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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 March 31, 1997
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
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(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 March 31, 1997 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 MARCH 31, 1997
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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>
MARCH 31,
1997
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ASSETS
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CURRENT ASSETS:
Cash and Short-Term Investments................................................................ $ 46,738.
Accounts Receivable - Net ..................................................................... 377,941.
Inventories.................................................................................... 873,278.
Prepaid Expenses .............................................................................. $ 42,550.
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Total Current Assets................................................................ $ 1,340,507.
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PROPERTY, PLANT AND EQUIPMENT - Net of Accumulated
Depreciation................................................................................... $ 596,224.
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PATENT COSTS, LESS ACCUMULATED AMORTIZATION............................................................. $ 12,003.
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DEFERRED INCOME TAXES, BENEFITS......................................................................... $ 183,107.
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TOTAL ASSETS........................................................................ $ 2,131,841.
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes Payable - Current Portion............................................................... $ 300,000.
Accounts Payable................................................................................ 160,064.
Accrued Expenses ................................................................................ 77,133.
Accrued Compensation and Vacation............................................................... 156,131.
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Total Current Liabilities............................................................ $ 693,328.
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LONG TERM LIABILITIES:
Notes payable - Long Term Portion............................................................. $ 20,833.
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TOTAL LIABILITIES............................................................................. $ 714,161.
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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 ............................................................................ $ 649,685.
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TOTAL STOCKHOLDERS' EQUITY................................................. $ 1,417,680.
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................. $ 2,131,841.
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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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THREE MONTHS ENDED MARCH 31,
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1997 1996
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NET SALES $ 366,486. $1,335,575.
COST OF SALES 609,390. 898,273.
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GROSS PROFIT (LOSS) ON SALES (242,904.) 437,302.
OPERATING EXPENSES 224,290. 309,878.
INTEREST EXPENSE 5,462. 4,771.
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OPERATING INCOME (LOSS) (472,656.) 122,653.
OTHER INCOME (EXPENSE) 2,549. 4,298.
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INCOME (LOSS) BEFORE TAXES (470,107.) 126,951.
PROVISION FOR INCOME TAXES (BENEFIT) (183,107.) 44,806.
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NET INCOME (LOSS) (287,000.) 82,145.
RETAINED EARNINGS AT BEGINNING OF PERIOD 936,685. 1,080,851.
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RETAINED EARNINGS AT END OF PERIOD $ 649,685. $1,162,996.
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NET INCOME (LOSS) PER COMMON SHARE $ (.26) $ .08
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WEIGHTED AVERAGE OF COMMON 1,093,636. 1,093,636.
SHARES OUTSTANDING ---------- ----------
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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>
THREE MONTHS ENDED MARCH 31,
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net Income (Loss) $ (287,000.) $ 82,145.
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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 28,950. 28,750.
(Increase) Decrease in Accounts Receivable (150,737.) ( 93,328.)
(Increase) Decrease in Inventory 29,696. 58,716.
(Increase) Decrease in Prepaid Expenses and Taxes (3,225.) ( 16,469.)
Increase (Decrease) in Accounts Payable 24,891. 86,829.
Increase (Decrease) in Accrued Expenses and Compensation 52,993. 56,787.
Increase (Decrease) in Accrued/Deferred Income Taxes (183,107.) 44,807.
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200,539. 166,092.
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Net Cash Provided (Used) by Operating Activities (487,539.) 248,237.
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CASH FLOWS FROM INVESTING ACTIVITIES
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Capital Expenditures - . ( 9,913.)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from Loans 250,000. -
Reduction in Notes Payable ( 12,500.) (187,500.)
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Net Cash Provided (Used) by Financing Activities (237,500.) (187,500.)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (250,039.) (50,824.)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 296,777. 141,013.
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 46,738. $ 191,837.
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FIFTH DIMENSION INC.
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NOTES TO FINANCIAL STATEMENTS
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MARCH 31, 1997
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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 MARCH 31, 1997
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PART 1 - ITEM 2
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
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OF OPERATIONS
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The Registrant reported a net loss of $287,000 for the first quarter of 1997 on
sales revenue of $366,486. This compares with 1996 first quarter income of
$82,145 on sales revenue of $1,335,575. This significant decline in operating
income and revenues is a result of production delays and decreasing contract
requirements on the Kearfott slip ring contract. The gross profit deficit for
the current quarter is a result of the production delay detailed above and low
margins on products shipped during the quarter. The sales level and gross profit
margins did not provide adequate coverage of manufacturing overhead incurred
during the first quarter thus resulting in the gross profit deficit. The Company
reduced operating expenses by 28% during the first quarter of 1997 versus the
first quarter of 1996. This reduction was primarily the result of lower
personnel costs although various other overheads were reduced in response to the
lower sales and production levels. Interest costs were slightly higher during
the current quarter based on additions to outstanding debt balances. Income tax
benefits were accrued based on the projected future tax reductions anticipated
to result from carryover of the first quarter operating loss.
The financial condition of the Registrant declined during the quarter as is
evidenced by a working capital reduction of $452,000. The operating losses and
an increase in accounts receivable balances resulted in the need to borrow
$250,000 during the quarter on a line of credit, thus increasing the debt-to-
equity ratio from 5% at December 31, 1996 to 23% at March 31, 1997. The company
anticipates continued financing requirements during the balance of 1997 and is
currently negotiating the renewal of its credit line which expired as of April
30, 1997. Failure to extend repayment of the current credit line balance and
obtain adequate additional short term financing may result in the Registrant's
inability to meet its cash obligations. Continued operating deficits are
projected for the balance of 1997 although at significantly lower levels than
experienced during the first quarter. Shipments on the Kearfott slip ring
contract are expected to resume and be completed during the second half of 1997.
The Registrant purchased no fixed assets during the quarter, while charging
$28,950 against income for depreciation purposes.
No other changes have occurred which would have a material affect on the
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: ________________________________
Craig Ebner
President
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<ARTICLE> 5
<LEGEND>
1. Balance Sheet dated March 31, 1997.
2. Fifth Dimension Inc. Statements of Operations for the Quarter Ended
March 31, 1997.
3. Fifth Dimension Inc. Statements of Cash Flows for the Quarter Ended
March 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 46,738
<SECURITIES> 364,936
<RECEIVABLES> 377,941
<ALLOWANCES> 0
<INVENTORY> 873,278
<CURRENT-ASSETS> 1,340,507
<PP&E> 596,224
<DEPRECIATION> 28,950
<TOTAL-ASSETS> 2,131,841
<CURRENT-LIABILITIES> 693,328
<BONDS> 0
0
0
<COMMON> 364,936
<OTHER-SE> 1,766,905
<TOTAL-LIABILITY-AND-EQUITY> 2,131,841
<SALES> 366,486
<TOTAL-REVENUES> 369,035
<CGS> 609,390
<TOTAL-COSTS> 833,680
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (183,107)
<INTEREST-EXPENSE> 5,462
<INCOME-PRETAX> (470,107)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (287,000)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
</TABLE>
