in place a secured credit facility with First Capital. Availability of funds under this facility is based on a
percentage of eligible accounts receivable and inventory. Availability on this facility amounted to approximately $1.0 million as of August 31, 2012 and was based solely on accounts receivable as substantially all of the Companys
inventory was deemed ineligible due to it being located in Mexico. The Company expects its availability to be limited to not more than $1.0 million in the foreseeable future. While the Companys credit facility does not contain explicit
financial covenants, the Companys lender has significant latitude in restricting, reducing or withdrawing the Companys credit facility at its sole discretion with limited notice, as is customary with these types of arrangements.
The initial term of the credit facility with First Capital ended in January 2012, at which time, the Company has continued to
factor its receivables with First Capital on a month-to-month basis and sixty days prior notice shall be required for the Company to terminate the agreement. The expiration of the initial term of the agreement did not affect the ability of First
Capital to terminate the agreement as described above.
5
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The Company began advancing on accounts receivable in September 2012 in order to fulfill
its working capital requirements and expects it will need to continue to rely on its credit facility through at least its third quarter. If its lender restricts, reduces or eliminates the Companys access to credit, or requires immediate
repayment of the amounts outstanding under the agreement, the Company would be required to pursue additional or alternative sources of liquidity such as equity financings, a new debt agreement with other creditors, or liquidate assets. However,
the Company cannot assure that such additional sources of liquidity would be available on reasonable terms, if at all.
C. Stock Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of Accounting Standards
Codification No. ASC 718-10,
Share-Based Payment
(ASC 718-10), which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718-10, share-based compensation cost is measured at
the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees requisite service period (generally the vesting period of the equity grant). Share-based compensation expenses, included in
general and administrative expenses in the Companys consolidated statement of operations for the six months ended August 31, 2012 and 2011, were approximately $23 thousand and $81 thousand, respectively. Due to deferred tax valuation
allowances provided, no net benefit was recorded against the share-based compensation charged.
The Company estimates the fair
value of restricted stock awards using the closing price on the grant date. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include
the expected option term, forfeiture rate, the expected volatility of the Companys stock over the options expected term, the risk-free interest rate over the options expected term, and the Companys expected annual dividend
yield. The Company believes that the valuation technique and the approach utilized to develop underlying assumptions are appropriate in calculating the fair values of the Companys stock options. Estimates of fair value are not intended to
predict actual future events or the value ultimately realized by persons who receive equity awards.
The fair value of the Companys
stock options granted in the nine months ended August 31, 2012 and 2011, respectively, was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
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August 31,
2012
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August 31,
2011
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Expected life (1)
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6.0
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5.8
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Expected volatility (2)
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165
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%
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168
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%
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Risk-free interest rate (3)
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0.8
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%
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1.3
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%
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Expected dividends
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None
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None
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(1)
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The option term is expressed in years and was determined using the simplified method for estimating expected option life.
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(2)
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The stock volatility for each grant is measured using the weighted average of historical daily price changes of the Companys common stock over the most recent
period equal to the expected option life of the grant, adjusted for activity which is not expected to occur in the future.
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(3)
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The risk-free interest rate for periods equal to the expected term of the share option is based on the U.S. Treasury yield curve in effect at the time of grant.
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On June 29, 2011, each of the Executive Officers was granted a restricted stock award (an Award)
pursuant to the Companys form of Restricted Stock Agreement under the Companys 2008 Stock Incentive Plan. The Awards to Mr. Murdock and Mr. Elwood were in the amounts of 37,500 shares of Common Stock and 25,000 shares
of Common Stock, respectively. Each Award vests in ten equal installments with the first installment vesting on June 29, 2012 and the remainder vesting on each of the next nine consecutive anniversaries; provided, however, if the Company
subsequently achieves net income for any fiscal year of the Company (but excluding the Companys fiscal years 2019, 2020 and 2021), as shown on the Companys audited consolidated financial statements for such fiscal year, the vesting of
the Award shall accelerate such that the number of shares of the Award which are unvested at the end of such fiscal year shall vest in three substantially equal installments over the then next three consecutive anniversaries of the date of the
Award.
6
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
On August 10, 2012, each of the Companys U.S. employees, including the
Executive Officers, were granted restricted stock awards (the Awards) pursuant to the Companys form of Restricted Stock Agreement under the Companys 2008 Stock Incentive Plan. The Awards were in the aggregate amount of 76,250
shares of Common Stock. Each award vests in three equal installments with the first installment vesting on August 10, 2013 and the remainder vesting on each of the two succeeding anniversaries.
D. Composition of Certain Balance Sheet Accounts
The composition of accounts receivable, net of reserves, is
as follows:
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August 31,
2012
|
|
|
February 29,
2012
|
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(In thousands)
|
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Due from factor
|
|
$
|
2,206
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|
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$
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1,183
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Accounts receivable, other
|
|
|
329
|
|
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
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$
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2,535
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|
|
$
|
1,668
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|
|
|
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Substantially all of the credit risk associated with the assigned invoices remained with the Company as of
August 31, 2012. Accounts receivable, other includes reserves for subsequent sales return and allowances for bad debtincluding reserves associated with certain invoices assigned to the factor.
The composition of inventories is as follows:
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|
|
|
|
|
|
August 31,
2012
|
|
|
February 29,
2012
|
|
|
|
(In thousands)
|
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Raw materials
|
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$
|
3,930
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|
|
$
|
1,419
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|
Work in process
|
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2,771
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|
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2,424
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Finished goods
|
|
|
2,518
|
|
|
|
2,790
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,219
|
|
|
$
|
6,633
|
|
|
|
|
|
|
|
|
|
|
Intangible assets were a result of an acquisition of substantially
all of the assets and assumption of substantially all of the liabilities of Coronado Technology Group, LLC that occurred on December 1, 2004 and are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2012
|
|
|
February 29, 2012
|
|
|
|
Amortization
Periods
(In
Years)
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net Book
Value
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net book
Value
|
|
|
|
(In thousands)
|
|
Trademarks
|
|
|
7-15
|
|
|
$
|
424
|
|
|
$
|
(379
|
)
|
|
$
|
45
|
|
|
$
|
424
|
|
|
$
|
(361
|
)
|
|
$
|
63
|
|
Completed technologies
|
|
|
12
|
|
|
|
1,620
|
|
|
|
(1,046
|
)
|
|
|
574
|
|
|
|
1,620
|
|
|
|
(978
|
)
|
|
|
642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
2,044
|
|
|
$
|
(1,425
|
)
|
|
$
|
619
|
|
|
$
|
2,044
|
|
|
$
|
(1,339
|
)
|
|
$
|
705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The changes in the carrying amount of
acquisition-related intangible assets for the three months ended August 31, 2012, are as follows:
|
|
|
|
|
|
|
Amortizing
Intangible Assets
|
|
|
|
(In thousands)
|
|
Balance, net, February 29, 2012
|
|
$
|
705
|
|
Amortization
|
|
|
(86
|
)
|
|
|
|
|
|
Balance, net, August 31, 2012
|
|
$
|
619
|
|
|
|
|
|
|
Amortization of acquisition-related
intangible assets over the next five fiscal years is estimated as follows:
|
|
|
|
|
Fiscal Year
|
|
(In thousands)
|
|
2013 (remaining six months)
|
|
$
|
85
|
|
2014
|
|
|
162
|
|
2015
|
|
|
135
|
|
2016
|
|
|
135
|
|
2017
|
|
|
102
|
|
|
|
|
|
|
Total
|
|
$
|
619
|
|
|
|
|
|
|
The composition of property and equipment is as follows:
|
|
|
|
|
|
|
|
|
|
|
August 31,
2012
|
|
|
February 29,
2012
|
|
|
|
(In thousands)
|
|
Molds and dies
|
|
$
|
1,316
|
|
|
$
|
1,234
|
|
Machinery and equipment
|
|
|
4,511
|
|
|
|
4,507
|
|
Furniture and fixtures
|
|
|
251
|
|
|
|
251
|
|
Autos and trucks
|
|
|
126
|
|
|
|
199
|
|
Leasehold improvements
|
|
|
138
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,342
|
|
|
|
6,329
|
|
Less accumulated depreciation and amortization
|
|
|
(6,110
|
)
|
|
|
(6,159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
232
|
|
|
$
|
170
|
|
|
|
|
|
|
|
|
|
|
Since certain of the Companys machinery and equipment is old and fully depreciated, it is possible that certain
of the Companys machinery and equipment could require replacement in the near future.
E. Commitments and Contingencies
The Company is involved from time to time in litigation incidental to its business. Management believes that the
outcome of such litigation will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.
F. Loss Per Share
Basic loss per share amounts excludes the dilutive effect of potential shares of common stock. Basic loss per share is
based upon the weighted-average number of shares of common stock outstanding. Diluted loss per share is based upon the weighted-average number of shares of common stock and dilutive potential shares of common stock outstanding for each period
presented. Potential shares of common stock include outstanding stock options and restricted stock, which may be included in the weighted average number of shares of common stock under the treasury stock method.
8
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The total number of options and
restricted shares outstanding were as follows:
|
|
|
|
|
|
|
|
|
|
|
August 31,
2012
|
|
|
February 29,
2012
|
|
|
|
(In thousands)
|
|
Stock options outstanding
|
|
|
74
|
|
|
|
77
|
|
Restricted shares outstanding
|
|
|
133
|
|
|
|
63
|
|
These amounts were excluded from the weighted-average number of shares of common stock outstanding, as including these
items would be anti-dilutive due to the Companys net loss.
G. Product Warranties
The Company provides reserves for the estimated cost of product warranty-related claims at the time
of sale, and periodically adjusts the provision to reflect actual experience related to its standard product warranty programs and its extended warranty programs. The amount of warranty liability accrued reflects managements best estimate of
the expected future cost of honoring Company obligations under its warranty plans. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise.
Meade
®
brand products, principally telescopes and binoculars, are generally covered by a one-year limited
warranty. Most of the Coronado
®
products have limited five-year warranties.
Included in the warranty accrual as of February 29, 2012, is $0.5 million related to the Companys former sport optics brands
that were sold in 2008 and for which the Company agreed to retain certain warranty liabilities. In June 2012, the Company entered into an agreement with the owner of one of the Companys former sport optics brands which eliminated the
Companys remaining liability of approximately $0.3 million for any future product warranty claims associated with that brand. The Company reduced its warranty accrual as of May 31, 2012 by $0.3 million accordingly.
Changes in the warranty liability, which is included as a component of
accrued liabilities on the accompanying Consolidated Balance Sheets, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
August 31,
|
|
|
Six Months Ended
August 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(In thousands)
|
|
Beginning balance
|
|
$
|
427
|
|
|
$
|
750
|
|
|
$
|
736
|
|
|
$
|
810
|
|
Release of warranty liability
|
|
|
|
|
|
|
|
|
|
|
(293
|
)
|
|
|
|
|
Warranty accrual
|
|
|
69
|
|
|
|
56
|
|
|
|
111
|
|
|
|
99
|
|
Labor and material
|
|
|
(85
|
)
|
|
|
(43
|
)
|
|
|
(143
|
)
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
411
|
|
|
$
|
763
|
|
|
$
|
411
|
|
|
$
|
763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H. Income Taxes
In accordance with ASC 740,
Accounting for Income Taxes
, the Company has determined that there was sufficient
uncertainty surrounding the future realization of its deferred tax assets to warrant the recording of a full valuation allowance. The valuation allowance was recorded based upon the Companys determination that there was insufficient objective
evidence, at this time, to recognize those assets for financial reporting purposes. For the period ended August 31, 2012, the Company has not changed its assessment regarding the recoverability of its deferred tax assets. Ultimate realization
of the benefit of the deferred tax assets is dependent upon the Company generating sufficient taxable income in future periods, including periods prior to the expiration of certain underlying tax credits.
9
MEADE INSTRUMENTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
No provision for income taxes was recorded in the current or prior period presented due
to the significance of the Companys net loss.
The tax years 2008 through 2011 remain open to examination by the major
taxing jurisdictions to which the Company is subject. However, the amount of a net operating loss carryforward can be adjusted for federal tax purposes for the three years (four years for the major state jurisdictions in which the Company operates)
after the net operating loss is utilized.
Unrecognized Tax Benefits
The Company is subject to income taxes in the United States and Mexico. Significant judgment is required in evaluating the Companys
tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for
tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite a belief that its tax return
positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of income tax audits. The provision for income taxes includes the impact of reserve provisions and changes to
reserves that are considered appropriate. Accruals for unrecognized tax benefits are provided for in accordance with the requirements of the prescribed authoritative guidance. At August 31, 2012 and February 29, 2012, there were no
unrecognized tax benefits. Management does not anticipate that there will be a material change in the balance of unrecognized tax benefits within the next 12 months.
The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. At August 31, 2012 and February 29, 2012, there were no accrued interest and
penalties related to uncertain tax positions.
10
ITEM 2.
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated
financial statements and related notes included in this Form 10-Q. This discussion may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking
statements due to known and unknown risks, uncertainties and other factors, including those risks discussed in Risk Factors in the Companys annual report on Form 10-K. Those risk factors expressly qualify all subsequent oral and
written forward-looking statements attributable to us or persons acting on our behalf. We do not have any intention or obligation to update forward-looking statements included in this Form 10-Q after the date of this Form 10-Q, except as required by
law.
Overview of the Company
Meade Instruments Corp. is engaged in the design, manufacture, marketing and sale of consumer optics products, primarily telescopes, telescope accessories and binoculars. We design our products in-house
or with the assistance of external consultants. Most of our entry level products are manufactured overseas by contract manufacturers in Asia, while our high-end telescopes are manufactured and assembled at our Mexico facility. Sales of our products
are driven by an in-house sales force as well as a network of sales representatives throughout the U.S. and through distributors internationally. We currently operate out of two primary locations: Irvine, California and Tijuana, Mexico. Our
California facility serves as the Companys corporate headquarters, research and development facility and U.S. distribution center; our Mexico facility contains our manufacturing, assembly, repair, packaging, and other general and
administrative functions. Our business is highly seasonal and our financial results have historically varied significantly on a quarter-by-quarter basis each year.
We believe that the Company holds valuable brand names and intellectual property that provide us with a competitive
advantage in the marketplace. The Meade
®
brand name is ubiquitous in the consumer telescope market, while the
Coronado
®
brand name represents a unique niche in the area of solar astronomy.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in the Condensed
Consolidated Financial Statements and accompanying notes. Note 1 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended February 29, 2012 describes the significant accounting policies and methods
used in the preparation of our Condensed Consolidated Financial Statements. Our critical accounting estimates, discussed in the Managements Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our
Annual Report on Form 10-K for the fiscal year ended February 29, 2012, include revenue recognition, estimates for allowances for doubtful accounts, inventories, property and equipment, intangible assets, accounting for income taxes, shipping
and handling costs, advertising, research and development, loss per share, concentration of credit risk, fair value of financial instruments, use of estimates in preparation of consolidated financial statements, product warranties, and stock-based
compensation. Such accounting policies and estimates require significant judgments and assumptions to be used in the preparation of our Consolidated Financial Statements and actual results could differ materially from the amounts reported based on
variability in factors affecting these estimates.
Our management discusses the development and selection of our critical
accounting policies and estimates with the Audit Committee of our Board of Directors at least annually. Our management also internally discusses the adoption of new accounting policies or changes to existing policies at interim dates, as it deems
necessary or appropriate.
New Accounting Pronouncements
From time to time, the Financial Accounting Standards Board or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated
through issuance of an Accounting Standards Update. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our Consolidated
Financial Statements upon adoption.
11
Results of Operations
The Companys business is seasonal. Historically, sales in the second and third quarter ended
August 31
st
and November 30
th
each year have been higher than sales achieved in each of the other
two fiscal quarters of the year. Thus, expenses and, to a greater extent, results from operations vary significantly by quarter. Therefore, caution is advised when appraising results for a period shorter than a full year, or when comparing any
period other than to the same period of the previous year. Sales in the second quarter ended August 31, 2012 were lower than the first quarter ended May 31, 2012, as explained below, but sales are expected to be higher in the third quarter ending
November 30, 2012.
Three Months Ended August 31, 2012 Compared to Three Months Ended August 31, 2011
The Company reported net sales of $4.0 million for the quarter ended August 31, 2012, a decrease of $2.1 million or 35% from net
sales of $6.1 million in the same period in the prior year. Approximately $0.7 million or 31% of this decrease in net sales was attributable to a reduction in net sales of high-end telescopes, which was due to the delay in shipment of the
Companys new LX800 and LX600 products and the impact that delay has had on sales for the Companys other high-end telescopes. Approximately $0.7 million or 31% and approximately $0.6 million or 27% of this decrease was due to reductions
in net sales of low end telescopes and microscopes, respectively, to mass retail customers due to decreased demand. Approximately $0.2 million or 10% of the reduction in net sales was due to reductions in accessories which were attributable to the
reduction in sales of high end telescopes. Approximately $0.3 million or 14% of the decrease in net sales was due to a reduction in sales of other products due to decreased demand. These decreases in net sales were partially offset by increases in
sales of intermediate telescopes of approximately $0.2 million due to the introduction of new products, such as the LX80.
Gross profit of $0.5 million during the three months ended August 31, 2012 decreased $0.8 million or 60% compared to the same period
in the prior year. Approximately $0.2 million or 25% of the decrease in gross profit was attributed to a net unfavorable change in product mix, principally the reduction in sales of high end telescopes and other products, and the remaining decrease
of $0.6 million was due to the lower revenue level providing less contribution margin over fixed costs of sales.
Selling
expenses for the second quarter ended August 31, 2012 were $0.4 million or 9% of net sales compared to $0.6 million or 10% of net sales during the same quarter in the prior year. The decrease in selling expenses as a percentage of net sales was
due to reductions in the headcount attributable to the elimination of the Companys U.S. distribution activities and recovery of bad debt.
General and administrative expenses for the second quarter ended August 31, 2012 were $0.9 million or 22% of net sales compared to $0.8 million or 13% of net sales in the same quarter in the prior
year. The increase in general and administrative expenses relative to the prior year was mainly due to the timing of professional fees and a property tax refund of $0.1 million which reduced general and administrative expenses during the three
months ended August 31, 2011.
Research and development expenses in the second quarter ended August 31, 2012
increased by $42 thousand or 19% compared to the same period in the prior year due to increased efforts at new product development and work being done to finish the development of new products.
No provision for income taxes was recorded in the current or prior period presented due to the significance of the Companys net
loss.
Six Months Ended August 31, 2012 Compared to Six Months Ended August 31, 2011
The Company reported net sales of $8.1 million for the six months ended August 31, 2012, a decrease of $2.2 million or 22% from net
sales of $10.3 million in the same period in the prior year. Approximately $0.7 million or 30% and $0.5 million or 24% of this decrease was attributable to reduced net sales of low-end telescopes and microscopes, respectively, to mass retail
customers due to reduced demand for these products. Approximately $0.2 million or 9% is attributable to a reduction in net sales of high-end telescopes due to delays in shipments of the Companys new LX800 and LX600 products, which are still
under development, and the impact that delay has had on net sales of other high-end telescope products. Approximately $0.1 million or 4% of the reduction in net sales was due to reductions in accessories which was attributed to the reduction in
sales of high end telescopes. Approximately $0.7 million or 26% of the decrease in net sales was due to a reduction in sales of other products due to decreased demand.
12
Gross profit of $1.4 million during the six months ended August 31, 2012 decreased $1.3
million or 48% compared to the same period in the prior year. Approximately $1.2 million or 88% of this decrease in gross profit was attributable to a reduction in net sales and approximately $0.1 million or 12% was attributed to unfavorable
fluctuations in indirect manufacturing costs, such as labor and material variances, compared to the prior year.
Selling
expenses for the six months ended August 31, 2012 and 2011 were consistent at 10% of net sales. Selling expenses decreased due to reductions in the headcount attributable to the elimination of the Companys U.S. distribution activities and
recovery of bad debt, offset by increased discretionary selling expenses such as advertising and marketing expenses.
General
and administrative expenses for the six months ended August 31, 2012 and 2011 were $1.8 million in both periods. General and administrative expenses are mostly fixed costs and generally do not vary with net sales as much as selling expenses.
Research and development expenses for the six months ended August 31, 2012 of $0.5 million increased by $0.1 million or
27% compared to the same period in the prior year due to increased efforts to complete product development of the LX800 and LX600 products.
Release of warranty liability of $0.3 million during the six months ended August 31, 2012 pertained to a reduction in the Companys warranty accrual which was recorded based upon
an agreement which released the Company of its remaining warranty liability associated with those products. No such adjustment applied to the prior year.
No provision for income taxes was recorded in the current or prior period presented due to the significance of the Companys net loss.
Seasonality
The Company has experienced, and expects to continue to
experience, substantial fluctuations in its sales, gross margins, working capital requirements and results from operations from quarter to quarter. Factors that influence these fluctuations include the volume and timing of orders received, changes
in the mix of products sold, market acceptance of the Companys products, competitive pricing pressures, the Companys ability to meet fluctuating demand and delivery schedules, the timing and extent of research and development expenses,
the timing and extent of product development activities and the timing and extent of advertising expenditures. Historically, a substantial portion of the Companys net sales and results from operations typically occurred in the second and third
quarter of the Companys fiscal year primarily due to the higher customer demand for less-expensive telescopes during the holiday season. Mass merchandisers, along with specialty retailers, purchase a considerable amount of their inventories to
satisfy seasonal customer demand. These purchasing patterns have caused the Company to increase its level of inventory during its second and third quarters in response to such demand or anticipated demand. As a result, the Companys working
capital requirements have correspondingly increased at such times. The Company continues to experience significant sales to mass merchandisers. Accordingly, the Companys net sales, working capital requirements and results from operations are
expected to be higher in its second and third quarters than in the first and fourth quarters of its fiscal year. Sales in the second quarter ended August 31, 2012 were lower than the first quarter ended May 31, 2012, as explained below, but sales
are expected to be higher in the third quarter ending November 30, 2012.
Liquidity and Capital Resources
At August 31, 2012, the Company had cash of $0.7 million, as compared to $3.9 million at February 29, 2012 and $2.6 million at
August 31, 2011. Net cash used in operating activities was approximately $3.1 million during the six months ended August 31, 2012 and $2.4 million during the six months ended August 31, 2011, an increase in net cash used of
approximately $0.7 million compared to the prior year. This increase in cash used in operating activities was attributed primarily to the increase in the Companys net loss of approximately $0.9 million from a loss of approximately $1.4 million
during the six months ended August 31, 2012 compared to a loss of approximately $0.5 million during the six months ended August 31, 2011, offset slightly by favorable net fluctuations in working capital.
13
The Company typically experiences increases in accounts receivable and inventories and a
corresponding decrease in cash beginning with the end of its first fiscal quarter and culminating with the end of its third fiscal quarter. Receivables and inventories then typically decrease, and cash increases, at the end of the Companys
fiscal year.
The Company currently has in place a secured credit facility with First Capital. Availability of funds under
this facility is based on a percentage of eligible accounts receivable and inventory. Availability on this facility amounted to approximately $1.0 million as of August 31, 2012 and was based solely on accounts receivable as substantially all of
the Companys inventory was deemed ineligible due to it being located in Mexico. The Company expects its availability to be limited to not more than $1.0 million in the foreseeable future. While the Companys credit facility does not
contain explicit financial covenants, the Companys lender has significant latitude in restricting, reducing or withdrawing the Companys credit facility at its sole discretion with limited notice, as is customary with these types of
arrangements.
The initial term of the credit facility with First Capital ended in January 2012, at which time, the
Company continued to factor its receivables with First Capital on a month-to-month basis and sixty days prior notice shall be required for the Company to terminate the agreement. The expiration of the initial term of the agreement did not affect the
ability of First Capital to terminate the agreement as described above.
The Company began advancing on accounts receivable in
September 2012 in order to fulfill its working capital requirements. Based upon expected order fulfillment and results from operations, the Company expects that it will need to continue to rely on its credit facility for working capital for at least
its third quarter. If its lender restricts, reduces or eliminates the Companys access to credit, or requires immediate repayment of the amounts outstanding under the agreement, the Company would be required to pursue additional or
alternative sources of liquidity such as equity financings, a new debt agreement with other creditors, or liquidate assets. However, the Company cannot assure that such additional sources of liquidity would be available on reasonable terms, if at
all.
Capital expenditures were approximately $115 thousand and $20 thousand for the six months ended August 31, 2012 and
2011, respectively. The increase in capital expenditures related to purchases of tools, molds and dies associated with new product development. The Company had no material capital expenditure commitments at August 31, 2012. However, certain of
the Companys machinery and equipment is old and fully depreciated. It is possible that certain of the Companys machinery and equipment could require replacement in the near future.
Inflation
The Company
does not believe that inflation has had a material effect on the results of operations during the past two years. However, there can be no assurance that the Companys business will not be affected by inflation in the remainder of fiscal 2013
and beyond.
Forward-Looking Information
The preceding Managements Discussion and Analysis of Financial Condition and Results of Operations section contains various forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which represent the Companys reasonable judgment concerning the future and are subject to risks and
uncertainties that could cause the Companys actual operating results and financial position to differ materially, including the following: the Company being able to see continued progress in its restructuring efforts, the timing of such
restructuring efforts, and the fact that the restructuring efforts will result in positive financial results in the future; the Companys expectation that it will continue to experience fluctuations in its sales, gross margins and profitability
from quarter to quarter consistent with prior periods; the Companys expectation that contingent liabilities will not have a material effect on the Companys financial position or results of operations.
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this item.
14
ITEM 4.
|
CONTROLS AND PROCEDURES
|
Evaluation of
Disclosure Controls and Procedures.
As of August 31, 2012, the Company carried out an evaluation, under the
supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and
procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on the evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls
and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.
Previously Reported Material Weakness in Internal Control over Financial Reporting
In connection with managements assessment of our internal control over financial reporting, we identified a material weakness in our internal control over financial reporting as of May 31, 2012
as described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim
financial statements will not be prevented or detected on a timely basis.
We did not effectively maintain a sufficient
level of resources within our accounting department, which resulted in a lack of separation of duties between the preparation and review of adjustments necessary to properly state inventory as of May 31, 2012. We have subsequently modified the
preparation and review procedures relative to inventory adjustments to address this deficiency in our internal control procedures, which is how the error was identified by management, and expect that this deficiency will be remediated through these
modifications.
As a result of the material weakness in internal control over financial reporting described above, management
concluded that the Companys internal control over financial reporting was not effective as of May 31, 2012 based on the criteria in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Furthermore, we amended and restated our financial statements contained in our Quarterly Report on Form 10-Q for the three months ended May 31, 2012.
For additional information regarding the restatements of these financial results and the material weakness identified by management, see Item 4. Controls and Procedures in the
Companys Quarterly Report on Form 10-Q/A for the three months ended May 31, 2012, filed on October 4, 2012 with the Securities and Exchange Commission.
Changes in Internal Control Over Financial Reporting
Except for the
remediation steps to address the material weakness in its internal control over financial reporting described above, there has been no change in the Companys internal control over financial reporting that occurred during the Companys
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting. Specifically, the preparation and review of the adjustment to record capitalized
overhead and variances from standard costs has been separated.
Under the direction of the Audit Committee, management will
continue to review and make any changes it deems necessary to the overall design of the Companys internal control over financial reporting, including implementing improvements in policies and procedures.
We are committed to a strong internal control environment, and believe that these remediation actions will remediate the material
weakness described above. The Company anticipates that it will complete its testing of the additional internal control processes designed to remediate this material weakness during the balance of its fiscal year ending in February 2013. We will
continue to assess the effectiveness of our remediation efforts in connection with managements future evaluations of internal control over financial reporting.
15
PART II OTHER INFORMATION
ITEM 1.
|
LEGAL PROCEEDINGS
|
Not
applicable.
Not
applicable.
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Not applicable.
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Not applicable.
ITEM 4.
|
MINE SAFETY DISCLOSURE
|
Not applicable.
ITEM 5.
|
OTHER INFORMATION
|
Not
applicable.
|
|
|
Exhibit
|
|
Exhibit Title or Description
|
|
|
10.1+
|
|
Amended and Restated Employment Agreement effective as of August 14, 2012 between Meade Instruments Corp. and Steven Murdock incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 14, 2012
|
|
|
10.2+
|
|
Amended and Restated Employment Agreement effective as of August 14, 2012 between Meade Instruments Corp. and John Elwood incorporated by reference to Exhibit 10.2 of the
Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 14, 2012
|
|
|
10.3+
|
|
Meade Instruments Corp. Amended and Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K as filed with the
Securities and Exchange Commission on July 18, 2012
|
|
|
10.4+
|
|
Form Non-Qualified Stock Option Agreement between the Company and recipients of non-qualified options granted pursuant to the Meade Instruments Corp. Amended and Restated 2008 Stock
Incentive Plan incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
10.5+
|
|
Form Non-Qualified Stock Option Agreement between the Company and non-employee directors of the Company receiving options granted pursuant to Section 8 of the Meade Instruments
Corp. Amended and Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.3 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
10.6+
|
|
Form Restricted Stock Agreement between the Company and recipients of restricted shares of the Companys Common Stock granted pursuant to the Companys Amended and
Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.4 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification Principal Executive Officer
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification Principal Financial Officer
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 Chief Executive Officer
|
|
|
32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 Chief Financial Officer
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
101.PRE*
|
|
XBRL Taxonomy Presentation Linkbase Document
|
*
|
As provided in Rule 406T of Regulation S-T, this information is deemed furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as
amended, and Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
Previously filed with the Securities Exchange Commission.
|
+
|
Management contract or compensatory plan or arrangement.
|
16
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.
|
|
|
|
|
|
|
|
|
|
|
MEADE INSTRUMENTS CORP.
|
|
|
|
|
Dated:
October 12, 2012
|
|
|
|
By:
|
|
/s/ STEVEN G. MURDOCK
|
|
|
|
|
|
|
Steven G. Murdock
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ JOHN A. ELWOOD
|
|
|
|
|
|
|
John A. Elwood
|
|
|
|
|
|
|
Senior Vice President Finance and Administration
|
|
|
|
|
|
|
Chief Financial Officer and Secretary
|
17
EXHIBIT INDEX
|
|
|
Exhibit
|
|
Exhibit Title or Description
|
|
|
10.1+
|
|
Amended and Restated Employment Agreement effective as of August 14, 2012 between Meade Instruments Corp. and Steven Murdock incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 14, 2012
|
|
|
10.2+
|
|
Amended and Restated Employment Agreement effective as of August 14, 2012 between Meade Instruments Corp. and John Elwood incorporated by reference to Exhibit 10.2 of the
Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 14, 2012
|
|
|
10.3+
|
|
Meade Instruments Corp. Amended and Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K as filed with the
Securities and Exchange Commission on July 18, 2012
|
|
|
10.4+
|
|
Form Non-Qualified Stock Option Agreement between the Company and recipients of non-qualified options granted pursuant to the Meade Instruments Corp. Amended and Restated 2008 Stock
Incentive Plan incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
10.5+
|
|
Form Non-Qualified Stock Option Agreement between the Company and non-employee directors of the Company receiving options granted pursuant to Section 8 of the Meade Instruments
Corp. Amended and Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.3 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
10.6+
|
|
Form Restricted Stock Agreement between the Company and recipients of restricted shares of the Companys Common Stock granted pursuant to the Companys Amended and
Restated 2008 Stock Incentive Plan incorporated by reference to Exhibit 10.4 of the Companys Current Report on Form 8-K as filed with the Securities and Exchange Commission on July 18, 2012
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification Principal Executive Officer
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification Principal Financial Officer
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 Chief Executive Officer
|
|
|
32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 Chief Financial Officer
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
101.PRE*
|
|
XBRL Taxonomy Presentation Linkbase Document
|
*
|
As provided in Rule 406T of Regulation S-T, this information is deemed furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as
amended, and Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
Previously filed with the Securities Exchange Commission.
|
+
|
Management contract or compensatory plan or arrangement.
|
18
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