U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
____X____ Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended _____March 31, 1996_____
_________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.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 11-1719724
- ------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
230 Marcus Boulevard, Hauppauge, New York 11788
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(Address of Principal Executive Offices)
(516) 273-0900
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(Issuer's Telephone Number, Including Area Code)
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(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 issuer's
classes of common equity, as of the latest practicable date
4,762,889
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<PAGE>
UNITED-GUARDIAN, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Statements of Earnings -
Three Months Ended
March 31, 1996 and 1995 2
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 3-4
Consolidated Statements of Cash Flows -
Three Months Ended
March 31, 1996 and 1995 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>
UNITED-GUARDIAN, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------
1996 1995
---- ----
Net sales $ 1,929,386 $ 1,686,521
---------- ----------
Costs and expenses:
Cost of sales 1,245,754 1,160,643
Operating expenses 487,520 450,143
---------- ----------
1,733,274 1,610,786
---------- ----------
Earnings from operations 196,112 75,735
Other income (expense):
Interest income 1,909 2,379
Interest expense (22,553) (29,260)
---------- ---------
Earnings before income taxes 175,468 48,854
Provision for income taxes 66,600 17,500
---------- ---------
Net earnings $ 108,868 $ 31,354
========== =========
Earnings per common share $ .02 $ .01
========== =========
See notes to financial statements.
2
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1996 1995
---------- -----------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $ 462,809 $ 307,061
Accounts receivable
(less allowance for doubtful
accounts of $24,802 at
March 31, 1996 and
December 31, 1995) 906,595 1,044,678
Inventories 2,278,296 2,289,328
Prepaid expenses and other
current assets 169,044 148,678
Deferred income taxes 59,503 59,503
---------- ----------
Total current assets 3,876,247 3,849,248
---------- ----------
Property, plant and equipment:
Land 69,000 69,000
Factory equipment and fixtures 2,033,506 1,973,589
Building and improvements 1,712,558 1,698,205
Waste disposal plant 133,532 133,532
---------- ----------
3,948,596 3,874,326
Less: Accumulated depreciation 2,429,372 2,380,652
---------- ----------
1,519,224 1,493,674
Assets under capital leases, net 18,850 22,965
---------- ----------
1,538,074 1,516,639
---------- ----------
Other assets:
Processes and patents, net 437,618 459,546
Other 176,443 90,382
---------- ----------
614,061 549,928
---------- ----------
$ 6,028,382 $ 5,915,815
========== ==========
See notes to financial statements.
3
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
LIABILITIES AND (UNAUDITED)
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 498,756 $ 545,901
Notes payable - banks 140,000 100,000
Accrued expenses and other 168,316 147,670
Current portion of long term
debt and capital lease
obligations 126,149 119,382
----------- ------------
Total current liabilities 933,221 912,953
----------- ------------
Long-term debt 711,975 727,462
----------- ------------
Capital lease obligations 3,971 5,053
----------- ------------
Deferred income taxes 43,121 43,121
----------- ------------
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 770,425 661,557
----------- ------------
Total stockholders' equity 4,336,094 4,227,226
----------- ------------
$ 6,028,382 $ 5,915,815
=========== ============
See notes to financial statements.
4
<PAGE>
UNITED-GUARDIAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------
1996 1995
---- ----
Cash flows from operating activities:
Net earnings $ 108,868 $ 31,354
Adjustments to reconcile net earnings
to net cash flows provided by
(used in) operations:
Depreciation and amortization 74,763 70,652
(Increase) decrease in assets:
Accounts receivable 138,083 70,860
Inventories 11,032 (58,937)
Prepaid expenses and other assets (106,427) (16,397)
Increase (decrease) in liabilities:
Accounts payable (47,145) (124,010)
Accrued expenses and other 20,646 (32,841)
--------- --------
Net cash provided by (used in)
operating activities 199,820 (59,319)
--------- --------
Cash flows from investing activities:
Acquisition of property, plant and
equipment (74,270) (72,059)
--------- --------
Net cash (used in) investing activities (74,270) (72,059)
--------- --------
Cash flows from financing activities:
Increase notes payable-bank, net 40,000 50,000
Principal payments on long-term debt (28,720) (28,720)
Proceeds from long term debt 20,000 ---
Principal payments on capital lease
obligations (1,082) (5,219)
--------- --------
Net cash provided by
financing activities 30,198 16,061
--------- --------
Net increase (decrease) in cash
and cash equivalents 155,748 (115,317)
Cash and cash equivalents at beginning
of period 307,061 477,324
---------- --------
Cash and cash equivalents at
end of period $ 462,809 $ 362,007
========== ========
See notes to financial statements.
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 March 31, 1996 and December 31, 1995 and the results of operations and
cash flows for the three months ended March 31, 1996 and 1995. The
accounting policies followed by the Company are set forth in the
Company's financial statements included in the December 31, 1995 Annual
Report.
2. The results of operations for the three months ended March
31, 1996 and 1995 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 Statement 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 $22,266 and $30,639 for the three
months ended March 31, 1996 and March 31, 1995 respectively.
Cash payments for income taxes were $35,183 and $38,991 for the
three months ended March 31, 1996 and March 31, 1995 respectively.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net Sales. Net Sales increased $242,865 (14.4%) for the three
months ended March 31, 1996 as compared to the comparable period in 1995.
The Guardian division had a sales increase of $201,869 (15.9%) while the
Eastern division had a sales increase of $40,993 (9.8%). The Guardian
sales increase was primarily due to increased sales of cosmetic products.
Cost of Sales. As a percentage of sales, cost of sales decreased
from 68.8% for the three months ended March 31, 1995 to 64.6% in the
comparable period in 1996. This decrease is mainly due to the absorption
of plant fixed costs by significantly higher revenue in 1996 as compared
to 1995.
Operating Expenses increased $37,377 (8.3%) for the three months
ended March 31, 1996 when compared to the comparable period in 1995. The
increase was primarily due to increases in payroll and payroll related
costs.
Interest Expense decreased $6,707 (22.9%) for the three months
ended March 31, 1996 when compared to the comparable period in 1995. This
decrease was mainly due to the decrease in interest rates and a lower
average balance of bank loans outstanding.
Interest Income decreased $470 (19.8%) for the three months
ended March 31, 1996 when compared to the comparable period in 1995. This
decrease is primarily due to the decrease in interest rates.
Financial Condition
Working capital was $2,936,295 at December 31, 1995 and
$2,943,026 at March 31, 1996. The current ratio remained unchanged at 4.2
to 1 at December 31, 1995 and March 31, 1996. The Company believes that
its working capital is and will continue to be sufficient to support its
operating requirements.
7
<PAGE>
PART II - OTHER INFORMATION
Item 6 (b) Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No reports have been filed on Form 8-K during this quarter.
UNITED-GUARDIAN, INC.
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
Chief Executive Officer and
Chief Financial Officer
Date: May 13, 1996
8
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<CIK> 0000101295
<NAME> UNITED-GUARDIAN, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 462,809
<SECURITIES> 0
<RECEIVABLES> 906,595
<ALLOWANCES> 24,802
<INVENTORY> 2,278,296
<CURRENT-ASSETS> 3,876,247
<PP&E> 3,948,596
<DEPRECIATION> 2,429,372
<TOTAL-ASSETS> 6,028,382
<CURRENT-LIABILITIES> 933,221
<BONDS> 711,975
0
0
<COMMON> 476,289
<OTHER-SE> 3,859,805
<TOTAL-LIABILITY-AND-EQUITY> 6,028,382
<SALES> 1,929,386
<TOTAL-REVENUES> 1,929,386
<CGS> 1,245,754
<TOTAL-COSTS> 1,245,754
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,553
<INCOME-PRETAX> 175,468
<INCOME-TAX> 66,600
<INCOME-CONTINUING> 108,868
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,868
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
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