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FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES ACT OF
1934
For the quarterly period ended May 31, 2000
Commission File Number 0-12305
REPRO-MED SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
New York 13-3044880
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
24 Carpenter Road, Chester, NY 10918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (845) 469-2042
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 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 ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 31, 2000
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Common stock, $.01 par value 23,354,000 shares
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REPRO-MED SYSTEMS, INC.
TABLE OF CONTENTS
PART I PAGE
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ITEM 1.
Financial Statements
Balance Sheets - May 31, 2000 and 3
February 29, 2000
Statements of Income - for the three-months
ending May 31, 2000 and May 31, 1999 4
Statements of Cash Flow -
May 31, 2000 and 1999 5
Notes to Financial Statements 6
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations. 6
PART II
ITEM 1.
Legal Proceedings 8
ITEM 2.
Changes in Securities 8
ITEM 3.
Defaults Upon Senior Securities 8
ITEM 4.
Submission of Matters to a Vote of Security Holders 8
ITEM 5.
Other Information 8
ITEM 6.
Exhibits and Reports on Form 8-K 8
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REPRO-MED SYSTEMS, INC
BALANCE SHEET
5-31-00 2-29-00
ASSETS ------- -------
CURRENT ASSETS
Cash & Cash Equivalents $136,117 $167,085
Accounts Receivable, net 240,653 227,871
Inventory 626,315 555,882
Prepaid Expenses & Other Receivables 56,522 45,517
Deposits 40,000 40,000
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TOTAL CURRENT ASSETS 1,099,607 1,036,355
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EQUIPMENT & OTHER ASSETS
Equipment-net 469,114 483,806
Other Assets 53,153 54,412
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TOTAL EQUIPMENT & OTHER ASSETS 522,267 538,218
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TOTAL ASSETS $1,621,874 $1,574,573
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LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $142,662 $59,363
Accrued Expenses 187,496 184,936
Current Portion Capital Gain 22,481 22,481
Customer Deposits 175,090 245,230
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Total Current Liabilities 527,729 512,010
Deferred Capital Gain 399,035 404,655
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TOTAL LIABILITIES 926,764 916,665
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STOCKHOLDERS' EQUITY
Preferred Stock, 8% Cumulative $.01
Par Value Authorized 2,000,000 Issued &
Outstanding 10,000 Shares 100 100
Common Stock, $.01 Par Value,
Authorized 50,000,000 Shares, Issued &
Outstanding 23,354,000 & 22,904,000
Respectively 233,540 229,040
Additional Paid-in Capital 2,054,131 2,031,631
Accumulated Deficit (1,450,661) (1,460,863)
Treasury Stock at Cost (142,000) (142,000)
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TOTAL STOCKHOLDERS' EQUITY 695,110 657,908
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,621,874 $1,574,573
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REPRO-MED SYSTEMS, INC
STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED
May 31, 2000 May 31, 1999
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SALES
Net Sales of Products $556,614 $527,277
COST AND EXPENSES
Cost of Goods Sold 292,454 303,447
Selling, General & Administrative Expenses 219,797 296,341
Research and Development 12,946 33,812
Depreciation and Amortization 21,415 22,976
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TOTAL COST AND EXPENSES 546,612 656,576
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INCOME (LOSS) FROM OPERATIONS 10,002 (129,300)
Non-Operating Income (Expense)
Interest (Expense) 0 (10,216)
Interest & Other Income 200 3,169
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200 (7,047)
INCOME (LOSS) BEFORE MINORITY
INTEREST SHARE OF OPERATIONS 10,202 (136,347)
Minority Interest in Income of Subsidiary 0 (6,613)
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Income (Loss) Before Income Taxes 10,202 (142,960)
Provision for Income Taxes 0 760
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NET INCOME (LOSS) AFTER TAXES 10,202 (143,720)
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EARNINGS (LOSS) PER COMMON SHARE
Primary $0.00 ($0.01)
Fully Diluted $0.00 ($0.01)
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REPRO-MED SYSTEMS, INC
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MAY 31, 2000 MAY 31, 1999
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OPERATING ACTIVITIES
INCOME (LOSS) FROM CONTINUED OPERATIONS $10,202 ($143,720)
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO CASH PROVIDED BY OPERATING
ACTIVITIES
Depreciation and Amortization 21,415 22,976
Income (Loss) of Minority Interests 0 6,613
Deferred Gross Profit - Building Lease (5,620) 0
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25,997 (114,131)
Changes In Assets and Liabilities
Accounts Receivable (12,782) (194,649)
Inventory (70,433) 35,229
Prepaid Expenses and Other Receivables (11,005) 14,416
Accounts Payable 83,299 82,154
Accrued Expenses 2,560 66,405
Customers Deposits (70,140) 0
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(78,501) 3,555
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (52,504) (110,576)
INVESTING ACTIVITIES
Short Term Investments 0 (373,340)
Capital Expenditures (5,283) (7,695)
Other Assets (181) 0
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(5,464) (381,035)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES
FINANCING ACTIVITIES
Issuance of Common Stock 27,000 0
Repayment of Term Loan 0 (22,825)
Repayment Line of Credit 0 (66,758)
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NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 27,000 (89,583)
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS (30,968) (581,194)
Cash and Cash equivalents, beginning of period 167,085 683,321
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Cash and Cash Equivalents, end of period $136,117 $102,126
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SUPPLEMENTAL DISCLOSURES
CASH PAYMENTS FOR
Interest $0 $10,216
Income Taxes $801 $0
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REPRO-MED SYSTEMS, INC.
NOTES TO THE FINANCIAL STATEMENTS
MANAGEMENT'S STATEMENT
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested that
these financial statements be read in conjunction with the financial statements
and the notes thereto included in the Company's latest annual report on Form
10-KSB dated February 29, 2000.
PART I ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Report on Form 10-QSB contains certain "forward-looking"
statements (as such term is defined in the Private Securities Litigation Reform
Act of 1995) and information relating to Repro-Med Systems, Inc. that are based
on the beliefs of the management of Repro-Med Systems, Inc. as well as
assumptions made by and information currently available to the management of
Repro-Med Systems, Inc. The Company's actual results may vary materially from
the forward-looking statements made in this report due to important factors such
as: recent operating losses, uncertainties associated with future operating
results; unpredictability related to Food and Drug Administration regulations,
introduction of competitive products, limited liquidity; reimbursement related
risks; government regulation of the home health care industry; success of the
research and development effort, market acceptance of FREEDOM60, availability of
sufficient capital to continue operations and dependence on key personnel. When
used in this report, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current views of
Repro-Med Systems, Inc. with respect to future events based on currently
available information and are subject to risks and uncertainties that could
cause actual results to differ materially from those contemplated in such
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof.
Repro-Med does not undertake any obligation to release publicly any revision to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
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THREE MONTHS ENDED MAY 31, 2000 VS. 1999
Sales increased 6% from $527,277 (1999) to $556,614 (2000) for the
quarter ended May 31. Sales continued to improve for the Res-Q-Vac while sales
of the IV decreased quarter over quarter due to a one-time sale of product to a
distributor in 1999, which did not repeat this year. The OEM sales improved in
this quarter over last year while the Plus resuscitator decreased due to a
tender order which did not re-occur this year.
Cost of goods decreased 4% due to improved efficiencies in production
and purchasing. The profit margin continued to improve this quarter with an
increase from 42% in 1999 to 48% in 2000.
Selling, general and administrative expense decreased 26% for the
current three-month period versus 1999. Management initiated expense and payroll
reductions in September 1999 that continue to produce savings compared to prior
periods.
Research and development expenses decreased 62% period to period
reflecting payroll reductions made in the second quarter of fiscal 2000 and the
reduction in the development of our new products due to limited available funds.
There was no material change in depreciation and amortization expense
during this period.
Interest expense was reduced to $0 as the result of a full payoff of
all bank indebtedness in October 1999.
LIQUIDITY AND CAPITAL RESOURCES
Our working capital increased from $524,345 as of February 29, 2000 to
$571,878 as of May 31, 2000.
As a subsequent event in June 2000 we negotiated a $200,000 line of
credit with Premier Bank which will be guaranteed by the President and one of
our directors. The line of credit is intended for materials purchases for new
orders.
We are currently operating at a neutral cash flow and have sufficient
capital for our ongoing needs, based on the anticipated continued sales growth
and maintaining careful control of expenses. We have demonstrated our ability to
control costs and believe we will be able to offset any unanticipated decreases
in revenues with additional reductions in overhead, materials, and labor. The
funds available on May 31,2000 are expected to meet cash requirements as planned
under current operating conditions for the next 12 months.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is neither a party to any material litigation, nor to the
knowledge of the officers and directors of the Company, is there any material
litigation threatened against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the Company
during the quarter ended May 31, 2000.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
REPRO-MED SYSTEMS, INC.
/s/ Andrew I. Sealfon MAY 31, 2000
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Andrew I. Sealfon, President, Treasurer,
Chairman of the Board, Director, and
Chief Executive Officer
