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, 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.
(Exact name of registrant as specified in its charter)
NEVADA 87-0404753
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1661 S. Sequin Ave., New Braunfels, Texas 78130
(Address of principal executive offices) (Zip Code)
830-620-4400
(Registrant's telephone number, including area code)
(1661 S. Sequin Ave., New Braunfels, Texas 78130)
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
March 31, 2000 was 7,440,925.
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<TABLE>
DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
March 31, December 31,
2000 1999
---------- ----------
(Unaduited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 10,496 $ 10,496
Accounts receivable, less allowance
For doubtful accounts of $66,500 1,187,971 1,619,976
Inventories 2,800,851 2,398,037
Prepaid expenses and other 126,832 265,525
Refundable income taxes
Deferred income taxes 120,084 120,084
Sale of Joint Venture 83,064 83,064
---------- ----------
4,329,298 4,497,182
---------- ----------
PROPERTY AND EQUIPMENT
Net 481,173 446,361
---------- ----------
OTHER ASSETS:
Investment in joint venture --- ---
Cash surrender value life insurance 103,234 103,234
Other 8,025 ---
---------- ----------
111,259 103,234
---------- ----------
$ 4,921,730 $ 5,046,777
========== ==========
See accompanying notes.
</TABLE>
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<TABLE>
DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND
STOCKHOLDERS' EQUITY
March 31, December 31,
2000 1999
---------- ----------
(Unaduited)
<S> <C> <C>
CURRENT LIABILITIES:
Cash overdraft $ 119.709 $ 146,110
Revolving line of credit 787,412 769,219
Notes payable related party 478,039 483,292
Accounts payable 358,789 183,653
Accrued expenses 232,422 446,550
Current maturities of long-term debt 11,357 15,689
Income taxes payable 1,300 ---
---------- ----------
Total current liabilities $ 1,989,029 $ 2,044,513
---------- ----------
Deferred income taxes 3,285 3,285
Long-term debt, less current maturities 17,626 17,626
---------- ----------
Total liabilities 2,009,940 2,065,424
---------- ----------
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 2,091,764 2,143,747
Unearned compensation (2,315) (2,315)
---------- ----------
3,071,942 3,123,925
Treasury stock - 738,779 and
698,779 shares, at cost (160,152) (142,572)
Total Stockholders'equity 2,911,790 2,981,353
---------- ----------
Total Liability and Stockholders'equity $ 4,921,730 $ 5,046,777
========== ==========
See accompanying notes.
</TABLE>
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended March 31,
2000 1999
---------- ----------
<S> <C> <C>
NET SALES $ 1,877,714 $ 1,696,573
COST OF GOODS SOLD 1,037,288 848,492
---------- ----------
Gross profit 840,426 848,081
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 864,564 746,161
---------- ----------
Operating Income/(Loss) (24,138) 101,920
INTEREST EXPENSE 26,545 27,107
---------- ----------
INCOME/(LOSS) BEFORE INCOME TAXES (50,683) 74,813
PROVISION FOR INCOME TAXES 1,300 25,462
---------- ----------
NET INCOME/(LOSS) $ (51,983) $ 49,351
========== ==========
INCOME/(LOSS) PER COMMON SHARE $ (.01) $ .00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,460,925 7,497,925
See accompanying notes.
</TABLE>
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<TABLE>
DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31,
2000 1999
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income/(Loss) $ (51,983) $ 49,351
Adjustments to reconcile net income/(loss)
to net cash used by operating activities -
Depreciation and amortization 33,496 64,296
Provision for losses on accounts receivable 35,500 10,045
Amortization of unearned compensation
Change in assets and liabilities:
Decrease in accounts receivable 432,005 49,748
Increase in inventories (402,815) (324,665)
Decrease in prepaid expenses and other 138,693 44,839
Increase in accounts payable 175,136 213,971
Decrease in accrued expenses (214,128) (75,454)
Increase in income tax payable 1,300 ---
Decrease (increase) in other assets (8,025) 10,732
---------- ----------
Cash provided (used) by operating activities 94,702 42,863
CASH FLOWS FROM INVESTING ACTIVITIES-
Capital expenditure (77,881) (20,752)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft (26,401) ---
Payments on long-term debt (4,377) (4,779)
Increase (decrease) in notes payable (12,940) (45,481)
Purchased treasury stock (17,580) --- ---
---------- ----------
Cash used in financing activities (61,298) (50,260)
DECREASE IN CASH --- (28,149)
---------- ----------
CASH, beginning of period 10,496 12,481
---------- ----------
CASH, end of period $ 10,496 $ (15,668)
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for -
Interest $ 30,378 27,107
See accompanying notes
</TABLE>
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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 March 31, 2000 and for the
three months ended
March 31, 2000 and March 31, 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:
March 31, 2000 December 31, 1999
---------- ----------
Raw materials and work in process $ 460,413 $ 516,308
Work in process --- 55,079
Finished goods 2,340,439 1,826,650
---------- ----------
$ 2,800,852 $ 2,398,037
========== ==========
NOTE 3 - STOCKHOLDERS' EQUITY
During the quarter ended March 31 2000 the company purchased 40,000
treasury shares for $17,580.
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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, 2000 was 2.2 which is
no change from December 31, 1999.
During the first quarter of 2000, financing activities used $61,298 due
to repayments on notes payable, long-term debt, and purchase of Treasrry
stock. 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 March 31, 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 quarter ended March 31, 2000 as compared to the
quarter ended March 31, 1999 increased $181,141 or 10.7%. This increase
in sales primarily relates to the sports market, and over-all broadening
of the customer base.
The gross margin percent decreased to 45% as compared to 50.0% in 1999.
The cost of goods was higher due to the customer base and product mix
this quarter
The total selling, general and administrative expenses increased 15.9%,
from $746,161 in 1999 to $864,564 in 2000. The increase in costs is
primarily due to the increased sales of licensed products resulting in
higher royalty expenses.
For the first quarter of 2000 the Company's pre-tax loss income was
$50,683 as compared to the income for 1999 of $74,813. The gross profit
margin was lower 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.
(Registtrant)
Date: May 15, 2000 /s/ Roger R. Tuttle
----------------------------------------
(Signature) Roger R. Tuttle, Chairman
of the Board and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 10,496
<SECURITIES> 0
<RECEIVABLES> 1,187,971
<ALLOWANCES> 66,500
<INVENTORY> 2,800,851
<CURRENT-ASSETS> 4,329,298
<PP&E> 481,173<FN>
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,921,730
<CURRENT-LIABILITIES> 1,989,029
<BONDS> 0
0
0
<COMMON> 8,180
<OTHER-SE> 2,903,610
<TOTAL-LIABILITY-AND-EQUITY> 4,921,730
<SALES> 1,877,714
<TOTAL-REVENUES> 1,877,714
<CGS> 1,037,288
<TOTAL-COSTS> 864,566
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,545
<INCOME-PRETAX> (50,683)
<INCOME-TAX> 1,300
<INCOME-CONTINUING> (51,983)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51,983)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
<FN>
<F1>Property and equipment, net
</FN>
</TABLE>
