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 May 1, 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 May 1, 1999
Common Stock, par value $0.25 775,585 shares
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - May 1,
1999 and October 31, 1998 3
Consolidated Statements of Income -
thirteen weeks ended May 1, 1999 and
May 2, 1998 and twenty-six weeks
ended May 1, 1999 and May 2, 19985 5
Consolidated Statements of Cash Flows -
twenty-six weeks ended May 1, 1999 and
May 2, 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
May 1, October 31,
1999 1998
CURRENT ASSETS
Cash and cash equivalents $ 3,803,643 $ 4,190,509
Trade accounts receivable 867,008 704,822
Inventories 345,711 357,716
Prepaid income taxes 120,180 -0-
Prepaid expenses 7,956 4,573
Marketable securities 527,013 501,884
Total current assets 5,671,511 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 32,115 26,709
Automobile 42,336 42,336
Total property and
Equipment 1,324,937 1,319,531
Less: accumulated depreciation 866,170 828,382
Net property and equipment 458,767 491,149
Total assets $ 6,130,278 $ 6,250,653
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
May 1, October 31,
1999 1998
CURRENT LIABILITIES
Accounts payable - trade $ 69,208 $ 64,305
Accrued income taxes -0- 241,599
Other current liabilities 117,961 334,452
Total current liabilities 187,169 640,356
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 5,587,315 5,254,632
Net unrealized gains on
equity securities 20,317 20,188
Less treasury stock at cost -
224,415 shares (187,218) (187,218)
Total stockholders' equity 5,943,109 5,610,297
Total liabilities and
stockholders' equity $ 6,130,278 $ 6,250,653
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME AND RETATINED EARNINGS
(Unaudited)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
May 1, 1999 May 2, 1998 May 1, 1999 May 2, 1998
NET SALES $ 1,060,628 $ 1,145,059 $ 1,944,804 $ 2,192,063
COST OF SALES 630,105 648,865 1,222,249 1,196,446
Gross profit on sales 430,523 496,194 722,555 995,617
OPERATING EXPENSES
Sales & delivery 7,889 8,601 15,468 11,794
General and administrative 123,990 119,902 261,464 239,396
Total operating expenses 131,879 128,503 276,932 251,190
Operating income 298,644 367,691 445,623 744,427
OTHER INCOME 52,600 45,371 108,295 85,736
Net income before taxes 351,244 413,062 553,918 830,163
FEDERAL AND STATE
INCOME TAXES 140,287 165,799 221,235 331,981
Net income 210,957 247,263 332,683 498,182
RETAINED EARNINGS -
beginning of period 5,376,358 4,406,891 5,254,632 4,155,972
RETAINED EARNINGS -
end of period $ 5,587,315 $ 4,654,154 $ 5,587,315 $ 4,654,154
EARNINGS PER SHARE OF
COMMON STOCK 0.27 0.32 0.43 0.64
Average shares of
stock outstanding 775,585 775,585 775,585 775,585
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
May 1, 1999 May 2, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 332,683 $ 498,182
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 37,788 18,867
Loss (gain) on sale of securities -0- 798
Decrease (increase) in:
Amounts receivable (162,186) 263,702
Inventories 12,005 (25,745)
Prepaid incomes taxes (120,180) -0-
Prepaid expenses (3,383) 14,694
(Decrease) increase in:
Accounts payable 4,903 40,070
Accrued income taxes (241,599) 74,575
Other current liabilities (216,491) (91,340)
Net cash (used) provided
by operating activities (356,460) 793,803
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (5,406) (131,152)
Purchases of securities (25,000) (75,018)
Sale of securities -0- 6,250
Net cash (used)
by investing activities (30,406) (199,920)
OPT-Sciences Corporation and Subsidiary
CONSOLIDATED OF CASH FLOWS
(Unaudited)
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
May 1, 1999 May 2, 1998
CASH FLOWS FROM FINANCING ACTIVITIES
Purchases of treasury stock $ -0- $ -0-
Net cash (used) in
financing activities -0- -0-
(Decrease) increase in cash (386,866) 593,883
Cash and cash equivalents
at beginning of year 4,190,509 2,981,027
Cash and cash equivalents
at end of year 3,803,643 3,574,910
SUPPLEMENTAL DISCLOSURES:
Interest paid -0- -0-
Income taxes paid $ 582,889 $ 269,781
OPT-Sciences Corporation and Subsidiary
NOTES TO CONDENSESD FINACIAL 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 May 1, 1999 and October 31,
1998, and the results of operations for the twenty-six weeks ended May 1,
1999 and May 2, 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 twenty-six weeks of the year from $4,190,509 to $3,803,643.
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 11% from the level of the first six
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 27% 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
