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: June 30, 2000
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.
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(Exact name of registrant as specified in its charter)
NEVADA 87-0404753
(State or other jurisdiction of (I.R.S. Employer
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incorporation or organization) Identification No.)
1661 S. Sequin Ave., New Braunfels, Texas 78130
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(Address of principal executive offices) (Zip Code)
830-620-4400
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(Registrant's telephone number, including area code)
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.
[ X ] Yes [ ] No
The number of shares outstanding of the registrant's common
stock as of June 30, 2000 was 7,440,925.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
June 30, December 31,
2000 1999
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(Unaduited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 11,496 $ 10,496
Accounts receivable, less allowance
For doubtful accounts of
$72,535 and $102,000 1,839,891 1,619,976
Inventories 3,148,008 2,398,037
Prepaid expenses and other 264,777 265,525
Deferred income taxes 120,084 120,084
Sale of Joint Venture 83,064 83,064
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5,467,320 4,497,182
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PROPERTY AND EQUIPMENT
Net 581,304 446,361
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OTHER ASSETS:
Cash surrender value life insurance 103,234 103,234
Other 28,962 ---
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132,196 103,234
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$ 6,180,820 $ 5,046,777
========== ==========
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND
STOCKHOLDERS' EQUITY June 30, December 31,
2000 1999
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(Unaduited)
<S> <C> <C>
CURRENT LIABILITIES:
Cash overdraft $ 169,579 $ 146,110
Revolving line of credit 1,271,763 769,219
Notes payable related party 467,515 483,292
Accounts payable 966,132 183,653
Accrued expenses 247,619 446,550
Current maturities of long-term debt 9,057 15,689
Income taxes payable 22,300 ---
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Total current liabilities $ 3,153,965 $ 2,044,513
Deferred income taxes 3,285 3,285
Long-term debt, less current maturities 16,583 17,626
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Total liabilities 3,173,833 2,065,424
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STOCKHOLDERS' EQUITY:
Common stock $ .001 par value -
authorized, 100,000,000 shares;
issued 8,179,704; 7,440,925 shares
outstanding (7,480,925 - 1999) 8,180 8,180
Capital in excess of par value 974,313 974,313
Retained earnings 2,186,985 2,143,747
Unearned compensation (2,315) (2,315)
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3,167,163 3,123,925
Treasury stock - 738,779 and 698,779
shares, at cost (160,176) (142,572)
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Total Stockholders' equity 3,006,987 2,981,353
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Total Liability and Stockholders' equity $ 6,180,820 $ 5,046,777
========== ==========
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended June 30,
2000 1999
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<S> <C> <C>
NET SALES $ 2,720,065 $ 2,358,508
COST OF GOODS SOLD 1,507,338 1,376,507
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Gross profit 1,212,727 982,001
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,057,662 882,602
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Operating Income/(Loss) 155,065 99,399
INTEREST EXPENSE 38,841 34,233
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INCOME/(LOSS) BEFORE INCOME TAXES 116,224 65,160
PROVISION FOR INCOME TAXES 21,000 22,160
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NET INCOME/(LOSS) $ 95,224 $ 43,006
========== ==========
INCOME/(LOSS) PER COMMON SHARE $ .01 $ .00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,460,925 7,497,925
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Six Months Ended June 30,
2000 1999
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<S> <C> <C>
NET SALES $ 4,597,778 $ 4,055,081
COST OF GOODS SOLD 2,539,474 2,224,998
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Gross profit 2,058,304 1,830,083
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,927,381 1,628,687
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Operating Income/(Loss) 130,923 201,396
INTEREST EXPENSE 65,385 61,399
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INCOME/(LOSS) BEFORE INCOME TAXES 65,538 140,057
PROVISION FOR INCOME TAXES 22,300 47,621
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NET INCOME/(LOSS) $ 43,238 $ 92,436
========== ==========
INCOME/(LOSS) PER COMMON SHARE $ .01 $ .01
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,460,925 7,497,925
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six months Ended June 30,
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income/(Loss) $ 43,238 $ 92,436
Adjustments to reconcile income to net
cash used by operating activities -
Depreciation and amortization 91,847 136,205
Change in assets and liabilities:
Increase in accounts receivable (219,945) (340,389)
Increase in inventories (749,971) (321,236)
Decrease in prepaid expenses and other 748 20,874
Increase (decrease) in accounts payable 782,479 (28,091)
Increase (decrease) in accrued expenses (198,931) 99,439
Increase in income tax payable 22,300 ---
Decrease (increase) in other assets (28,962) 61,932
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Cash provided (used) by operating activities (257,199) (278,830)
CASH FLOWS FROM INVESTING ACTIVITIES-
Capital expenditure (226,758) (65,270)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft 23,469 ---
Payments on long-term debt (7,675) (5,474)
Increase (decrease) in notes payable 486,767 210,386
Purchase treasury stock (17,604) ---
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Cash provided in financing activities 484,957 204,912
INCREASE (DECREASE) IN CASH 1,000 (139,188)
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CASH, beginning of period 10,496 12,481
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CASH, end of period $ 11,496 $ (126,707)
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SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for -
Interest $ 49,784 $ 27,107
See accompanying notes
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DYNA GROUP INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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 principals 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-KSB for the year ended December 31, 1999.
The financial information included herein at June 30, 2000 and for
the six months ended June 30, 2000 and June 30, 1999 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, 1999 was derived from the Company's
audited financial statements for 1999.
NOTE 2 - INVENTORIES
Inventories consist of the following:
June 30, 2000 December 31, 1999
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Raw materials and work in process $ 553,043 $ 516,308
Work in process --- 55,079
Finished goods 2,594,965 1,826,650
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$ 3,148,008 $ 2,398,037
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NOTE 3 - STOCKHOLDERS' EQUITY
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
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Liquidity and Capital Resources
The Company's working capital ratio at June 30, 2000 was 1.7, which
is lower from December 31, 1999.
During the second quarter of 2000, financing activities provided
$484,957 due to increase of inventory and accounts receivable.
Effective April 3, 2000, the Company secured a line of credit with a
Texas bank with a maximum borrowing limit of $1,500,000.
As of June 30, 2000, 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 six months ended June 30, 2000 as compared to the
six months ended June 30, 1999 increased $542,697 o 13.1%. This
increase in sales primarily relates to the sports market, and over-
all broadening of the customer base.
The gross margin percent decreased to 44.8% as compared to 45.1% in
1999. The cost of goods sold was higher due to the customer base and
product mix this quarter.
The total selling, general and administrative expenses increased
18.3%, from $1,628,687 in 1999 to $1,927,381 in 2000. The increase in
costs is primarily due to the increased sales of licensed products
resulting in higher royalty expenses and legal expenses.
The jury returned a verdict in the Company's favor in a lawsuit
against a vendor, which was overturned by the judge. The case is
currently in the appeals process. All costs of the case have been
expensed as incurred.
For the second quarter of 2000 the Company's pre-tax income was
$116,224 as compared to the income for 1999 of $65,160. The gross
profit margin was higher due to customer base and product mix sold
this quarter, which effected our net earnings.
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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: August 20, 2000 /s/ Roger R. Tuttle
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(Signature) Roger R. Tuttle, Chairman of
the Board and Chief Executive Officer
