U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the 3 month period ended June 30, 1996.
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transaction period from to
Commission File No. 0-14840
BERES INDUSTRIES, INC.
(Name of Small Business Issuer in its Charter)
New Jersey 22-1661772
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1785 Swarthmore Avenue
Lakewood, New Jersey 08701
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (908) 367-5700
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
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.
(1) Yes X No (2) Yes No
State the number of shares outstanding of each of the
Registrant's classes of common equity, as of the latest
applicable date:
12,411,934 - July 23, 1996
Beres Industries, Inc.
June 30, 1996
Form 10-QSB
Index
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1996 and
March 31, 1996
Consolidated Statements of Operations for the Three
Months Ended June 30, 1996 and 1995
Consolidated Statement of Changes in Stockholders
Equity for the Three Months Ended June 30, 1996
Consolidated Statements of Cash Flows for the Three
Months Ended June 30, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Managements Discussion and Analysis, Material Changes
in Financial Condition and Results of Operations
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
6/30/96 3/31/96
(Unaudited) (Note 1)
ASSETS
Current Assets
Cash and Equivalents $ 371,000 $ 377,000
Cash - Restricted 271,000 268,000
Accounts Receivable - Trade:
Less Allowance for Doubtful
Accounts of $258,000 at Each
Date 603,000 600,000
Inventories - Raw Materials 104,000 94,000
- Work in Process 27,000 183,000
- Finished Goods 130,000 17,000
Prepaid Expenses and Other
Current Assets 52,000 70,000
Total Current Assets 1,558,000 1,609,000
Property, Plant and Equipment - Less
Accumulated Depreciation of
$5,192,000 and $5,155,000
Respectively 1,722,000 1,759,000
Other Assets 57,000 57,000
Total Assets $ 3,337,000 $ 3,425,000
See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
6/30/96 3/31/96
(Unaudited) (Note 1)
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Current Maturities of Long-Term
Debt $ 228,000 $ 250,000
Current Maturities of Capital
Lease Obligations 61,000 61,000
Accounts Payable and Accrued
Expenses 350,000 413,000
Customer Deposits 23,000 35,000
Total Current Liabilities 662,000 759,000
Long-Term Debt - Less Current
Maturities 1,045,000 1,067,000
Stockholders Equity
Common Stock - Par Value $.02 Per
Share:
Authorized 21,000,000 Shares
Issued and Outstanding -
12,412,000 Shares 248,000 248,000
Capital in Excess of Par Value 3,445,000 3,445,000
Retained Deficit ( 1,893,000) ( 1,924,000)
1,800,000 1,769,000
Less: Amounts Due on Sale of
Common Stock 170,000 170,000
Total Stockholders Equity 1,630,000 1,599,000
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY $ 3,337,000 $ 3,425,000
See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months
Ended Ended
6/30/96 6/30/95
Revenues
Contract Revenue and Net Sales $ 1,025,000 $ 891,000
Total Revenues 1,025,000 891,000
Operating Expenses
Contract Costs and Cost of Goods
Sold 781,000 746,000
Selling, General and
Administrative 195,000 197,000
Total Operating Expenses 976,000 943,000
Operating Income (Loss) 49,000 ( 52,000)
Other Income (Expenses)
Interest and Other Income 11,000 15,000
Interest Expense ( 29,000) ( 27,000)
Total Other Income (Expenses) ( 18,000) ( 12,000)
Net Income (Loss) $ 31,000 $( 64,000)
Weighted Average Number of Shares
Outstanding 12,412,000 12,412,000
Net Income (Loss) Per Common Share
Outstanding $ 0.002 $( 0.005)
Unaudited - See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1996
Common Stock Capital in
Excess of Retained
Shares Par Value Par Value Deficit
Balances -
April 1, 1996 12,412,000 $ 248,000 $ 3,445,000 $(1,924,000)
Net Income for the
Period - - - 31,000
Balances -
June 30, 1996 12,412,000 $ 248,000 $ 3,445,000 $(1,893,000)
Unaudited - See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Cash Flows from Operating Activities:
Net Income (Loss) for the Period $ 31,000 $( 64,000)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 39,000 71,000
Changes in Operating Assets and
Liabilities:
Accounts Receivable - Trade ( 3,000) ( 70,000)
Inventories 33,000 26,000
Prepaid Expenses and Other
Current Assets 16,000 ( 6,000)
Other Assets -0- 2,000
Accounts Payable and Accrued
Expenses ( 63,000) ( 46,000)
Customer Deposits ( 12,000) -0-
Net Cash Provided By (Used in)
Operating Activities 41,000 ( 87,000)
Cash Flows from Investing Activities:
Acquisitions of Property and
Equipment -0- ( 59,000)
Investment in Restricted Cash ( 3,000) -0-
Net Cash (Used in) Investing Activities ( 3,000) ( 59,000)
Unaudited - See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT D)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Cash Flows from Financing Activities:
Principal Payments on Long-Term Debt $ (28,000) $( 26,000)
Principal Payments on Capital
Lease Obligations ( 16,000) ( 12,000)
Net Cash (Used in) Financing
Activities ( 44,000) ( 38,000)
Net Decrease in Cash and Equivalents ( 6,000) (184,000)
Cash and Equivalents, Beginning of Year 377,000 454,000
Cash and Equivalents, End of Period $ 371,000 $ 270,000
SUPPLEMENTAL INFORMATION:
Cash Paid for Interest $ 29,000 $ 31,000
Unaudited - See Accompanying Notes to Financial Statements
Part I - Item 1
BERES INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The consolidated balance sheet at the end of the
preceding fiscal year has been derived from the audited
consolidated balance sheet contained in the Company s
Form 10-KSB and is presented for comparative purposes.
All other financial statements presented are unaudited.
In the opinion of Management, all adjustments which
include only normal recurring adjustments necessary to
present fairly the financial position for all periods
presented have been made. The results of operations
for the interim periods are not necessarily indicative
of the operating results for the full year.
Footnote disclosures normally included in financial
statements prepared in accordance with generally
accepted accounting principles have been omitted in
accordance with the published rules and regulations of
the Securities and Exchange Commission. These
consolidated financial statements should be read in
conjunction with the financial statements and notes
thereto included in the Company s Form 10-KSB for the
most recent fiscal year ended.
Note 2 - Reclassifications
Certain amounts previously reported in the June 30,
1995 financial statements have been reclassified to
conform with the June 30, 1996 presentation.
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net Sales For the three months ended June 30, 1996 increased by
$134,000 or 15% from those in 1995. Net Sales by segment were as
follows:
Three Months
Ended September 30,
1996 1995
Athenia $ 156,000 $ 69,000
Custom Molding 591,000 579,000
Finished Ribbons 278,000 243,000
Audio Cassettes 0 0
$1,025,000 $ 891,000
Athenia's sales vary from quarter to quarter depending on the
production time required to build various tools and the amount of
backlog. During the quarter ended June 30, 1996, Athenia's sales
increased approximately $87,000 or 126% from the comparable 1995
period. This increase is primarily the result of the low level
of shipments made during the 1995 period and is more indicative
of normal sales level for this segment. Although backlog for
Athenia has recently decreased, Management is hopeful that with
continued effort to obtain new orders for new tooling and/or
repairs, a respectable sales level will be maintained.
Custom molding consists of the Company's injection molding
operations, including ribbon cartridge kits sold to outside
customers in the ribbon industry, and the sale of custom molded
contract products to plastic product manufacturers. Sales for
this segment increased approximately $12,000 or 2% for the
quarter ended June 30, 1996 as compared to the similar period of
1995. As discussed in recent prior filings, Management has made
a concentrated effort to redirect the Company toward increasing
custom contract molding which traditionally carries the highest
gross profit margins for the Company. Maintaining this increased
level of sales for this segment is the result of those efforts.
Management intends to continue concentrating its efforts in this
area and anticipates that sales for this segment will remain at
or above current levels.
Finished ribbons cartridge sales increased approximately $35,000
or 14.4% during the quarter ended June 30, 1996 as compared to
the similar 1995 period. This increase is primarily the result
of increased orders from one customer. Due to a decreased demand
for impact ribbon products in the market, a result of the
increased popularity of laser and ink jet printers, Management
anticipates that sales for finished ribbons may suffer in the
immediate future. In an attempt to offset this, efforts will be
concentrated on attempting to secure business in certain niche
markets for impact ribbons, i.e. point of sale products, where it
is predicted that growth will continue. It can not be determined
with certainty at this time if the Company will be successful in
securing this business to offset the anticipated general decline.
Audio cassettes sales were $0 for the quarter ended June 30, 1996
due to the fact that production in this segment remains suspended
at this time. As discussed in prior filings, production was
halted due to losses resulting primarily from low selling prices
caused by intense foreign competition. Management is attempting
to liquidate the manufacturing equipment. Although certain
prospective purchasers have expressed an interest, it is not
known at this time if a sale of these assets will be successfully
consummated.
Contract costs and costs of goods sold varies based upon sales
volume and product mix. Cost of sales decreased to 76.2% from
83.7% for the quarter ended June 30, 1996 as compared to 1995.
This improvement is primarily the result of the overall increased
sales level together with improved production efficiencies and
controlled manufacturing costs.
Selling, general and administrative expenses remained
approximately the same at $195,000 for the quarter ended June 30,
1996 as compared to $197,000 for the similar 1995 period.
Interest and other income decreased $4,000 to $11,000 for the
quarter ended June 30, 1996 as compared to the similar 1995
period. This decrease is primarily the result of lower
commission income earned on the sale of imported plastic ribbon
kits.
Interest expense increased $2,000 to $29,000 for the three months
ended June 30, 1996 as compared to the similar 1995 period. This
increase is primarily the result of increased debt from a loan
taken on during January 1996 for the Purchase of a new injection
molding machine.
Net income for the quarter ended June 30, 1996 was $31,000 as
compared to a net loss of $64,000 for the similar period of 1995.
This improvement is primarily the result of the improvement in
gross profit due to the increased level of sales and the result
of controlling costs.
Management will continue to monitor the performance of all
segments with an emphasis on attempting to increase sales and
improve cost controls. A particular emphasis is being placed on
increasing sales in the custom molding segment which results in
the highest gross profit margins. Absent a further downturn in
the overall economy, Management is hopeful for improved operating
results.
MATERIAL CHANGES IN FINANCIAL POSITION
The principal change in financial position during the three
months ended June 30, 1996 was an improvement in working capital
to $896,000 at June 30, 1996 from $850,000 at March 31, 1996.
Additionally, for the three month period, operations generated
net cash of approximately $41,000 which was sufficient to allow
the Company to meet all its obligations and not deplete reserves.
The Company intends to continue operating under the assumption
that no significant new financing will be available. Scheduled
obligations are expected to be met by operating cash flows. If
necessary, additional cost cutting measures will be implemented.
Achieving the return to growth and profitability will require the
Company to overcome uncertainties which it now faces, namely, the
weakened markets for its impact ribbon product line and the
sluggishness of the U.S. economy. It is not possible to
determine the effects of these factors on the Company's financial
condition or liquidity at this time. Management is evaluating
the possibility of raising capital to invest in new markets or
attempting to align the Company with a strategic partner that
could utilize the Company's capabilities as it moves forward.
The potential success of accomplishing either of these avenues is
not determinable at this time. Management will continue its
efforts increase sales and improve cost controls. Absent any
unanticipated operating expenses or a significant further
downturn in the economy, Management is hopeful for an improvement
in long term operating results.
BERES INDUSTRIES, INC. AND SUBSIDIARIES
PART II OTHER INFORMATION
Item 1 Legal Proceedings:
There have been no material changes in legal
proceedings from as previously reported in the Company's 10-KSB
for the fiscal year ended March 31, 1996.
Item 2 Change in Securities:
None
Item 3 Default 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:
None
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) 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.
Date: August 12, 1996 BERES INDUSTRIES, INC.
(Registrant)
S/ CHARLES BERES, JR.
Charles Beres, Jr., Chief
Executive Officer, President,
Treasurer, Chief Financial
Officer, Director
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the
capacities and on the date indicated.
Dated: August 14, 1996 S/ CHARLES BERES, SR.
Charles Beres, Sr., Chairman
of the Board, Director
Dated: August 12, 1996 S/ CHARLES BERES, JR.
Charles Beres, Jr., Chief
Executive Officer, President,
Treasurer, Chief Financial
Officer, Director
Dated: August 12, 1996 S/ JOSEPH L. DELIKAT
Joseph L. Delikat, Vice
President, Secretary, Director
Dated: August 12, 1996 S/ HAROLD E. ZUBER
Harold E. Zuber, Vice
President, Director
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<PERIOD-END> JUN-30-1996
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<RECEIVABLES> 895,000
<ALLOWANCES> 258,000
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<COMMON> 248,000
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<OTHER-SE> 1,382,000
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