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 September 30, 1997
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 November 12, 1997
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - September 30, 1997 and
March 31, 1997 2
Consolidated Statements of Operations - For The Three
Months Ended September 30, 1997 and 1996 and For The
Six Months Ended September 30, 1997 and 1996 3
Consolidated Statements of Changes in Stock holders'
Equity - For The Six Months Ended September 30, 1997 4
Consolidated Statements of Cash Flows - For The Six
Months Ended September 30, 1997 and 1996 5
Notes To Consolidated Financial Statements 6-8
Item 2. Management's Discussion And Analysis of Financial
Condition and Results of Operations 6
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
September 30, March 31,
1997 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 1,035,710 1,174,965
Certificates of Deposit 0 107,000
Accounts receivable--trade less allowance
for doubtful accounts of $20,500 265,521 315,164
Inventories:
Raw materials and supplies 121,167 130,543
Finished goods--chemicals 67,176 73,634
Other current assets 31,388 35,526
Total Current Assets 1,520,962 1,836,832
Property and Equipment 52,155 54,831
Equipment held for sale or lease, net of
accumulated depreciation of $51,721 and
$51,014, respectively 334,919 321,823
Note Receivable 82,307 82,306
Loan receivable from officers, bearing
interest at 3% per annum 62,052 66,652
Other Assets 554,456 506,864
Total Assets $ 2,606,851 $2,869,308
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 195,230 142,394
Accrued expenses and other 19,533 22,556
Prepayments from customer 0 69,293
Total Current Liabilities 214,763 234,243
Stockholders' Equity 2,392,088 2,635,065
Total Liabilities & Stockholders' Equity $2,606,851 $2,869,308
See accompanying notes to consolidated financial statements
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
Revenues:
Net sales $ 292,048 $ 467,301 $ 569,109 $907,232
Costs And Expenses:
Cost of sales 119,934 191,471 247,807 332,611
Selling, general and 297,676 261,545 588,425 464,582
administrative
Total cost and expenses 417,670 453,016 836,232 797,193
Operating Income(loss) ($ 125,562) $ 14,285 ($ 267,123) $110,039
Other Income: 13,908 13,990 24,145 27,442
Income (loss) before
income taxes ($111,654) $28,275 ($242,978) $137,481
Net income (loss) ($111,654) $28,275 ($242,978) $137,481
Net income (loss) per
common share (0.003) 0.001 (0.006) 0.003
See accompanying notes to consolidated financial statements.
3
ADMTRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
Common Capital In
Stock Par Excess Of Accumulated
Shares Value Par Value Deficit Total
Balance,
March 31, 1997 42,474,907 21,237 4,819,436 (2,205,608) 2,635,065
Net income
Six months ended
September 30, 1997 (242,978) (242,978)
Balance
September 30, 1997 42,474,907 21,237 4,819,436 (2,448,586) 2,392,087
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended September 30,
1997 1996
Cash Flows From Operating Activities:
Net income(loss) ($ 242,978) $ 137,481
Adjustments to reconcile net income(loss)
to net cash flows from operating activities:
Depreciation and amortization 11,165 9,788
Changes in operating assets and liabilities:
Accounts receivable--trade 49,643 (164,946)
Inventories 15,834 (63,954)
Other current assets 4,138 ( 3,718)
Equipment held for sale or lease (13,096) 72,805
Net change in other assets (49,123) (39,249)
Accounts payable--trade 52,836 52,681
Accrued expenses and prepayments
from customers (72,376) (48,627)
Net cash flows provided by (used in)
operating activities (243,897) (47,739)
Cash Flows From Investing Activities:
Investment in treasury notes 0 (100,531)
Maturities of treasury notes 0 100,297
Downpayment for purchase of stock of
Precision Assembly (1,000) 0
Purchase of property and equipment (5,958) (10,283)
Principal payments on
notes receivable 0 (3,000)
Repayment from loans to officer 4,600 0
Net changes in certificates of deposit 107,000 (1,610)
Net cash flows provided by (used in)
investing activities 104,642 (15,127)
Cash Flows From Financing Activities: 0 0
Net change in cash and cash equivalents (139,255) (62,866)
Cash and cash equivalents--
Beginning of period 1,174,965 1,113,626
Cash and cash equivalents--
End of period 1,035,710 1,050,760
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,
1997 (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 September 30, 1997 the Company had cash and certificates of deposit of
$1,035,710 as compared to $1,281,965 at March 31, 1997. This decrease was
the result of net cash flows used in operating activities offset by cash
provided by investing activities.
Operating Activities
Net cash flows used have increased $195,270 to ($243,897) for the six months
ended September 30, 1997 as compared to net cash flows of ($48,627) for six
months ended September 30, 1996. This increase was primarily the result of
reduction in net income, due to significant increases in expenses related to
the arbitration with Arthronix.
Investing Activities
Capital expenditures consisted of $5,958 for the purchase of property and
equipment, a $1,000 deposit for an acquisition coupled with a decrease in
certificates of deposit of $107,000 as well as receipt of repayments of loans
to officer of $4,600.
6
Financing Activities
The Company did not have any cash activities with relation to financing
activities in 1997.
The Company does not have any material external sources of liquidity or
unused sources of funds.
Year 2000
The company has provided for changes in its software to satisfy compliance
with the year 2000 problem.
Results of Operations
Quarter Ended September 30, 1997
Revenues
Revenues were $292,048 in 1997 as compared to $467,301 in 1996 representing a
decrease of $175,253 or 37%. Revenues from the Company's Sonotron Medical
activities decreased $153,093 coupled with a decrease in chemical revenues of
$22,160.
Gross Profit
Gross profit of $173,000 in 1997 as compared to $275,830 in 1996 was
$102,830, or 37%, below the gross profit in 1996. Gross profit was 59% of
revenues in 1997 as compared with 59% of revenues in 1996. The gross profit
margin between 1997 and 1996 was comparable.
Operating Income(Loss)
Operating loss in 1997 was ($125,562) compared to operating income of
$14,285 in 1996. Selling general and administrative expenses increased by
$36,131 due to increased legal and administrative expenses related to the
arbitration with Arthronix.
Other Income
There were no significant changes in Other Income during the period.
Results of Operations
Six Months Ended September 30, 1997
Revenues
Revenues were $569,109 in 1997 as compared to $907,232 in 1996 representing
a decrease of $338,123 or 37%. Revenues from the Company's Sonotron Medical
activities decreased by $262,057 coupled with a decrease in chemical revenues
of $76,066.
7
Gross Profit
Gross profit of $321,302 in 1997 as compared to $574,621 in 1996 was $253,319,
or 44% below the gross profit in 1996. Gross profit was 57% of revenues in
1997 and 63% 1995. The reduction in gross profit is due to the mix in
product sales.
Operating Income(Loss)
Operating loss was $242,978 in 1997 compared to an operating income of
$137,481 in 1996. Selling, general and administrative expenses increased by
$123,843 due to increased legal and administrative expenses related to
arbitration with Arthronix,
Other Income
Other income of $24,145 in 1997 decreased $3,297 from $27,442 in 1996,
principally due to a decrease in interest income.
8
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
Chief Executive Officer
And By:\s\Andre' DiMino
Andre' DiMino
Principal Financial Officer
Dated: Northvale, New Jersey
November 12, 1997
