UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from______to_________
Commission file number 0-6658
SCIENTIFIC INDUSTRIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 04-2217279
(State of incorporation) (IRS Employer Identification No.)
70 Orville Drive, Bohemia, New York 11716
(Address of principal executive offices)
(516)567-4700
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) 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 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 issuer's classes of
common equity, as of the latest practicable date: 826,239.
<PAGE>
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARY
FORM 10-QSB
The following information of the registrant and its subsidiary are submitted
herewith:
PART I - - Financial Information:
Condensed Consolidated Balance Sheet - September 30, 1995 1
Condensed Consolidated Statements of Income -
Three Months Ended September 30, 1995 and 1994 2
Condensed Consolidated Statements of Cash Flows -
Three Months Ended September 30, 1995 and 1994 3
Notes to Condensed Consolidated Financial
Statements 4
Management's Discussion and Analysis 5
PART II -- Other Information:
Items 1 through 6 6
Signatures 7
<PAGE>
SCIENTIFIC INDUSTRIES INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
ASSETS
September 30, 1995
------------------
Current assets:
Cash and cash equivalents $ 25,800
Investment securities 787,900
Trade accounts receivable, less allowance
for doubtful accounts of $7,400 297,700
Inventories (Note 2) 306,000
Prepaid expenses and other current assets 49,900
Deferred income taxes 67,900
------------------
Total current assets 1,535,200
Property and equipment at cost, less
accumulated depreciation of $53,700 107,400
Intangible assets at cost, less
accumulated amortization of $3,200 60,800
Deferred income taxes 7,100
Other assets 89,900
------------------
Total assets $1,800,400
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,500
Accrued expenses and taxes 218,600
Customer advances 1,100
-----------------
Total current liabilities 249,200
-----------------
Deferred compensation 50,300
-----------------
Stockholders' equity:
Common stock,0 $.05 par value 42,300
Additional paid-in capital 842,300
Unrealized holding loss on investment
securities (2,300)
Retained earnings 671,000
-----------------
1,553,300
Less common stock held in treasury, at cost 52,400
-----------------
1,500,900
-----------------
Total stockholders' equity and liabilities $1,800,400
=================
See notes to condensed unaudited consolidated financial statements
<PAGE>
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Month Periods Ended
September 30, 1995 September 30, 1994
------------------ ------------------
Net sales $ 629,500 $ 658,300
Cost of goods sold 399,700 398,200
---------- ----------
Gross profit 229,800 260,100
Selling, general
and administrative expenses 180,000 181,900
---------- ----------
Income from operations 49,800 78,200
Interest and other income 8,900 7,600
---------- ----------
Income before income taxes 58,700 85,800
Income taxes 21,000 32,500
---------- ----------
Net income $ 37,700 $ 53,300
========== ==========
Net income per common share (Note 3): $ .04 $ .06
Weighted average number of
outstanding shares 826,239 826,239
See notes to condensed unaudited consolidated financial statements
<PAGE>
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Month Periods
Ended September 30,
1995 1994
--------- ---------
Operating activities:
Net income $ 37,700 $ 53,300
--------- ---------
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 12,600 7,100
Changes in assets and liabilities:
Accounts receivable (26,900) (61,700)
Inventories (33,900) 17,200
Prepaid expenses and other current
assets (12,100) (9,200)
Other assets 4,400 (14,700)
Accounts payable (57,300) 54,100
Accrued expenses and taxes 55,600 (115,900)
Customer advances (14,800) 1,800
--------- ---------
Total adjustments (72,400) (121,300)
--------- ---------
Net cash used in
operating activities (34,700) (68,000)
--------- ---------
Investing activities:
Purchase of investments, held to
maturity (381,700) (184,300)
Redemption of investments, principally
held to maturity 197,300
Capital expenditures (6,700) (6,500)
Purchase of intangible assets (64,000)
--------- ---------
Net cash used in investing
activities (255,100) (190,800)
--------- ---------
Net decrease in cash and cash equivalents (289,800) (258,800)
Cash and cash equivalents, beginning
of year 315,600 318,300
--------- ---------
Cash and cash equivalents, end of period $ 25,800 $ 59,500
========= =========
Supplemental disclosures:
Cash paid during the period for:
Income taxes $ 6,300 $ 99,800
See notes to condensed unaudited consolidated financial statements
<PAGE>
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
General:As contemplated by the Securities and Exchange Commission, the
accompanying financial statements and footnotes have been condensed and
therefore do not contain all financial statements and disclosures required
by generally accepted accounting principles. Reference should be made to
the Annual Report to Stockholders for the year ended June 30, 1995 of
Scientific Industries, Inc., the "Company."
The statements as of and for the three months ended September 30, 1995 and
1994 are unaudited. In the opinion of management, all adjustments have
been made to present fairly the results of such unaudited interim periods.
1. Significant accounting policies:
Principles of consolidation:
The accompanying condensed consolidated financial statements include the
accounts of Scientific Industries, Inc. and Scientific Packaging Industries,
Inc. (a 100% owned subsidiary). All intercompany items and transactions
have been eliminated in consolidation.
2. Inventories:
Inventories for interim financial statement purposes are computed by costing
sales made during the applicable periods. Management has estimated the
components of inventory to be as follows:
September 30,
1995
-------------
Raw materials $256,900
Work in process 39,800
Finished goods 9,300
-------------
$306,000
=============
3. Net income per share:
Net income per share of Common Stock is computed on the basis of the weighted
average number of shares outstanding plus the dilutive effect of stock
options.
<PAGE>
SCIENTIFIC INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
The Company's working capital remained essentially the same being $1,286,000
at September 30, 1995 compared to $1,304,700 at June 30, 1995. Management
believes that the Company's working capital will be sufficient to meet the
Company's operational requirements through the current fiscal year.
Results of Operations
The Three Months Ended September 30, 1995 Compared With Three Months Ended
September 30, 1994.
Net sales for the three month period ended September 30, 1995 ($629,500)
were slightly lower compared with the three month period ended September 30,
1994 ($658,300). The gross profit margin for the three month period ended
September 30, 1995 of 36.5% decreased from the gross profit margin for the
comparable period last year (39.5%). The decrease is due to increased
material costs, and to a lesser extent, decreased sales volume for the
quarter ended September 30, 1995. Management believes that decreased lower
profit margins will continue in the future due to the fact that higher
material costs cannot all be totally absorbed within our pricing structure.
This is a result of the demand for medical cost containment within the
industry.
Total operating expenses for the three month period ended September 30, 1995
compared with the three month period ended September 30, 1994 remained
essentially the same.
Income before income taxes for the three month period ended September 30,
1995 compared with the three month period ended September 30, 1994 decreased
$27,100 mainly due to the lower gross profit margin.
<PAGE>
SCIENTIFIC INDUSTRIES, INC.
FORM 10-QSB
For the Quarter Ended September 30, 1995
PART II--OTHER INFORMATION
Not applicable
<PAGE>
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.
Scientific Industries, Inc.
Registrant
______________________________
Lowell A. Kleiman
President and Treasurer
______________________________
Helena R. Santos
Controller and Assistant
Treasurer
Date: November 13, 1995
