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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the 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: 0-17385
DYNA GROUP INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
87-0404753
(I.R.S. Employer
Identification No.)
1801 W. 16th Street, Broadview, Illinois 60153
(Address of principal executive offices) (Zip Code)
708-450-9200
(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: _____
The number of shares outstanding of the registrant's common stock as of March
31, 1996 was 7,482,925.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
------ 1996 1995
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 7,169 $ 157,007
Accounts receivable, less allowance
for doubtful accounts of $92,000 1,705,167 2,405,039
Inventories 3,907,504 3,667,195
Prepaid expenses and other 196,360 118,267
Deferred tax assets 61,372 61,372
---------- ----------
5,877,572 6,408,880
---------- ----------
PROPERTY AND EQUIPMENT, less
accumulated depreciation of
$2,137,120 and $2,038,929 1,121,555 1,137,353
---------- ----------
OTHER ASSETS:
Cost in excess of net assets of acquired
business, less accumulated amortization
of $105,933 and $100,963 29,819 34,789
Investment in joint venture 84,821 84,821
Due from joint venture 74,499 --
Other 96,660 93,833
---------- ----------
285,799 213,443
---------- ----------
$7,284,926 $7,759,676
---------- ----------
</TABLE>
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
LIABILITIES AND
--------------- March 31, December 31,
STOCKHOLDERS' EQUITY 1996 1995
-------------------- ---- ----
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable to banks $ 2,042,294 $ 2,565,000
Notes payable related party 350,000 400,000
Accounts payable 810,381 642,026
Accrued expenses 347,099 458,423
Current maturities of long-term debt 150,311 150,311
----------- -----------
3,700,085 4,215,760
----------- -----------
LONG-TERM DEBT BANK: 648,446 685,652
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock $.001 par value - authorized,
100,000,000 shares; issued 8,179,704 8,180 8,180
Capital in excess of par value 967,113 950,687
Retained earnings 2,117,600 2,063,460
Treasury stock - 696,779 and
714,557 (140,084) (143,657)
Unearned compensation (16,414) (20,406)
----------- -----------
2,936,395 2,858,264
----------- -----------
$ 7,284,926 $ 7,759,676
=========== ===========
</TABLE>
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
1996 1995
----------- -----------
<S> <C> <C>
NET SALES $ 2,272,678 $ 2,040,439
COST OF SALES 1,272,697 1,029,298
------------ -----------
Gross profit 999,981 1,011,141
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 842,308 774,129
----------- -----------
Operating income 157,673 237,012
INTEREST EXPENSE 70,350 44,206
LOSS FROM JOINT VENTURE -- (7,350)
----------- -----------
Income from operations
before income taxes 87,323 185,456
PROVISION FOR INCOME TAXES 33,183 70,473
----------- -----------
NET INCOME $54,140 $114,983
=========== ===========
INCOME PER COMMON SHARE $.01 $.02
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,469,592 7,496,814
</TABLE>
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1996 1995
---- ----
<S> <C> <C>
Income from continuing operations $ 54,140 $ 114,983
Adjustments to reconcile income from continuing
operations to net cash used by operating activities -
Depreciation and amortization 103,161 66,481
Amortization of unearned compensation 3,992 2,883
Loss from joint venture -- 7,350
Change in assets and liabilities:
Decrease in accounts receivable 699,872 135,258
Increase in inventories (240,309) (427,269)
Increase in prepaid expenses and other (78,093) (108,997)
Increase in accounts payable 168,354 126,397
Decrease in accrued expenses (111,324) (35,931)
Increase in other assets (2,827) (39,682)
--------- ---------
Cash (used) provided by operating activities 596,966 (158,527)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (82,393) (102,223)
--------- ---------
Cash used by investing activities (82,393) (102,223)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt (37,206) (33,846)
Increase (decrease) in notes payable (572,706) 210,000
Advance to joint venture (74,499) (30,000)
Issue treasury stock 20,000 --
Repurchase common stock -- (51,411)
---------- ---------
Cash provided (used) by financing activities (664,411) 94,743
---------- ---------
DECREASE IN CASH (149,838) (166,007)
CASH, beginning of period 157,007 305,610
--------- ---------
CASH, end of period $ 7,169 $ 139,603
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for -
Interest $ 67,663 $ 42,485
Income Taxes 142,781 90,273
</TABLE>
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - FINANCIAL INFORMATION
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to or as permitted by such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.
The financial information included herein at March 31, 1996 and for the
three months ended March 31, 1996 and March 31, 1995 is unaudited and, in the
opinion of the Company, reflects all adjustments (which includes only normal
recurring adjustments) necessary for the fair presentation of financial
position as of that date and the results of operations for those periods. The
information in the consolidated balance sheet as of December 31, 1995 was
derived from the Company's audited financial statements for 1995.
NOTE 2 - INVENTORIES
Inventories consist of the following:
March 31, 1996 December 31, 1995
-------------- ----------------
Raw materials and work in process $ 1,462,807 $ 1,131,045
Finished goods 2,444,697 2,536,150
----------- -----------
$ 3,907,504 $ 3,667,195
=========== ===========
NOTE 3 - STOCKHOLDERS' EQUITY
During the first quarter of 1996 the Company issued 17,778 shares of stock
from its treasury at a cost of $3,573, and an issuance price of $20,000 for the
acquisition of certain NFL licensing rights.
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Company's working capital ratio at March 31, 1996 increased to 1.6 to 1
from 1.5 to 1 at December 31, 1995. Cash in bank decreased by $149,838 during
the quarter.
Operating activities provided cash flow of $596,966, with income from
operations and non-cash adjustments providing $161,293. Changes in net working
capital provided $435,673. The net increase in working capital was primarily
due to vigorous collections of accounts receivable along with a moderate
increase in accounts payable. These increases were partially offset by
increases in inventories and prepaid expenses and a decrease in accrued
expenses.
Capital expenditures for dies and molds used $82,393. Financing activities
used $664,411, primarily due to repayments on notes payable and long-term debt.
At March 31, 1996, the Company has a revolving line of credit with a bank
allowing borrowing up to $2,750,000 against qualified accounts receivable and
inventory. At March 31, 1996 approximately $142,000 was available for
borrowing. This line of credit is due June 30, 1996. The Company anticipates
renewing this agreement.
As of March 31, 1996, there are no material commitments for future capital
expenditures, and management does not anticipate any major expenditures in the
foreseeable future. It is management's belief that the Company's present
facilities will be adequate to meet its current and future needs.
Results of Operations
Net sales for the quarter ended March 31, 1996 as compared to March 31,
1995 increased $232,239. Gross margin decreased to 44% as compared to 49.5% in
1995. This decrease is attributable to sales mix.
Selling, general and administrative expenses as a percent of sales
decreased to 37% in 1996 from 38% in 1995. This nominal decrease is due to
fixed costs comprising the greater proportion of these expenses, and thus not
increasing directly with sales volume increases.
Interest expense increased substantially as a result of higher borrowing
levels as compared to last year.
As a result of the foregoing, income before taxes decreased $98,133 to
$87,323 and income after taxes decreased $60,843 to $54,140.
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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.
DYNA GROUP INTERNATIONAL, INC.
------------------------------
(Registrant)
Date: May 10, 1996 /s/ Roger R. Tuttle
------------- -------------------
(Signature) Roger R. Tuttle, Chairman of the Board and
Chief Executive Officer
Date: May 10, 1996 /s/ Thomas J. Heslinga
------------ ---------------------
(Signature) Thomas J. Heslinga, Treasurer (Principal
Accounting and Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 7,169
<SECURITIES> 0
<RECEIVABLES> 1,797,167
<ALLOWANCES> 92,000
<INVENTORY> 3,907,504
<CURRENT-ASSETS> 5,877,572
<PP&E> 3,258,675
<DEPRECIATION> 2,137,120
<TOTAL-ASSETS> 7,284,926
<CURRENT-LIABILITIES> 3,700,085
<BONDS> 648,446
0
0
<COMMON> 8,180
<OTHER-SE> 2,928,215
<TOTAL-LIABILITY-AND-EQUITY> 7,284,926
<SALES> 2,272,678
<TOTAL-REVENUES> 2,272,678
<CGS> 1,272,697
<TOTAL-COSTS> 1,272,697
<OTHER-EXPENSES> 842,308
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,350
<INCOME-PRETAX> 87,323
<INCOME-TAX> 33,183
<INCOME-CONTINUING> 54,140
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,140
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
