U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1O-QSB
(Mark One)
_X_ Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended ____September 30, 1995___
______Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ____________ to _________________
Commission File Number ____0-7855___
_____________________UNITED-GUARDIAN INC.______________________
(Exact Name of Small Business Issuer as Specified in Its Charter)
__________Delaware_____________ ____11-1719724___
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
____________230 Marcus Boulevard, Hauppauge, New York 11788__________
(Address of Principal Executive Offices)
____________________________(516) 273-0900______________________________
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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 ________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes _______ No ________
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date
_______________________________4,762,889________________________________
<PAGE>
UNITED-GUARDIAN, INC.
INDEX
Page No.
________
Part I. Financial Information:
Consolidated Statements of Earnings -
Nine and Three Months Ended
September 30,1995 and 1994 2
Consolidated Balance Sheets -
September 30, 1995 and
December 31,1994 3-4
Consolidated Statements of Cash Flows -
Nine Months Ended
September 30,1995 and 1994 5
Consolidated Notes to Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Part II. Other Information 8
<PAGE>
PART I. - FINANCIAL INFORMATION
UNITED-GUARDIAN, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
<S> <C> <C> <C> <C>
1995 1994 1995 1994
_________ _________ _________ _________
Revenue:
Sales $ 5,153,384 $ 4,772,365 $ 1,581,374 $1,554,628
Fees and retainers 25,000 30,000 --- 5,000
_________ _________ _________ _________
5,178,384 4,802,365 1,581,374 1,559,628
_________ _________ _________ _________
Costs and expenses:
Cost of sales 3,295,572 3,214,471 973,937 980,442
Operating expenses 1,376,873 1,462,735 454,940 493,351
_________ _________ _________ _________
4,672,445 4,677,206 1,428,877 1,473,793
_________ _________ _________ _________
Earnings from operations 505,939 125,159 152,497 85,835
Other income (expense):
Interest income 6,815 5,296 2,603 1,952
Interest expense (82,166) (87,915) (24,291) (31,943)
_________ __________ _________ _________
Earnings before 430,588 42,540 130,809 55,844
income taxes
Provision for income taxes 162,500 9,850 48,700 9,850
_________ __________ _________ _________
Net earnings $ 268,088 $ 32,690 $ 82,109 $ 45,994
========= ========== ========= =========
Earnings per common share $ .06 $ .01 $ .02 $ .01
========= ========== ========= =========
</TABLE>
See consolidated notes to financial statements
Page 2
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
____________ __________
(UNAUDITED)
Current assets:
Cash and cash equivalents $ 200,518 $ 477,324
Accounts receivable
(less allowance for doubtful
accounts of $15,735 at
September 30, 1995 and $19,634 at
December 31, 1994) 952,261 926,694
Inventories 2,447,307 2,275,247
Prepaid expenses and other 124,644 207,408
current assets
Deferred income taxes 83,845 83,845
_________ _________
Total current assets 3,808,575 3,970,518
_________ _________
Property, plant and equipment;
Land 69,000 69,000
Factory equipment and fixtures 1,930,530 1,776,439
Building and improvements 1,691,893 1,653,643
Waste disposal plant 133,532 133,532
_________ _________
3,824,955 3,632,614
Less: Accumulated depreciation 2,335,036 2,187,653
_________ _________
1,489,919 1,444,961
Assets under capital leases, net 27,080 39,424
_________ _________
1,516,999 1,484,385
_________ _________
Other assets:
Processes and patents, net 481,474 547,258
Other 89,999 12,471
_________ _________
571,473 559,729
_________ _________
$ 5,897,047 $ 6,014,632
========= =========
See consolidated notes to financial statements.
Page 3
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SEPTEMBER 30, DECEMBER 31,
STOCKHOLDERS' EQUITY 1995 1994
_________ _________
(UNAUDITED)
Current liabilities:
Accounts payable $ 492,370 $ 730,544
Notes payable bank 100,000 150,000
Accrued expense and other 145,637 146,294
Current portion of long term
debt and capital lease
obligations 119,549 126,908
_________ _________
Total current liabilities 857,556 1,153,746
_________ _________
Long-term debt 756,257 842,491
_________ _________
Capital lease obligations 6,136 9,385
_________ _________
Deferred income taxes 54,625 54,625
_________ _________
Stockholders' equity:
Common stock $.10 par value, 476,289 476,289
authorized 10,000,000 shares,
issued and outstanding
4,762,889 shares
Capital in excess of par value 3,089,380 3,089,380
Retained earnings 656,804 388,716
_________ _________
Total stockholders' equity 4,222,473 3,954,385
_________ _________
$ 5,897,047 $ 6,014,632
========= =========
See consolidated notes to financial statements.
Page 4
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
1995 1994
_______ ________
Cash flows provided by operating activities:
Net earnings $ 268,088 $ 32,690
Adjustments to reconcile net earnings
to net cash flows from operations:
Depreciation and amortization 225,511 193,035
(Increase) decrease in assets:
Accounts receivable (25,567) 155,160
Inventories (172,060) 9,568
Prepaid expenses and other assets 5,236 (63,670)
Increase (decrease) in liabilities:
Accounts payable (238,174) 124,100
Accrued expenses and other (657) (179,067)
________ ________
Net cash provided by operating activities 62,377 271,816
________ ________
Cash flows from investing activities:
Acquisition of property, plant and equipment (192,341) (146,605)
________ ________
Net cash (used in) investing activities (192,341) (146,605)
________ ________
Cash flows from financing activities:
Decrease notes payable-bank, net (50,000) (245,000)
Principal payments on long-term debt (86,234) (74,999)
Principal payments on current portion of
long term debt and capital lease
obligations (10,608) (16,826)
________ ________
Net cash (used in) financing activities (146,842) (336,825)
________ ________
Net (decrease) in cash and cash equivalents (276,806) (211,614)
Cash and cash equivalents at beginning
of period 477,324 736,268
________ ________
Cash and cash equivalents at
end of period $ 200,518 $ 524,654
======== ========
See consolidated notes to financial statements
Page 5
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of September 30, 1995 and the results of operations and cash flows
for the nine and three months ended September 30, 1995 and 1994. The
accounting policies followed by the Company are set forth in
the Company's financial statements included in the December 31, 1994
Annual Report.
2. The results of operations for the nine and three months ended
September 30, 1995 and 1994 are not necessarily indicative of the results to
be expected for the full year. Certain prior year amounts have been
reclassified to conform with the current year presentation.
3. For purposes of the Consolidated Balance Sheets and Consolidated
Statements of Cash Flows, the Company considers all highly liquid
investments purchased with a maturity of three months or less to be
cash equivalents.
Cash payments for interest were $83,948 and $88,146 for the nine
months ended September 30, 1995 and September 30,1994, respectively.
Cash payments for taxes were $157,245 and $174,136 for the nine
months ended September 30,1995 and September 30,1994, respectively.
Page 6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
_____________________
Gross Revenue from Operations: Revenue increased $376,019 (7.8%)
for the nine months ended September 30, 1995 as compared to the comparable
period in 1994. The Guardian division had a sales increase of $326,490
(9.1%) while the Eastern division had a sales increase of $54,529
(4.6%). The Guardian sales increase was primarily due to increased sales
volume and price increases on some cosmetic products.
For the three month period ended September 30, 1995, revenue
increased $21,746(1.4%) over the comparable period in 1994, Sales of
Guardian division decreased $49,995 (4.2%) while sales of the
Eastern division increased $76,741 (21.9%).
Cost of Sales: As a percentage of sales, cost of sales decreased from
67.4% for the nine months ended September 30, 1994 to 64% in the comparable
period in 1995. This decrease is mainly due to the absorption of plant
fixed costs by significantly higher revenue in 1995 as compared to 1994,
along with increased margins resulting from the Company's restructuring
of some of its distributor agreements.
Cost of sales, as a percentage of sales, decreased from 63.1% for the
three month period ended September 30, 1994 to 61.6% for the comparable
period in 1995. This decrease was mainly due to increased margins
resulting from the Company's restructuring of some of its distributor
agreements.
Operating Expenses decreased $85,862 (5.9%) in the nine months ended September
30, 1995 when compared to the comparable period in 1994. For the three
months ended September 30, 1995, there was a decrease of $38,411 (7.8%) over
the comparable period in 1994. These decreases were primarily due to
decreases in payroll and payroll related costs.
Interest Expense decreased $5,749 (6.5%) in the nine months ended September
30, 1995 when compared to the comparable period in 1994 and $7,652 (24%)
in the three month period ended September 30, 1995 over the comparable period
in 1994. These decreases were mainly due to the decline in outstanding bank
loans.
Interest Income increased $1,519 (28.7%) in the nine months ended September
30, 1995 when compared to the comparable period in 1994.. For the three
month period ended September 30, 1995 there was an increase of $651
(33.4%)over the comparable period in 1994. These increases are primarily due
to the increase in interest rates.
Financial Condition
___________________
Working capital increased from $2,816,772 at December 31, 1994 to
$2,951,019 at September 30, 1995 primarily as a result of cash provided by
operations. The current ratio increased from 3.4 to 1 at
December 31, 1994 to 4.4 to 1 at September 30, 1995. The Company believes
that its working capital is and will continue to be sufficient to
support its operating requirements.
Page 7
<PAGE>
SIGNATURES
In accordance with 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.
UNITED-GUARDIAN, INC.
(Registrant)
By: Alfred R. Globus
Alfred R. Globus
Chief Executive Officer and
Chief Financial Officer
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000101295
<NAME> UNITED-GUARDIAN, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 200,518
<SECURITIES> 0
<RECEIVABLES> 952,261
<ALLOWANCES> 15,735
<INVENTORY> 2,447,307
<CURRENT-ASSETS> 3,808,575
<PP&E> 3,824,955
<DEPRECIATION> 2,335,036
<TOTAL-ASSETS> 5,897,047
<CURRENT-LIABILITIES> 857,556
<BONDS> 756,257
<COMMON> 476,289
0
0
<OTHER-SE> 3,746,184
<TOTAL-LIABILITY-AND-EQUITY> 5,897,047
<SALES> 5,153,384
<TOTAL-REVENUES> 5,178,384
<CGS> 3,295,572
<TOTAL-COSTS> 3,295,572
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82,166
<INCOME-PRETAX> 430,588
<INCOME-TAX> 162,500
<INCOME-CONTINUING> 268,088
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 268,088
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
