U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT ISSUED UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission file
December 31, 1998 Number 33-42408-NY
WESTBURY METALS GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 11-3023099
(State or other jurisdiction of (IRS Employer Identification
incorporation) Number)
750 Shames Drive, Westbury, New York 11590
(Address of principal executive offices)
Registrant's telephone number, including area code:
(516) 997-8333
-------------------------------------------
(Former name or address if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all
documents and reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes _______ No
- -------
APPLICABLE ONLY TO CORPORATE ISSUERS
As at December 31, 1998, 3,197,312 shares of the issuer's Common Stock, $.001
par value, were outstanding.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
WESTBURY METALS GROUP, INC.
FORM 10-QSB
For the Quarter Ended December 31, 1998
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
ITEM 1-FINANCIAL STATEMENTS Page
Consolidated Balance Sheets as of December 31, 1998 and June 30,
1998................................... 1
Consolidated Statements of Operations for the six months and three months
December 31, 1998 and 1997...................................................2
Consolidated Statements of Stockholders' Equity for the six months
ended December 31, 1998 and the year ended June 30,
1998..............................................................................3
Consolidated Statements of Cash Flows for the six months ended December
31, 1998 and 1997......... 4
Notes to Consolidated Financial
Statements..................................................................... 5-6
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.............................................................7
PART II - OTHER INFORMATION
SIGNATURES. ......................................................................8
<PAGE>
WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
DECEMBER 31, JUNE 30,
1998 1998
---- ----
ASSETS
CURRENT ASSETS:
Cash $ 635,293 $ 877,520
Accounts receivable 1,837,713 788,749
Inventory - 835,565
Prepaid expenses and other current assets 1,567,940 348,795
------------------ ---------------
Total Current Assets 4,040,946 2,850,629
------------------ ---------------
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment 1,245,474 599,843
Less: accumulated depreciation and amortization (230,761) (162,695)
------------------ ---------------
Property, Plant and Equipment - net 1,014,713 437,148
------------------ ---------------
OTHER ASSETS:
Goodwill - net of accumulated amortization 225,600 230,720
Deposits 84,888 113,177
------------------ ---------------
Total other assets 310,488 343,897
------------------ ---------------
TOTAL ASSETS $5,366,147 $ 3,631,674
================== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable - Receivable Financing 1,053,478 -
Due to customers 637,010 455,553
Accounts payable and accrued expenses 644,963 528,246
Current portion of mortgage payable 11,092
------------------ ---------------
Total Current Liabilities 2,346,543 983,799
Mortgage payable, non-current portion 312,125
------------------ ---------------
TOTAL LIABILITIES 2,658,668 983,799
------------------ ---------------
STOCKHOLDERS' EQUITY:
Common stock $.001 par value; Authorized 50,000,000
shares; issued and outstanding 3,197,312 shares 3,197 3,197
Capital in excess of par value 3,171,879 3,171,879
Accumulated deficit (467,597) (527,201)
------------------ ---------------
Total Stockholders' Equity 2,707,479 2,647,875
------------------ ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,366,147 $ 3,631,674
================== ===============
<PAGE>
WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
(UNAUDITED) (UNAUDITED)
------------------------------------- --------------------------------------
1998 1997 1998 1997
---- ---- ---- ----
Revenues:
Sales $ 12,272,649 $ 4,116,507 $ 7,366,420 $ 2,219,913
Refining 2,321,708 813,697 1,901,468 328,470
Other 28,723 15,537 22,530 -
Interest 31,331 12,124 27,151 661
---------------- ------------------ --------------- ------------------
Total revenues 14,654,411 4,957,865 9,317,569 2,549,044
---------------- ------------------ --------------- ------------------
Costs and expenses:
Cost of sales 11,360,310 3,930,591 6,901,095 2,118,359
Cost of refining 1,908,515 618,235 1,766,544 186,427
Selling, general and administrative 1,174,899 446,103 540,417 245,790
Depreciation and amortization 73,186 46,992 39,378 23,557
Interest 69,923 11,942 33,715 8,748
---------------- ------------------ --------------- ------------------
Total costs and expenses 14,586,833 5,053,863 9,281,149 2,582,881
---------------- ------------------ --------------- ------------------
Income before income taxes 67,578 (95,998) 36,420 (33,837)
Provision for income taxes 7,974 - 1,958 12,349
---------------- ------------------ --------------- ------------------
Net income (loss) $ 59,604 $ (95,998) $ 38,378 $(46,186)
================ ================== =============== ==================
Net income (loss) per share - basic $ 0.02 $ (0.05) $ 0.01 $(0.02)
Net income (loss) per share - diluted $ 0.02 $ (0.05) $ 0.01 $(0.02)
Average shares outstanding - basic 3,197,312 1,850,000 3,197,312 1,850,000
Average shares outstanding - diluted 3,522,312 1,850,000 3,522,312 1,850,000
<PAGE>
WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 (UNAUDITED)
AND FOR THE YEAR ENDED JUNE 30, 1998
COMMON STOCK CAPITAL IN TOTAL
EXCESS OF ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT PAR VALUE DEFICIT EQUITY
BALANCE, JULY 1, 1997 1,850,000 $ 1,850 98,150 $ (102,760) $ (2,760)
COMMON STOCK ISSUED
UPON MERGER WITH
ROSECAP, INC.
MARCH 31, 1998 180,000 180 40,857 41,037
COMMON STOCK ISSUED
IN PRIVATE PLACEMENT
MARCH 31, 1998 814,503 815 2,015,224 2,016,039
COMMON STOCK ISSUED
UPON CONVERSION OF
BRIDGEHOLDER LOANS
MARCH 31, 1998 233,333 233 699,767 700,000
COMMON STOCK ISSUED
IN PRIVATE PLACEMENT
MAY 8, 1998 119,476 119 317,881 318,000
NET LOSS FOR THE YEAR
ENDED JUNE 30, 1998 (424,441) (424,441)
---------------------------------------------------------------------------------------------
BALANCE JUNE 30, 1998 3,197,312 3,197 3,171,879 (527,201) 2,647,875
NET INCOME FOR THE
SIX MONTHS ENDED
DECEMBER 31, 1998
(UNAUDITED) 59,604 59,604
---------------------------------------------------------------------------------------------
BALANCE
DECEMBER 31, 1998
(UNAUDITED) 3,197,312 $ 3,197 $3,171,879 $ (467,597) $ 2,707,479
=============================================================================================
<PAGE>
WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
(UNAUDITED) (UNAUDITED)
Operating activities: 1998 1997
---- ----
Net Income (loss) $ 59,604 $ (95,998)
Adjustments to reconcile net income (loss) to net cash
used in operating activities net of assets and
liabilities acquired in merger:
Depreciation and amortization 73,186 46,992
Changes in assets and liabilities:
Accounts receivable (1,048,964) 48,184
Inventories 835,565 (428,916)
Prepaid expenses (1,219,145) (99,555)
Deposits 28,289 (18,345)
Notes Payable 552,188
Due to customers 181,457 (132,378)
Accounts payable and accrued expenses 116,717 74,097
--------------- ------------------
Net cash used in operating activities (973,291) (53,731)
--------------- ------------------
Investing activities
Property, plant and equipment (320,631) 79,228
--------------- ------------------
Financing activities
Repayment of long term debt (1,783)
Note payable - accounts receivable financing 1,053,478
--------------- ------------------
Net cash from financing activities 1,051,695
--------------- ------------------
Net decrease in cash (242,227) 25,497
Beginning Cash Balance 877,520 73,136
--------------- ------------------
Ending Cash Balance $ 635,293 $ 98,633
=============== ==================
Supplemental cash flow information:
Cash paid for interest $ 69,923 $ 11,942
Property, plant and land addition financed
by long-term debt $ 325,000 $ -
<PAGE>
NOTE 1- GENERAL
The accompanying financial information should be read in conjunction with the
audited financial statements including the notes thereto, as of and for the year
ended June 30, 1998. The June 30, 1998 statements have been amended as of
February 15, 1999 to show the accounting treatment for the merger of Westbury
Alloys, Inc. and Rosecap, Inc. as Westbury Alloys, Inc. being the acquirer
rather than the Rosecap, Inc.
The information furnished in this report reflects all adjustments (consisting of
only normal recurring accruals) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods.
NOTE 2- ORGANIZATION
On June 18, 1998, the Company name was changed from Rosecap, Inc. to Westbury
Metals Group, Inc. ("WMG"). On March 31, 1998 the Company entered into a merger
between Westbury Acquisition Corp. ("WAC"), a wholly owned subsidiary of the
Company, and Westbury Alloys, Inc., ("Westbury") a Delaware Corporation, the
surviving entity. The merger is a reverse merger whereby the principals of
Westbury became the principals and the largest shareholders of the Company. The
Company commenced operating the business of Westbury after the consummation of
the merger. Prior to the merger, the Company, which was incorporated in 1990,
had not conducted any operations and reported as a development stage enterprise.
Westbury reclaims principally gold, silver, platinum and palladium from scrap
and residues from the electronics, jewelry, petroleum, dental, chemical,
automotive, mining and aerospace industries. After controlled weighing,
sampling, and assaying to determine values and to settle with the customer,
Westbury either purchases the precious metal or returns metal to the customer.
Through its Peruvian subsidiary Alloy Trading S.A. ("Alloy"), Westbury imports
metals for its own use as well as for direct sale to third parties.
Alloy, a 98% owned subsidiary of Westbury, was incorporated in Peru in 1996. The
remaining 2% of the capital stock of Alloy are owned by the two local managers
of Alloy. The long range purpose of Alloy is to develop trading opportunities
between Peruvian companies and their counterparts worldwide and to explore
opportunities in metal related activities including gold and silver bullion,
transactions with the mining industry, jewelry manufacturers, and other similar
activities.
NOTE 3 - INVENTORIES
Inventories are stated at current market value. Consistent with other companies
that refine and produce precious metal fabricated products; some of the
Company's gold and silver requirements are furnished by customers and suppliers
on a consignment basis.
Title to the consigned gold and silver remains with the Consignor. The value of
consigned gold and silver held by the Company is not included in the Company's
Balance Sheet. On December 31, 1998 the Company held $2,339,956 of precious
metals under a consignment agreement with Republic National Bank. The Company's
gold and silver requirements are provided from a combination of owned
inventories, precious metals which have been purchased and sold for future
delivery, and gold and silver received from suppliers and customers on a
consignment basis.
<PAGE>
NOTE 4 - NET INCOME (LOSS) PER COMMON SHARE
Basic net income (loss) per common share is calculated using the weighted
average number of common shares outstanding during the period. Diluted income
(loss) per share is calculated by including all dilutive potential common share
such as stock options and warrants. A reconciliation between the numerators and
denominators of the basic and diluted net income per common share is as follows:
Six Months Ended
December 31,
1998 1997
Net income (loss) (numerator for basic and diluted net income
(loss) per common share) $ 59,604 $ (95,998)
---------- ------------
Weighted average common shares
(denominator for basic net income (loss) per common share) 3,197,312 1,850,000
Effect of dilutive securities:
Employee stock options 325,000 0
---------- ------------
Weighted average common and potential common shares
outstanding (denominator for diluted income (loss) per
common share) 3,522,312 1,850,000
--------- ---------
Net income (loss) per common share-Basic $ .02 $ (.05)
------------- -------------
Net income (loss) per common share-Diluted $ .02 $ (.05)
------------- -------------
Potential common shares are not included for the six months ended December 31,
1997 because they would be anti-dilutive.
<PAGE>
ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Westbury Metals Group, through its subsidiaries engages in four significant
areas of the precious metals business as follows: -trading and risk management
services including metals leasing, financing arrangements, cash and forward
purchases and sales for internal metals management requirements -manufacturing
and sale of precious and base metal products for use by industry -refining
services to generators and manufacturers of precious metals -catalyst
procurement and collection for the purpose of processing and recovery of
platinum group metals.
On September 29, 1998 the Company acquired a property adjoining its refining
facility to house the catalyst procurement and processing operation.
Revenues
Revenues were $14,654,411 for the first six months of fiscal 1999 compared to
$4,957,865 for the first six months of fiscal 1998. Net income for the same
periods was $59,604 and $ (95,998) respectively. This increase is primarily a
result of expanded operations outside of the refining services offered in the
past.
Year 2000
Management believes that there is no impact to the Company as it relates to the
Year 2000.
Liquidity, Capital Resources and Other Financial Data
The Company has been relying on a gold consignment program and internally
generated funds to finance its metal purchases, inventories and accounts
receivable. Inventories are stated at market value. Consistent with other
companies that refine and produce precious metal fabricated products, customers
and suppliers on a consignment basis furnish some of the Company's gold and
silver requirements. Title to the consigned gold and silver remains with the
Consignor. The value of consigned gold and silver held by the Company is not
included in the Company's inventory and there is no related liability recorded.
At December 31, 1998 the Company held $2,339,956 of precious metal under a
consignment agreement with Republic National Bank for which the Company is
charged a consignment fee based on current rates. There can be no assurances
that fluctuations in the precious metals markets and credit would not result in
an interruption of the Company's gold supply or the credit arrangements
necessary to allow the Company to support its accounts receivable and continue
the use of consigned gold. The Company has entered into an agreement for the
financing of its accounts receivable up to a maximum credit limit of $2,000,000.
Management believes that operations will continue to improve in the third
quarter of fiscal 1999. Through manufacturing cost controls at West Tech,
diversification in it's refining area and greater efficiencies in its catalyst
operations higher profits are anticipated, although there can be no assurances
that management will continue to be successful in its efforts.
</TABLE>
<PAGE>
SIGNATURE
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.
WESTBURY METALS GROUP, INC.
By:______________________________
David Nadler
Chief Financial Officer
Date: February 22, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S FORM 10-QSB AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-1-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,837,713
<ALLOWANCES> 0
<INVENTORY> 306,396
<CURRENT-ASSETS> 4,040,946
<PP&E> 1,245,474
<DEPRECIATION> 230,761
<TOTAL-ASSETS> 5,366,147
<CURRENT-LIABILITIES> 2,346,543
<BONDS> 0
0
0
<COMMON> 3,197
<OTHER-SE> 2,704,282
<TOTAL-LIABILITY-AND-EQUITY> 5,366,147
<SALES> 14,623,080
<TOTAL-REVENUES> 14,654,411
<CGS> 13,268,825
<TOTAL-COSTS> 13,268,825
<OTHER-EXPENSES> 1,248,085
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,923
<INCOME-PRETAX> 65,578
<INCOME-TAX> 7,974
<INCOME-CONTINUING> 59,604
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,604
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
