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 June 30, 1998
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)
Issuer's Telephone Number, including
Area Code: (201) 767-6040
Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to the filing requirements for the
past 90 days:
YES X NO______
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
43,724,907 shares of Common Stock, $.0005 par value,
as of August 8, 1998
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - June 30, 1998 and
March 31, 1998 2
Consolidated Statements of Operations - For The Three
Months Ended June 30, 1998 and 1997 3
Consolidated Statements of Changes in Stockholders'
Equity - For The Three Months Ended June 30, 1998 4
Consolidated Statements of Cash Flows - For The Three
Months Ended June 30, 1998 and 1997 5
Notes To Consolidated Financial Statements 6
Item 2. Management's Discussion And Analysis of Financial
Condition and Results of Operations 6-7
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
June 30, March 31,
1998 1998
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 805,028 1,127,947
Accounts receivable--trade less allowance
for doubtful accounts of $15,500 325,798 317,888
Inventories:
Raw materials and supplies 204,729 261,000
Finished goods--chemicals 56,426 59,535
Other current assets 23,395 24,101
Total Current Assets 1,415,376 1,790,371
Property and Equipment 79,153 75,833
Equipment in use and under lease agreements,
net of accumulated depreciation of $61,953
and $60,164 respectively 78,412 82,415
Equipment held for sale 303,633 302,218
Loan receivable from officers 71,877 59,502
Other Assets 593,250 523,309
Total Assets $ 2,541,701 $2,833,648
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 144,437 397,338
Accrued expenses and other 80,825 46,139
Notes payable - current 104,629 110,842
Total Current Liabilities 329,891 554,319
Notes payable non-current 41,412 48,676
Stockholders' Equity 2,170,398 2,230,653
Total Liabilities & Stockholders' Equity $2,541,701 $2,833,648
See accompanying notes to consolidated financial statements
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
1998 1997
Revenues:
Net sales $ 555,822 $ 277,061
Costs And Expenses:
Cost of sales 275,870 127,873
Selling, general and 351,308 290,749
administrative
Total cost and expenses 627,178 418,622
Operating Income (Loss) ($ 71,356) ($141,561)
Other Income:
Interest, net of expense and 11,101 10,237
other income
Net income (loss) ($ 60,255) ($131,324)
Net Income (loss) per ( .001) ( 0.003)
common share
See accompanying notes to consolidated financial statements.
3
ADMTRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998
(Unaudited)
Common Capital In
Stock Par Excess Of Accumulated
Shares Value Par Value Deficit Total
Balance,
March 31, 1998 43,724,907 21,862 5,137,176 (2,928,385) 2,230,653
Net income(loss)
Three months
ended June 30, 1998 ( 60,255) ( 60,255)
Balance
June 30, 1998 43,724,907 21,862 5,137,176 (2,988,640) 2,170,398
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Three Months Ended June 30,
1998 1997
Cash Flows From Operating Activities:
Net income (loss) ($ 60,255) ($ 131,324)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization 16,100 5,804
Changes in operating assets and liabilities
Accounts receivable--trade (7,910) 58,356
Inventories 59,380 22,310
Other current assets 706 3,940
Equipment in use or under lease 1,714 184
Equipment held for sale (1,415) -
Net change in other assets (78,677) (48,818)
Accounts payable--trade (252,901) (70,394)
Accrued expenses pre payments 34,686 (75,029)
from customers
Net cash flows provided by (used in)
operating activities (288,572) (234,971)
Cash Flows From Investing Activities:
Purchase of property and equipment (8,395) (2,763)
Loan to officer, net of repayments (12,375) 2,000
Net change in certificates of deposit - 107,000
Net cash flows provided by (used in)
investing activities (20,770) 106,237
Cash Flows From Financing Activities:
Additional borrowings of notes payable, net (13,477) -
Net change in cash and cash equivalents (322,819) (128,734)
Cash--Beginning of period 1,127,847 1,174,965
Cash--End of period 805,028 1,046,231
Supplemental disclosure of cash flow activities:
Interest paid 2,463 -
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,
1998 (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 June 30, 1998 the Company had cash of $805,028 as compared to $1,127,847
at March 31, 1998. This decrease was principally the result of cash used in
operating activities.
Operating Activities
Net cash decreased $288,572 for the period as compared to a decrease of
$234,971 in 1997. Net loss accounted for a decrease of $60,255 in 1998 as
compared to a decrease of $131,324 attributable to net loss in 1997.
Accounts receivable decreased in 1998 by $7,910 while inventories increased by
$59,380.
Investing Activities
Capital expenditures consisted of $8,395 for the purchase of office
equipment. Loans to officers increased by $12,375 net of repayments.
Financing Activities
The Company had additional net borrowings of notes payable of $13,477.
The Company does not have any material external sources of liquidity or unused
sources of funds.
6
Results of Operations
Quarter Ended June 30, 1998
Revenues
Revenues were $555,822 in 1998 as compared to $277,061 in 1997 representing an
increase of $278,761 or 101%. Chemical revenues increased $1,425 and
revenues from the Company's medical activities increased by $277,336 primarily
due to an acquisition of a medical device manufacturing facility.
Gross Profit
Gross profit of $279,952 in 1998 was 87% above the gross profit in 1997.
Gross profit was 50% of revenues in 1998 as compared with 54% of revenues
in 1997. The decrease in gross profit was the result of the product
mix of sales which consisted of a modest increase in sales of the
Company's chemical products with a higher gross profit margin coupled
with an increase in medical segment sales with a lower gross profit
margin.
Operating Income (Loss)
Operating loss of $60,255 in 1998 was $71,069 less than the operating loss of
$131,324 in 1997. There was an increase in selling general and
administrative expenses related to legal fees and associated costs the
company incurred in its arbitration and counter claims with a former
distributor of the Sonotron Medical Products and a change in the product mix
of sales for the period. This was offset by an increase in revenues from the
acquisition of a medical device manufacturing company.
Other Income (Loss)
Other income of $11,101 in 1998 increased $864, from $10,237 in 1997. This
marginal increase was related to the timing of amounts invested at comparable
interest rates.
7
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
August 19, 1998
