UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1996 Commission File Number 000-28876
CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
(Exact name of registrant as specified in its charter)
Delaware 13-3035216
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 Route 22
Hillside, New Jersey 07205
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (201) 926-0816
------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities and 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 No X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of December 6, 1996
- ---------------------------------- ----------------------------------
Common Stock, Par Value 4,335,000
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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INDEX
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Part I: Financial Information
Item 1: Financial Statements
Consolidated Balance Sheet as of September 30, 1996 [Unaudited] 1..2
Consolidated Statements of Operations for the three months ended
September 30, 1996 and 1995 [Unaudited]..................... 3.....
Consolidated Statement of Stockholders' Equity for the three months
ended September 30, 1996 [Unaudited]........................ 4.....
Consolidated Statements of Cash Flows for three months ended
September 30, 1996 and 1995 [Unaudited]..................... 5.....6
Notes to Consolidated Financial Statements [Unaudited]...... 7.....9
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................10.....11
Part II: Other Information..........................................12
Signature...........................................................13
. . . . . . . .
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996.
[UNAUDITED]
- ------------------------------------------------------------------------------
<S> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 337,444
Accounts Receivable - Net 1,443,178
Inventories 1,749,874
Deferred Income Taxes 87,000
Prepaid Expenses and Other Current Assets 233,315
-----------
Total Current Assets 3,850,811
Property, Plant and Equipment - Net 964,598
-----------
Other Assets:
Goodwill 302,862
Prepaid Pension Costs 294,334
Deferred Offering Costs 288,620
Security Deposits and Other Assets 153,342
-----------
Total Other Assets 1,039,158
Total Assets $ 5,854,567
===========
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
1
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996.
[UNAUDITED]
- ------------------------------------------------------------------------------
<S> <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Notes Payable - Trade and Bank $ 978,797
Note Payable - Stock Retirement 156,473
Accounts Payable 1,112,936
Federal and State Income Taxes Payable 172,105
Accrued Expenses and Other Current Liabilities 609,214
-----------
Total Current Liabilities 3,029,525
Non-Current Liabilities:
Notes Payable - Related Party 276,444
Non-Current Rent Payable 107,183
Deferred Income Taxes 31,000
-----------
Total Non-Current Liabilities 414,627
Commitments and Contingencies [4] --
Stockholders' Equity:
Preferred Stock --
Common Stock 6,140
Additional Paid-in Capital 687,256
Retained Earnings 1,717,019
Total Stockholders' Equity 2,410,415
Total Liabilities and Stockholders' Equity $ 5,854,567
===========
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
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2
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
- ------------------------------------------------------------------------------
Three months ended
September 30,
1 9 9 6 1 9 9 5
------- -------
<S> <C> <C>
Sales $2,108,454 $ 1,981,339
Cost of Sales 1,590,259 1,446,876
---------- -----------
Gross Profit 518,195 534,463
Selling and Administrative Expenses 578,549 573,165
---------- -----------
Operating [Loss] (60,354) (38,702)
---------- -----------
Other Income [Expense]:
Interest Expense (26,469) (13,856)
Interest and Investment Income 782 2,693
---------- -----------
Total Other [Expense] (25,687) (11,163)
---------- -----------
[Loss] Before Income Taxes (86,041) (49,865)
Federal and State Income Taxes [Benefit] (22,155) (15,600)
---------- -----------
Net [Loss] $ (63,886) $ (34,265)
========== ===========
Net [Loss] Per Share $ (.02) $ (.01)
========== ===========
Average Common Shares Outstanding 3,021,000 3,021,000
========== ===========
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
3
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1996.
[UNAUDITED]
- ------------------------------------------------------------------------------
Total
Common Stock Preferred Paid-in RetainedStockholders'
Shares Par Value Stock Capital Earnings Equity
<S> <C> <C> <C> <C> <C> <C>
Balance - July 1, 1996 $3,370,000 $ 6,740 $ -- $1,883,132 $1,700,905 $3,590,777
Reversal of Issuance of
Bridge Units (300,000) (600) -- (1,199,400) 80,000 (1,120,000)
Imputed Interest on Note
Payable - Related Party -- -- -- 3,524 -- 3,524
Net [Loss] -- -- -- -- (63,886) (63,886)
-------- -------- -------- --------- -------- --------
Balance - September 30,
1996 3,070,000 $ 6,140 $ -- $ 687,256 $1,717,019 $2,410,415
========== ===== ======== ========= ========== ==========
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
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4
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
- ------------------------------------------------------------------------------
Three months ended
September 30,
1 9 9 6 1 9 9 5
------- -------
<S> <C> <C>
Operating Activities:
Net [Loss] $ (63,886) $ (34,265)
---------- -----------
Adjustments to Reconcile Net Income to Net Cash
[Used for] Operating Activities:
Depreciation and Amortization 62,183 56,202
Non-Current Rent Charge (1,570) 8,899
Deferred Income Taxes (12,000) (16,367)
Imputed Interest on Note Payable - Related Party 3,524 3,524
Changes in Assets and Liabilities:
Increase [Decrease] in:
Accounts Receivable 753,322 175,856
Inventories (316,642) 37,007
Prepaid Expenses and Other Current Assets 39,742 (101,340)
[Increase] Decrease in:
Accounts Payable (764,254) (724,029)
Federal and State Income Taxes Payable 3,140 (112,087)
Accrued Expenses and Other Liabilities 159,591 (41,160)
---------- -----------
Total Adjustments (72,964) (713,495)
---------- -----------
Net Cash - Operating Activities - Forward (136,850) (747,760)
---------- -----------
Investing Activities:
Payment for Property and Equipment (21,776) (44,703)
Loans to Stockholders' (1,427) (6,725)
Repayment of Note Receivable 1,048 --
Repayment of Loan from Affiliated Company -- --
Loan to Related Company (722) --
Contribution to Paid-in Capital -- 2,977
---------- -----------
Net Cash - Investing Activities - Forward (22,877) (48,451)
---------- -----------
Financing Activities:
Proceeds from Notes Payable 200,000 --
Repayment of Notes Payable (248,448) (248,448)
Deferred Offering Costs (219,446) --
---------- -----------
Net Cash - Financing Activities - Forward $ (267,894) $ (248,448)
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
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5
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
- ------------------------------------------------------------------------------
Three months ended
September 30,
1 9 9 6 1 9 9 5
------- -------
<S> <C> <C>
Net Cash - Operating Activities - Forwarded $ (136,850) $ (747,760)
Net Cash - Investing Activities - Forwarded (22,877) (48,451)
Net Cash - Financing Activities - Forwarded (267,894) (248,448)
---------- -----------
Net [Decrease] Increase in Cash and Cash Equivalents (427,621) (1,044,659)
Cash and Cash Equivalents - Beginning of Periods 765,065 1,870,747
---------- -----------
Cash and Cash Equivalents - End of Periods $ 337,444 $ 826,088
========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ 14,586 $ 26,247
Income Taxes $ 457 $ 95,000
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
6
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
[1] Business
Chem International, Inc. [the "Company"] is engaged primarily in the
manufacturing, marketing and sales of vitamins, nutritional supplements and
herbal products. Its customers are located primarily throughout
the United States.
[2] Summary of Significant Accounting Policies
[A] Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of the Company and its subsidiaries all of which
are wholly-owned. Intercompany transactions and balances have been eliminated in
consolidation.
[B] Basis of Reporting - The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and Item
310(b)of Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, such statements include all
adjustments [consisting only of normal recurring items] which are considered
necessary to make the interim financial statements not misleading. It is
suggested that these financial statements be read in conjunction with the
financial statements and notes for the year ended June 30, 1996 included in the
Chem International, Inc. Form SB- 2 which was declared effective October 29,
1996.
[C] Earnings Per Share - Earnings per common share are computed based upon the
weighted average number of common and "common share equivalent" shares
outstanding during the periods presented after giving retroactive effect to the
1-for-4 reverse stock split in July 1996. Common stock equivalents are included
when dilutive.
No amounts have been ascribed to previously outstanding Class A preferred stock
in any period since such stock has been redeemed and the dividend preferences
thereon have been waived.
[D] Investment in and Advances to Partnership - The Company was a 50% general
partner in Swedish Herbal Institute - Chem Associates [the "Partnership"]. In
addition to its $1,000 capital investment, the Company had advanced
approximately $70,000 in exchange for a series of promissory notes. As of June
30, 1996, the Partnership is insolvent and the Company has recorded a loss on
its investment and a charge for approximately 50% of its note receivable for the
year then ended. At September 30, 1996, the balance of this note is $32,672.
[3] Inventories
Inventories consist of the following at September 30, 1996:
Raw Materials $ 887,934
Work-in-Process 138,741
Finished Goods 723,199
-----------
Total $ 1,749,874
----- ===========
[4] Commitments and Contingencies
Certain manufacturing and office facilities are leased from Gerob Realty
Partnership whose partners are stockholders of the Company. The current lease,
which expires on December 31, 1996, provides for a minimum annual rental of
$120,000 plus payment of all real estate taxes. Rent and real estate tax expense
for the three months ended September 30, 1996 and 1995 on this lease was
approximately $43,000 and $43,000, respectively.
7
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
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[4] Commitments and Contingencies [Continued]
The Company's lease agreement for other warehouse and office facilities expires
on November 14, 2001 and provides for minimum annual rentals of $332,500 through
November 14, 1999 and $370,000 from November 15, 1999 through November 14, 2001
plus real estate taxes and building operating expenses. The rentals under these
leases are recorded for financial accounting purposes on a straight-line basis.
At June 30, 1996, accrued future rentals of $108,753, which give effect to both
future scheduled increases and certain concessions at the lease inception have
been reflected as a non-current liability in the attached balance sheet. This
liability will be reduced in future years to the extent that the minimum rentals
payable in those years exceeds the average net expense recorded on the
straight-line basis. At its option, the Company has the right to renew this
lease for an additional five year period. In September 1996, a limited liability
company, which is 50% owned by the Company's president and principal stockholder
and certain family members, contracted to purchase these premises.
The minimum rental commitment for long-term non-cancelable leases is as follows:
Year Ending
June 30,
1997 $ 495,681
1998 435,681
1999 435,681
2000 459,119
2001 473,181
Thereafter 177,443
-----------
Total $ 2,476,786
----- ===========
Total rent expense, including real estate taxes and maintenance charges, was
approximately $137,000 and $106,000 for the three months ended September 30,
1996 and 1995, respectively. The Company subleases a portion of its premises on
a month-to-month basis. Rent expense is stated net of sublease income of
approximately $62,000 and $45,000 for the three months ended September 30, 1996
and 1995, respectively.
Effective July 1, 1996, the Company entered into three year employment
agreements with its president and four other officers which provide for
aggregate annual salaries of $458,000 for the year ending June 30, 1997 and
$680,000 for the year ending June 30, 1998. These agreements are subject to
annual increases equal to at least the increase in the customer price index for
the Northeastern area. An agreement with one of the officers also provides for a
$100,000 signing bonus which is refundable on a pro rata basis during the period
from July 1, 1996 to June 30, 1997, if the executive voluntarily terminates his
employment.
The Company is unable to predict its ultimate financial exposure with respect to
its prior sale of certain products which may have contained allegedly
contaminated Tryptophan which is the subject of numerous lawsuits against
unrelated manufacturers, distributors, suppliers, importers and retailers of
that product. However, management does not presently believe the outcome of
these actions will have a material adverse effect on the Company.
8
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #3
- ------------------------------------------------------------------------------
[5] New Authoritative Pronouncement
The Financial Accounting Standards Board ["FASB"] issued Statement of Financial
Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in March of
1995. SFAS No. 121 establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used, and for long-lived assets and certain
identifiable intangibles to be disposed of. SFAS No. 121 is effective for
financial statements issued for fiscal years beginning after December 15, 1995.
SFAS No. 121 could have a material impact on the Company's financial statements.
The FASB has also issued SFAS No. 123 "Accounting for Stock-Based Compensation,"
in October 1995. SFAS No. 123 uses a fair value based method of recognition for
stock options and similar equity instruments issued to employees as contrasted
to the intrinsic valued based method of accounting prescribed by Accounting
Principles Board ["APB"] Opinion No. 25, "Accounting for Stock Issued to
Employees." The recognition requirements of SFAS No. 123 are effective for
transactions entered into in fiscal years that begin after December 15, 1995.
The Company will continue to apply Opinion No. 25 in recognizing its stock based
employee arrangements. The disclosure requirements of SFAS No. 123 are effective
for financial statements for fiscal years beginning after December 15, 1995. The
Company adopted the disclosure requirements on July 1, 1996. SFAS 123 also
applies to transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees. Those transactions must be
accounted for based on the fair value of the consideration received or the fair
value of the equity instrument issued, whichever is more reliably measurable.
This requirement is effective for transactions entered into after December 15,
1995.
[6] Subsequent Events
[A] Stock Option Plan - The Company has adopted a stock option plan for the
granting of options to employees, officers, directors and consultants of the
Company to purchase up to 1,000,000 shares of common stock, at the discretion of
the Board of Directors. Stock options grants are limited to a total of 500,000
shares for "incentive stock options" and 500,000 shares for "non-statutory
options" and, may not be priced less than the fair market value of the Company's
common stock at the date of grant. Options granted are generally for ten year
periods, except that options granted to a 10% stockholder [as defined] are
limited to five year terms. On October 16, 1996, options to purchase 573,597
shares at the offering price and 25,974 shares at 110% of the offering price
were granted. Such options become exercisable on October 16, 1997.
[B] Bridge Units - On October 16, 1996, the bridge lenders waived their rights
to the bridge units and agreed to the cancellation of the underlying securities.
Accordingly, the Company has eliminated the amount previously recorded for the
bridge units and the related bridge loan finance costs.
[C] Initial Public Offering - On October 29, 1996, the Company received net
proceeds of approximately $3,431,425 from the sale of 625,000 units at $7.00 per
unit. Each unit consisted of two shares of Common Stock and two Class A
Redeemable Common Stock Purchase Warrants.
. . . . . . . . . . . . . . . .
9
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Item 2.
CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
The following discussion should be read in conjunction with the historical
financial statements of the Company and notes thereto.
Three months ended September 30, 1996 Compared to September 30, 1995
Results of Operations
The Company's net losses for the three months ended September 30, 1996 and 1995
were $(63,886) and $(34,265), respectively.
Sales for the three months ended September 30, 1996 and 1995 were $2,108,454 and
$1,981,339, respectively, an increase of approximately $127,000 or 6.4%. Retail
and mail order sales for the first quarter of 1996 totaled $183,404 as compared
to $188,974 for the first quarter of 1995, a decrease of $5,570 or 2.9%.
For the three months ended September 30, 1996, the Company had net sales to a
customer, who accounted for 42% of net sales in 1996, and that generated
approximately 45% of net sales in 1995.
Cost of sales increased to $1,590,259 for the first quarter of 1996 as compared
to $1,446,876 for the first quarter of 1995. Cost of sales increased as a
percentage of sales to 75.4% for the first quarter of 1996 from 73.0% for the
first quarter of 1995. The increase in cost of sales is due to an increase in
manufacturing expenses.
Selling and administrative expenses for the three months ended September 30,
1996 were $578,549 versus $573,165 for the same period a year ago. The increase
of $5,384 was primarily attributable to officers' compensation of approximately
$37,000, a decrease in travel and entertainment expenses of approximately
$33,000, a decrease in freight out of approximately $23,000, a decrease in
consulting fees of approximately $17,000 and a decrease in office expenses of
approximately $20,000.
Other income [expense] was $(25,687) for the first quarter of 1996 as compared
to $(14,524) for the first quarter of 1995. This decrease of $11,163 is
attributable to an increase in interest expense due to increased borrowings
under the Company's line of credit.
Liquidity and Capital Resources
At September 30, 1996, the Company had working capital of $821,286 and cash and
cash equivalents of $337,444. The Company utilized $136,850 and $747,760 for
operations for the three months ended September 30, 1996 and 1995, respectively.
The Company utilized $22,877 and $48,451 in investing activities for the three
months ended September 30, 1996 and 1995, respectively. The Company utilized
$267,894 and $248,448 from financing activities for the quarter ending September
30, 1996 and 1995.
On October 19, 1996, the Company successfully completed an initial public
offering whereby the Company sold 625,000 units at $7.00 per unit, each unit
consisting of two shares of Common Stock and two Class A Redeemable Common Stock
Purchase Warrants. The net proceeds to the Company after deducting underwriting
discounts and commissions of $575,575 and other expenses of the offering of
approximately $368,000 were approximately $3,431,425.
10
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CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------------
Three months ended September 30, 1996 Compared to September 30, 1995
Liquidity and Capital Resources [Continued]
The Company had a revolving line of credit with a bank which bore interest at
.75% over the bank's prime lending rate and expired on November 30, 1996. At
September 30, 1996, the outstanding balance under the credit line was $500,000.
On November 6, 1996, the Company paid off the outstanding balance. The Company
had additionally secured a $350,000 equipment line of credit/term loan which
bore interest at 1.50% over the bank's prime lending rate. At September 30,
1996, the Company had borrowed $94,156. On November 29, 1996, the Company
borrowed an additional $132,844 to finance the purchase of a blister packaging
machine. The Company intends to renew the line of credit for $500,000 and to
convert the equipment line of credit/term loan to a five year term loan.
The Company's principal commitments at September 30, 1996 consisted of
obligations under operating leases for facilities.
Effective July 1, 1996, the Company entered into employment agreements with each
of its executive officers providing for aggregate compensation in the amount of
$680,000 for the fiscal year ending June 30, 1997. Such compensation amounts to
an approximate increase of $300,000 as compared to fiscal 1996.
On October 16, 1996, the bridge lenders waived their rights to the bridge units
and agreed to the cancellation of the underlying securities. Accordingly, the
Company eliminated the amount previously recorded for the bridge units and the
related bridge loan finance costs. Stockholders' equity has been reduced by
$1,120,000.
Management believes that the net proceeds from the initial public offering,
borrowing available under the anticipated line of credit and anticipated cash
flows from operations will be sufficient to meet the Company's working capital
needs for the foreseeable future.
New Authoritative Pronouncement
The Financial Accounting Standards Board ["FASB"] issued Statement of Financial
Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in March of
1995. SFAS No. 121 establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used, and for long-lived assets and certain
identifiable intangibles to be disposed of. SFAS No. 121 is effective for
financial statements issued for fiscal years beginning after December 15, 1995.
SFAS No. 121 could have a material impact on the Company's financial statements.
The FASB has also issued SFAS No. 123 "Accounting for Stock-Based Compensation,"
in October 1995. SFAS No. 123 uses a fair value based method of recognition for
stock options and similar equity instruments issued to employees as contrasted
to the intrinsic valued based method of accounting prescribed by Accounting
Principles Board ["APB"] Opinion No. 25, "Accounting for Stock Issued to
Employees." The recognition requirements of SFAS No. 123 are effective for
transactions entered into in fiscal years that begin after December 15, 1995.
The Company will continue to apply Opinion No. 25 in recognizing its stock based
employee arrangements. The disclosure requirements of SFAS No. 123 are effective
for financial statements for fiscal years beginning after December 15, 1995. The
Company adopted the disclosure requirements on July 1, 1996. SFAS 123 also
applies to transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees. Those transactions must be
accounted for based on the fair value of the consideration received or the fair
value of the equity instrument issued, whichever is more reliably measurable.
This requirement is effective for transactions entered into after December 15,
1995.
Impact of Inflation
The Company does not believe that inflation has significantly affected its
results of operations
11
<PAGE>
Part II: Other Information
CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
- ------------------------------------------------------------------------------
Item 1: Legal Proceeding
None
Item 2: Changes in Securities
None
Item 3: Defaults Upon Senior Securities
None
Item 4: Submission of Matters to a Vote of Security Holders
None
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8K
None
12
<PAGE>
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.
CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
Date: December 9, 1996 By:/s/ E. Gerald Kay
E. Gerald Kay,
President and Chief Executive Officer
Date: December 9, 1996 By:/s/ Eric Friedman
Eric Friedman,
Chief Financial Officer
13
<PAGE>
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.
CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
Date: December 9, 1996 By:
E. Gerald Kay,
President and Chief Executive Officer
Date: December 9, 1996 By:
Eric Friedman,
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 337,444
<SECURITIES> 0
<RECEIVABLES> 1,443,178
<ALLOWANCES> 0
<INVENTORY> 1,749,874
<CURRENT-ASSETS> 3,850,811
<PP&E> 964,598
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,854,567
<CURRENT-LIABILITIES> 3,029,525
<BONDS> 0
0
0
<COMMON> 6,140
<OTHER-SE> 2,404,275
<TOTAL-LIABILITY-AND-EQUITY> 5,854,567
<SALES> 2,108,454
<TOTAL-REVENUES> 2,108,454
<CGS> 1,590,259
<TOTAL-COSTS> 578,549
<OTHER-EXPENSES> (782)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,469
<INCOME-PRETAX> (86,041)
<INCOME-TAX> 22,155
<INCOME-CONTINUING> (63,886)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (63,886)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
