U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly report under to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended August 1, 1998
Commission File No. 0-1455
OPT - SCIENCES CORPORATION
(Exact name of small business issuer as specified in its charter)
New Jersey 21-0681502
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
1912 Bannard Street, Riverton, NJ 08077
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 609-829-2800
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve 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__________
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at August 1, 1998
Common Stock, par value $0.25 775,585 shares
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - August 1,
1998 and November 1, 1997 3
Consolidated Statements of Income -
thirteen weeks ended August 1, 1998 and
August 2, 1997 and thirty-nine weeks
ended August 1, 1998 and forty
weeks ended August 2, 1997 5
Consolidated Statements of Cash Flows -
thirty nine weeks ended August 1, 1998 and
forty weeks ended August 2, 1997 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis or Plan
of Operation 9
PART II OTHER INFORMATION
Item 1 Not Applicable
Item 2 Not Applicable
Item 3 Not Applicable
Item 4 Not Applicable
Item 5 Not Applicable
Item 6 Not Applicable
SIGNATURE 10
ASSETS
August 1, November 1,
1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 3,783,202 $ 2,981,027
Trade accounts receivable 779,415 903,496
Inventories 326,422 322,707
Prepaid expenses 9,587 28,992
Marketable securities 471,822 375,489
Total current assets 5,370,448 4,611,711
PROPERTY AND EQUIPMENT
Land 114,006 114,006
Building and improvements 335,845 335,845
Machinery and equipment 739,008 598,607
Small tools 53,580 53,580
Furniture and fixtures 8,048 8,048
Office equipment 41,551 40,990
Automobile 42,336 42,336
Total property and
equipment 1,334,374 1,193,412
Less: accumulated depreciation 821,538 775,441
Net property and
equipment 512,836 417,971
Total assets $ 5,883,284 $ 5,029,682
LIABILITIES AND STOCKHOLDERS' EQUITY
August 1, November 1,
1998 1997
CURRENT LIABILITIES
Accounts payable - trade $ 92,576 $ 76,267
Accrued income taxes 264,998 146,210
Other current liabilities 226,481 283,211
Total current liabilities 584,055 505,688
STOCKHOLDERS' EQUITY
Common capital stock - par value
$.025 per share - authorized
and issued 1,000,000 shares 250,000 250,000
Additional paid in capital 272,695 272,695
Retained earnings 4,937,896 4,155,972
Net unrealized gains on
equity securities 25,856 32,545
Less treasury stock at cost -
224,415 shares and 224,415 shares
respectively (187,218) (187,218)
Total stockholders' equity 5,299,229 4,523,994
Total liabilities and
stockholders' equity $ 5,883,284 $ 5,029,682
Thirteen Weeks Thirteen Weeks Thirty-nine Forty Weeks
Ended Ended Weeks Ended Ended
August 1, 1998 August 2, 1997 August 1, 1998 August 2, 1997
NET SALES $ 1,266,911 $ 1,046,344 $ 3,458,974 $ 2,481,328
COST OF SALES 675,366 627,572 1,871,812 1,699,857
Gross profit
on sales 591,545 418,772 1,587,162 781,471
OPERATING EXPENSES
Sales & delivery 7,340 3,371 19,134 15,983
General and
administrative 107,249 65,135 346,645 218,062
Total operating
expenses 114,589 68,506 365,779 234,045
Operating income 476,956 350,266 1,221,383 547,426
OTHER INCOME 64,678 35,338 150,414 113,878
Net income
before taxes 541,634 385,604 1,371,797 661,304
FEDERAL AND STATE
INCOME TAXES 257,892 154,000 589,873 264,100
Net income 283,742 231,604 781,924 397,204
RETAINED EARNINGS -
beginning of
period 4,654,154 3,647,239 4,155,972 3,481,639
RETAINED EARNINGS -
end of period $ 4,937,896 $ 3,878,843 $ 4,937,896 $ 3,878,843
EARNINGS PER SHARE OF
COMMON STOCK 0.37 0.30 0.64 0.51
Average shares of
stock outstanding 775,585 775,592 775,585 775,638
Thirty-nine Weeks Forty Weeks
Ended Ended
August 1, 1998 August 2, 1997
CASH FLOWS FROM OPERATING ACTIVIES
Net income $ 781,924 $ 397,204
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 46,097 34,185
(Gain) on sale of securities (16,348) (7,954)
Decrease (increase) in
Accounts receivable 124,081 (302,731)
Inventories (3,715) (15,747)
Prepaid expenses 19,405 17,433
(Decrease) increase in
Accounts payable 16,309 (3,219)
Accrued income taxes 118,788 (101,070)
Other current liabilities (56,730) (69,212)
Net cash provided (used)
by operating activities 1,029,811 (51,111)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property
and equipment (140,962) (68,944)
Purchases of securities (143,424) (125,060)
Sale of securities 56,750 327,960
Net cash (used) provided
by investing activities $ (227,636) $ 133,956
Thirty-nine Weeks Forty Weeks
Ended Ended
August 1, 1998 August 2, 1997
CASH FLOW FROM
FINANCING ACTIVITIES:
Purchases of treasury stock $(-0-) $ (830)
Net cash (used) in
financing activities (-0-) (830)
Increase in cash 802,175 82,015
Cash and cash equivalents
at beginning of year 2,981,027 2,557,251
Cash and cash equivalents
at end of year $ 3,783,202 $ 2,639,266
SUPPLEMENTAL DISCLOSURES:
Interest paid $ -0- $ -0-
Income taxes paid $ 471,085 $ 332,941
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
OPT-Sciences Corporation's financial position as of August 1, 1998 and
November 1, 1997, and the results of operations for the twenty-six weeks
ended August 1, 1998 and for the twenty-seven weeks ended August 2, 1997 and
cash flows for the respective periods then ended.
2. The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Cash and cash equivalents--OPT Sciences Corporation's cash balances increased
during the first nine months of the year from $2,981,027 to $3,783,202.
Profits generated, coupled with a decrease in accounts receivable more than
offset asset and marketable security purchases. There are no material
obligations in existence which would be anticipated to cause any substantial
decrease in the cash balances from other than the Company's future operations.
RESULTS OF OPERATIONS
Sales revenues have increased by about 39% from the level of the first nine
months of the prior year, which continues the growth trend of the prior year.
Gross profits increased by about 103% from those of the prior year due to
increase in volume which makes more efficient use of the available labor
force. Earnings from investments are higher due to higher invested balances
than at the same time last year.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
OPT-SCIENCE CORPORATION
Registrant
Date Anderson McCabe, President
Date Harvey Habeck,
Chief Accountant
7
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
OPT-Sciences Corporation and Subsidiary
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
