SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended: June 30, 2000
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[ ] 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: 0-30629
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FIRST AID DIRECT, INC.
(Name of small business issuer in its charter)
Florida 59-1796257
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(State of incorporation) (IRS employer Ident. No.)
10211 N.W. 53rd St., Sunrise, FL 33351
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(address of principal office) (Zip Code)
Registrant's telephone number: (954) 749-9926
Indicate by check mark whether the Registrant: (1) has 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
The number of shares outstanding of each of the issuer's classes of
equity as of June 30, 2000:
3,905,000 shares of Common Stock, $.001 par value.
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FIRST AID DIRECT, INC.
TABLE OF CONTENTS
Form 10-QSB
For the Quarter Ended June 30, 2000
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements.
Condensed Balance Sheet (Unaudited) as of June 30, 2000 Page 3
Condensed Statements of Income (Unaudited) for the six months
ended June 30, 2000 and 1999 and the three months ended
June 30, 2000 and 1999 Page 4
Condensed Statements of Cash Flows (Unaudited) for the six months
ended June 30, 2000 and 1999 Page 5
Notes to Financial Statements. Page 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K.
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FIRST AID DIRECT, INC.
CONDENSED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
ASSETS
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Current assets:
Cash $ 25,942
Accounts receivable 413,809
Inventories 462,146
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Total current assets 901,897
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Property and equipment, net 75,959
Intangible asset, net 129,559
Other assets 34,361
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$ 1,141,776
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
Accounts payable and accrued expenses $ 225,136
Due to stockholder 50,000
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Total current liabilities 275,136
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Stockholders' equity:
Common stock 3,905
Additional paid-in capital 1,596,207
Deficit (728,472)
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871,640
Less: subscriptions receivable (5,000)
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866,640
$ 1,141,776
The accompanying notes are an integral part of these condensed
financial statements.
Page 3
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FIRST AID DIRECT, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
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<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
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2000 1999 2000 1999
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Net sales $ 1,328,904 $ 851,458 $ 710,976 $ 445,673
Cost of sales 937,954 612,709 517,456 318,442
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Gross margin 390,950 238,749 193,520 127,231
General and administrative expenses 322,535 247,047 166,284 140,328
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Income from continuing operations before income taxes
provision for income taxes 68,415 (8,298) 27,236 (13,097)
Provision for income taxes -- (22,000) -- (11,000)
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Income from continuing operations 68,415 13,702 27,236 (2,097)
Income (loss) from discontinued operations, net
of income taxes -- (1,128) -- 217
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Net income $ 68,415 $ 12,574 $ 27,236 $ (1,880)
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Net income per share information:
Basic:
Net income per share $ .02 $ .00 $ .01 $ .00
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Weighted average number of common shares 3,905,000 3,868,492 3,905,000 3,905,000
=========== =========== =========== ===========
Diluted:
Net income per share $ .02 $ .00 $ .01 $ .00
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Weighted average number of common shares 3,905,000 3,868,492 3,905,000 3,905,000
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The accompanying notes are an integral part of these condensed
financial statements.
Page 4
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FIRST AID DIRECT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
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2000 1999
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Cash flows from operating activities:
Net income $ 68,415 $ 12,574
Depreciation and amortization 14,803 14,000
Changes in assets and liabilities (177,440) (66,571)
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Net cash used in operating activities (94,222) (39,997)
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Cash flows from investing activities:
Purchase of equipment (675) (5,182)
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Net cash used in investing activities (675) (5,182)
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Cash flows from financing activities:
Repayment of stockholder loan (150,000) --
Proceeds from sale of stock -- 112,000
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Net cash provided by (used in) financing activities (150,000) 112,000
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Net increase (decrease) in cash and cash equivalents (244,897) 66,821
Cash, beginning of period 270,839 20,548
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Cash, end of period $ 25,942 $ 87,369
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Supplemental Disclosure of Cash Paid:
Interest $ -- $ --
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Non-cash Investing and Financing Activities:
Assets acquired in exchange for debt $ 200,000
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The accompanying notes are an integral part of these condensed
financial statements.
Page 5
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FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed financial statements of First Aid Direct,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Regulation S-B. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three and
six month periods ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2000. For further
information, refer to the financial statements and footnotes for the year ended
December 31, 1999 found in the Company's Form 10-SB.
The fiscal years ended December 31, 2000 and December 31, 1999 are herein
referred to as "fiscal 2000" and "fiscal 1999", respectively.
2. Inventories
Inventories are comprised primarily of first aid products held for sale, and are
stated at the lower of cost or market, determined on the FIFO method.
3. Acquisition of assets
Purchase
On March 17, 2000, the Company entered into an asset purchase
agreement to buy certain assets from a Company stockholder. The
Company purchased accounts receivable, inventory and customer lists
for $200,000, as noted below, to be paid in cash. The $200,000
represents cost as reflected in the accounting books and records of
the stockholder. As of June 30, 2000, $150,000 has been paid; the
remaining $50,000 is due on demand.
Accounts receivable $ 25,264
Inventories 41,374
Customer listings 133,362
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$200,000
Commitments
The Company entered into a non-competition agreement and a
consulting agreement with the original owner of the assets
purchased above. The covenant not to compete is being amortized
over the five-year term of the agreement and provides for payments
of $25,000 each year, for a term of three years, to be paid in
thirty-six equal installments totaling $75,000. The consulting
agreement is for a three-year term and provides for thirty-six
equal installments totaling $75,000.
4. Sales to Stockholder
During the six months ended June 30, 2000, 19% of revenue was derived from sales
to a stockholder.
Page 6
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THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS AND EVENTS COULD
DIFFER MATERIALLY FROM THOSE PROJECTED AS A RESULT OF THE RISKS AND
UNCERTAINTIES SET FORTH UNDER THE CAPTION "CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS", IN OUR FORM 10-SB FOR THE YEAR ENDED DECEMBER 31,
1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULT OF OPERATIONS
Three months ended June 30, 2000 compared to the three months ended June 30,
1999.
Sales Total revenue increased 60% in the second quarter of fiscal 2000 over the
same period in fiscal 1999. The revenue increased $265,303 from $445,673 to
$710,976 in the three months ended June 30, 2000 over the same period in the
prior fiscal year. Revenue increased 30% due to the supplier agreement signed
with Van Dyne Crotty, Inc., to be the primary supplier for its retail first aid
distribution business. An additional revenue increase of 12% was attributable to
the Company acquiring a customer list and other assets from Van Dyne Crotty,
Inc. as disclosed in Note 3 to the financial statements. The remaining revenue
increase resulted from increased sales to other distributors.
Costs and Expenses The cost of sales for the second quarter increased $199,014
from $318,442 in the second quarter of fiscal 1999 to $517,456 in the second
quarter of fiscal 2000. This resulted in an increase in the gross margin of
$66,289, from $127,231 in the second quarter of fiscal 1999 to $193,520 in the
second quarter of fiscal 2000. As a percentage, the gross margin decreased from
29% in fiscal 1999 to 27% in fiscal 2000, principally as a result of growth in
distributor sales over our more profitable direct sales and increases in freight
due to our expanding distribution.
General and administrative expenses increased $25,956 from $140,328 in the
second quarter of fiscal 1999 to $166,284 in the second quarter of fiscal 2000.
Also, general and administrative expenses decreased as a percent of revenue from
31% in 1999 to 23% in 2000. The increase in general and administrative expenses
resulted from an increase in sales staff to develop new markets as well as
increased costs associated with filing the Form 10-SB to become a fully
reporting publicly held company. The decrease in the percent of revenue resulted
from increased sales without increasing staff or overhead at the same rate.
Income from continuing operations The Company's income from continuing
operations increased $40,333 during the second quarter of fiscal 2000 to
$27,236, from a loss of $13,097 during the second quarter of fiscal 1999. The
increase results from improved sales without increasing overhead at the same
rate, the restructuring of our staff and the fine-tuning of our core operation
after the sale of the regional van distribution business.
Other The Company had an income tax benefit during the second quarter of fiscal
1999 of $11,000. No income tax expense or benefit is recorded in the six month
period ended June 30, 2000, as the Company will utilize net operating loss
carryforwards to offset the current tax expense. The Company had income from
discontinued operations during the second quarter of fiscal 1999 of $217. The
overall net income increased $29,116 during the second quarter of fiscal 2000 to
$27,236 from a net loss of $1,880 during the second quarter of fiscal 1999.
Page 7
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Six months ended June 30, 2000 compared to the six months ended June 30, 1999.
Sales Total revenues increased 56% for the six months ended June 30, over the
same periods in fiscal 1999. Net sales increased $477,446 from $851,458 in the
six months of fiscal 1999 to $1,328,904 in the six months of fiscal 2000.
Revenue increased 30% due to the supplier agreement signed with Van Dyne Crotty,
Inc., to be the primary supplier for its retail first aid distribution business.
An additional revenue increase of 6% was attributable to the Company acquiring a
customer list and other assets from Van Dyne Crotty, Inc. as disclosed in Note 3
to the financial statements. The remaining revenue increase resulted from
increased sales to other distributors.
Costs and Expenses The cost of sales for the six months increased $325,245 from
$612,709 in the same period of fiscal 1999 to $937,954 for fiscal 2000. This
resulted in an increase in the gross margin of $152,201, from $238,749 during
the six months of fiscal 1999 to $390,950 for the same period of fiscal 2000. As
a percentage, the gross margin increased from 28% in fiscal 1999 to 29% in
fiscal 2000. The increase results from improving gross margins through volume
discounts from our suppliers and improved pricing of our products from direct
ship sales.
General and administrative expenses increased $75,488 from $247,047 in the six
months of fiscal 1999 to $322,535 during the six months of fiscal 2000. General
and administrative expenses decreased as a percent of revenue from 29% in 1999
to 24% in 2000. The decrease in the percent of revenue resulted from increased
sales without increasing staff or overhead at the same rate.
Income from continuing operations The Company's income from continuing
operations increased $76,713 during the six months of fiscal 2000 to $68,415,
from a loss of $8,298 during the six months of fiscal 1999. The increase results
from improved sales without increasing staff or overhead, the restructuring of
our staff and the fine-tuning of our core operation after the sale of the
regional van distribution business.
Other The Company had an income tax benefit during the six months of fiscal 1999
of $22,000. No income tax expense or benefit is recorded in the six month period
ended June 30, 2000, as the Company will utilize net operating loss
carryforwards to offset the current tax expense. The Company had a loss from
discontinued operations during the six months of fiscal 1999 of $1,128. The
overall net income increased $55,841 during the six months of fiscal 2000 to
$68,415 from $12,574 during the six months of fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of the Company's cash are net cash flows from operating
activities and short-term vendor financing. Currently, the Company does not have
available any established lines of credit with banking facilities.
The Company believes its current available cash position, coupled with its cash
forecast for the year and periods beyond, is sufficient to meet its cash needs
on both a short-term and long-term basis. The balance sheet has a strong working
capital ratio (3.28 to 1) and management is not aware of any known trends or
demands, commitments, events, or uncertainties, as they relate to liquidity
which could negatively affect the Company's ability to operate and grow as
planned.
Page 8
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Part II. OTHER INFORMATION
Item 5. Other information.
On March 17, 2000, the Company entered into an asset purchase agreement to buy
certain assets from a company stockholder (See Note 3 of the financial
statements).
Item 6. Exhibits:
(a) (27.1) Financial Data Schedule
(b) Reports on Form 8-K
None
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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.
First Aid Direct, Inc., a Florida corporation
Date: November 13, 2000 By /s/ Scott Siegel
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Scott Siegel, President and CEO
(Principal Executive Officer)
