<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended August 31, 1997
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: 0-19121
PDK LABS INC.
(Exact name of Registrant as specified in its charter)
New York 11-2590436
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation of organization) Number)
145 Ricefield Lane
Hauppauge, New York
(Address of principal executive offices)
11788
(Zip Code)
(516) 273-2630
(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 and (2) has been subject to such filing requirements for
the past 90 days.
Yes /X/ No / /
Class Outstanding at September 29, 1997
Common Stock 3,557,153
<PAGE>
PDK LABS INC.
FORM 10-Q
QUARTERLY REPORT
FOR THE NINE MONTHS ENDED AUGUST 31, 1997
TABLE OF CONTENTS
Page to Page
------------
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements:
Balance sheets.....................................................1
Statements of operations...........................................2
Statements of cash flows...........................................3
Notes to financial statements......................................4-8
Item 2. Management's discussion and analysis
of financial condition and results
of operations.............................................9-10
PART 11. OTHER INFORMATION
Item 1. Legal proceedings.........................................11
Item 4 Submission of matters to a vote of security holders.......11
SIGNATURES..................................................................12
<PAGE>
PDK LABS INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, November 30,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,844,982 $ 2,885,517
Investment in marketable securities, at fair value (Note 4) 1,360,567 3,463,596
Accounts receivable - less allowance
for doubtful accounts of $42,000 and $42,000, respectively 7,434,723 8,015,159
Inventories (Note 5) 26,295,801 23,272,516
Prepaid income taxes 153,617 416,685
Prepaid expenses and other current assets (Note 8) 1,480,462 1,043,313
Deferred tax asset (Note 8) 535,405 383,211
----------- -----------
Total current assets 40,105,557 39,479,997
----------- -----------
INVESTMENTS IN MARKETABLE SECURITIES (Note 4) 769,521 1,650,512
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation and amortization of
$5,252,009 and $4,376,600, respectively 5,136,708 5,132,548
INTANGIBLE ASSETS, net of accumulated amortization
of $7,954,632 and $6,312,075, respectively 2,001,797 3,552,696
INVESTMENT IN COMPARE GENERIKS, INC. 500,000 500,000
OTHER ASSETS 3,036,043 2,938,755
--------- -----------
$51,549,626 $53,254,508
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 2,744,984 $ 5,750,701
Dividends payable (Note 6) 89,659 45,223
Income taxes payable (Note 8) 526,739 500,611
Current portion of long-term debt (Note 9) 1,188,802 1,328,509
---------- ------------
Total current liabilities 4,550,184 7,625,044
---------- ------------
LONG-TERM DEBT (Note 9) 15,067,774 13,602,768
DEFERRED INCOME TAX LIABILITY (Note 8) 665,427 1,251,117
INTERESTS OF MINORITY HOLDERS IN SUBSIDIARY 3,925,754 4,114,371
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY: (Note 6)
Common stock, $.01 par value; authorized 30,000,000
shares; 3,438,244 and 3,191,986 issued and outstanding, respectively 34,382 31,919
Preferred stock, $.01 par value; authorized
5,000,000 shares; 577,373 issued and outstanding 5,774 7,396
Additional paid-in capital 27,758,823 27,754,634
Unearned compensation (3,981,245) (4,939,907)
Retained earnings 5,066,007 4,442,741
Treasury stock, at cost; 268,000 and 103,500 shares,
respectively (1,543,254) (635,575)
----------- -------------
27,340,487 26,661,208
----------- -----------
$51,549,626 $53,254,508
=========== ===========
</TABLE>
1
<PAGE>
PDK LABS INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
----------------- ------------------
August, 31 August, 31 August, 31 August 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $35,075,377 $33,214,488 $13,580,216 $11,935,799
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 19,322,573 21,337,619 7,197,129 7,959,114
Selling, general and administrative 14,092,452 10,655,220 5,827,684 3,899,466
---------- ------------ --------- -----------
33,415,025 31,992,839 13,024,813 11,858,580
---------- ------------ ------------ -----------
OPERATING INCOME 1,660,352 1,221,649 555,403 77,219
---------- ------------ ------------ -----------
OTHER:
Interest income (314,950) (330,822) (83,566) (124,933)
Interest expense 986,344 659,872 364,318 237,312
Dividend Income (45,000) - (20,000) -
Loan cost expense 231,774 - 231,774 -
Gain on sale of securities - (574,954) - -
---------- ------------ ------------ -----------
858,168 (245,904) 492,526 112,379
---------- ------------ ------------ -----------
EARNINGS/(LOSS) BEFORE PROVISION
FOR INCOME TAXES 802,184 1,467,553 62,877 (35,160)
PROVISION/(BENEFIT) FOR INCOME
TAXES 246,000 757,000 (71,000) 144,000
---------- ------------ ------------ -----------
EARNINGS/(LOSS) BEFORE MINORITY
INTEREST 556,184 710,553 133,877 (179,160)
MINORITY INTEREST IN NET LOSS
OF SUBSIDIARY 292,712 68,362 192,148 93,634
---------- ------------ ------------ -----------
NET EARNINGS/(LOSS) $ 848,896 $ 778,915 $ 326,025 $ (85,526)
=========== ============== =========== =============
EARNINGS/(LOSS) PER SHARE $ .21 $ .16 $ .10 $ (.05)
----------- -------------- ----------- -------------
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 2,941,093 3,191,986 2,974,934 3,191,986
========= ========= ========= =========
</TABLE>
2
<PAGE>
PDK LABS INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
August 31, August 31,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 848,896 $ 778,915
------------ ------------
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization 3,408,966 2,915,914
Loan cost expense 231,774 -
Minority interest in (loss) earnings of subsidiary (292,712) (68,362)
Gain on sale of securities - (574,954)
Deferred income tax (benefit) provision (737,884) 240,190
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable 580,436 (1,437,441)
Inventories (3,023,285) (6,347,858)
Prepaid income taxes 263,068 -
Prepaid expenses and other current assets (492,136) (547,901)
Other assets (54,864) 24,385
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (3,005,717) 2,881,511
Dividends payable 3,695 -
Income taxes payable 26,128 (117,820)
------------ -----------
Total adjustments (3,092,531) (3,032,336)
------------ -----------
Net cash used in operating activities (2,243,635) (2,253,421)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in investments in marketable securities 2,984,020 5,473,931
Purchase of property, plant and equipment (882,473) (2,129,906)
Acquisition of intangible assets (91,658) (2,137,810)
Disposal of property, plant and equipment 2,904 -
------------ -----------
Net cash provided by investing activities 2,012,793 1,206,215
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of revolving credit line 11,800,000 2,750,000
Repayment of debt (16,774,701) (1,022,627)
Proceeds from term loan 6,300,000 1,500,000
Net increase in stockholder loans (42,424) (11,880)
Net proceeds from sale of securities - 1,774,954
Purchase of treasury stock (907,679) -
Dividends paid (184,889) (184,889)
----------- -----------
Net cash provided by financing activities 190,307 4,805,558
----------- -----------
Net (decrease) increase of cash and cash equivalents (40,535) 3,758,352
Cash and cash equivalents at beginning of period 2,885,517 928,761
----------- -----------
Cash and cash equivalents at end of period $ 2,844,982 $ 4,687,113
=========== ===========
</TABLE>
3
<PAGE>
PDK LABS INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1997
1. Basis of Presentation:
The interim condensed consolidated financial statements
furnished reflect all adjustments which are, in the opinion of management,
necessary to present a fair statement of the financial position, as of August
31, 1997 and the results of operations and statements of cash flows for the nine
month periods ended August 31, 1997 and August 31, 1996. The balance sheet as of
November 30, 1996 has been derived from the audited balance sheet as of that
date. This report should be read in conjunction with the Company's annual report
filed on Form 10-KSB for the fiscal year ended November 30, 1996. The results of
operations and cash flows for the nine month periods ended August 31, 1997 are
not necessarily indicative of the results to be expected for the full year.
2. Principles of Consolidation:
The accompanying consolidated financial statements include the
accounts of PDK Labs Inc. ("PDK") and its subsidiary, Futurebiotics, Inc.
("Futurebiotics") (collectively the "Company"). All intercompany balances and
transactions have been eliminated.
3. Concentration of Credit Risk:
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Statement of Accounting Standards
No. 105, include corporate bonds rated at least "A-1" or the equivalent thereof
by Standard & Poors Corporation.
4. Investment in Marketable Securities:
Investments in debt and equity securities are designated as
trading, held-to-maturity, or available-for-sale. Management considers the
Company's marketable securities, consisting principally of corporate bonds rated
at least "A-1" or the equivalent thereof by Standard & Poors Corporation, to be
available-for-sale. Available-for-sale securities are reported at amounts which
approximate fair value.
5. Inventories:
Inventories have been estimated by using the gross profit method
for the interim periods. The components of the inventories are as follows:
<TABLE>
<CAPTION>
August 31, 1997 November 30, 1996
--------------- -----------------
(Unaudited)
<S> <C> <C>
Raw materials $10,518,321 $ 5,829,483
Work-in-process 5,259,160 9,211,383
Finished goods 10,518,320 8,231,650
----------- ------------
$26,295,801 $ 23,272,516
=========== ============
</TABLE>
4
<PAGE>
PDK LABS INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1997
(Continued)
6. Stockholders' Equity:
Earnings per Common share were computed by dividing net earnings less
dividends on Preferred shares by the weighted average number of shares of Common
Stock outstanding during the period. The effect of Common Stock equivalents on
the computation of earnings per share is anti-dilutive. Shares held in escrow
and treasury shares have been excluded from the weighted average number of
shares.
Preferred stockholders are entitled to cumulative annual dividends of
$.49 per share, payable at the election of the Company in cash, Common Stock, or
a combination thereof. Such dividends are payable semi-annually on or about
April 15 and October 15 of each year. Dividends earned for the nine month
periods ended August 31, 1997 and August 31, 1996 totaled $225,630 and $275,483,
respectively. The Company paid a cash dividend in April 1997 and April 1996.
On July 18, 1997, the Company's Board of Directors authorized the
Company to repurchase up to an additional $1,000,000 worth of its own Common
Stock, par value $.01, in the public market. The Company's management has been
afforded the discretion to purchase the shares at such time or times, and at
such prices, as management believes appropriate.
On July 21, 1997, the Board of Directors authorized the increase of the
conversion rate of the Company's Series A Convertible Preferred Stock from 3/10
of a share of the Company's Common Stock for each share of Preferred Stock to 1
1/2 shares of the Company's Common stock for each share of Preferred Stock. The
increase of the conversion rate was for a period of 45 days and ended on
September 3, 1997, at which time the conversion rate returned to the original
rate of 3/10 of a share of the Company's Common Stock per share of Preferred
Stock.
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
----------------- ------------------
August 31, August 31, August 31, August 31,
1997 1996 1997 1996
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net earnings (loss) $ 848,896 $ 778,915 $ 326,025 $ (85,526)
Dividends 225,630 275,483 40,741 90,594
---------- ----------- ---------- ----------
Earnings (loss) available to
common shareholders $ 623,266 $ 503,432 $ 285,284 $ (176,120)
----------- ----------- ---------- ----------
Weighted average number of
shares 2,941,093 3,191,986 2,974,934 3,191,986
--------- ----------- --------- ---------
Earnings (loss) per share $ .21 $ .16 $ .10 $ (.05)
=========== =========== ========= ==========
</TABLE>
5
<PAGE>
PDK LABS INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1997
(Continued)
7. Major Customer:
Sales to a major customer approximated 16% of total sales for the nine
month period ended August 31, 1997.
8. Income Taxes:
The tax effects of temporary differences that give rise to the deferred
tax liability at August 31, 1997 consist principally of the Company's investment
in subsidiary, depreciation and amortization.
9. Long-Term Debt:
<TABLE>
<CAPTION>
August 31, 1997 November 30, 1996
--------------- -----------------
(Unaudited)
<S> <C> <C>
Long-term debt consists of the following:
Revolving lines of credit (a) (c) $ 9,800,000 $10,000,000
Term loan, payable in monthly installments
of $105,000, plus interest at prime, through
September 2002; collateralized by the
Company's assets (b) (c) 6,300,000 -
Term loan, payable in quarterly installments
of $200,000, plus interest at prime, through
August 2000; collateralized by the Company's
assets (b) (c) - 3,000,000
Term loan, payable in quarterly principal
installments of $75,000, plus interest at prime,
through February 2001; collateralized by the
Company's assets (b) (c) - 1,350,000
Term loan, payable in monthly installments of
$5,800 plus interest at prime; collateralized
by certain equipment (b) - 348,000
Capital lease obligations, expiring in various
years through 2001, payable in monthly
installments approximating $3,750 156,576 196,277
Other - 37,000
----------- -----------
16,256,576 14,931,277
Less current portion 1,188,802 1,328,509
----------- -----------
$15,067,774 $13,602,768
=========== ===========
</TABLE>
6
<PAGE>
PDK LABS INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1997
(Continued)
(a) Revolving Credit Line
On August 20, 1997 the Company and its subsidiary entered into a
revolving credit agreement (the "New Agreement") with a new bank which extends
through September 2000. The New Agreement provides for aggregate borrowings of
up to $15,000,000 for the Company and $4,000,000 for its subsidiary. The rate of
interest payable under the New Agreement is, at the Company's option, a function
of the prime rate or the Eurodollar rate. The Company and its subsidiary are
jointly and severally liable for the unpaid balance of this credit line. This
New Agreement replaced an existing revolving credit agreement which was due to
expire in September 1999.
(b) Term Loan Facility
On August 20, 1997 the Company entered into a term loan facility with a
new bank which provides for aggregate borrowings of up to $8,500,000 for the
Company and its subsidiary. The term loan aggregating $6,300,000 at August 31,
1997 is payable in monthly installments of $105,000 plus interest at prime.
Payments will commence on October 1, 1997 and continue through September 1, 2002
when the remaining principal amount is due. A portion of the proceeds were used
to re-pay existing indebtedness under prior term loan obligations.
(c) The revolving line of credit and term loan facility contain various
covenants pertaining to the maintenance of certain financial ratio restrictions,
limitations on dividends, and restrictions on borrowings.
The prime rate at August 31, 1997 was 8 1/2%.
7
<PAGE>
PDK LABS INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1997
(Continued)
10. Commitments:
The Company is party to an amended supply agreement with a vendor.
Pursuant to this agreement, PDK is required to make minimum annual purchases of
$2,500,000 or pay the sum of $100,000 (pro-rated based on purchases). As of
August 31, 1997, the Company exceeded the minimum annual purchase requirement.
In December 1996, the Company amended its "Supply Agreement" (the
"Amended Agreement") with Compare Generiks, Inc. ("CGI"). Under the Amended
Agreement which expires in 2001, the Company will provide CGI certain products
at prices based upon the Company's material cost plus a specified mark-up. In
March 1997, the Company entered into a second five year Supply Agreement with
CGI covering the purchase of products in the "Max Brand" and "Heads Up" product
ranges.
In May 1997, the Company entered into an Exclusive Supply Agreement
(the "New Agreement") with a non-affiliated pharmaceutical distributor (the
"distributor") for a three year term. The New Agreement supercedes the Company's
Exclusive Supply and Licensing Agreement with this distributor dated October 16,
1995. Under the New Agreement, the Company was granted exclusive supply rights
to distribute certain products to the distributor's customers. In consideration
for the supply rights, the Company agreed to pay a royalty fee to the
distributor equal to the difference between (i) the purchase price as billed to
the customers and (ii) an amount equal to the material cost of the products
times a fixed percentage.
8
<PAGE>
PDK LABS INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the nine and three month periods ended August 31, 1997
approximated $35,075,000 and $13,580,000 respectively, as compared to
$33,214,000 and $11,936,000 in the corresponding periods. Gross profit for the
six and three month periods ended August 31, 1997 amounted to approximately
$15,753,000 (45% of sales) and $6,383,000 (47% of sales), respectively as
compared to $11,877,000 (36% of sales) and $3,977,000 (33% of sales) in the
corresponding periods in the prior year. The increase in sales and gross profit
is principally attributable to the Company entering into a new exclusive supply
agreement with a major non-affiliated customer.
Selling, general and administrative expenses approximated $14,092,000
and $5,828,000 for the nine and three month periods ended August 31, 1997,
respectively. As a percentage of sales, these amounts represent 40% and 43%
respectively, as compared to 32% and 33% in the corresponding periods in the
prior year. The increase is principally attributable to a royalty fee being paid
in connection with a supply agreement with a major non-affiliated customer.
In December 1996, the Company amended its Supply Agreement ("Amended
Agreement") with Compare Generiks, Inc., ("CGI"). The Amended Agreement provides
for the Company to supply CGI with certain products at prices based on the
Company's material cost plus a specified mark-up.
In March 1997, the Company entered into a second five year Supply
Agreement with CGI covering the purchase of products in the "Max Brand" and
"Heads Up" product ranges.
In May 1997, the Company entered into an exclusive supply agreement
("New Agreement") with a non-affiliated pharmaceutical distributor (the
"distributor") for a three year term. The new agreement supercedes the Company's
Exclusive Supply and Licensing Agreement with this distributor dated October 16,
1995. Under the New Agreement, the Company was granted exclusive supply rights
to distribute certain products to the distributor's customers. In consideration
for the supply rights, the Company agreed to pay a royalty fee to the
distributor equal to the difference between (i) the purchase price as billed to
the customers and (ii) an amount equal to the material cost of the products
times a fixed percentage.
Interest expenses, net of interest income was $671,000 and $281,000 for
the nine and three month periods ended August 31, 1997, as compared to $329,000
and $112,000 in the corresponding periods in the prior year. The increase is
principally attributable to increased bank borrowings.
9
<PAGE>
PDK LABS INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Liquidity and Capital Resources
The Company had net working capital of approximately $35,555,000 at
August 31, 1997
The Company's statement of cash flows reflects cash used in operating
activities of approximately $2,244,000. This use of cash reflects increases in
operating assets, such as inventories ($3,023,000), prepaid expenses and other
current assets ($492,000) and decreases in operating payables such as accounts
payable and accrued expenses ($3,006,000) offset by a decrease in accounts
receivable ($580,000), prepaid income taxes ($263,000), depreciation and
amortization expense of ($3,409,000), and an adjustment for loan costs of
($232,000).
Net cash provided by investing activities approximated $2,013,000,
principally attributable to the sale and maturity of securities ($2,984,000),
net of acquisition of property, plant and equipment ($882,000), and the
acquisition of intangible assets ($92,000).
The statement also reflects net cash provided by financing activities
of approximately $190,000 representing bank borrowings net of repayments
($1,326,000) offset by the purchase of treasury stock ($908,000), payment of
cash dividends ($185,000) and increase in shareholder loans of ($42,000).
During the nine month period ended August 31, 1997, the Company
repurchased 164,500 shares of its own stock at an average price of $5.52 per
share. On July 18, 1997, the Company's Board of Directors authorized the Company
to repurchase up to an additional $1,000,000 worth of its own Common stock, par
value $.01, in the public market. As of August 31, 1997, the Company had
authorization to repurchase an additional $757,000 worth of its own stock.
On August 20, 1997, the Company and its subsidiary entered into a
revolving credit agreement (the "New Agreement") with a new bank which extends
through September 2000. The New Agreement provides for aggregate borrowings of
up to $15,000,000 for the Company and $4,000,000 for its subsidiary. The rate of
interest payable under the New Agreement is, at the Company's option, a function
of the prime rate or the Eurodollar rate. The parent and its subsidiary are
jointly and severally liable for the unpaid balance of this credit line. This
agreement replaced an existing revolving credit agreement which was due to
expire in September 1999.
The Company also entered into a new Term Loan Facility with a new bank.
The term loan aggregating $6,300,000 at August 31, 1997, is payable in monthly
installments of $105,000, plus interest at prime through September 1, 2002. A
portion of the proceeds were used to repay existing indebtedness under prior
term loan obligations. Loan costs of approximately $232,000 related to the
existing indebtedness were charged to operations in the three months ended
August 31, 1997 in connection with these transactions.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
Reference is made to Item 3 in the Company's Form 10-KSB for the year
ended November 30, 1996.
Item 4 - Submission of Matters to a Vote of Security-Holders
On August 1, 1997, the Company held its annual meeting of stockholders.
The following directors were re-elected to the Company's Board of Directors:
Michael Krasnoff
Stanley Krasnoff
Ira Helman
Hartley T. Bernstein
Robin Marks-Kauffman
In addition, the stockholders ratified the appointment of Holtz
Rubenstein & Co., LLP as the Company's certified public accountants.
11
<PAGE>
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.
PDK LABS INC.
Dated: October 15, 1997 By: /s/ Karine Hollander
------------------------
Karine Hollander
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> AUG-31-1997
<CASH> 2,844,982
<SECURITIES> 1,360,567
<RECEIVABLES> 7,476,723
<ALLOWANCES> 42,000
<INVENTORY> 26,295,801
<CURRENT-ASSETS> 40,105,557
<PP&E> 10,388,717
<DEPRECIATION> 5,252,009
<TOTAL-ASSETS> 51,549,626
<CURRENT-LIABILITIES> 4,550,184
<BONDS> 15,067,774
0
5,774
<COMMON> 34,382
<OTHER-SE> 27,300,331
<TOTAL-LIABILITY-AND-EQUITY> 51,549,626
<SALES> 35,075,377
<TOTAL-REVENUES> 35,075,377
<CGS> 19,322,573
<TOTAL-COSTS> 19,322,573
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 986,344
<INCOME-PRETAX> 802,184
<INCOME-TAX> 246,000
<INCOME-CONTINUING> 848,896
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 848,896
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
