FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended June 30, 2000
Commission File Number 000-20175
NYER MEDICAL GROUP, INC
(Exact name of registrant as specified in its charter)
Florida 01-0469607
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1292 Hammond Street, Bangor, Maine 04401
(Address of principal executive offices) (Zip Code)
(207) 942-5273
(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 twelve 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 .
As of August 14, 2000, there were outstanding, 3,742,189 shares of common
stock,par value $.0001 per share.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
INDEX
PART I
FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets, June 30, 2000
and December 31, 1999 3-4
Consolidated Statements of Operations, Three Months
Ended June 30, 2000 and June 30, 1999 5
Consolidated Statements of Operations, Six Months
Ended June 30, 2000 and June 30, 1999 6
Consolidated Statements of Cash Flows, Six Months
Ended June 30, 2000 and June 30, 1999 7-8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Second Quarter 2000 Results 10-17
PART II - OTHER INFORMATION
Item 3. Other Information 18
Signatures 19
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
June 30, December 31,
2000 1999
Current assets:
Cash and cash equivalents $ 384,554 $ 1,066,562
Investment in marketable securities 1,465,283 1,492,185
Accounts receivable, less
allowance for doubtful accounts
of $180,559 at June 30, 2000
and $177,739 at December 31, 1999 3,909,076 3,704,025
Inventories, net 4,428,933 4,289,055
Prepaid expenses 279,867 104,923
Receivables from related parties 3,505 3,877
Investment in discontinued operation 432,185 472,855
Total current assets 10,903,403 11,133,482
Property, plant and equipment, at
cost:
Land 92,800 92,800
Building 641,508 641,508
Leasehold improvements 543,807 543,807
Machinery and equipment 125,263 125,263
Transportation equipment 366,735 338,971
Office furniture, fixtures,
and equipment 911,262 865,310
2,681,375 2,607,659
Less accumulated depreciation
and amortization (1,239,982) (1,073,393)
1,441,393 1,534,266
Goodwill and other deferred assets,
net of accumulated amortization of
$466,508 and $412,687 at June 30,
2000 and December 31, 1999,
respectively 418,474 472,295
Advances due from related companies 34,346 33,592
452,820 505,887
Total assets $12,797,616 $13,173,635
See accompanying notes to consolidated financial statements.
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
June 30, December 31,
2000 1999
Current liabilities:
Current portion of notes payable
due related party $ 161,508 $ 161,508
Current portion of long-term debt 156,831 222,879
Accounts payable 3,650,888 3,458,835
Accrued payroll and related taxes 227,989 235,046
Accrued expenses and other
liabilities 131,032 224,117
Total current liabilities 4,328,248 4,302,385
Notes payable due related party,
net of current portion 377,819 442,820
Long-term debt, net of current
portion 514,355 555,808
Minority interest 599,563 580,312
Deferred credits 35,501 63,339
Shareholders' equity:
Class A Preferred stock, par value
$.0001, Authorized, issued and
outstanding: 2,000 shares 1 1
Class B Preferred stock, series 1,
par value $.0001, Authorized:
2,500,000; issued and outstanding:
1,000 shares at June 30, 2000 and
December 31, 1999
Common stock, par value $.0001
Authorized: 10,000,000 shares;
issued: 3,753,189 at June 30, 2000
and 3,748,789 at December 31, 1999 375 375
Additional paid-in capital 17,679,268 17,657,268
Stock sale receivable (115,500) (115,500)
Treasury stock (11,000 shares at
June 30, 2000 and
December 31, 1999) (52,249) (52,249)
Accumulated deficit (10,569,765) (10,260,924)
Total shareholders' equity 6,942,130 7,228,971
Total liabilities and
shareholders' equity $12,797,616 $13,173,635
See accompanying notes to consolidated financial statements.
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 JUNE 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
Three Months Ended
June 30, June 30,
2000 1999
Net sales $10,613,124 $9,504,138
Cost and expenses:
Cost of goods sold 8,353,247 7,724,670
Selling and retail 1,400,923 1,326,357
Warehouse and delivery 200,514 86,656
Administrative 720,272 616,517
10,674,956 9,754,200
Operating (loss) income (61,832) (250,062)
Other income (expense):
Interest expense (9,546) (20,406)
Interest income 54,879 44,576
Other 40,900 11,604
Total other income 86,233 35,774
Income (loss) before
minority interest 24,401 (214,288)
Minority interest (28,041) 31,744
(Loss) income from
continuing operations (3,640) (182,544)
Discontinued operations
Loss from disposal of
Nyer Nutritional Systems
including operating losses
during phase out period (86,812) (145,327)
Net loss from discontinued
operations (86,812) (145,327)
Net Loss $ (90,452) $ (327,871)
Basic and diluted loss per common
share from continuing operations $ $ (.05)
Basic and diluted loss per common
share from discontinued operations (.02) (.04)
Basic and diluted loss per
common share $ (.02) $ (.09)
Weighted average common shares
outstanding 3,742,189 3,737,789
See accompanying notes to consolidated financial statements.
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
June 30, June 30,
2000 1999
Net sales $20,373,366 $18,958,572
Cost and expenses:
Cost of goods sold 16,122,747 15,352,842
Selling and retail 2,766,537 2,645,599
Warehouse and delivery 391,300 172,185
Administrative 1,350,977 1,299,447
20,631,561 19,470,073
Operating loss (258,195) (511,501)
Other income (expense):
Interest expense (30,516) (44,481)
Interest income 100,295 119,275
Other 64,113 58,304
Total other income 133,892 133,098
Loss before
minority interest (124,303) (378,403)
Minority interest expense (19,251) 60,071
Loss from continuing
operations (143,554) (318,332)
Discontinued operations
Loss from disposal of
Nyer Nutritional Systems
including operating losses
during phase out period (165,287) (235,916)
Net loss from discontinued
operations (165,287) (235,916)
Net Loss $ (308,841) $ (554,248)
Basic and diluted loss per share:
Continuing operations $ (.04) $ (.09)
Discontinued operations (.04) (.06)
Basic and diluted loss per share $ (.08) $ (.15)
Weighted average common shares
outstanding 3,739,573 3,737,789
See accompanying notes to consolidated financial statements.
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
June 30, June 30,
2000 1999
Cash flows from operating
activities:
Net loss $(308,841) $(554,248)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation 188,653 173,984
Amortization 53,821 69,192
Gain on sale of pharmacy (25,000)
Minority interest 19,251 (60,071)
Decrease in deferred credit (27,838) (27,902)
Changes in certain working capital
elements (427,590) (284,247)
Net cash flows used in
operating activities (502,544) (708,292)
Cash flows from investing activities:
Purchase of property, plant and
equipment (73,715) (337,490)
Proceeds from sale of pharmacy 50,800
Proceeds from marketable securities 26,902
Net change in advances due from
related companies (754) 3,234
Decrease in other assets, net 706 895
Net cash used in investing
activities (46,861) (282,561)
Cash flows from financing activities:
Proceeds from issuance of
long-term debt 18,000 200,000
Payments of long-term debt (107,603) (89,319)
Net repayments of notes to
related parties (65,000) (40,000)
Proceeds from exercise of stock
options 22,000
Net cash (provided by) used
in financing activities (132,603) 70,681
Net decrease in cash
and cash equivalents (682,008) (920,172)
Cash and cash equivalents at
beginning of period 1,066,562 4,136,988
Cash and cash equivalents at
end of period $ 384,554 $3,216,816
See accompanying notes to consolidated financial statements.
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
June 30, June 30,
2000 1999
Changes in certain working capital
elements:
Accounts receivable, net $ (205,051) $ 564,412
Inventories (139,878) (116,976)
Prepaid expenses (174,944) (82,394)
Receivables from related parties 372 (2,684)
Accounts payable 192,053 (224,325)
Accrued payroll and related
taxes (7,057) (46,564)
Accrued expenses and other
liabilities (93,085) (375,716)
Net change $ (427,590) $ (284,247)
Six Months Ended
June 30, June 30,
2000 1999
Cash paid during the first
six months:
Interest $ 31,303 $ 39,550
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principals have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not to be misleading. In
the opinion of management, the amounts shown reflect all adjustments
necessary to present fairly the financial position and results of
operations for the periods presented. All such adjustments are of a
normal recurring nature.
Basic and diluted loss per share of common stock has been determined
by dividing net earnings by the weighted average number of shares of
common stock outstanding.
It is suggested that the financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's Form 10-K for the year ended December 31, 1999.
Certain amounts in 1999 and 1998 have been reclassified to conform to
the 2000 presentation.
2. Business Segments:
The Company had three active business segments in 2000 and 1999:
(1)wholesale and retail sale of surgical, diabetic, medical equipment and
supplies, (2) wholesale and retail distribution of equipment, supplies, and
novelty items to emergency medical service, fire departments, and police
departments, and (3) retail pharmacy drug store chain. Business segments are
determined based on products or services offered for sale.
Summary data for the quarter ended June 30, 2000 is as follows:
Diabetic,
Medical, and EMT, Fire, Police Pharmacy
Surgical Supplies Equip and Supplies Chain Corporate Consolidated
Net Sales $3,919,069 $2,436,089 $14,018,208 $20,373,366
Operating
(loss)income (141,733) (69,952) 183,001 $ (229,510) (258,194)
Total assets 2,968,029 1,874,719 5,786,336 1,736,347 12,365,431
Capital
Expenditures 44,474 27,342 1,899 73,715
Depreciation
and
amortization 66,230 25,378 148,451 2,415 242,474
Interest income (5,362) (6,247) (88,686) (100,295)
Interest
expense 13,649 692 16,175 30,516
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. Business Segments, continued
Summary data for the quarter ended June 30, 1999 is as follows:
Diabetic,
Medical, and EMT, Fire, Police Pharmacy
Surgical Supplies Equip and Supplies Chain Corporate Consolidated
Net Sales $3,514,216 $3,379,788 $12,064,568 $18,958,572
Operating
(loss)income (39,839) (112,075) (168,077)$ (203,510) (523,501)
Total assets 2,474,432 2,089,854 5,206,952 3,197,282 12,968,520
Capital
Expenditures 91,003 35,349 208,863 335,215
Depreciation
and
amortization 51,729 37,767 151,173 2,507 243,176
Interest income (6,956) (13,789) (98,530) (119,275)
Interest
expense 18,107 530 25,844 44,481
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Results of Operations
Quarter Ended June 30, 2000 as compared to Quarter Ended June 30, 1999.
NET SALES. Total sales for the first six months of 2000 increased 7% over the
same period of 1999 to $20,373,366, representing an increase of $1,414,794.
The following table shows sales by subsidiary for first six months of 2000
and 1999:
June 30, June 30,
Subsidiary 2000 1999 % increase (decrease)
Eaton $14,018,208 $12,064,568 16.2%
Anton 1,274,733 1,513,771 (15.8)
ADCO 3,158,226 2,954,047 7.0
SCBA 9,290 16,415 (43.4)
ADCO South 649,103 560,170 15.9
Conway 1,152,067 1,849,601 (37.7)
Nyer Internet 111,739 -
$20,373,366 $18,958,572
The major reason for the increase in revenues was due to the
Company's pharmacy chain, Eaton. Eaton sales increased due to their
increased volume on prescription drugs as a result of continued
marketing campaign which is focused on assisted-living and home-based
sectors. ADCO's sales increased $204,179 in 2000, as compared to
1999 due mainly to continued growth of its Nevada division, its
respiratory division, and a continued focus and effort on marketing
to the nursing home and physician markets. The major reason for the
decrease in sales for Conway's was the sale of three fire trucks in
the first quarter of 1999 as compared to no fire truck deliveries in
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Results of Operations: continued,
the first six months of 2000. The Company intends to focus more on fire
equipment and supplies and less on fire truck sales due to lower margins
realized on the sale of fire trucks. As a result, the Company expects
Conway's sales to decline in the short term with expected increases
in gross margin.
The following table shows sales by subsidiary for three months ended June 30,
2000 and 1999:
Three months ended
June 30, June 30,
Subsidiary 2000 1999 % increase (decrease)
Eaton $ 7,258,772 $6,366,704 14.0%
Anton 722,840 804,350 (10.1)
ADCO 1,598,708 1,574,239 1.6
SCBA 6,098 12,119 (49.7)
ADCO South 315,989 279,737 13.0
Conway 640,656 466,989 37.2
Nyer Internet 70,061 100.0
$10,613,124 $9,504,138
GROSS PROFIT MARGIN. The Company's overall gross margins were approximately
20.9% in 2000 as compared 19.0% for the first six months of 1999.
The following is a table of gross margins by subsidiary for the first six
months 2000 and 1999 and for three months ended June 30, 2000 and 1999:
For six months ended For three months ended
June 30, June 30, June 30, June 30,
Subsidiary 2000 1999 2000 1999
Eaton 19.2% 18.2% 19.4% 19.4%
Anton 18.1 22.0 19.0 20.0
ADCO 27.3 24.4 27.8 25.3
SCBA 24.0 28.6 24.3 71.0
ADCO South 23.3 26.6 24.2 22.7
Conway 25.5 10.4 27.0 31.0
Nyer Internet 19.3 - 22.8 -
Eaton's gross margin declined slightly due to continued lower
reimbursements from insurance companies, medicare and medicaid. They believe
they can off set this decline by increased sales volume. ADCO South's
decline was due to increased equipment sales which are generally lower than
supplies sales. Conway's increase in margin was the result of three fire
truck deliveries in the first quarter of 1999 as compared to no fire truck
deliveries in the first six months of 2000.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Results of Operations: continued,
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling, general,
and administrative expenses increased approximately 9.5% in 2000 to
$4,508,814 from $4,117,231 in 1999. The following table shows the breakdown
by subsidiary (and corporate expenses) as follows:
Six months ended Three months ended
June 30, June 30, June 30, June 30,
Subsidiary 2000 1999 2000 1999
Eaton $ 2,504,262 $ 2,361,979 $ 1,262,290 $ 1,127,406
Anton 310,210 362,438 158,221 183,809
ADCO 930,005 788,790 464,107 411,718
SCBA 595 2,324 287 -
ADCO South 146,755 124,661 75,973 60,220
Corporate 229,510 191,511 136,253 102,506
Conway 286,854 285,092 152,949 143,752
Nyle Home Health - 436 - 119
Nyer Internet 100,623 - 71,629 -
$ 4,508,814 $ 4,117,231 $ 2,321,709 $ 2,029,530
Eaton's increase in selling, general, and administrative expenses (SG&A)
is primarily due to increase in their sales. Anton's decrease in S,G & A
expenses were due to less personnel and costs associated with less sales.
ADCO's selling, general, and administrative expenses increased due
additional salesmen in its Nevada and New England divisions, increased
expenses in its respiratory division (started in February 1999) and increased
marketing costs. Nyer Internet overhead is due to web site development
costs.
CONTINUING OPERATIONS. In total, the Company experienced a net loss of
$139,914 in 2000 as compared to a net loss of $141,788 in 1999.
The following table summarizes the loss from continuing operations by
subsidiary:
Six months ended Three months ended
June 30, June 30, June 30, June 30,
Subsidiary 2000 1999 2000 1999
Eaton $ 149,188 $ (129,800) $ 132,551 $ (82,771)
Anton (71,094) (28,098) (20,746) 7,483
ADCO (54,517) (65,915) (14,288) (29,622)
SCBA (1,089) (1,703) 357 541
ADCO South (4,482) 15,362 (4,058) 2,506
Corporate (66,123) (27,060) (49,855) (28,335)
Conway (4,416) (80,682) 14,058 (52,227)
Nyle Home Health - (436) - (119)
Nyer Internet (91,021) - (61,659) -
$ (143,554) $ (318,332) $ (3,640) $(182,544)
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Eaton's income of $149,188 for the first six months of 2000 as compared
to a loss of (129,800) for the same period in 1999 is mainly due increased
sales of $1,953,640, and their selling, general, and administrative expenses
increased only $142,283. Eaton's gross margin increased by 1%. ADCO's loss
increase is due to two additional salesmen, increased expenses in its
respiratory division (started in February 1999) and increased marketing
costs. Anton's loss is due to less than expected sales to cover their
overhead. Nyer Internet incurred a loss of (91,021) due to web site
development costs which had lower than expected sales and margins to
offset the additional overhead.
DISCONTINUED OPERATIONS
In October 1999, the Board of Directors approved a plan for the disposal
of its investment in Nyer Nutritional Systems, Inc. The results of NNS have
been reported as a discontinued operation for all periods presented.
The Company signed a letter of intent with National
Distribution and Contracting Inc. (NDC) to purchase the assets of
NNS, subject to the successful completion of a clinical trial and
execution of a patent license assignment by the 20% owner of Nyer
Nutritional, who owns the patents. Based upon discussions with
NDC, the Company believes the clinical trial was successful.
The Company's signed letter of intent expired July 15, 2000.
Currently, no further discussions are contemplated.
The Company is exploring a number of options with regard to Nyer
Nutritional Systems. Nyer Nutritional Systems is currently inactive.
The Company incurred approximately $165,287 of expenses related to
the NNS business for the first six months of 2000 and $235,916 for the
same period in 1999.
The Company has reported the assets to be disposed, primarily
inventory and patents, on the balance sheet as investment in
discontinued operation. Revenues for NNS are $0, $268,431 and
$1,515 for the years ended 1999, 1998 and 1997.
The Company currently owns 739,216 shares (or 19.8%) of the outstanding
common stock of Genetic Vectors, Inc.
Net interest expense as a percentage of sales was less than 1% in the
first six months of 2000 and 1999, respectively.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Liquidity and Capital Resources
Net cash used in operating activities was $502,544 for the quarter ended
June 30, 2000 and $708,292 for the quarter ended June 30, 1999. The
primary use of cash from operations in 2000 was to fund operations for the
Company's businesses. The Company partially offset its net loss by increases
in accounts payable.
Net cash used in investing activities was $46,861 for the quarter ended
June 30, 2000 as compared to $282,561 for the same period of 1999.
Net cash (provided by) used in financing activities was $(132,603)
for the first six months of 2000 as compared to $70,681 for the same
period in 1999.
The Company anticipates its current cash resources are adequate to fund
its current operating needs. The Company has retained a financial advisor
to raise capital necessary to expand its business. There can be no assurance
that this capital can be raised.
Results of Operations
Quarter Ended June 30, 1999 as compared to Quarter Ended June 30, 1998.
NET SALES. Total sales for the first six months of 1999 increased 7.8% over
the same period of 1998 to $18,958,572, representing an increase of
$1,368,104.
The following table shows sales by subsidiary for the first six months of
1999 and 1998:
Six months ended
June 30, June 30,
Subsidiary 1999 1998 % increase (decrease)
Eaton $12,064,568 $10,743,277 12.3%
Anton 1,513,771 1,748,007 (13.4)
ADCO 2,906,020 2,576,869 12.8
SCBA 16,415 24,505 (33.0)
ADCO South 560,170 558,630 -
Conway 1,849,601 1,836,889 .7
Nyer Nutritional 102,291 (100.0)
Nyer Diabetic 48,027 100.0
$18,958,572 $17,590,468
The major reason for the increase in sales was due to Eaton's
increase of approximately $1.3.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 JUNE 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Results of Operations: continued,
The following table shows sales by subsidiary for three months ended June 30,
1999 and 1998:
Three months ended
June 30, June 30,
Subsidiary 1999 1998 % increase (decrease)
Eaton $6,366,704 $5,720,032 11.3%
Anton 804,350 1,006,994 (20.1)
ADCO 1,550,098 1,278,027 21.3
SCBA 12,119 16,227 (25.3)
ADCO South 279,737 277,296 -
Conway 466,989 1,289,795 (63.8)
Nyer Nutritional - 102,291 (100.0)
Nyer Diabetic 24,141 100.0
$9,504,138 $9,690,662
GROSS PROFIT MARGIN. The Company's overall gross margins were approximately
18.9% for the first six months of 1999 as compared 21.9% for the same period
in 1998.
The following is a table of gross margins by subsidiary for the first six
months 1999 and 1998 and for three months ended June 30, 1999 and 1998:
For six months ended For three months ended
June 30, June 30, June 30, June 30,
Subsidiary 1999 1998 1999 1998
Eaton 18.2% 20.8% 19.4% 19.4%
Anton 22.0 17.7 20.0 20.0
ADCO 24.4 25.0 25.3 25.3
SCBA 28.6 68.0 24.1 71.0
ADCO South 26.6 23.6 22.7 22.7
Conway 10.4 26.5 31.0 31.0
Nyer Nutritional - 28.7 - 28.7
Nyer Diabetic 27.8 - -
Eaton's gross margin declined due to lower reimbursements from insurance
companies, medicare and medicaid. They believe they can off set this decline
by increased sales volume. Anton's increase was the result of higher
supplies sales and lower sales in equipment sales (supplies sales generally
have a higher gross profit margin than equipment sales). Conway's decrease
in margin was the result of three fire truck deliveries in the first quarter
of 1999. Fire trucks and equipment sales are sold at lower gross margins.
The average gross profit margin for fire trucks is between 3-7%.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 JUNE 30, 1999
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Results of Operations: continued,
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling, general,
and administrative expenses were $4,117,231 in 1999 from $4,158,690 in 1998.
The following table shows the breakdown by subsidiary (and corporate
expenses) as follows:
Six months ended Three months ended
June 30, June 30, June 30, June 30,
Subsidiary 1999 1998 1999 1998
Eaton $ 2,361,979 $ 2,088,087 $ 1,127,406 $ 1,044,231
Anton 362,438 399,711 183,809 206,168
ADCO 744,881 684,928 391,350 340,774
SCBA 2,324 2,885 - 2,192
ADCO South 124,661 131,099 60,220 66,113
Corporate 191,511 185,060 102,506 97,820
Conway 285,092 387,625 143,752 214,473
Nyle Home Health 436 66 119 -
Nyer Diabetic 43,909 - 20,368 -
$ 4,117,231 $ 3,879,461 $ 2,029,530 $ 1,971,771
Continuing Operations. In total, the Company experienced a net loss of
$318,332 in 1999 as compared to a net loss of $221,909 in 1998 from
continuing operations.
The following table summarizes the loss from continuing operations by
subsidiary:
Six months ended Three months ended
June 30, June 30, June 30, June 30,
Subsidiary 1999 1998 1999 1998
Eaton $ (129,800) $ 107,555 $ (82,771) $ 53,589
Anton (28,098) (79,702) 7,483 (10,431)
ADCO (35,372) (48,732) (18,060) (19,003)
SCBA (1,703) 7,426 541 5,698
ADCO South 15,362 (8,686) 2,506 7,773
Corporate (27,060) (9,023) (28,335) 58,712
Conway (80,682) 71,874 (52,227) 51,169
Nyle Home Health (436) (767) (119) (584)
Nyer Diabetic (30,543) - (11,562) -
$ (318,332) $ 39,945 $(182,544) $ 146,923
Eaton incurred additional overhead costs associated with its sale of a store,
the implementation of a new computer system, and have seen a decline in their
margins due to lower than expected reimbursements from the insurance
companies. ADCO's loss of $35,372 as compared to a loss of $48,732 in 1998,
can be attributed to increased sales and margin which was partially off set
by costs associated with the start up of its respiratory division in February
of 1999 (which had minimal sales to offset the additional overhead) and the
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 JUNE 30, 1999
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE SECOND QUARTER RESULTS
Results of Operations: continued,
development of an interactive web site which added additional overhead with
no sales to offset the costs until the third quarter of 1999. Corporate had
a loss due to less interest income which help to reduce corporate overhead
costs and additional overhead for public relations. ADCO South's net income
was the result of increased gross profit margins. ADCO South also had
minimal equipment sales for the second quarter of 1999 as compared to 1998.
Anton and reduction in their losses is due to less personnel costs due to
less sales. Conway had a change over in their sales force in the fourth
quarter of 1998 and is just now starting to see increased sales due to the
hiring of two new salesmen.
The Company incurred approximately $235,916 of expenses related to
the NNS business for the first six months of 1999 and $364,144 for the
same period in 1998.
The Company has reported the assets to be disposed, primarily
inventory and patents, on the balance sheet as investment in
discontinued operation.
The Company currently owns 739,216 shares (or 31.5%) of the outstanding
common stock of Vectors.
In December 1998, the Company wrote down its investment in Vectors to
zero due to significant uncertainties regarding the Company's ability to
recover its investment.
Net interest expense as a percentage of sales was less than 1% in the
first three months of 1999 and 1998, respectively.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
PART II
Item 3: Other information
The Company filed an 8-K in August announcing the resignation of their
independent certified public accountants, PricewaterhouseCoopers, LLP.
The Company is currently in the process of engaging new independent
certified public accountants.
The Company is still actively seeking to acquire medical related
companies.
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 June 30, 2000
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
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.
NYER MEDICAL GROUP, INC.
Date: August 14, 2000 /s/ Samuel Nyer
Samuel Nyer,
President
Date: August 14, 2000 /s/ Karen L. Wright
Karen L. Wright,
Treasurer
(Chief Financial Officer)
