SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File No. 0-14696
RMED International, Inc.
(Exact Name of Registrant and Specified in its Charter)
Colorado 84-0898302
(State of Incorporation) (I.R.S. Employer Identification Number)
675 Industrial Boulevard, Delta, CO 81416
(Address of Principal Offices)
(970) 874-7536
(Registrant's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock $.01
par value(Title of
Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 3 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) had been subject to such filing
requirements for the past 90 days.
[X] YES [ ] NO
There were 6,370,958 shares of the Registrant stock $.01 par value common stock
outstanding as of March 31, 1997.
<PAGE>
RMED International, Inc.
Condensed Financial Statements
TABLE OF CONTENTS
PAGE
PART I. Item 1.
Condensed Balance Sheet as of March 31, 1997 and
December 31, 1996 F-1
Condensed Statements of Operations for the three
months ended March 31, 1997 and 1996 F-2
Condensed Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 F-3
Condensed Statement of Changes in Stockholders' Equity
for the three months ended March 31, 1997 F-4
Notes to Condensed Financial Statements for the three
months ended March 31, 1997 F-5
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. Other Information 8
Signatures 9
<PAGE>
RMED International, Inc.
Balance Sheet
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 34,139 $ 7,006
Accounts receivable, less $24,000 and $6,000
allowance for doubtful accounts, respectively 124,670 63,267
Inventory, at cost 174,694 141,937
Notes receivable, current maturities 40,598 64,195
Prepaids and other 3,344 3,123
----------- -----------
377,445 279,528
----------- -----------
NOTES RECEIVABLE, less current maturities 314,885 295,892
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Land and building 245,000 245,000
Furniture and office equipment 50,255 50,255
Machinery and equipment 15,375 12,875
Vehicles 5,796 5,796
----------- -----------
316,426 313,926
Less accumulated depreciation (69,883) (66,450)
----------- -----------
246,543 247,476
----------- -----------
OTHER ASSETS 16,014 16,075
----------- -----------
$ 954,887 $ 838,971
=========== ===========
CURRENT LIABILITIES
Notes payable, current maturities $ 3,026 $ 2,958
Note payable to President 154,823 136,874
Accounts payable and accrued liabilities 218,460 156,779
----------- -----------
376,309 296,611
----------- -----------
NOTES PAYABLE, less current maturities 143,729 144,821
----------- -----------
520,038 441,432
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 50,000,000
shares authorized; 6,370,958 shares issued
and outstanding 63,710 63,710
Contributed capital 5,146,013 5,146,013
Accumulated deficit (4,774,874) (4,812,184)
----------- -----------
434,849 397,539
----------- -----------
$ 954,887 $ 838,971
=========== ===========
See accompanying notes. F-1
<PAGE>
RMED International, Inc.
Statement of Operations
Three Months Ended
-----------------------------
March 31,1997 March 31,1996
------------- -------------
(Unaudited) (Unaudited)
SALES $ 400,929 $ 260,861
COST OF GOODS SOLD 190,481 160,360
--------- ---------
GROSS PROFIT 210,448 100,501
--------- ---------
OPERATING EXPENSES
General and administrative 127,842 105,283
Sales and marketing 55,051 75,635
--------- ---------
182,893 180,918
--------- ---------
OPERATING INCOME (LOSS) 27,555 (80,417)
--------- ---------
OTHER INCOME (EXPENSE)
Interest income 12,870 7,358
Interest expense (6,959) (3,186)
Gain on sale of medical products line 3,228 4,769
Gain on sale of diaper machine 616 8,750
Marketable securities, net realized and
unrealized gain (loss) -- (7,580)
--------- ---------
9,755 10,111
--------- ---------
NET INCOME (LOSS) $ 37,310 $ (70,306)
========= =========
EARNINGS (LOSS) PER SHARE $ .005 $ (.011)
========= =========
See accompanying notes. F-2
<PAGE>
RMED International, Inc.
Statement of Cash Flows
Three Months Ended
-----------------------------
March 31,1997 March 31,1996
------------- -------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 37,310 $ (70,306)
Adjustments to reconcile net income (loss)
to net cash provided by operations:
Depreciation and amortization 3,493 4,217
Changes in assets and liabilities:
Accounts receivable (61,403) (93,943)
Inventory (32,757) (89,863)
Marketable securities -- 61,473
Prepaids and other current assets (221) 1,663
Accounts payable and accrued liabilities 61,682 60,025
Payable to stock investment companies -- (36,908)
--------- ---------
NET CASH FROM (USED FOR) OPERATIONS 8,104 (163,642)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Reduction in medical products line and diaper
machine notes receivable 7,837 6,220
Decrease (increase) in note receivable from
Chairman (3,233) (2,117)
Purchase of equipment (2,500) --
--------- ---------
NET CASH FROM (USED FOR) INVESTING ACTIVITIES 2,104 4,103
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings (payments) on note payable to President 17,949 (1,803)
Payments on mortgage (1,024) (467)
Exercise of stock options -- 119,405
Borrowings to refinance mortgage -- 6,321
--------- ---------
NET CASH FROM (USED FOR) FINANCING ACTIVITIES 16,925 123,456
--------- ---------
NET INCREASE (DECREASE) IN CASH 27,133 (36,083)
CASH - BEGINNING OF PERIOD 7,006 36,687
--------- ---------
CASH - END OF PERIOD $ 34,139 $ 604
========= =========
See accompanying notes. F-3
<PAGE>
RMED International, Inc.
Statement of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock
------------ Contributed Accumulated
Shares Amount Capital Deficit
------ ------ ------- -------
<S> <C> <C> <C> <C>
Balances, December 31, 1996 6,370,958 $ 63,710 $ 5,146,013 $(4,812,184)
Net loss (unaudited) -- -- -- 37,310
--------- ----------- ----------- -----------
Balances, March 31, 1997 (Unaudited) 6,370,958 $ 63,710 $ 5,146,013 $(4,774,874)
========= =========== =========== ===========
</TABLE>
See accompanying notes. F-4
<PAGE>
RMED International, Inc.
Notes to Condensed Financial Statements
For the Three Months Ended March 31, 1997
(Unaudited)
Note A - General
The accompanying unaudited condensed financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. The financial statements include all the accounts
of RMED International, Inc. (the "Company") and its wholly owned subsidiaries,
all of which are inactive. All intercompany transactions and balances have been
eliminated. In the opinion of management, all material adjustments, consisting
of only normal recurring adjustments considered necessary for a fair
presentation, have been included. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Form
10-KSB for the year ended December 31, 1996.
Note B - Earnings (Loss) Per Share
Earnings (loss) per share of common stock are computed using the weighted
average number of shares outstanding during each period plus common stock
equivalent shares (in periods in which they have a dilutive effect).
Note C - Contingency
In August 1994, the Company commenced an action in the United States District
Court for the Southern District of New York against Sloan's Supermarkets, Inc.
and John A. Catsimatidis to recover damages based on the defendants' failure to
disclose, in its public filings and otherwise, the existence of an investigation
by the Federal Trade Commission ("FTC") regarding the concentration of
supermarkets by entities owned or controlled by the defendants. The Company
purchased approximately 226,000 shares of Sloan's common stock in November and
December 1993, in open market transactions on the American Stock Exchange,
without knowledge of the FTC investigation, and sold a portion of these shares
at a loss after June 2, 1994, when the Company learned of the FTC investigation.
The legal action has been certified as a "class action" with the Company the
class action representative. Litigation is subject to many uncertainties and the
Company is unable to predict the outcome of this matter.
F-5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RMED International, Inc. (the "Company", "RMED") was incorporated
under the laws of the State of Colorado on December 28, 1982, and is
in the business of marketing and selling Tushies(R) brand baby
products.
The Company recently received a patent for its GEL-FREE cotton blend
disposable diapers. Tushies diapers and natural formula wipes are
manufactured by outside private label manufacturers pursuant to
Company specifications.
The increase in sales and turnaround in net income in the first
quarter of 1997 directly reflects continued growth of the Company's
base and brand recognition.
Material Changes in Financial Position
Total assets of the Company increased $115,916 from $838,971 at
December 31, 1996 to $954,887 at March 31, 1997. This increase was
attributable primarily to an increase in accounts receivable and
inventory.
During the three month period ended March 31, 1997, net working
capital increased $18,219 primarily due to increases in accounts
receivable and inventory offset by an increase in the note payable to
the President, and accounts payable and accrued liabilities.
Total liabilities at March 31, 1997 were $520,038 compared to $441,432
at December 31, 1996. The increase of total liabilities of $78,606 was
primarily due to increased accounts payable and accrued liabilities,
and an increase in note payable to the President.
Total stockholders' equity increased $37,340 during the three month
period ended March 31, 1997. The increase was primarily a result of an
improvement in the gross profit margin and overall increase in sales.
Material Changes in Results of Operations
Net sales for the quarter ended March 31, 1997 were $400,929 compared
to net sales of $260,861 for the quarter ended March 31, 1996, an
increase of 54%.
Gross profit for the three months ended March 31, 1997 was $210,448
compared to $100,501 in the prior year, an increase of 109%.
Operating expenses for the three months ended March 31, 1997 and 1996
were $182,893 and $180,918, respectively.
The net income for the quarter ended March 31, 1997 was $37,310
compared to a net loss of $70,306 for the quarter ended March 31,
1996. The increase in the net income for 1997 is due to the factors
discussed above.
Liquidity and Capital Resources
At March 31, 1997 the Company had working capital of $1,136 consisting
of $377,445 in current assets and $376,309 in current liabilities.
As of March 31, 1997 the Company's long term debt is $146,775
consisting of a mortgage payable on the Delta, Colorado facility.
6
<PAGE>
ART II. Other Information
Items 1-5. Not applicable
Item 6. Exhibits and Reports on Form 8-K
In the three months ended March 31, 1997 no reports were filed on Form
8-K.
7
<PAGE>
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.
RMED International, Inc.
Date: May 13, 1997
/s/ EDWARD REISS
------------------------
Edward Reiss
Vice President and Principal
Financial Officer
8
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 34,139
<SECURITIES> 0
<RECEIVABLES> 148,670
<ALLOWANCES> 24,000
<INVENTORY> 174,694
<CURRENT-ASSETS> 377,445
<PP&E> 316,426
<DEPRECIATION> (69,883)
<TOTAL-ASSETS> 954,887
<CURRENT-LIABILITIES> 376,309
<BONDS> 143,729
0
0
<COMMON> 63,710
<OTHER-SE> 371,139
<TOTAL-LIABILITY-AND-EQUITY> 954,887
<SALES> 400,929
<TOTAL-REVENUES> 400,929
<CGS> 190,481
<TOTAL-COSTS> 182,893
<OTHER-EXPENSES> (16,714)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,959
<INCOME-PRETAX> 37,310
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,310
<EPS-PRIMARY> .005
<EPS-DILUTED> .005
</TABLE>
