10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 25, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-619

WSI Industries, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	41-0691607
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

213 Chelsea Road, Monticello, Minnesota	55362
(Address of principal executive offices)	(Zip Code)

(763) 295-9202

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed

since last report)

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 (§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, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "larger accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer   ¨
Non-accelerated filer¨	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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,903,889 shares of common stock were outstanding as of December 28, 2012.

Explanatory Note

The purpose of this Amendment No. 1 to WSI Industries, Inc’s Quarterly Report on Form 10-Q for the quarterly period ended November 25, 2012, filed with the Securities and Exchange Commission on January 8, 2013  (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

ITEM 6.  EXHIBITS

A.           The following exhibits are included herein:

Exhibit 31.1* Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.

Exhibit 31.2* Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.

Exhibit 32* Certification pursuant to 18 U.S.C. §1350.

101.INS** XBRL Instance

101.SCH** XBRL Taxonomy Extension Schema

101.CAL** XBRL Taxonomy Extension Calculation

101.DEF** XBRL Taxonomy Extension Definition

101.LAB** XBRL Taxonomy Extension Labels

101.PRE** XBRL Taxonomy Extension Presentation

*  These exhibits were previously included or incorporated by reference in WSI Industries, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended November 25, 2012, filed with the Securities and Exchange Commission on January 7, 2013.

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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.

	WSI INDUSTRIES, INC.
Date:  January 8, 2013	By:	/s/ Benjamin T. Rashleger
		Benjamin T. Rashleger, President & CEO
Date:  January 8, 2013	By:	/s/ Paul D. Sheely
		Paul D. Sheely, Vice President, Finance & CFO

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Note 4 - Long-Term Debt

3 Months Ended

Nov. 25, 2012

Long-term Debt [Text Block]

4.             LONG-TERM DEBT

During the quarter ended November 25, 2012, the Company entered into one debt agreement for a total of approximately $508,000 in connection with the acquisition of machinery and equipment.  The debt agreement requires monthly payments, carries an interest rate of approximately 3.3% and is secured by the related asset acquired and matures in 2019.

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Note 3 - Other Assets

3 Months Ended

Nov. 25, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

3.             OTHER ASSETS

Goodwill and other assets consist of costs resulting from business acquisitions which total $2,368,452 at November 25, 2012 and August 26, 2012 (net of accumulated amortization of $344,812 recorded prior to the adoption of ASC 350 Goodwill and Other Intangible Assets).

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Nov. 25, 2012	Aug. 26, 2012
Current Assets:
Cash and cash equivalents	$ 2,465,043	$ 2,911,961
Accounts receivable	4,186,596	5,198,987
Inventories	3,569,554	2,920,390
Prepaid and other current assets	233,105	218,632
Deferred tax assets	146,692	140,843
Total Current Assets	10,600,990	11,390,813
Property, Plant and Equipment – Net	10,333,867	9,314,826
Goodwill and other assets, net	2,368,452	2,368,452
Total Assets	23,303,309	23,074,091
Current Liabilities:
Trade accounts payable	2,320,918	2,345,709
Accrued compensation and employee withholdings	530,927	916,210
Other accrued expenses	280,118	335,071
Current portion of long-term debt	1,447,610	1,377,295
Total Current Liabilities	4,579,573	4,974,285
Long-term debt, less current portion	5,546,304	5,462,854
Deferred tax liabilities	1,212,635	970,252
Stockholders’ Equity:
Common stock, par value $.10 a share; authorized 10,000,000 shares; issued and outstanding 2,903,889 and 2,913,412 shares, respectively	290,388	291,341
Capital in excess of par value	3,142,754	3,306,235
Deferred compensation	(124,013)	(270,257)
Retained earnings	8,655,668	8,339,381
Total Stockholders’ Equity	11,964,797	11,666,700
Total Liabilities and Stockholders’ Equity	$ 23,303,309	$ 23,074,091

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Note 1 - Condensed Consolidated Financial Statements

3 Months Ended

Nov. 25, 2012

Condensed Financial Statements [Text Block]

1.             CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

The condensed consolidated balance sheet as of November 25, 2012, the condensed consolidated statements of income for the thirteen weeks ended November 25, 2012 and November 27, 2011 and the condensed consolidated statements of cash flows for the thirteen weeks then ended, respectively, have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.

The condensed consolidated balance sheet at August 26, 2012 is derived from the audited consolidated balance sheet as of that date.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  Therefore, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 26, 2012.  The results of operations for interim periods are not necessarily indicative of the operating results for the full year.

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Note 2 - Inventories

3 Months Ended

Nov. 25, 2012

Inventory Disclosure [Text Block]

2.             INVENTORIES

Inventories consist primarily of raw material, work-in-progress (WIP) and finished goods and are valued at the lower of cost or market value:

	November 25, 2012		August 26, 2012
Raw material	$	948,280	$	900,474
WIP		1,769,807		1,396,217
Finished goods		851,467		623,699
	$	3,569,554	$	2,920,390

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Nov. 25, 2012	Aug. 26, 2012
Allowance for doubtful accounts receivable (in Dollars)	$ 10,074
Common stock par value (in Dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	2,903,889	2,913,412
Common stock, shares outstanding	2,903,889	2,913,412

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Note 5 - Property (Detail) (USD $)	1 Months Ended	3 Months Ended
	Aug. 31, 2012 sqft	Nov. 25, 2012	Nov. 27, 2011
Area of Real Estate Property	107,000
Estimated Cost of Expansion (in Dollars)	$ 3,500,000
Payments to Acquire Property, Plant, and Equipment (in Dollars)	$ 871,000	$ 937,579	$ 205,156
Expansion [Member]
Area of Real Estate Property	47,000

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Document And Entity Information	3 Months Ended
	Nov. 25, 2012	Dec. 28, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	WSI INDUSTRIES, INC.
Document Type	10-Q
Current Fiscal Year End Date	--08-25
Entity Common Stock, Shares Outstanding		2,903,889
Amendment Flag	false
Entity Central Index Key	0000104897
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Nov. 25, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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Note 6 - Earnings Per Share (Detail) - Basic And Diluted Earnings Per Share (USD $)	3 Months Ended
	Nov. 25, 2012	Nov. 27, 2011
Net income (in Dollars)	$ 431,415	$ 105,179
Denominator for basic earnings per share - weighted average shares	2,868,953	2,837,555
Employee and non-employee options (in Dollars)	$ 78,920	$ 59,970
Denominator for diluted earnings per share	2,947,873	2,897,525
Basic earnings per share (in Dollars per share)	$ 0.15	$ 0.04
Diluted earnings per share (in Dollars per share)	$ 0.15	$ 0.04

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Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
	Nov. 25, 2012	Nov. 27, 2011
Net sales	$ 8,583,739	$ 5,986,941
Cost of products sold	7,101,774	5,059,171
Gross margin	1,481,965	927,770
Selling and administrative expense	727,849	690,174
Interest and other income	(1,431)	(2,198)
Interest and other expense	81,461	75,453
Earnings from operations before income taxes	674,086	164,341
Income taxes	242,671	59,162
Net income	$ 431,415	$ 105,179
Basic earnings per share (in Dollars per share)	$ 0.15	$ 0.04
Diluted earnings per share (in Dollars per share)	$ 0.15	$ 0.04
Cash dividend per share (in Dollars per share)	$ 0.04	$ 0.04
Weighted average number of common shares outstanding, basic (in Shares)	2,868,953	2,837,555
Weighted average number of common shares outstanding, diluted (in Shares)	2,947,873	2,897,525

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Note 2 - Inventories (Tables)

3 Months Ended

Nov. 25, 2012

Schedule of Inventory, Current [Table Text Block]

	November 25, 2012		August 26, 2012
Raw material	$	948,280	$	900,474
WIP		1,769,807		1,396,217
Finished goods		851,467		623,699
	$	3,569,554	$	2,920,390

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Note 6 - Earnings Per Share

3 Months Ended

Nov. 25, 2012

Earnings Per Share [Text Block]

6.             EARNINGS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per share:

	Thirteen weeks ended
	November 25, 2012		November 27, 2011
Numerator for earnings per share:
Net income	$	431,415	$	105,179
Denominator:
Denominator for basic earnings per share - weighted average shares		2,868,953		2,837,555
Effect of dilutive securities:
Employee and non-employee options		78,920		59,970
Dilutive common shares
Denominator for diluted earnings per share		2,947,873		2,897,525
Basic earnings per share	$	.15	$	.04
Diluted earnings per share	$	.15	$	.04

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Note 3 - Other Assets (Detail) (USD $)	Nov. 25, 2012	Aug. 26, 2012
Goodwill	$ 2,368,452	$ 2,368,452
Finite-Lived Intangible Assets, Accumulated Amortization	$ 344,812

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Note 6 - Earnings Per Share (Tables)

3 Months Ended

Nov. 25, 2012

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Thirteen weeks ended
	November 25, 2012		November 27, 2011
Numerator for earnings per share:
Net income	$	431,415	$	105,179
Denominator:
Denominator for basic earnings per share - weighted average shares		2,868,953		2,837,555
Effect of dilutive securities:
Employee and non-employee options		78,920		59,970
Dilutive common shares
Denominator for diluted earnings per share		2,947,873		2,897,525
Basic earnings per share	$	.15	$	.04
Diluted earnings per share	$	.15	$	.04

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Note 2 - Inventories (Detail) - Inventories (USD $)	Nov. 25, 2012	Aug. 26, 2012
Raw material	$ 948,280	$ 900,474
WIP	1,769,807	1,396,217
Finished goods	851,467	623,699
	$ 3,569,554	$ 2,920,390

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Note 4 - Long-Term Debt (Detail) (USD $)	Nov. 25, 2012
Debt Instrument, Face Amount (in Dollars)	$ 508,000
Debt Instrument, Interest Rate, Stated Percentage	3.30%

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Condensed Consolidated Statements Of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Nov. 25, 2012	Nov. 27, 2011
Cash Flows From Operating Activities:
Net income	$ 431,415	$ 105,179
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	426,624	327,665
Deferred taxes	232,671	44,522
Stock option compensation expense	42,975	39,747
Changes in assets and liabilities:
Decrease in accounts receivable	1,012,391	375,820
Increase in inventories	(649,164)	(271,076)
Decrease (increase) in prepaid expenses	(14,473)	63,098
Decrease in accounts payable and accrued expenses	(522,328)	(160,812)
Net cash provided by operations	960,111	524,143
Cash Flows From Investing Activities:
Purchase of property, plant and equipment	(937,579)	(205,156)
Net cash used in investing activities	(937,579)	(205,156)
Cash Flows From Financing Activities:
Payments of long-term debt	(354,321)	(270,419)
Dividends paid	(115,129)	(113,564)
Net cash used in financing activities	(469,450)	(383,983)
Net Decrease In Cash And Cash Equivalents	(446,918)	(64,996)
Cash And Cash Equivalents At Beginning Of Year	2,911,961	2,920,078
Cash And Cash Equivalents At End Of Reporting Period	2,465,043	2,855,082
Cash paid during the period for:
Interest	81,626	75,453
Payroll withholding taxes in cashless stock option exercise	61,164	6,513
Income taxes	10,000	11,000
Non-cash investing and financing activities:
Acquisition of equipment through loans	$ 508,086	$ 1,378,958

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Note 5 - Property

3 Months Ended

Nov. 25, 2012

Property, Plant and Equipment Disclosure [Text Block]

5.             PROPERTY

In August 2012, the Company announced that it was expanding its Monticello, Minnesota facility.  The 47,000 square foot expansion would roughly double the amount of manufacturing space the Company has and would increase the total facility size to approximately 107,000 square feet.  The Company expects the expansion to cost approximately $3.5 million and to be completed early in calendar year 2013.  Funding for the expansion is anticipated to come from available cash and debt.  During the quarter ended November 25, 2012, the Company incurred approximately $871,000 of cost related to the building expansion which was funded out of the Company’s available cash.