SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission File No. 0-17629
ADM TRONICS UNLIMITED, INC.
(Exact name of registrant as specified in its Charter)
Delaware 22-1896032
(State or Other Jurisd- (I.R.S. Employer Identifi-
iction of Incorporation cation Number)
or organization)
224-S Pegasus Avenue, Northvale, New Jersey 07647
(Address of Principal Executive Offices)
Registrant's Telephone Number, including
Area Code: (201) 767-6040
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
the filing requirements for at least the past 90 days:
YES X NO______
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
42,474,907 shares of Common Stock, $.0005 par value,
as of February 5, 1996
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - December 31, 1996 and
March 31, 1996 2
Consolidated Statements of Operations - For The Three
Months Ended December 31, 1996 and 1995 3
Consolidated Statements of Operations - For The Nine
Months Ended December 31, 1996 and 1995 3
Consolidated Statement of Changes in Stockholders'
Equity - For The Nine Months Ended December 31, 1996 4
Consolidated Statements of Cash Flows - For The Nine
Months Ended December 31, 1996 and 1995 5
Notes To Consolidated Financial Statements 6
Item 2. Management's Discussion And Analysis of Financial
Condition and Results of Operations 6
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
1996 1996
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 1,129,293 1,113,626
Certificates of Deposit 107,000 105,390
Securities held to maturity 100,531 100,297
Accounts receivable--trade less allowance
for doubtful accounts of $20,500 235,650 200,758
Inventories:
Raw materials and supplies 154,069 129,809
Finished goods--chemicals 86,520 60,094
Other current assets 178,253 172,282
Total Current Assets 1,991,316 1,882,256
Property and Equipment 54,418 48,629
Equipment held for sale or lease, net of
accumulated depreciation of $50,660 and
$49,599, respectively 361,809 463,500
Notes Receivable 85,307 82,306
Equity securities available for sale 20,000 20,000
Loan receivable from officers, bearing
interest at 3% per annum 68,252 68,252
Other Assets 382,369 340,030
Total Assets $ 2,963,471 $2,904,973
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 77,925 58,426
Accrued expenses and other 15,673 27,431
Prepayments from Customer 69,093 124,943
Total Current Liabilities 162,691 210,800
Deferred Sales Revenue 65,860 65,860
Stockholders' Equity 2,734,920 2,628,313
Total Liabilities & Stockholders' Equity $2,963,471 $2,904,973
See accompanying notes to consolidated financial statements
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
1996 1995 1996 1995
Revenues:
Net sales $ 274,315 $ 368,543 $ 1,181,547 $1,487,681
Costs And Expenses:
Cost of sales 118,058 101,654 450,669 512,310
Selling, general and 201,686 172,346 666,268 658,971
administrative
Total cost and expenses 319,744 274,000 1,116,937 1,171,281
Operating Income (Loss) ($45,429) $94,543 $64,610 $316,400
Other Income:
Interest net of expenses and 14,556 22,015 41,998 63,604
other income
Income (loss) before income
tax benefit ($30,873) $116,558 $106,608 $380,004
Income tax benefit 0 0 0 0
Net Income (loss) ($30,873) $116,558 $106,608 $380,004
Net Income (loss) per (0.001) 0.003 0.003 0.009
common share
See accompanying notes to consolidated financial statements.
3
ADMTRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
Common Capital In
Stock Par Excess Of Accumulated
Shares Value Par Value Deficit Total
Balance,
March 31, 1996 42,474,907 21,237 4,819,436 (2,212,360) 2,628,313
Net income (loss)
nine months ended
December 31,1996 106,608 106,608
Balance
December 31,1996 42,474,907 21,237 4,819,436 (2,105,752) 2,734,921
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended December 31,
1996 1995
Cash Flows From Operating Activities:
Net income $ 106,608 $ 380,004
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization 14,683 27,182
Changes in operating assets and liabilities:
Accounts receivable--trade (34,892) (83,984)
Inventories (50,686) 1,573
Other current assets (5,971) 6,995
Other assets (42,339) (40,755)
Equipment held for sale or lease 91,501 (207,991)
Accounts payable--trade 19,499 93,922
Customer deposits payable (55,850) 158,039
Accrued expenses and other (11,758) (13,950)
Net cash flows provided by (used in)
operating activities 30,795 321,035
Cash Flows From Investing Activities:
Investment in treasury notes (100,531) 0
Maturities of treasury notes 100,297 0
Purchase of property and equipment (10,284) (3,337)
Principal payments on notes receivable (3,000) 287,285
Net changes in certificates of deposit (1,610) (297,779)
Net cash flows provided by (used in)
investing activities (15,128) (13,831)
Cash Flows From Financing Activities:
Repayments of notes and leases payable 0 (1,897)
Net change in cash and cash equivalents 15,667 305,307
Cash--Beginning of year 1,113,626 286,546
Cash--End of period 1,129,293 591,853
Supplemental cash flow information:
Interest paid 567 1,486
Income taxes paid 500 2,866
See accompanying notes to consolidated financial statements.
5
ADM TRONICS UNLIMITED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation:
The consolidated balance sheet at the end of the preceding fiscal year has
been derived from the audited consolidated balance sheet contained in the
Company's annual report on Form 10-KSB for the fiscal year ended March 31,
1995 (the "Form 10-KSB") and is presented for comparative purposes. All
other financial statements are unaudited. In the opinion of management, all
adjustments which include only normal recurring adjustments necessary to
present fairly the financial position, results of operations and changes in
financial positions for all periods presented have been made. The results of
operations for interim periods are not necessarily indicative of the operating
results for the full year.
Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Form 10-KSB.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At December 31, 1996 the Company had cash, certificates of deposit and
investment securities of $1,336,824 as compared to $1,319,313 at March 31,
1996. This increase was principally due to cash flows from operating activities.
Operating Activities
Net cash flows have decreased $289,640 to $15,667 for the nine months ended
December 31, 1996 as compared to net cash flows of $305,307 for the nine
months ended December 31, 1995. This decrease was the result of reduced net
income and reduced receipts of customer deposits.
Investing Activities
Investing activities consisting of capital expenditures of $10,284 for the
purchase of property and equipment and $3,000 in principal payments on notes
receivable. Treasury notes of $100,297 were redeemed offset by an investment
in treasury notes of $100,531.
Financing Activities
The Company did not have any cash flows related to financing activities during
the period.
The Company does not have any material external sources of liquidity or
unused sources of funds.
6
Results of Operations
Quarter Ended December 31, 1996
Revenues
Revenues were $274,315 in 1996 as compared to $368,543 in 1995 representing
a decrease of $94,228 or 25%. Revenues from the Company's Sonotron medical
activities decreased by $39,214 coupled with a decrease in chemical revenues
of $55,014.
Gross Profit
Gross profit of $156,257 in 1996 was $110,632, or 41%, below the gross profit
in 1995. Gross profit was 57% of revenues in 1996 as compared with 72% of
revenues in 1995.
Operating Income (Loss)
Operating loss of $30,873 in 1996 was $147,431 below the operating income of
$94,543 in 1995. Selling general and administrative expenses increased by
$29,340.
Other Income
Other income of $64,481 in 1996 increased by $30,918, or 34%, from $22,015 in
1995, principally due to a decrease in interest income from reduced rates.
Results of Operations
Nine Months Ended December 31, 1996
Revenues
Revenues were $1,181,547 in 1996 as compared to $1,487,681 in 1995 representing
a decrease of $306,134 or 20%. Revenues from the Company's Sonotron medical
activities decreased by $319,425 offset by chemical revenues which increased
by $13,291.
Gross Profit
Gross profit of $730,878 in 1996 was $244,493, or 25% below the gross profit
in 1995. Gross profit was 62% of revenues in 1996 as compared with 66% of
revenues in 1995.
Operating Income
Operating income of $64,610 in 1996 was $251,790, or a 79% decrease from
the operating income of $316,400 in 1995. Selling, general and
administrative expenses increased by $7,297.
Other Income
Other income of $41,998 in 1996 decreased $21,606 from $63,604 in 1995,
due to a decrease in interest income from reduced rates.
7
PART II - OTHER INFORMATION
Item 4 - Submission of Alternate to a Vote of Security Holders
(a) A special meeting of shareholders was held on October 16, 1996.
(b) The meeting did not involve the election of directors.
(c) The only matter voted upon at the meeting was a proposed amendment to the
Company's Certificate of Incorporation to change the Company's authorized
number of shares to 150,000,000 shares of Common Stock, $.0005 par value,
and 5,000,000 shares of preferred stock, $.01 par value, which Preferred
Stock may be designated and issued in such series and upon such terms and
conditions as the Board of Directors may from time to time determine.
22,559,550 shares were cast in favor of the amendment, 180,175 shares
were cast against and 47,800 shares abstained.
(d) Not applicable.
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.
ADM Tronics Unlimited, Inc.
By:\s\Alfonso DiMino
Dr. Alfonso DiMino
President
And By:\s\Andre' DiMino
Andre' DiMino
Principal Financial Officer
Dated: Northvale, New Jersey
February 6, 1997
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