FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
.................to.................
Commission file number 33-19583
ZEVEX INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
NEVADA
87-0462807
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
5175 Greenpine Drive, Murray, Utah
84123
(Address of principal executive offices)
(Zip Code)
(801) 264-1001
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ] Not Applicable [ X ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. As of May
8, 1996, the Company had outstanding 1,356,716 shares of common stock,
par value $0.04 per share.
PART I
FINANCIAL INFORMATION
______________________________________________________________________
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
______________________________________________________________________
ZEVEX International, Inc. (the "Company"), files herewith balance
sheets of the Company as of March 31, 1996, and December 31, 1995, and
the related statements of operations and cash flows for the respective
three month periods ended March 31, 1996 and 1995. In the opinion of
management of the Company, the financial statements reflect all
adjustments, all of which are normal recurring adjustments, necessary
to fairly present the financial condition of the Company for the
interim periods presented. The financial statements included in this
report on Form 10-Q should be read in conjunction with the audited
financial statements of the Company and the notes thereto included in
the annual report of the Company on Form 10-KSB for the year ended
December 31, 1995.
ZEVEX INTERNATIONAL, INC. & SUBSIDIARY
Balance Sheet
-Unaudited-
ASSETS
Mar 31 Dec 31
1996 1995
CURREN
T
ASSETS
Cash in 850,677 870,333
Banks
Accounts 1,020,99 1,209,79
Receivabl 1 4
e
Employee 4,085 2,835
Advances
Tax 0 0
Refunds
Work-In-
Process 1,093,194 791,960
Total 2,968,947 2,874,922
Current
Assets
OTHER
ASSETS
Net 506,384 363,771
Property
&
Equipment
Deposits
6,182 8,682
Total 512,566 372,453
Other
Assets
TOTAL 3,481,513
ASSETS 3,247,375
LIABILITIES & STOCKHOLDERS' EQUITY
LIABIL
ITIES
Accounts 362,126 191,562
Payable
Other 111,943 96,206
Accrued
Expenses
Income
Taxes 23,246 58,735
Payable
Total 497,315
Current 346,503
Liabilities
0 0
Long-
Term
Debt
Deferr 0 0
ed
Taxes
Total 0 0
Long-
Term
Debt
STOCKHOLDERS' EQUITY
Common Stock 5,000,000 shares
authorized at
$0.04 par
value
issued
and
outstanding
1,130,716 share in 1995,
and 1,35,716 shares in 1996 54,629 54,629
Capital 1,344,833 1,344,833
in Excess
of Par
Value
Retained Earnings 1,584,736 1,501,410
Total Stockholders 2,984,198 2,900,872
Equity
TOTAL 3,481,513 3,247,375
LIABILITIES &
STOCKHOLDERS EQUITY
ZEVEX INTERNATIONAL, INC. & SUBSIDIARY
Statement of Operations
For For
Three Three
Months Months
Ended Ended
3/31/96 3/31/95
REVENUES
Sales 1,267,607 1,184,946
Cost of Sales
713,306 683,409
Gross Profit 554,301 501,537
General Expenses
Marketing, G&A 357,218 290,809
Research and Devel.
114,228 131,433
Operating Income 82,855 79,295
Other Income 13,084 9,411
Provision for Taxes
(12,613) (8,181)
Net Income (Loss)
83,326 80,525
Income Per Share
.0610 .0712
Weighted Average
Shares Otstanding
1,365,706 1,130,609
ZEVEX INTERNATIONAL, INC. & SUBSIDIARY
Statement of Cash Flows
For the three months ended June 30, 1995
and June 30, 1996
Mar 31 Mar 31
1996 1995
Cash Flows from Operating Activities:
Net income (loss) 83,326 80,524
Noncash revenue and expense adjustments:
Depreciation 46,860 36,249
Change in assets and liability accounts:
(Increase) decrease in accounts 188,803
receivable (13,642)
(Increase) decrease in work-in-process
(301,234) (71,073)
(Increase) decrease in deposits 2,500
(2,306)
(Increase) decrease prepaid expenses 0 5,862
(Increase) decrease in employee advances 0
(1,250)
Increase (decrease) in accounts payable 170,564 61,287
Increase (decrease) in accrued expenses 15,737 3,713
Increase (decrease) in provision for
taxes (35,489) 8,181
Net Cash flows used for
operating activities
169,817 108,795
Cash flows from investing activities:
Purchse of equipment
(189,473) (23,042)
Net increase (decrease) in cash (19,656) 85,753
Cash at beginning of period
870,333 602,871
Cash at end of period
850,677 950,085
ZEVEX INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
1. Summary of Significant Accounting Policies
A. Business Information
The Company was incorporated under the laws of the State of
Nevada on December 30, 1987. The Company was originally
incorporated as Downey Industries, Inc. and changed its name
to ZEVEX International, Inc. on August 15, 1988.
B. Principles of Consolidation
The consolidated financial statements include the accounts of
ZEVEX, International, Inc. (Company) and its wholly-owned
subsidiary ZEVEX, Inc. All significant inter company balances
and transactions have been eliminated in the consolidation.
C. Machinery and Equipment
Machinery and equipment are stated at cost less accumulated
depreciation. Depreciation is provided over expected useful
lives of five or seven years on accelerated methods, which
provide for more depreciation expense in the early years of the
estimated life of the asset.
Major replacements which extend the useful lives of equipment are
capitalized and depreciated over the remaining useful life.
Normal maintenance and repair items are charged to costs and
expenses incurred.
Upon retirement or disposal of property, plant or equipment, the
costs and related accumulated depreciation amounts are eliminated
and any gain or loss is included in operation in the year of
disposition.
Notes to the financial statements - continued
D. Work In Process
Work in process is stated at the lower of cost (first-in, first-
out method) or market value.
E. Bad Debts
The Company accounts for bad debts using the direct write off
method. Accounts are written off when deemed uncollectible.
F. Net Income Per Share
The computation of net income per share of common stock is
computed by dividing net income for the period by the weighted
average number of shares outstanding during the period. Common
stock equivalents which dilute earnings per share were not taken
into consideration in the calculation because they had no
material impact.
2. Business Combination
On August 11, 1988, the Company acquired the outstanding stock of
ZEVEX, Inc., a manufacturer and producer of acoustic and electronic
equipment for special applications, in exchange for 600,000 shares of
its common stock. This business combination has been accounted for in
a manner similar to a pooling-of-interests.
3. Income Taxes
Provision for income taxes is made, at Federal and State statutory
rates, based on earnings reported in the financial statements for the
amount of income taxes payable currently, less any prepayment
deposits.The provision for income taxes at March 31, 1995 and March
31, 1996 consists of the following:
1996 1995
Federal income taxes $ 7,816 $ 3,747
State income taxes 4,797 4,434
Provision for income tax $ 12,613 $ 8,181
========== ==========
4.Major Customers
The Company distributes its products directly and is not dependent
upon any single customer. However, sales to three customers for the
three months ending March 31, 1996, each represented 10% or more of
total sales.
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
______________________________________________________________________
Results of Operations
The Company's sales increased to $1,267,607 in the first quarter 1996
from $1,184,946 in the first quarter 1995, an increase of
approximately 7% for the three months ending March 1996. During the
first three months of 1996, 72% of total revenues resulted in sales to
three customers, all of whom were major customers in 1995. Since the
Company's products are sold to OEMs as components for incorporation
into products manufactured by them, demand for the Company's products
is affected by the demand for the final products manufactured by the
OEMs, which is beyond the control of the Company, and no assurances
can be given that orders from any customer will increase or remain at
current levels or that they will not decline.
The Company's gross profit as a percentage of sales was 43% in the
first quarter 1996, as compared to 43% in the first quarter 1995.
Management does not expect any significant changes in cost of sales
during 1996 with the product mix which is expected to be delivered.
Selling, general and administrative expenses for the quarter ended
March 31, 1996 increased $66,409, from $290,809 in the first quarter
of 1995 to $357,218 in the first quarter 1996. Management attributes
the increase in these expenses to increased sales effort including
travel, and legal costs incurred for patent and trademark filings.
The Company believes that general and administrative expenses will
remain constant for the remainder of 1996.
Research and development expenses vary from quarter to quarter
depending on the number and nature of pending research and development
projects and their various stages of completion. During the first
quarter of 1996 research and development expenses were $114,228
compared to $131,433 during the first quarter of 1995. The expenses
incurred during the first quarter were for the continued development
of several proprietary products and new applications of the Company's
ultrasound technology. Management believes the investment in research
and development will serve the Company's future well, and will
continue these expenses at the current rate for at least the next
several quarters.
Net income increased to $83,326, or 6.6% of net sales, in the first
quarter of 1996, from $80,525, or 6.8% of net sales, in the first
quarter of 1995. The decreases of net income percentage during 1996
as compared to 1995 are principally due to the increase in sales and
related expenses for the current year.
As of March 31, 1996 the Company's backlog of customer orders was
$2,808,325, as compared to $2,362,000 on March 31, 1995. Management
estimates that approximately 90% of the backlog will ship before
December 31, 1996.
Liquidity and Capital Resources
During the quarter ending March 31, 1996, the Company produced $83,326
of net income from operating activities Cash decreased by $19,656, in
the first quarter of 1996. During the quarter ending March 31, 1995,
the Company produced $80,525, of net income from operating activities.
Net cash increased by $85,753, in the first quarter of 1995, as the
Company funded an increase in accounts receivable and inventories of
work in progress for future sale.
The Company's purchases of new research, production, test equipment
and tooling was $189,473 for the first three months of 1996.
The Company's working capital at March 31, 1996, was $2,471,632, as
compared to $2,361,371 at March 31, 1995. The increase is primarily
attributed to the income from operations. The portion of working
capital represented by cash at such dates was $850,677 and $950,085,
respectively. The Company utilizes substantial portions of its cash
from time to time to fund its operations.
PART II
OTHER INFORMATION NOT APPLICABLE AT THIS TIME
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
______________________________________________________________________
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.
ZEVEX INTERNATIONAL, INC.
Dated: May 10, 1996 By /s/ Dean G. Constantine
Dean G. Constantine, President
By /s/ Phillip L. Mcstotts
Phillip L. McStotts, Secretary
(Principal Financial Officer)
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 850,677
<SECURITIES> 0
<RECEIVABLES> 1,020,991
<ALLOWANCES> 0
<INVENTORY> 1,093,194
<CURRENT-ASSETS> 2,968,947
<PP&E> 1,013,459
<DEPRECIATION> 507,075
<TOTAL-ASSETS> 3,481,513
<CURRENT-LIABILITIES> 497,315
<BONDS> 0
0
0
<COMMON> 54,629
<OTHER-SE> 2,929,569
<TOTAL-LIABILITY-AND-EQUITY> 3,481,513
<SALES> 1,267,607
<TOTAL-REVENUES> 1,267,607
<CGS> 713,306
<TOTAL-COSTS> 713,306
<OTHER-EXPENSES> 471,446
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 95,939
<INCOME-TAX> 12,613
<INCOME-CONTINUING> 83,326
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83,326
<EPS-PRIMARY> .061
<EPS-DILUTED> .061
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