The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the consolidated audited financial
statements and the notes to those financial statements included elsewhere in
this report. This discussion includes forward- looking statements that involve
risks and uncertainties. As a result of many factors, such as those set forth
under "risk factors" and elsewhere in this report, our actual results may differ
materially from those anticipated in these forward-looking statements.
The following table sets forth selected historical consolidated financial data from our consolidated financial statements and should be read in conjunction with our consolidated financial statements including the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" which are included below.
FISCAL YEAR ENDED
Year Ended September 30, 2013 2012 Revenues
$ 13,673,531 $ 12,162,046Operating Expenses $ 798,135 $ 683,372Net Income (Loss) $ 288,497 $ 648,199
Net Income (Loss) Per Common Share,
$ 0.01 $ 0.02
Weighted Average Number of Shares 40,599,129 39,823,129
September 30, 2013 2012 Current Assets
$ 2,506,078 $ 1,571,638Total Assets $ 2,873,776 $ 1,678,374Total Liabilities $ 1,742,594 $ 835,689
Total Stockholders' Equity(Deficit)
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The following discussion and analysis is based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in
15We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries.
We value our inventories at the lower of cost or market. We write down inventory balances for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions.
Goodwill is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the Company's carrying amount is greater than the fair value. In accordance with SFAS 142, the Company examined goodwill for impairment and determined that the Company's carrying amount did not exceed the fair value, thus, there was no impairment.
Generally, sales are recognized when shipments are made to customers. Rebates, allowances for damaged goods and other advertising and marketing program rebates are accrued pursuant to contractual provisions and included in accrued expenses. Certain amount of our revenues fall under the percentage-of-completion method of accounting used for long-term contracts. Under this method, sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Sales and gross profit are adjusted prospectively for revisions in estimated total contract costs and contract values. Estimated losses are recorded when identified.
RESULTS OF OPERATIONS
Net Sales :. Net sales for 2013 increased by
Gross Profit : Gross profits for 2013 decreased
Operating Expenses : Operating expenses for 2013 increased
Net Income/Loss : The Company had a net income of
Provision for Income Taxes : The income tax provision for this year is
16 EFFECTS OF INFLATION
The Company's business and operations have not been materially affected by inflation during the periods for which financial information is presented.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was
Trade receivables increased by
Continuing operations used
We anticipate that the outlook for our products and services remains fairly strong and we are positioned well to take advantage of it.
We believe there is currently a gradually increasing public awareness of the issues surrounding air quality and that this trend will continue for the next several years. We also believe there is an increase in public concern regarding the effects of air quality on society and future generations, as well as an increase in interest by standards-making bodies in creating specifications and techniques for detecting, defining and solving air quality problems. As a result, we believe there will be an increase in interest in our emission monitors, and environmental control products of subsidiary Griffin Filters.
This Outlook section, and other portions of this document, include certain "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, among others, those statements preceded by, following or including the words "believe," "expect," "intend," "anticipate" or similar expressions. These forward-looking statements are based largely on the current expectations of management and are subject to a number of assumptions, risks and uncertainties. Our actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include those discussed in Item 1A. Risk Factors as well as:
the shortage of reliable market data regarding the emission monitoring & air filtration market;
changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations;
anticipated working capital or other cash requirements;
changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the market;
product obsolescence due to the development of new technologies; and
Various competitive factors that may prevent us from competing successfully in the marketplace.
In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Form 10-K will in fact occur.