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: September 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
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(State or other jurisdiction of (I.R.S. Employer
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 September 30, 2000 was 7,440,925.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
September 30, December 31,
2000 1999
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(Unaduited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 10,084 $ 10,496
Accounts receivable, less allowance
For doubtful accounts of $72,535
and $95,029 1,743,757 1,619,976
Inventories 3,229,418 2,398,037
Prepaid expenses and other 106,734 265,525
Deferred income taxes 136,984 120,084
Sale of Joint Venture 83,064 83,064
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5,310,041 4,497,182
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PROPERTY AND EQUIPMENT
Net 556,795 446,361
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OTHER ASSETS:
Cash surrender value life insurance 103,234 103,234
Other 19,743 ---
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122,977 103,234
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$ 5,989,813 $ 5,046,777
========== ==========
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND
STOCKHOLDERS' EQUITY September 30, December 31,
2000 1999
---------- ----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Cash overdraft $ 98,720 $ 146,110
Revolving line of credit 1,114,780 769,219
Notes payable related party 459,622 483,292
Accounts payable 721,987 183,653
Accrued expenses 209,915 446,550
Current maturities of long-term debt 5,047 15,689
Income taxes payable 129,600 ---
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Total current liabilities $ 2,739,671 $ 2,044,513
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Deferred income taxes 3,285 3,285
Long-term debt, less current maturities 14,936 17,626
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Total liabilities 2,757,892 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 2,411,919 2,143,747
Unearned compensation (2,315) (2,315)
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3,392,097 3,123,925
Treasury stock - 738,779 and 698,779
shares, at cost (160,176) (142,572)
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Total Stockholders' equity 3,231,921 2,981,353
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Total Liability and Stockholders' equity $ 5,989,813 $ 5,046,777
========== ==========
See accompanying notes.
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DYNA GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended September 30,
2000 1999
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<S> <C> <C>
NET SALES $ 3,019,924 $ 2,848,549
COST OF GOODS SOLD 1,650,241 1,716,818
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Gross profit 1,369,683 1,131,731
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,020,369 944,904
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Operating Income/(Loss) 349,314 186,827
INTEREST EXPENSE 17,087 39,832
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INCOME/(LOSS) BEFORE INCOME TAXES 332,227 146,995
PROVISION FOR INCOME TAXES 107,300 49,982
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NET INCOME/(LOSS) $ 224,927 $ 97,013
========== ==========
INCOME/(LOSS) PER COMMON SHARE $ .03 .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 OPERATIONS (UNAUDITED)
Nine Months Ended September 30,
2000 1999
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<S> <C> <C>
NET SALES $ 7,617,702 $ 6,903,630
COST OF GOODS SOLD 4,189,817 3,945,915
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Gross profit 3,427,885 2,957,715
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,947,786 2,567,709
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Operating Income/(Loss) 480,099 390,006
INTEREST EXPENSE 82,472 101,176
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INCOME/(LOSS) BEFORE INCOME TAXES 397,627 288,830
PROVISION FOR INCOME TAXES 129,600 97,603
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NET INCOME/(LOSS) $ 268,027 $ 191,227
========== ==========
INCOME/(LOSS) PER COMMON SHARE $ .04 $ .03
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)
Nine months Ended September 30,
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income/(Loss) $ 268,027 $ 191,227
Adjustments to reconcile loss to net
cash used by operating activities -
Depreciation and amortization 156,982 238,681
Change in assets and liabilities:
Increase in accounts receivable (123,781) (1,035,774)
Increase in inventories (831,381) (80,846)
Decrease in prepaid expenses and other 158,791 35,838
Increase (decrease) in accounts payable 538,334 45,498
Increase (decrease) in accrued expenses (236,635) 119,066
Increase in income tax payable 129,600 ---
Decrease (increase) in other assets (36,498) 46,976
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Cash provided (used) by operating activities (244,588) (630,561)
CASH FLOWS FROM INVESTING ACTIVITIES-
Capital expenditure (267,416) (88,690)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft (47,390 ---
Payments on long-term debt (13,320) (6,571)
Increase (decrease) in notes payable 321,891 376,726
Purchase treasury stock (17,604) ---
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Cash provided in financing activities 243,565 370,155
INCREASE (DECREASE) IN CASH (412) (157,869)
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CASH, beginning of period 10,496 12,481
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CASH, end of period $ 10,084 $ (145,388)
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for -
Interest $ 59,073 $ 70,537
Income Tax $ --- $ 25,500
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 September 30, 2000 and for
the nine months ended September 30, 2000 and September 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:
September 30, 2000 December 31, 1999
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Raw materials and work in process $ 551,790 $ 516,308
Work in process --- 55,079
Finished goods 2,677,628 1,826,650
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$ 3,229,418 $ 2,398,037
========== ===========
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 September 30, 2000 was 1.94,
which was 2.20 at December 31, 1999.
During the third quarter of 2000, financing activities provided
$243,565 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 September 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 - Nine Months
Net sales for the nine months ended September 30, 2000 as compared to
the nine months ended September 30, 1999 increased $714,072 or 10.3%.
This increase in sales primarily relates to the sports market, and
over-all broadening of the customer base.
The gross margin percent increased to 45.0% as compared to 42.8% in
1999. The gross profit margin was higher due to customer base and
product mix sold this quarter, which effected our net earnings.
The total selling, general and administrative expenses increased 14.8%,
from $2,567,709 in 1999 to $2,947,786 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 third quarter of 2000 the Company's pre-tax income was $397,627
as compared to the income for 1999 of $288,830. The net income was
$268,027, which reflected a $.04 earnings per share as compared to 1999
of $191,227 and $.03 per share.
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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: November 14, 2000 /s/ Roger R. Tuttle
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(Signature) Roger R. Tuttle, Chairman of
the Board and Chief Executive Officer
