<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended May 31, 2000
Commission file number 2-92261
WESTBRIDGE RESEARCH GROUP
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California 95-3769474
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1150 Joshua Way
Vista, California 92083
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(Address of principal executive office) (Zip Code)
Registrant's telephone number,
including area code: (760) 599-8855
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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 of
1934 during the preceding 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 a recent date: 2,103,438 shares of common stock,
no par value, as of May 31, 2000.
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
2000 1999
(UNAUDITED) (AUDITED)
------------------ -----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 295,669 $ 267,136
Trade accounts receivable, less
allowance for doubtful accounts of
$5,000 and $5,000 respectively 412,825 270,032
Inventories 142,156 89,941
Prepaid expenses and other
current assets 23,946 25,905
------------------ ------------------
Total Current Assets 874,596 653,014
PROPERTY AND EQUIPMENT 549,496 535,318
Less accumulated depreciation (414,359) (395,874)
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Net Property and Equipment 135,137 139,444
PREPAID ROYALTY, net of accumulated
amortization of $70,092 and $60,534
respectively 125,850 135,408
LONG TERM ACCOUNTS RECEIVABLE, net 130,000 130,000
------------------- ------------------
TOTAL ASSETS $ 1,265,583 $ 1,057,866
=================== ==================
</TABLE>
See accompanying notes to consolidated
condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(continued)
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
2000 1999
(UNAUDITED) (AUDITED)
------------------ ------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 94,275 $ 15,790
Notes payable - related parties 246,188 253,060
Note payable 29,139 30,234
Accrued expenses 49,967 63,260
Current portion of capital
lease obligation 15,919 14,692
Current portion of long-term debt 5,197 5,413
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TOTAL CURRENT LIABILITIES 440,685 382,449
Long-term debt 17,226 19,631
Capital lease obligations:
net of current portion 22,754 31,615
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TOTAL LIABILITIES 480,665 433,695
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SHAREHOLDERS' EQUITY
Common stock, no par value:
Authorized 9,375,000 shares
Issued and outstanding 2,103,438 shares 8,479,854 8,479,854
Paid in Capital: 95,000 95,000
Accumulated deficit (7,789,936) (7,950,683)
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TOTAL SHAREHOLDERS' EQUITY 784,918 624,171
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TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $ 1,265,583 $ 1,057,866
================== ==================
</TABLE>
See accompanying notes to consolidated
condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED MAY 31 ENDED MAY 31
2000 1999 2000 1999
--------------------------- ------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 685,166 $ 623,113 $ 906,703 $ 858,744
COST OF SALES 231,462 225,591 306,302 306,074
----------- ----------- ------------ ------------
GROSS PROFIT 453,704 397,522 600,401 552,670
----------- ----------- ------------ ------------
OPERATING EXPENSES
Research and development 35,554 37,510 72,675 65,007
Selling 123,119 123,536 221,883 228,497
General and administration 52,512 55,588 106,957 103,164
Royalties 21,590 18,789 33,807 32,492
Amortization of formula -- 20,085 -- 40,169
----------- ----------- ------------ ------------
TOTAL OPERATING EXPENSES 232,775 255,508 435,322 469,329
----------- ----------- ------------ ------------
Operating income 220,929 142,014 165,079 83,341
OTHER INCOME (EXPENSE)
Interest expense (7,548) (6,153) (14,510) (12,578)
Interest income 5,053 2,922 10,156 3,839
Other income 1,622 0 1,622 6,491
----------- ----------- ------------ ------------
Income before income taxes 220,056 138,783 162,347 81,093
Provision for income taxes -- 1,600 1,600 1,600
----------- ----------- ------------ ------------
Net income $ 220,056 $ 137,183 $ 160,747 $ 79,493
=========== =========== ============ ============
Basic earnings per common share $ .11 $ .07 $ .08 $ .04
=========== =========== ============ ============
Weighted average shares
outstanding 2,103,438 2,103,438 2,103,438 2,103,438
=========== =========== ============ ============
Diluted earnings per
common share $ .09 $ .06 $ .07 $ .03
=========== =========== ============ ============
Weighted average shares, options
and warrants outstanding $ 2,330,638 $ 2,314,888 $ 2,330,638 $ 2,312,888
=========== =========== ============ ============
</TABLE>
See accompanying notes to consolidated
condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, MAY 31,
2000 1999
============================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 160,747 $ 79,493
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Amortization of prepaid royalty 9,558 9,558
Depreciation and amortization 18,485 51,340
Changes in Operating Assets and Liabilities:
Increase in trade accounts receivable (142,793) (123,794)
Increase in inventories (52,215) (27,493)
Decrease [increase] in prepaid expenses 1,959 (14,921)
Increase [decrease] in accounts payable 78,485 (8,628)
[Decrease] increase in accrued liabilities (13,293) 587
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Net cash provided by [used in] operating activities 60,933 (33,858)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (14,178) (63,702)
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Net cash used in investing activities (14,178) (63,702)
----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations (7,634) (5,910)
Borrowings on capital lease obligations 34,979
Payments on notes payable and notes payable-
related parties (10,588) (9,613)
----------------- ------------------
Net Cash [used in] provided by financing activities (18,222) 19,456
----------------- ------------------
INCREASE [DECREASE] IN CASH 28,533 (78,104)
CASH AT BEGINNING OF PERIOD 267,136 249,729
----------------- ------------------
CASH AT END OF PERIOD $ 295,669 $ 171,625
================= ==================
</TABLE>
See accompanying notes to consolidated
condensed financial statements.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION:
The consolidated balance sheet as of May 31, 2000, the
consolidated statement of operations for the six-month periods ended May
31, 2000, and 1999, respectively, and the consolidated statements of cash
flows for the six-month periods then ended have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments except as noted in management's
discussion and analysis of financial condition and results of operations)
necessary to present fairly the financial position, results of operations
and changes in cash flows have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the 1999 Annual Report
on Form 10-KSB. The results of operations for the quarter ended May 31,
2000, are not necessarily indicative of the operating results for the full
year.
B. RECLASSIFICATION:
C. STOCK SPLIT:
On July 17, 1997 the shareholders of the Company voted to execute
a one-for-four reverse stock split. The reverse stock split was effective
for shareholders of record on February 6,1998. Per share amounts in the
accompanying financial statements have been restated to give effect for the
reverse stock split as if it occurred on December 1, 1996.
D. SUBSEQUENT EVENTS:
None
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WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
RESULTS OF OPERATIONS:
Net sales for the three month period ended May 31, 2000 were $685,166,
representing a 10% increase from the same period in the prior year. For the six
month period ended May 31, 2000, sales were $906,703 and represents an increase
of 6% from $858,744 in the prior year. This increase is due to increased sales
to existing customers.
Cost of sales as a percentage of net sales decreased to 34% for the
quarter ended May 31, 2000 as compared with 36% for the same period in the prior
year. For the six month period ended May 31, 2000, cost of sales as a percentage
of net sales also decreased to 34% from 36% when compared with the prior year.
Operating expenses for the three and six month periods ended May 31,
2000 decreased 9% and 8%, respectively, compared with the same periods in the
prior year. The decrease is primarily due to a reduction in the amortization of
formula which was fully amortized in June, 1999.
Research and development expenses as a percentage of net sales for the
three and six month periods ended May 31, 2000 were 6% and 8% respectively,
compared with 6% and 8% for the same periods in the prior year.
Selling expenses as a percentage of net sales for the three and six
month periods ended May 31, 2000 were 18% and 25%, respectively, compared with
20% and 27% for the same periods in the prior year.
General and administrative expenses in the three and six month periods
ended May 31, 2000 decreased by $3,076 or 6%, and increased $3,793 or 4%,
respectively, when compared with the same periods in the prior year.
Net income for the quarter ended May 31, 2000 was $220,056 as compared
with net income of $137,183, for the same period in the prior year. Accordingly,
basic earnings per share increased to approximately $.11 for the quarter ended
May 31, 2000 compared with approximately $.07 for the quarter ended May 31,
1999.
Income taxes have not been provided for in the accompanying financial
statements of operations due to the net operating loss carry forwards generated
in prior years that are available for carry forward against current year income.
<PAGE>
WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES:
The Company has no material commitments for capital expenditures.
Working capital was $433,911 at May 31, 2000, up from $270,565 at
November 30, 1999.
Based on current cash flow projections management expects that the
Company can continue operations for the current year without infusions of
additional cash.
IMPACT OF INFLATION
The Company does not believe inflation has had a significant effect on
its operations.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
27 Financial Data Schedule
B. REPORTS ON FORM 8-K
None
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WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY
SIGNATURES
Pursuant to the requirements 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.
WESTBRIDGE RESEARCH GROUP
(Registrant)
/s/ Christine Koenemann
------------------------------
Christine Koenemann, President
Principal Executive Officer
Principal Financial Officer
Date: July 19, 2000
