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 July 31, 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 July 31, 1999
Common Stock, par value $0.25 775,385 shares
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - July 31,
1999 and October 31, 1998 3
Consolidated Statements of Income -
thirteen weeks ended July 31, 1999 and
August 1, 1998 and thirty-nine weeks
ended July 31, 1999 and August 1, 1998 5
Consolidated Statements of Cash Flows -
thirty nine weeks ended July 31, 1999 and
August 1, 1998 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
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
July 31, October 31,
1999 1998
CURRENT ASSETS
Cash and cash equivalents $ 4,160,208 $ 4,190,509
Trade accounts receivable 768,202 704,822
Inventories 341,700 357,716
Prepaid income taxes 131,511 -0-
Prepaid expenses 3,558 4,573
Marketable securities 510,087 501,884
Total current assets 5,915,266 5,759,504
PROPERTY AND EQUIPMENT
Land 114,006 114,006
Building and improvements 356,845 335,845
Machinery and equipment 767,008 739,007
Small tools 53,580 53,580
Furniture and fixtures 8,048 8,048
Office equipment 32,115 26,709
Automobile 42,336 42,336
Total property and
equipment 1,373,938 1,319,531
Less: accumulated depreciation 884,326 828,382
Net property and
equipment 489,612 491,149
Total assets $ 6,404,878 $ 6,250,653
LIABILITIES AND STOCKHOLDERS' EQUITY
July 31, October 31,
1999 1998
CURRENT LIABILITIES
Accounts payable - trade 103,385 64,305
Accrued income taxes -0- 241,599
Other current liabilities 143,010 334,452
Total current liabilities 246,395 640,356
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 5,820,165 5,254,632
Net unrealized gains on
equity securities 3,391 20,188
Less treasury stock at cost -
224,615 shares and 224,415 shares (187,768) (187,218)
Total stockholders' equity 6,158,403 5,610,297
Total liabilities and
stockholders' equity $ 6,404,878 $6,250,653
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
Thirteen Weeks Thirteen Weeks Thirty-nine Thirty-nine
Ended Ended Weeks Ended Weeks Ended
July 31, 1999 August 1, 1998 July 31, 1999 August 1, 1998
NET SALES $ 1,079,148 $ 1,266,911 $ 3,023,952 $ 3,458,974
COST OF SALES 606,313 675,366 1,828,562 1,871,812
Gross profit
on sales 472,835 591,545 1,195,390 1,587,162
OPERATING EXPENSES
Sales & delivery 7,652 7,340 23,120 19,134
General and
administrative 131,620 107,249 393,084 346,645
Total operating
expenses 139,272 114,589 416,204 365,779
Operating income 333,563 476,956 779,186 1,221,383
OTHER INCOME 54,132 64,678 162,427 150,414
Net income before
taxes 387,695 541,634 941,613 1,371,797
FEDERAL AND STATE
INCOME TAXES 154,845 257,892 376,080 589,873
Net income 232,850 283,742 565,533 781,924
RETAINED EARNINGS -
beginning of
period 5,587,315 4,654,154 5,254,632 4,155,972
RETAINED EARNINGS -
end of period $ 5,820,165 $ 4,937,896 $ 5,820,165 $ 4,937,896
EARNINGS PER SHARE OF
COMMON STOCK 0.30 0.37 0.73 1.01
Average shares of
stock outstanding 775,548 775,585 775,573 775,585
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Thirty-nine Weeks Thirty-nine Weeks
Ended Ended
July 31, 1999 August 1, 1998
CASH FLOWS FROM OPERATING ACTIVIES
Net income $ 565,533 $ 781,924
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 55,944 46,097
(Gain) on sale of securities -0- (16,348)
Decrease (increase) in:
Accounts receivable (63,380) 124,081
Inventories 16,016 (3,715)
Prepaid Income taxes (131,511) -0-
Prepaid expenses 1,015 19,405
(Decrease) increase in
Accounts payable 39,080 16,309
Accrued income taxes (241,599) 118,788
Other current liabilities (191,442) (56,730)
Net cash provided
by operating activities 49,656 1,029,811
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (54,407) (140,962)
Purchases of securities (25,000) (143,424)
Sale of securities -0- 56,750
Net cash (used)
by investing activities $ (79,407) $ (227,636)
Thirty-nine Weeks Thirty-nine Weeks
Ended Ended
July 31, 1999 August 1, 1998
CASH FLOW FROM
FINANCING ACTIVITIES:
Purchases of treasury stock $ (550) $ (-0-)
Net cash (used) by
financing activities (550) (-0-)
(Decrease) Increase in cash (30,301) 802,175
Cash and cash equivalents
at beginning of year 4,190,509 2,981,027
Cash and cash equivalents
at end of year $ 4,160,208 $ 3,783,202
SUPPLEMENTAL DISCLOSURES:
Interest paid $ -0- $-0-
Income taxes paid $ 749,065 $ 471,085
OPT-Sciences Corporation and Subsidiary
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
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 July 31, 1999 and October
31, 1998, and the results of operations for the thirty-nine weeks ended
July 31, 1999 and August 1, 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 thirty-nine weeks of the year from $4,190,509 to $4,160,208.Profits
generated could not offset an increase in accounts receivable, asset and
marketable security purchases and the payment of current and estimated corporate
income taxes. 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 13% from the level of the first nine
months of the prior year. The drop-off is due primarily to the expiration of
a large program at the end of the prior fiscal year. This has caused the gross
profit to fall about 25% 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.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
duly caused 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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