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 January 30, 1999
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 January 30, 1999
Common Stock, par value $0.25 775,585 shares
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - January 30,
1999 and October 31, 1998 3
Consolidated Statements of Income -
thirteen weeks ended January 30, 1999 and
thirteen weeks ended January 31, 1998 5
Consolidated Statements of Cash Flows -
thirteen weeks ended January 30, 1999 and
thirteen weeks ended January 31, 1998 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion
and Analysis or Plan of Operation 8
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 9
ASSETS
January 30, October 31,
1999 1998
CURRENT ASSETS
Cash and cash equivalents $ 4,102,160 $ 4,190,509
Trade accounts receivable 573,558 704,822
Inventories 342,300 357,716
Prepaid expenses 15,291 4,573
Marketable securities 531,180 501,884
Total current assets 5,564,489 5,759,504
PROPERTY AND EQUIPMENT
Land 114,006 114,006
Building and improvements 335,845 335,845
Machinery and equipment 739,007 739,007
Small tools 53,580 53,580
Furniture and fixtures 8,048 8,048
Office equipment 26,709 26,709
Automobile 42,336 42,336
Total property and
equipment 1,319,531 1,319,531
Less: accumulated depreciation 848,014 828,382
Net property and equipment 471,517 491,149
Total assets $ 6,036,006 $ 6,250,653
LIABILITIES AND STOCKHOLDERS' EQUITY
January 30, October 31,
1999 1998
CURRENT LIABILITIES
Accounts payable - trade $ 48,645 $ 64,305
Accrued income taxes 128,749 241,599
Other current liabilities 128,495 334,452
Total current liabilities 305,889 640,356
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 5,370,156 5,254,632
Net unrealized gains on
equity securities 24,484 20,188
Less treasury stock at cost -
224,415 shares (187,218) (187,218)
Total stockholders' equity 5,730,117 5,610,297
Total liabilities and
stockholders' equity $ 6,036,006 $ 6,250,653
Thirteen Weeks Thirteen Weeks
Ended Ended
January 30, 1999 January 31, 1998
NET SALES $ 884,176 $ 1,047,004
COST OF SALES 592,144 547,581
Gross profit
on sales 292,032 499,423
OPERATING EXPENSES
Sales & delivery 7,579 3,193
General and administrative 137,474 119,494
Total operating expenses 145,053 122,687
Operating income 146,979 376,736
OTHER INCOME 55,695 40,365
Net income before taxes 202,674 417,101
FEDERAL AND STATE
INCOME TAXES 87,150 166,182
Net income 115,524 250,919
RETAINED EARNINGS -
beginning of period 5,254,632 4,155,972
RETAINED EARNINGS -
end of period $ 5,370,156 $ 4,406,891
EARNINGS PER SHARE OF
COMMON STOCK 0.15 0.32
Average shares of
stock outstanding 775,585 775,585
Thirteen Weeks Thirteen Weeks
Ended January 30, Ended January 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 115,524 $ 250,919
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 19,632 10,331
Loss on sale of securities -0- 798
Decrease (increase) in:
Accounts receivable 131,264 229,522
Inventories 15,416 9,293
Prepaid expenses (10,718) 7,716
(Decrease) increase in:
Accounts payable (15,660) (32,793)
Accrued income taxes (112,850) (33,818)
Other current liabilities (205,957) (117,089)
Net cash (used) provided
by operating activities (63,349) 324,879
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment -0- (35,563)
Purchases of securities (25,000) (50,018)
Sale of securities -0- 6,250
Net cash (used) provided
by investing activities $ (25,000) $ (79,331)
(Decrease) increase in cash (88,349) 245,548
Cash and cash equivalents
at beginning of year 4,190,509 2,981,027
Cash and cash equivalents
at end of year $ 4,102,160 $ 3,226,575
SUPPLEMENTAL DISCLOSURES:
Interest paid $ -0- $ -0-
Income taxes paid $ 200,000 $ 200,000
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 January 30, 1999 and October
31, 1998, and the results of operations for the thirteen weeks ended January 30,
1999 and January 31, 1998 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 decreased
during the first quarter of the year from $4,190,509 to $4,102,160. Profits
generated, coupled with a decrease in accounts receivable and inventory, did
not offset decreases in current obligations. 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 decreased by about 16% from the level of the first quarter
of the prior year. The drop-off is due primarily to the expiration of a large
program during the prior quarter. This has caused the gross profit to fall
about 42% as compared to the prior year as the Company is not producing at its
full capacity. Earnings from investments are higher due to higher invested
balances than at the same time last year.
READINESS FOR YEAR 2000
The company believes that it and its suppliers and customers will not be
materially and adversely affected by the impact of the year 2000 date change.
Management continues to review and monitor all internal processes and to
confirm with its vendors and customers the readiness to deal with computer
based problems related to the date change. Management expects to confirm full
compliance with year 2000 requirements by July 1, 1999.
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
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