SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended March 31, 1998.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from __________ to __________
Commission file number 0-18122
ANTENNAS AMERICA, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Utah 87-0454148
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4860 Robb Street, Suite 101,
Wheat Ridge, Colorado 80033
----------
(Zip Code)
(303) 421-4063
------------------------------------------------
(Issuer's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has 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.
Yes __X__ No _____
As of March 31, 1998 the Registrant had outstanding 73,839,422 shares of its
common stock, par value $.0005.
Transitional Small Business Disclosure Format (Check One):
Yes ______ No __X__
1
<PAGE>
ANTENNAS AMERICA, INC.
FORM 10-QSB
MARCH 31, 1998
TABLE OF CONTENTS
Page
No.
Part I ----
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 1998 3
Consolidated Statements of Operations for the Three Months Ended
March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1997 5
Note to Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 7 - 8
Forward Looking Statements 9
Part II
Item 6. Exhibits and Reports on Form 8-K 10
2
<PAGE>
ANTENNAS AMERICA, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
ASSETS 3/31/98
------ -------
Current Assets:
Cash $ 22,280
Accounts Receivable 385,711
Inventories 509,570
Prepaid Expenses 77,977
Tax Asset (NOL) 194,485
-------
Total Current Assets 1,190,023
Machinery & Equipment net of
accumulated depreciation 441,865
Other Assets:
Intangible Assets net of
accumulated amortization 45,417
Deposits 10,612
------
Total Assets $ 1,687,917
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Loan Account $ 342,779
Notes Payable 208,393
Accounts Payable-Trade 508,774
Other Accrued Liabilities 5,844
-----
Total Current Liabilities 1,065,790
Notes Payable, Officers 136,301
Total Liabilities 1,202,091
=========
Shareholders' Equity:
Common stock, $.0005 par value,
250,000,000 shares authorized,
73,839,422 shares issued and
outstanding. 36,920
Paid-in Capital 800,714
Subscriptions to Common Stock 18,500
Retained Earnings (deficit) ( 370,308)
---------
Total Equity 485,826
Total Liabilities and Equity $1,687,917
==========
3
<PAGE>
ANTENNAS AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
3/31/98 3/31/97
------- -------
Sales, Net $842,784 $615,376
Cost of Sales 494,462 322,029
------- -------
Gross Profit 348,322 293,347
Selling, General and
Administrative Expenses 322,415 227,027
------- -------
Income (loss) from Operations 25,907 66,320
Other Income and (Expense):
Interest Expense (17,014) (14,898)
------- -------
Net Income
before Income Taxes 8,893 51,422
Income Tax 3,024 17,483
----- ------
Net Income $ 5,869 $ 33,939
======= ========
Average Shares Outstanding 73,839,422 73,539,422
---------- ----------
4
<PAGE>
ANTENNAS AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------- --------------
<S> <C> <C>
Net Income $ 5,869 $ 33,939
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 25,815 8,400
Interest added to note payable 2,384 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (58,026) (62,586)
(Increase) decrease in inventory (1,016) (22,571)
(Increase) decrease in deferred tax asset 3,024 17,483
(Increase) decrease in prepaid expenses (2,237) (23,337)
Increase (decrease) in accounts payable
and accrued expenses
69,599 34,376
------------- --------------
Total adjustments 39,543 (48,235)
------------- --------------
Net cash provided by (used in)
operating activities 45,412 (14,296)
------------- --------------
Cash flows from investing activities:
Patent acquisition costs (10,123) (3,762)
Acquisition of plant and equipment (57,645) (30,251)
------------- --------------
Net cash used in investing activities (67,768) (34,013)
------------- --------------
Cash flows from financing activities:
Proceeds from officer loans - 7,651
Repayment of officer loans (1,000) -
Proceeds of new borrowing 2,914 -
Repayment of notes and leases payable (18,920) (4,368)
------------- --------------
Net cash provided by (used in)
financing activities (17,006) 3,283
------------- --------------
Decrease in cash (39,362) (45,026)
Cash and cash equivalents,
beginning of period 61,642 55,636
------------- --------------
Cash and cash equivalents,
end of period $ 22,280 $ 10,610
============= ==============
</TABLE>
See accompanying note to financial statements
5
<PAGE>
ANTENNAS AMERICA, INC.
NOTE TO FINANCIAL STATEMENTS
MARCH 31, 1998
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments necessary to present fairly the
financial position of the Company as of March 31, 1998 and the results of
operations and cash flows for the periods presented. All such adjustments are of
a normal recurring nature. The results of operations for the periods presented
are not necessarily indicative of the results for the full year.
The accounting policies followed by the Company are set forth in Note 1 to the
Company's financial statements in Form 10-KSB for the year ended December 31,
1997. These financial statements should be read in conjunction with the
financial statements and notes included in the Form 10-KSB.
6
<PAGE>
ANTENNAS AMERICA, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
For the period ended March 31, 1998
RESULTS OF OPERATIONS
Revenues for the three month period ended March 31, 1998 were $842,784 as
compared to $615,376 for the same period in 1997. The 37% increase in sales is
primarily due to the increased sales of the Company's Freedom(TM) and Walldo(TM)
local TV antenna systems.
The Company's net income for the three months ended March 31, 1998 was $5,869
compared with $33,939 for the period ended March 31, 1997. The decrease in
profits for the period is attributable to a decrease in gross margin on sales
for the period, the expenses associated with the development of several new
antenna systems to be introduced in the second half of 1998, increases in
depreciation and amortization expense primarily resulting from an increased
amount of manufacturing equipment.
Gross profit on a quarterly basis varies due to a number of factors including
product mix, fixed production costs and research and development expenses. Gross
profit margin (gross profit divided by net sales) for the three month period
ended March 31, 1998 was 41%, as compared with 48% for the three month period
ended March 31, 1997. The decrease is attributable to lower margins associated
with the product mix for the period and the pass-through purchases of certain
components required by the Company's O.E.M. customers to manufacture certain
conformal antenna systems for those customers' proprietary products. As the
Company anticipates that a higher percentage of its future revenues may be to
its O.E.M. customers with similar pass-through purchases of certain components,
the gross profit margin can be expected to be affected similarly.
FINANCIAL CONDITION
Compared to December 31, 1997 the Company's total assets as of March 31, 1998
increased $60,846 to $1,687,917 with liabilities increasing from $1,147,114 to
$1,202,091. Both the increases in total assets and liabilities are primarily due
to an increase in inventory. The Company has hired a full-time purchasing
manager and expects to increase its inventory turns throughout fiscal 1998
thereby lowering its overall inventory and associated costs. Shareholders'
equity improved from $479,957 to $485,826, which is the a result of the net
operating income for the period.
In addition to an increasing portion of revenues from O.E.M. products, the
Company anticipates continued increases in sales of product to the consumer
electronics marketplace through distributors. Consequently, the Company's future
revenues will be more seasonable than in previous quarters. The Company is
currently adjusting its overall operations to adapt to a more seasonal revenue
stream. Therefore, although the Company continues to operate on a positive cash
flow basis, the Board of Directors has authorized the issuance of a Private
Placement of the Company's common stock to provide additional working capital to
assist the Company with its fixed manufacturing, inventory and other costs to be
incurred in anticipation of the Company's potential growth relating to its new
and existing products.
7
<PAGE>
FORWARD LOOKING STATEMENTS
This report contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Although the Company believes that the expectations reflected in the
forward looking statements and the assumptions upon which the forward looking
statements are based are reasonable, it can give no assurance that such
expectations and assumptions will prove to be correct. See the Company's Annual
Report on Form 10-KSB for additional statements concerning important factors,
such as demand for products, manufacturing costs, and competition, that could
cause actual results to differ materially from the Company's expectations.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. Exhibits And Reports On Form 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K.
None
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act Of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ANTENNAS AMERICA, INC.
Date: May 14, 1998 By: /s/ Randall P. Marx
-----------------------------------------
Randall P. Marx
Chief Executive Officer
and Principal Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000826326
<NAME> Antennas America, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.000
<CASH> 22280
<SECURITIES> 0
<RECEIVABLES> 385,711
<ALLOWANCES> 0
<INVENTORY> 509570
<CURRENT-ASSETS> 1200634
<PP&E> 674250
<DEPRECIATION> 186967
<TOTAL-ASSETS> 1687917
<CURRENT-LIABILITIES> 1065790
<BONDS> 136301
0
0
<COMMON> 36920
<OTHER-SE> 448906
<TOTAL-LIABILITY-AND-EQUITY> 1687917
<SALES> 842784
<TOTAL-REVENUES> 842784
<CGS> 494462
<TOTAL-COSTS> 816877
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17014
<INCOME-PRETAX> 8893
<INCOME-TAX> 3024
<INCOME-CONTINUING> 25907
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5869
<EPS-PRIMARY> .000
<EPS-DILUTED> .000
</TABLE>
