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, 1998
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(h) 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 report(s), 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, 1998.
<PAGE>
RMED International, Inc.
Condensed Financial Statements
TABLE OF CONTENTS
Page
Part I. Item 1.
Condensed Balance Sheet as of March 31, 1998 and F-1
December 31, 1997
Condensed Statements of Operations for the three months F-2
ended March 31, 1998 and 1997
Condensed Statements of Cash Flows for the three months F-3
ended March 31, 1998 and 1997
Condensed Statements of Changes in Stockholders' Equity F-4
for the three months ended March 31, 1998
Notes to Condensed Financial Statements for the three F-5
months ended March 31, 1998
Item 2.
Management's Discussion and Analysis of Financial 6
Condition and Results of Operations
Part II. Other Information 8
Signatures 9
<PAGE>
RMED International, Inc.
Balance Sheet
March 31, December 31,
1998 1997
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 63,017 $ 178,754
Accounts receivable, less allowance for
uncollectible accounts of $6,000 and
$6,000, respectively 131,087 100,082
Notes receivable, current maturities 40,947 39,928
Inventory, at cost 123,102 76,604
Prepaids and other 59,436 60,108
----------- -----------
417,589 455,476
----------- -----------
NOTES RECEIVABLE, less current maturities 61,320 68,782
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Land and building 245,000 245,000
Furniture and office equipment 50,255 50,255
Machinery and equipment 15,737 15,737
Vehicles 5,796 5,796
----------- -----------
316,788 316,788
Less accumulated depreciation (83,651) (80,213)
----------- -----------
233,137 236,575
----------- -----------
OTHER ASSETS 16,233 16,299
----------- -----------
$ 728,279 $ 777,132
=========== ===========
CURRENT LIABILITIES
Note payable, current maturities $ 3,319 $ 3,244
Note payable to President 68,800 186,790
Accounts payable and accrued liabilities 206,639 219,745
----------- -----------
278,758 409,779
NOTES PAYABLE, less current maturities 140,540 141,532
----------- -----------
419,298 551,311
----------- -----------
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 (4,900,742) (4,983,902)
----------- -----------
308,981 225,821
----------- -----------
$ 728,279 $ 777,132
=========== ===========
See accompanying notes.
F-1
<PAGE>
RMED International, Inc.
Statement of Operations
Three Months Ended
-------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
(Unaudited) (Unaudited)
SALES OF DIAPERS $ 531,546 $ 400,929
COST OF GOODS SOLD 222,008 190,481
----------- -----------
GROSS PROFIT 309,538 210,448
----------- -----------
OPERATING EXPENSES
General and administrative 139,258 127,842
Sales and marketing 99,514 55,051
----------- -----------
238,772 182,893
----------- -----------
OPERATING INCOME 70,766 27,555
----------- -----------
OTHER INCOME (EXPENSE)
Interest income 8,364 12,870
Interest expense (5,489) (6,959)
Gain on sale of medical products
line and diaper machine 6,209 3,844
Other 3,310 --
----------- -----------
12,394 9,755
----------- -----------
NET INCOME $ 83,160 $ 37,310
=========== ===========
EARNINGS (LOSS) PER SHARE - BASIC $ 0.01 $ 0.01
=========== ===========
EARNINGS (LOSS) PER SHARE - ASSUMING DILUTION $ 0.01 $ 0.01
=========== ===========
WEIGHTED AVERAGE SHARES - BASIC 6,370,958 6,370,958
=========== ===========
WEIGHTED AVERAGE SHARES - DILUTED 7,204,886 7,021,752
=========== ===========
See accompnaying notes.
F-2
<PAGE>
RMED International, Inc.
Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 83,160 $ 37,310
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation and amortization 3,504 3,493
Changes in assets and liabilities:
Accounts receivable (31,005) (61,403)
Inventory (46,498) (32,757)
Prepaids and other current assets 672 (221)
Accounts payable and accrued liabilities (13,106) 61,682
------------ ------------
NET CASH FROM OPERATIONS (3,273) 8,104
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Reduction in medical products line note receivable
and diaper machine notes receivable 6,443 7,837
Decrease (increase) in note receivable from Chairman -- (3,233)
Purchase of equipment -- (2,500)
------------ ------------
NET CASH FROM (USED FOR) INVESTING ACTIVITIES 6,443 2,104
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings (payments) on note payable to President (117,990) 17,949
Payments on mortgage (917) (1,024)
------------ ------------
NET CASH FROM (USED FOR) FINANCING ACTIVITIES (118,907) 16,925
------------ ------------
NET INCREASE (DECREASE) IN CASH (115,737) 27,133
CASH - BEGINNING OF PERIOD 178,754 7,066
------------ ------------
CASH - END OF PERIOD $ 63,017 $ 34,199
============ ============
</TABLE>
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, 1997 6,370,958 $ 63,710 $ 5,146,013 $(4,983,902)
Net income (unaudited) -- -- -- 83,160
----------- ----------- ----------- -----------
Balances, March 31, 1998 (Unaudited) 6,370,958 $ 63,710 $ 5,146,013 $(4,900,742)
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-4
<PAGE>
RMED International, Inc.
Notes to Condensed Financial Statements
For the Three Months Ended March 31, 1998
(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, 1997.
Note B - Earnings (Loss) Per Share
Basic earnings (loss) per share of common stock are computed using the weighted
average number of common stock outstanding during each period. Diluted earnings
per share is calculated by increasing the weighted average shares by
contingently issuable shares to the Company's President for a patent interest
and for stock options computed using the treasury stock method.
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) and TenderCare(R) brands baby
products.
The Company holds a patent for its GEL-FREE cotton blend disposable
diapers. Tushies and TenderCare diapers and natural formula wipes are
manufactured by outside private label manufacturers pursuant to Company
specifications.
The increase in sales and profit in the first quarter 1998 directly
reflects continued growth of the Company's product line, brand recognition
and customer base.
Material Changes in Financial Position
Total assets of the Company decreased $48,853 from $777,132 at December
31, 1997 to $728,297 at March 31, 1998. The decrease was primarily
attributable to repayment of borrowings to the Company's President offset
by increases in accounts receivable and inventory.
During the three month period ended March 31, 1998, net working capital
increased $93,134 primarily due to a decrease in the note payable to the
President and increases in inventory and accounts receivable.
Total liabilities at March 31, 1998 were $419,298 compared to $551,311 at
December 31, 1997. The decrease of total liabilities of $132,013 is
primarily due to a decrease in the note payable to the President.
Total stockholders' equity increased $83,160 during the three month period
ended March 31, 1998. The increase was primarily a result of an
improvement in the gross profit margin and overall increase in sales.
Material Changes on Results of Operations
Net sales for the quarter ended March 31, 1998 were $531,546 compared to
net sales of $400,929 for the quarter ended March 31, 1997, an increase of
33%.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION cont'd
Gross profit for the three months ended March 31, 1998 was $309,538
compared to $210,448 in the prior year, an increase of 47%.
Operating expenses for the three months ended March 31, 1998 and 1997 were
$238,772 and $182,893, respectively, an increase of 31%.
The net income for the quarter ended March 31, 1998 was $83,160 compared
to $37,310 for the quarter ended March 31, 1997.
Liquidity and Capital Resources
At March 31, 1998, the Company had working capital of $138,831 consisting
of $417,589 in current assets and $278,758 in current liabilities.
As of March 31, 1998 the Company's long term debt is $140,540 consisting
of a mortgage payable on the Delta, Colorado facility.
7
<PAGE>
Part II. Other Information
Item 1-5. Not applicable.
Item 6. Exhibits and reports on Form 8-K.
In the three months ended March 31, 1998 no reports were filed on
Form 8-K.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and 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 11, 1998
/s/ Brenda Schenk
--------------------------
Brenda Schenk
President and Principal Financial
Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 63,017
<SECURITIES> 0
<RECEIVABLES> 137,087
<ALLOWANCES> 6,000
<INVENTORY> 123,102
<CURRENT-ASSETS> 417,589
<PP&E> 316,788
<DEPRECIATION> 83,651
<TOTAL-ASSETS> 728,279
<CURRENT-LIABILITIES> 278,758
<BONDS> 140,540
0
0
<COMMON> 63,710
<OTHER-SE> 245,271
<TOTAL-LIABILITY-AND-EQUITY> 728,279
<SALES> 531,546
<TOTAL-REVENUES> 531,546
<CGS> 222,008
<TOTAL-COSTS> 238,772
<OTHER-EXPENSES> (17,883)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,489
<INCOME-PRETAX> 83,160
<INCOME-TAX> 0
<INCOME-CONTINUING> 83,160
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83,160
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
