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, 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 Small Business Issuer 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: (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 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:
YES X NO______
State 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 9, 1998
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - December 31, 1997 and
March 31, 1997 2
Consolidated Statements of Operations - For The Three
Months Ended December 31, 1997 and 1996 3
Consolidated Statements of Operations - For The Nine
Months Ended December 31, 1997 and 1996 3
Consolidated Statement of Changes in Stockholders'
Equity - For The Nine Months Ended December 31, 1997 4
Consolidated Statements of Cash Flows - For The Nine
Months Ended December 31, 1997 and 1996 5
Notes To Consolidated Financial Statements 6
Item 2. Management's Discussion And Analysis of Financial
Condition and Results of Operations 6
Part II. Other Information 8
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
1997 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 786,890 1,174,965
Certificates of Deposit 100,183 107,000
Accounts receivable--trade less allowance
for doubtful accounts of $20,500 357,002 315,164
Inventories:
Raw materials and supplies 310,838 130,543
Finished goods--chemicals 53,449 73,634
Other current assets 28,641 35,526
Total Current Assets 1,637,003 1,836,832
Property and Equipment 74,364 54,831
Equipment held for sale or lease, net of
accumulated depreciation of $52,076 and
$51,014, respectively 328,450 321,823
Notes Receivable 82,307 82,306
Loan receivable from officers, bearing
interest at 3% per annum 59,452 66,652
Other Assets 630,561 506,864
Total Assets $ 2,812,137 $2,869,308
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 228,650 142,394
Accrued expenses and other 28,352 22,556
Notes Payable 65,694 0
Prepayments from Customer 86,032 69,293
Total Current Liabilities 408,728 234,243
Long-term liabilities: Note payable 47,500 0
Stockholders' Equity 2,355,909 2,635,065
Total Liabilities & Stockholders' Equity $2,812,137 $2,869,308
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,
1997 1996 1997 1996
Revenues:
Net sales $ 358,580 $ 274,315 $ 927,689 $1,181,547
Costs And Expenses:
Cost of sales 184,527 118,058 432,334 450,669
Selling, general and 223,533 201,686 811,958 666,268
administrative
Total cost and expenses 408,060 319,744 1,244,292 1,116,937
Operating Income (Loss) ($49,480) ($45,429) ($ 316,603) $ 64,610
Other Income:
Interest net of expenses and 13,302 14,556 37,447 41,998
other income
Income before unrealized loss on
equity securities available for (36,178) (30,873) (279,156) 106,608
sale and income tax benefit
Unrealized loss on equity
securities available for sale 0 0 0 0
Income (loss) before income
tax benefit ($36,178) ($30,873) ($279,156) $106,608
Income tax benefit 0 0 0 0
Net Income (loss) ($36,178) ($30,873) ($279,156) $106,608
Net Income (loss) per (0.001) (0.001) (0.007) 0.003
common share
See accompanying notes to consolidated financial statements.
3
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
Common Capital In
Stock Par Excess Of Accumulated
Shares Value Par Value Deficit Total
Balance,
March 31, 1997 42,474,907 21,237 4,819,436 (2,205,608) 2,635,065
Net income (loss)
nine months ended
December 31,1997 (279,156) (279,156)
Balance
December 31,1997 42,474,907 21,237 4,819,436 (2,484,764) 2,355,909
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended December 31,
1997 1996
Cash Flows From Operating Activities:
Net income(loss) ($ 279,156) $ 106,608
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization 18,155 14,683
Changes in operating assets and liabilities:
Accounts receivable--trade 16,168 (34,892)
Inventories 48,547 (50,686)
Other current assets 6,885 ( 5,971)
Equipment held for sale or lease (7,689) 91,501
Net change in other assets (49,696) (42,339)
Accounts payable--trade (42,951) 19,499
Accrued expenses and prepayments
from customers (64,320) (67,608)
Net cash flows provided by (used in)
operating activities (354,057) 30,795
Cash Flows From Investing Activities:
Investment in treasury notes 0 (100,531)
Maturities of treasury notes 0 100,297
Cash paid for company acquisition (53,000) 0
Cash balance of company acquired 8,851 0
Purchase of property and equipment (5,958) (10,284)
Principal payments on notes receivable 0 (3,000)
Repayment of loans to officer 7,200 0
Net changes in certificates of deposit 6,817 (1,610)
Net cash flows provided by (used in)
investing activities (36,090) (15,128)
Cash Flows From Financing Activities:
Additional borrowings of notes payable, net 2,072 0
Net change in cash and cash equivalents (388,075) 15,667
Cash and cash equivalents
-Beginning of year 1,174,965 1,113,626
Cash and cash equivalents
-End of period 786,890 1,129,293
Supplemental statment of non-cash investing and
financing activities:
Fair value of assets received in connection 309,272 0
with company acquisition
Fair value of liabilities assumed in
connection with company acquisition 327,184 0
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 December 31, 1997 the Company had cash and certificates of deposit of
$887,073 as compared to $1,281,965 at March 31, 1997. This decrease was
principally due to cash flows used in operating activities and cash used for
an acquisition.
Operating Activities
Net cash flows decreased $403,742 to ($388,075) for the nine months ended
December 31, 1997 as compared to net cash flows of $15,667 for the nine
months ended December 31, 1996. This decrease was primarily due to cash used
in operating activities of $354,057 and cash used in investing activities of
$36,090.
Investing Activities
Investing activities consisted of cash used for an acquisition of $53,000
and purchases of property and equipment of $5,958 offset by cash received
in the acquisition of $8,851; repayments of loans to officers of $7,200 and
changes in certificates of deposits of $6,817.
Financing Activities
The Company received $2,072 from additional borrowings.
The Company does not have any material external sources of liquidity or
unused sources of funds.
6
Results of Operations
Quarter Ended December 31, 1997
Revenues
Revenues were $358,580 in 1997 as compared to $274,315 in 1996 representing
an increase of $84,265 or 30.7%. Revenues from the Company's Sonotron medical
activities increased by $36,748 coupled with an increase in chemical revenues
of $47,517.
Gross Profit
Gross profit of $174,053 in 1997 was $17,796, or 11.4%, above the gross
profit in 1996. Gross profit was 48.5% of revenues in 1997 as compared with
57% of revenues in 1996. The lower gross profit percentage was due to the
product mix of sales with higher sales volume of products with a lower gross
profit margin.
Operating Income (Loss)
Operating loss of $49,480 in 1997 was $4,051 above the operating loss of
$45,429 in 1996. Selling general and administrative expenses increased by
$21,847.
Other Income
Other income of $13,302 in 1997 decreased by $1,254, or 8.6%, from $14,556 in
1996, principally due to a decrease in interest income from reduced amounts
invested.
Results of Operations
Nine Months Ended December 31, 1997
Revenues
Revenues were $927,689 in 1997 as compared to $1,181,547 in 1996 representing
a decrease of $253,858 or 21%. Revenues from the Company's Sonotron medical
activities decreased by $214,540 and chemical revenues decreased by $39,318.
Gross Profit
Gross profit of $495,355 in 1997 was $235,523 or 32% below the gross profit
in 1996. Gross profit was 53% of revenues in 1997 as compared with 62% of
revenues in 1996. The lower gross profit percentage was due to the product
mix of sales with higher sales volume of products with a lower gross profit
margin.
Operating Income (Loss)
Operating loss of $316,603 in 1997 was $381,213 below the operating income
of $64,610 in 1996. Selling, general and administrative expenses increased
by $145,690.
7
Other Income
Other income of $37,447 in 1997 decreased $4,551 from $41,998 in 1996,
due to a decrease in interest income from reduced amounts invested.
Part II: Other Information
Item 6 Exhibits and reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Not applicable
8
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
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 13, 1998
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