Micropac Industries, Inc.(the "Company"), a Delawarecorporation, manufactures and distributes various types of hybrid microelectronic circuits, solid state relays, power controllers, and optoelectronic components and assemblies. The Company's products are used as components in a broad range of military, space and industrial systems, including aircraft instrumentation and navigation systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200o C) products. The Company's products are either custom (being application specific circuits designed and manufactured to meet the particular requirements of a single customer) or standard, proprietary components such as catalog items. The Company's facilities are certified and qualified by Defense Logistics Agency(DLA) to MIL-PRF-38534 (class K-space level), MIL-PRF-19500 JANS (space level), and MIL-PRF-28750 (class K-space level) and is certified to ISO 9001-2002. Micropac is a National Aeronautics and Space Administration(NASA) core supplier, and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has UL approval on the new industrial power controllers. The Company's core technology is the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors used in the Company's optoelectronic components and assemblies. Results of Operations Three months ended Nine months ended 8/31/2013 8/25/2012 8/31/2013 8/25/2012 NET SALES 100.0 % 100.0 % 100.0 % 100.0 % COST AND EXPENSES: Cost of Goods Sold 60.2 % 63.7 % 61.5 % 69.2 % Research and development 8.4 % 3.6 % 8.1 % 3.0 % Selling, general & administrative expenses 21.9 % 21.1
% 20.8 % 22.4 %
Total cost and expenses 90.5 % 88.4
% 90.4 % 94.6 %
OPERATING INCOME BEFORE INTEREST 9.5 % 11.6 % 9.6 % 5.4 % AND INCOME TAXES Interest income 0.5 % 0.4 % 0.1 % 0.2 % INCOME BEFORE TAXES 10.0 % 12.0 % 9.7 % 5.6 % Provision for taxes 3.6 % 4.3 % 3.5 % 2.0 % NET INCOME 6.4 % 7.7 % 6.2 % 3.6 % Sales for the three and nine month periods ended
August 31, 2013totaled $4,508,000and $14,239,000, respectively. Sales for the third quarter decreased $124,000compared to the same period of 2012, while sales for the first nine months of 2013 increased $1,795,000or 14.4% above the first nine months of 2012. Sales were 28% in the commercial market, 54% in the military market, and 18% in the space market for the nine months ended August 31, 2013compared to 25% in the commercial market, 60% in the military market, and 15% in the space market for the nine months ended August 25, 2012.