SECURITIES AND EXCHANGE COMMISSSION
Washington, DC 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 Office)
(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 6,395,958 shares of the Registrant stock $.01 par value common stock
outstanding as of June 30, 1998.
<PAGE>
RMED International, Inc.
Condensed Financial Statements
TABLE OF CONTENTS
PAGE
PART I. Item 1.
Condensed Balance Sheet as of June 30, 1998 and
December 31, 1997 F-1
Condensed Statements of Operations for the three and
six months ended June 30, 1998 and 1997 F-2
Condensed Statements of Cash Flows for the six months
ended June 30, 1998 and 1997 F-3
Condensed Statement of Changes in Stockholders' Equity
for the six months ended June 30, 1998 F-4
Notes to Condensed Financial Statements F-5
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. Other Information 7
Signatures 8
<PAGE>
RMED International, Inc.
Balance Sheet
June 30, December 31,
1998 1997
----------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 38,415 $ 178,754
Accounts receivable, less allowance
for doubtful accounts
of $6,000 and $6,000, respectively 237,596 100,082
Notes receivable, current maturities 42,341 39,928
Inventory, at cost 160,029 76,604
Prepaids and other 108 60,108
----------- -----------
478,489 455,476
----------- -----------
NOTES RECEIVABLE, less current maturities 53,345 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 (87,089) (80,213)
----------- -----------
229,699 236,575
----------- -----------
OTHER ASSETS 16,167 16,299
----------- -----------
$ 777,700 $ 777,132
=========== ===========
CURRENT LIABILITIES
Note payable, current maturities $ 3,400 $ 3,244
Note payable to President 64,913 186,790
Accounts payable and accrued liabilities 233,011 219,745
----------- -----------
301,324 409,779
----------- -----------
NOTE PAYABLE, less current maturities 139,977 141,532
----------- -----------
441,301 551,311
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 50,000,000
shares authorized; 6,395,958 and
6,370,958 issued and outstanding,
respectively 63,960 63,710
Contributed capital 5,160,412 5,146,013
Accumulated deficit (4,887,973) (4,983,902)
----------- -----------
336,399 225,821
----------- -----------
$ 777,700 $ 777,132
=========== ===========
See accompanying notes.
F-1
<PAGE>
RMED International, Inc.
Statement of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------- ----------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
---------------- ----------------- ---------------- ----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
SALES OF DIAPERS $ 653,004 $ 412,155 $ 1,184,550 $ 813,084
COST OF GOODS SOLD 348,618 324,037 570,626 514,518
----------- ----------- ----------- -----------
GROSS PROFIT 304,386 88,118 613,924 298,566
----------- ----------- ----------- -----------
OPERATING EXPENSES
General and administrative 205,622 134,802 344,880 262,644
Sales and marketing 99,154 96,488 198,668 151,539
----------- ----------- ----------- -----------
304,776 231,290 543,548 414,183
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (390) (143,172) 70,376 (115,617)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest income 7,640 11,680 16,004 24,550
Interest expense (4,870) (6,620) (10,359) (13,579)
Gain on sale of medical products line
and diaper machine 6,312 6,994 12,521 10,838
Other 4,077 4,076 7,387 4,076
----------- ----------- ----------- -----------
13,159 16,130 25,553 25,885
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 12,769 $ (127,042) $ 95,929 $ (89,732)
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE:
BASIC $ 0.00 $ (0.02) $ 0.02 $ (0.01)
=========== =========== =========== ===========
DILUTED $ 0.00 $ (0.02) $ 0.01 $ (0.01)
=========== =========== =========== ===========
WEIGHTED SHARES - BASIC 6,393,089 6,370,958 6,378,417 6,370,958
=========== =========== =========== ===========
WEIGHTED SHARES - DILUTED 7,447,967 6,370,958 7,361,862 6,370,958
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-2
<PAGE>
RMED International, Inc.
Statement of Cash Flows
Six Months Ended
----------------------------
June 30, 1998 June 30, 1997
------------- -------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 95,929 $ (89,732)
Adjustments to reconcile net income (loss)
to net cash provided by operations:
Stock issued for services 14,649 --
Depreciation and amortization 7,008 6,957
Changes in assets and liabilities:
Accounts receivable (137,514) (90,992)
Inventory (83,425) (15,944)
Prepaids and other current assets 60,000 (221)
Accounts payable and liabilities 13,266 114,547
--------- ---------
NET CASH FROM (USED FOR) OPERATIONS (30,087) (75,385)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments received on medical products
line and diaper machine notes receivable 13,024 16,779
Increase in note receivable from Chairman -- (5,946)
Purchases of equipment -- (3,127)
Increase in other assets -- (418)
--------- ---------
NET CASH FROM INVESTING ACTIVITIES 13,024 7,288
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in (payments on) note payable
to President (121,877) 75,069
Payments on mortgage payable (1,399) (1,707)
--------- ---------
NET CASH FROM (USED FOR) FINANCING ACTIVITIES (123,276) 73,362
--------- ---------
NET INCREASE (DECREASE) IN CASH (140,339) 5,265
CASH - BEGINNING OF PERIOD 178,754 7,006
--------- ---------
CASH - END OF PERIOD $ 38,415 $ 12,271
========= =========
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>
December 31, 1997 6,370,958 $ 63,710 $ 5,146,013 $(4,983,902)
Issued for services 25,000 250 14,399 --
Net loss (unaudited) -- -- -- 95,929
--------- ----------- ----------- -----------
June 30, 1998 (Unaudited) 6,395,958 $ 63,960 $ 5,160,412 $(4,887,973)
========= =========== =========== ===========
</TABLE>
See accompanying notes.
F-4
<PAGE>
RMED International, Inc.
Notes to Condensed Financial Statements
For the Six Months Ended June 30, 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 OPERATONS
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) Baby
Products.
Tushies and TenderCare products are manufactured by outside private label
manufacturers pursuant to Company specifications.
TenderCare Baby Diapers are competitive in price to the leading brand
diapers. This has been a major factor in sales growth. Every domestic
major health food store is now carrying one or both of our brands.
Products sold by the Company to retail stores and through the 800 home
delivery service include TushiesWipes, Tushies Organic T-shirts, Bibbies
Disposable Baby Bibs, TushiesMates for the cloth-diaper services and
GARLIC Natural, Biodegradable Mosquito Barrier.
MATERIAL CHANGES IN FINANCIAL POSITION
Total assets of the Company increased $568 from $777,132 at December 31,
1997 to $777,700 at June 30, 1998.
During the six month period ended June 30, 1998, net working capital
increased $131,468 primarily due to repayments on the note payable to the
President and an increase in accounts receivable and inventory.
Total liabilities at June 30, 1998 were $441,301 compared to $551,311 at
December 31, 1997. The decrease in total liabilities of $110,010 was
primarily due to the decrease in the note to the President.
Total stockholders' equity increased $110,578 during the six month period
ended June 30, 1998. The increase was primarily a result of an improvement
in gross profit and an overall increase in sales.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net sales for the quarter ended June 30, 1998 were $653,004 compared to
$412,155 for the quarter ended June 30, 1997, an increase of 58%. Net
sales for the six months ended June 30, 1998 were $1,184,550 compared to
$813,084 for the six months ended June 30, 1998, an increase of 46%.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION cont'd
Gross profit increased to $304,386 in the quarter ended June 30, 1998
compared to $88,118 for period ended June 30, 1997 and increased to
$613,924 for the six month period ended June 30, 1998 compared to $298,566
for the six month period ended June 30, 1997. Improvement in gross margin
is directly related to reduced costs from outside suppliers.
Operating expenses for the quarter and six month periods ended June 30,
1998 were $304,776 and $543,548, respectively, compared to $231,290 and
$414,183 in the quarter and six months period ended June 30, 1997, an
increase of $73,486 and $129,365, due primarily to increases in general
and administrative expenses of $70,820 and $82,236 and increases in
marketing expenses of $2,666 and $47,129. The increase in the G&A in 1998
were due to an increase in professional fees.
The net income for the quarter and six months periods ended June 30, 1998
was $12,769 and $95,929 respectively, as compared to a loss of $(127,042)
for the three months ended June 30, 1997 and a loss of $(89,732) for the
six months period. The increase in the net income is due to the factors
discussed above.
Liquidity and Capital Resources
At June 30, 1998 the Company had a net working capital $177,165 consisting
of $478,489 in current assets and $301,324 in current liabilities.
As of June 30, 1998 the Company's long term debt is $139,977 consisting of
a mortgage payable on the Delta, Colorado facility.
Year 2000 Issues
The Company has not presently addressed the extent of the Year 2000 effect
on its computerized system or the estimated costs required to remidiate.
At present it is uncertain as to the effect the Year 2000 scenario will
have on operations, liquidity and financial condition. There presently is
not a contingency plan in effect to address this issue.
PART II. Other Information
Items 1-6. Not applicable.
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: August 12, 1998
/s/ Brenda Schenk
-----------------------------
Brenda Schenk
President & Principal
Financial Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 38,415
<SECURITIES> 0
<RECEIVABLES> 237,596
<ALLOWANCES> 6,000
<INVENTORY> 160,029
<CURRENT-ASSETS> 478,489
<PP&E> 316,788
<DEPRECIATION> 87,089
<TOTAL-ASSETS> 777,700
<CURRENT-LIABILITIES> 301,324
<BONDS> 139,997
0
0
<COMMON> 63,960
<OTHER-SE> 272,439
<TOTAL-LIABILITY-AND-EQUITY> 777,700
<SALES> 653,004
<TOTAL-REVENUES> 653,004
<CGS> 348,618
<TOTAL-COSTS> 304,776
<OTHER-EXPENSES> (18,029)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,870
<INCOME-PRETAX> 12,769
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,769
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,769
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
