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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 June 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 June 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 JUNE 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>
JUNE 30,
1996
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ASSETS
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CURRENT ASSETS:
Cash and Short-Term Investments.......................... $ 324,708.
Accounts Receivable - Net................................ 832,105.
Inventories.............................................. 682,918.
Prepaid Expenses......................................... $ 61,654.
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Total Current Assets................................ $ 1,901,385.
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PROPERTY, PLANT AND EQUIPMENT - Net of Accumulated
Depreciation............................................. $ 611,727.
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PATENT COSTS, LESS ACCUMULATED AMORTIZATION................... $ 12,495.
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DEFERRED INCOME TAXES, NET.................................... $ 8,869.
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TOTAL ASSETS........................................ $ 2,534,476.
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes Payable - Current Portion.......................... $ 50,000.
Accounts Payable......................................... 143,474.
Accrued Expenses......................................... 20,601.
Accrued Compensation and Vacation........................ 182,187.
Income Taxes............................................. 61,384.
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Total Current Liabilities........................... $ 457,646.
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LONG TERM LIABILITIES:
Notes payable - Long Term Portion........................ $ 58,333.
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TOTAL LIABILITIES........................................ $ 515,979.
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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........................................ $ 1,250,502.
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TOTAL STOCKHOLDERS' EQUITY..................... $ 2,018,497.
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..... $ 2,534,476.
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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 SIX MONTHS QUARTER SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995
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<S> <C> <C> <C> <C>
NET SALES $1,393,080. $2,728,655. $ 738,130. $1,644,691.
COST OF SALES 953,384. 1,851,657. 585,630. 1,293,088.
----------- ----------- ----------- -----------
GROSS PROFIT ON SALES 439,696. 876,998. 152,500. 351,603.
OPERATING EXPENSES 304,378. 614,256. 312,735. 629,196.
INTEREST EXPENSE 2,768. 7,539. 4,217. 8,592.
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OPERATING INCOME (LOSS) 132,550. 255,203. (164,452.) (286,185.)
OTHER INCOME (EXPENSE) 2,687. 6,985. 7,838. 12,460.
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES 135,237. 262,188. (156,614.) (273,725.)
PROVISION FOR INCOME TAXES
(BENEFIT) 47,731. 92,537. (47,193.) (82,474.)
----------- ----------- ----------- -----------
NET INCOME (LOSS) 87,506. 169,651. (109,421.) (191,251.)
RETAINED EARNINGS AT
BEGINNING OF PERIOD 1,162,996. 1,080,851. 1,091,661. 1,173,491.
----------- ----------- ----------- -----------
RETAINED EARNINGS AT END
OF PERIOD $1,250,502. $1,250,502. $ 982,240. $ 982,240.
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER
COMMON SHARE $ .08 $ .16 $ (.10) $ (.17)
----------- ----------- ----------- -----------
WEIGHTED AVERAGE OF COMMON
SHARES OUTSTANDING 1,093,636. 1,093,636. 1,093,636. 1,093,636.
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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>
SIX MONTHS ENDED JUNE 30,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
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Net Income (Loss) $ 169,651. $(191,251.)
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ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
- ------------------------------------------
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
- --------------------------------------------
Depreciation Expense 56,462. 60,000.
(Increase) Decrease in Accounts Receivable (86,821.) 585,126.
(Increase) Decrease in Inventory 170,216. (298,315.)
(Increase) Decrease in Prepaid Expenses
and Taxes (5,731.) (16,084.)
Increase (Decrease) in Accounts Payable 31,153. (72,924.)
Increase (Decrease) in Accrued Expenses
and Compensation 5,781. (60,540.)
Increase (Decrease) in Accrued/Deferred Income Taxes 91,382. (96,804.)
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262,442. 100,459.
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Net Cash Provided (Used) by Operating
Activities 432,093. (90,792.)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Capital Expenditures (48,398.) (47,898.)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from Loans
Reduction in Notes Payable (200,000.) (25,000.)
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Net Cash Provided (Used) by Financing
Activities (200,000.) (25,000.)
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NET INCREASE (DECREASE) IN CASH AND CASH
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EQUIVALENTS 183,695. (163,690.)
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CASH AND CASH EQUIVALENTS AT BEGINNING
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OF PERIOD 141,013. 272,958.
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CASH AND CASH EQUIVALENTS AT END OF
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PERIOD $324,708. $ 109,268.
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FIFTH DIMENSION INC.
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NOTES TO FINANCIAL STATEMENTS
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JUNE 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 JUNE 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 net income of $87,506 and $169,651 for the second
quarter and first half of 1996 on sales revenue of $1,393,080 and $2,728,655,
respectively. This compares favorable with 1995 second quarter and first half
losses of $109,421 and $191,251 on sales of $738,130 and $1,644,691,
respectively. This significant improvement in operating income and revenues is
a result of 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 contributed to
successful current year results. The gross profit improvements during the
current periods are a result of the revenue increases detailed above and stable
manufacturing overhead expenses during this period. A decline in 1996 operating
expenses also contributed to the operating results as reductions were made in
personnel and benefit expenses. Interest costs were lower during the current
periods as debt was significantly reduced. Income taxes were provided for based
on statutory rates.
The financial condition of the Registrant improved during the first half as
cash balances increased by $183,500 and working capital increased by $187,500.
The operating profits and reductions in inventory balances enabled the company
to reduce outstanding loan balances by $200,000 during the first half of 1996.
The Registrant purchased fixed assets of $48,398 during the first half, while
charging $56,462 against income for depreciation purposes.
The Registrant anticipates lower production and shipment levels over the second
half of 1996 as a major slip ring contract, which represents approximately 70%
of the Registrants's annual revenues, phases down toward its conclusion at the
end of this year. Operation results are expected to be impacted by the lower
shipments over the second half of the year, with the possibility of losses being
incurred as a result of management's decision to maintain engineering and
related expenses. The sales revenue from the major slip ring contract ending
in 1996 will not be immediately replaceable and, thus, the Registrant is
expected to experience significantly lower revenue levels and operating
deficits in 1997. The Registrant is aggressively pursuing new customers for
the conventional slip rings, investing in applied research to develop new
products and continues 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 while pursuing Registrant growth efforts.
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: August 7, 1996 By: /s/ Craig Ebner
---------------------------- --------------------------------
Craig Ebner
President
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIFTH
DIMENSION INC.'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDING
JUNE 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> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 324,708
<SECURITIES> 364,936
<RECEIVABLES> 832,105
<ALLOWANCES> 0
<INVENTORY> 682,918
<CURRENT-ASSETS> 1,901,385
<PP&E> 611,727
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,534,476
<CURRENT-LIABILITIES> 457,646
<BONDS> 0
0
0
<COMMON> 364,936
<OTHER-SE> 1,653,561
<TOTAL-LIABILITY-AND-EQUITY> 2,534,476
<SALES> 1,393,080
<TOTAL-REVENUES> 1,395,767
<CGS> 953,384
<TOTAL-COSTS> 1,257,762
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,768
<INCOME-PRETAX> 135,237
<INCOME-TAX> 47,731
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,506
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
