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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File No.
0-2532
FIFTH DIMENSION INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
New Jersey 21-0717490
- --------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
801 New York Avenue, Trenton, New Jersey 08638
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(Address of Principal Executive Office) (Zip Code)
Issuer's Telephone Number, Including Area Code: (609) 393-8350
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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
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
As of September 30, 1996 the Registrant had outstanding, 1,093,636 shares
of Common Stock $.33 1/3 par value.
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FIFTH DIMENSION INC.
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TABLE OF CONTENTS
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PERIOD ENDED SEPTEMBER 30, 1996
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PAGE
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PART 1 - FINANCIAL INFORMATION
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Item 1 - Financial Statements
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Balance Sheet............................................... 1
Statement of Operations and Retained Earnings............... 2
Statement of Cash Flows..................................... 3
Notes to Financial Statements............................... 4
Item 2 - Management's Discussions and Analysis of Financial
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Conditions and Results of Operations.................................. 5
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FIFTH DIMENSION INC.
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BALANCE SHEET
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(UNAUDITED)
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<CAPTION>
SEPTEMBER 30,
1996
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ASSETS
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CURRENT ASSETS:
Cash and Short-Term Investments............................ $ 336,740.
Accounts Receivable - Net.................................. 722,427.
Inventories................................................ 692,441.
Prepaid Expenses........................................... $ 43,000.
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Total Current Assets.................................. $ 1,794,608.
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PROPERTY, PLANT AND EQUIPMENT - Net of Accumulated
Depreciation............................................... $ 651,287.
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PATENT COSTS, LESS ACCUMULATED AMORTIZATION..................... $ 9,917.
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DEFERRED INCOME TAXES, NET...................................... $ 7,496.
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TOTAL ASSETS.......................................... $ 2,463,308.
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes Payable - Current Portion............................ $ 50,000.
Accounts Payable........................................... 168,552.
Accrued Expenses........................................... 20,381.
Accrued Compensation and Vacation.......................... 132,693.
Income Taxes............................................... 48,403.
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Total Current Liabilities............................. $ 420,029.
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LONG TERM LIABILITIES:
Notes payable - Long Term Portion.......................... $ 45,833.
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TOTAL LIABILITIES.......................................... $ 465,862.
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STOCKHOLDERS' EQUITY:
Common Stock - ($.33 1/3 Par Value)........................ 364,936.
Additional Paid-In Capital................................. 403,663.
Treasury Stock - At Cost................................... (604.)
Retained Earnings.......................................... $ 1,229,451.
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TOTAL STOCKHOLDERS' EQUITY....................... $ 1,997,446.
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....... $ 2,463,308.
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</TABLE>
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FIFTH DIMENSION INC.
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STATEMENT OF OPERATIONS AND RETAINED EARNINGS
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(UNAUDITED)
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<CAPTION>
QUARTER NINE MONTHS QUARTER NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
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<S> <C> <C> <C> <C>
NET SALES $1,003,333. $3,731,988. $1,078,578. $2,723,269.
COST OF SALES 716,022. 2,567,679. 744,136. 2,037,224.
----------- ----------- ----------- -----------
GROSS PROFIT ON SALES 287,311. 1,164,309. 334,442. 686,045.
OPERATING EXPENSES 321,283. 935,539. 292,464. 921,660.
INTEREST EXPENSE 2,496. 10,035. 5,516. 14,108.
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OPERATING INCOME (LOSS) (36,468.) 218,735. 36,462. (249,723.)
OTHER INCOME (EXPENSE) 3,934. 10,919. 1,691. 14,151.
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES (32,534.) 229,654. 38,153. (235,572.)
PROVISION FOR INCOME TAXES
(BENEFIT) (11,483.) 81,054. 11,496. (70,978.)
----------- ----------- ----------- -----------
NET INCOME (LOSS) (21,051.) 148,600. 26,657. (164,594.)
RETAINED EARNINGS AT
BEGINNING OF PERIOD 1,250,502. 1,080,851. 982,240. 1,173,491.
----------- ----------- ----------- -----------
RETAINED EARNINGS AT END
OF PERIOD $1,229,451. $1,229,451. $1,008,897. $1,008,897.
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER
COMMON SHARE $ (.02) $ .14 $ .02 $ (.15)
----------- ----------- ----------- -----------
WEIGHTED AVERAGE OF COMMON
SHARES OUTSTANDING 1,093,636. 1,093,636. 1,093,636. 1,093,636.
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</TABLE>
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FIFTH DIMENSION, INC.
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STATEMENT OF CASH FLOWS
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(UNAUDITED)
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<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
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Net Income (Loss) $ 148,600. $(164,594.)
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ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
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CASH PROVIDED BY OPERATING ACTIVITIES:
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Depreciation Expense 88,529. 90,000.
(Increase) Decrease in Accounts Receivable 22,857. 527,687.
(Increase) Decrease in Inventory 160,693. (337,208.)
(Increase) Decrease in Prepaid Expenses and Taxes 15,501. 13,279.
Increase (Decrease) in Accounts Payable 30,859. (88,978.)
Increase (Decrease) in Accrued Expenses and
Compensation (19,716.) (93,947.)
Increase (Decrease) in Accrued/Deferred Income
Taxes 80,929. (101,507.)
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379,652. 9,326.
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Net Cash Provided (Used) by Operating Activities 528,252. (155,268.)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Capital Expenditures (120,025.) (48,966.)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from Loans 175,000.
Reduction in Notes Payable (212,500.) (37,500.)
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Net Cash Provided (Used) by Financing Activities (212,500.) 137,500.
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 195,727. (66,734.)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 141,013. 272,958.
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 336,740. $ 206,224.
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</TABLE>
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FIFTH DIMENSION INC.
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NOTES TO FINANCIAL STATEMENTS
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SEPTEMBER 30, 1996
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NOTE #1 INVENTORIES
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On an interim basis, the cost of goods sold and resulting inventory
valuation is calculated using the gross profit method. A physical
inventory is taken December 31 of each year and a distribution into raw
materials, work in process and finished goods is only available at that
time.
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FIFTH DIMENSION INC.
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PERIOD ENDED SEPTEMBER 30, 1996
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PART 1 - ITEM 2
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS
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The Registrant reported a net loss of $21,051 for the quarter ended
September 30, 1996 resulting in a nine month net income of $148,600 on sales
revenue of $1,003,333 and $3,731,988 for the three and nine month periods,
respectively. This compares with 1995 third quarter net income of $26,657 on
sales of $1,078,578 and a nine month loss of $235,572 on sales of $2,723,269.
While 1996 third quarter results are somewhat lower than 1995 results for the
similar period, a significant improvement in year to date results are still
being reflected due to 1996 production increases in the slip ring product lines.
This area experienced production delays and problems during the first half of
1995, thus negatively impacting results for that period, while uninterrupted
operations during 1996 and the addition of various new slip ring customers have
contributed to the current year results. Gross profit as a percentage of sales
revenue declined in both comparable periods due to 1996 shipments of various new
and developmental products. Operating expenses have shown slight increases
during the current periods while interest costs were lower as debt was
significantly reduced. Income taxes were provided for based on statutory rates.
The financial condition of the Registrant has improved during 1996 as cash
balances have increased by $195,727 and working capital has increased by
$118,361. The operating profits and reductions in inventory balances have
enabled the company to reduce outstanding loan balances by $212,500 during 1996.
The Registrant purchased fixed assets of $120,025 during 1996, while charging
$88,529 against income for depreciation purposes.
The Registrant anticipates lower production and shipment levels on its major
slip ring contract with Kearfott Guidance and Navigation Corp. in the final
quarter of 1996 as the Kearfott Contract phases down. While the Registrant
anticipates an overall revenue increase in the fourth quarter of 1996 as
compared to the previous quarter, operating results are expected to be
negatively impacted by a less favorable product mix. The sales revenue from the
Kearfott Contract ending in 1996, which represents approximately 75% for the
Registrant's 1996 revenues, will not be immediately replaceable and, thus, the
Registrant is expected to experience significantly lower revenue levels and
operating deficits in 1997. In an effort to offset the impact of the conclusion
of this Contract, the Registrant is aggressively pursuing new customers for
conventional slip rings, investing in applied research to develop new products
and continuing its merger and acquisition efforts. Continuing increases in cash
balances and reduction of inventory and loan balances over the remainder of 1996
should enable the Registrant to enter 1997 in a strong balance sheet position.
Fifth Dimension has been advised by their customer Kearfott Guidance and
Navigation Corp. of sample test failures within a Production Lot containing more
than 200 IMU Slip Rings valued at approximately $780,000. Based upon Fifth
Dimension's experience with previous sample test failures, such failures could
have occurred because of a problem with the testing or could have occurred
because of a failure of the units themselves. If the failure is the result of
the units themselves, the units will be returned to Fifth Dimension and could
require additional testing, repair or replacement. The contractual arrangement
between Kearfott and Fifth Dimension sets forth a procedure for resolving sample
test failures of units, which procedure has commenced. However, as of this date
it is too early to determine the responsibility or action required. It is not
expected that the disposition and impact will be immediately known.
Other than the matters presented in the previous paragraphs, no other changes
have occurred which would have a material affect on liquidity, financial
condition or results of operations of the Registrant.
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FIFTH DIMENSION INC.
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SIGNATURES
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In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIFTH DIMENSION INC.
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(Registrant)
Dated: By:
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Craig Ebner
President
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIFTH
DIMENSION INC. UNAUDITED STATEMENTS FOR QUARTER ENDING SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 336,740
<SECURITIES> 364,936
<RECEIVABLES> 722,427
<ALLOWANCES> 0
<INVENTORY> 692,441
<CURRENT-ASSETS> 1,794,608
<PP&E> 651,287
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,463,308
<CURRENT-LIABILITIES> 420,029
<BONDS> 0
0
0
<COMMON> 364,936
<OTHER-SE> 1,632,510
<TOTAL-LIABILITY-AND-EQUITY> 2,463,308
<SALES> 1,003,333
<TOTAL-REVENUES> 1,007,267
<CGS> 716,022
<TOTAL-COSTS> 1,037,305
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,496
<INCOME-PRETAX> (32,534)
<INCOME-TAX> (11,483)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,051)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
</TABLE>
