===========================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
Form 10-QSB/A No 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
Commission File No. 0-22429
DHB CAPITAL GROUP INC
(Exact name of Registrant as specified in its charter)
Delaware 11-3129361
State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
11 Old Westbury Road, Old Westbury, New York 11568
(Address of principal executive offices)
Registrant's telephone number: (516) 997-1155
Not applicable
Former name, former address and former fiscal year, if changed since last report
Indicate by check whether the registrant (1) 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 [ ]
As of August 12, 1996, there were 22,954,529 shares of Common
Stock, $.001 par value outstanding.
===============================================================================
<PAGE>
This filing 10-QSB/A No. 1 amends the Quarterly Report on Form 10-QSB dated
August 14, 1996 of DHB Capital Group Inc. (the Company). The undersigned
registrant hereby amends the following items, financial statements, exhibits or
other portions of such report on Form 10-QSB date August 14, 1996 (the
"Form-10QSB") as set forth below:
CONTENTS
PART I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1996 and December 31, 1995
Consolidated Statements of Income (Loss) and Retained Earnings
(Deficit) for the three months ended June 30, 1996 and 1995
Consolidated Statements of Income (Loss) and Retained Earnings
(Deficit) for the six months ended June 30, 1996 and 1995
Consolidated Statements of Cash Flows for the six months ended June 30,
1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Results of Operations
Operations and Financial Condition
PART II Other Information
Signatures
<PAGE>
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
UNAUDITED
JUNE 30, DECEMBER 31,
1996 1995
------------- ---------------
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 667,215 $ 475,108
Marketable securities 4,957,327 1,829,856
Accounts receivable, less allowance for
doubtful accounts of $80,695 & $70,000 5,560,919 3,819,571
Inventories 7,416,015 7,856,199
Prepaid expenses and other current assets 771,124 208,510
------------ ------------
Total Current Assets 19,372,600 14,189,244
------------ ------------
Property, and Equipment, at cost, less accumulated
depreciation of $ 433,196 and $325,454 1,615,668 1,077,066
------------ ------------
Other Assets
Intangible assets, net 752,067 721,327
Investment in non-marketable securities 3,816,750 3,316,750
Deposits and other assets 439,004 160,821
------------ ------------
Total Other Assets 5,007,821 4,198,208
------------ ------------
Total Assets $ 25,996,089 $ 19,465,208
============ ============
LIABILITIES AND EQUITY
Current Liabilities
Note payable $ 2,550,000 $ 2,550,000
Current Maturities 60,000 --
Accounts payable 3,167,347 2,847,690
Accrued expenses and other liabilities 469,777 301,067
Deferred taxes payable 11,100 23,700
Income taxes payable 319,916 50,783
------------ ------------
Total Current Liabilities 6,578,140 5,773,240
------------ ------------
Long Term Debt
Long Term Debt 168,603 --
Due to shareholder 1,890,000 1,890,000
------------ ------------
Total Long Term Debt 2,058,603 1,890,000
Total Liabilities 8,636,743 7,663,240
------------ ------------
<PAGE>
<CAPTION>
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
(continued)
JUNE 30, DECEMBER 31,
1996 1995
------------- ---------------
<S> <C> <C>
Stockholders' Equity
Preferred stock -- 219
Common stock 15,210 13,841
Additional paid-in capital 16,708,820 12,123,470
Common stock subscription receivable (575,000) (437,500)
Retained earnings 1,210,316 101,938
------------ ------------
Total Stockholders' Equity 17,359,346 11,801,968
------------ ------------
Total Liabilities and Shareholders' Equity $ 25,996,089 $ 19,465,208
============ ============
</TABLE>
See Accompanying notes to financial statements
<PAGE>
DHB CAPITAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
1996 1995
------------ ------------
<S> <C> <C>
Net Sales $ 6,604,450 $ 2,617,430
Cost of sales 4,445,807 1,971,651
------------ ------------
Gross Profit 2,158,643 645,779
Selling, general and administrative expenses 2,051,217 1,156,454
------------ ------------
Income before other income (expense) 107,246 (510,675)
Other Income (Expense)
Interest expense, net of interest (94,072) (69,666)
Dividend income 14,245 --
Realized gain (loss) on marketable securities 108,401 22,234
Unrealized gain (loss) on marketable securities 578,221 708,952
------------ ------------
Total Other Income (Expense) 606,795 661,520
------------ ------------
Income (loss) before income taxes 714,221 150,845
Income taxes 182,000 1,160
------------ ------------
Net Income (loss) 532,221 149,685
Retained Earnings (Deficit) - Beginning 678,095 (112,765)
------------ ------------
Retained Earnings (Deficit) - End 1,210,316 36,920
============ ============
Earnings (loss) per common share:
Primary $ 0.025 $ 0.008
Fully Diluted $ 0.024 $ 0.008
Weighted average number of common shares outstanding
after giving effect to the 50% stock dividend:
Primary 21,670,790 17,945,700
Fully Diluted 22,192,790 17,945,700
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DHB CAPITAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
1996 1995
------------ ------------
<S> <C> <C>
Net Sales $ 13,649,078 $ 5,269,520
Cost of sales 9,540,335 3,488,886
------------ ------------
Gross Profit 4,108,733 1,780,634
Selling, general and administrative expenses 3,762,751 2,148,611
------------ ------------
Income before other income (expense) 345,987 (367,977)
Other Income (Expense)
Interest expense, net of interest (162,608) (88,385)
Dividend income 16,135 --
Realized gain (loss) on marketable securities 94,416 39,087
Unrealized gain (loss) on marketable securities 1,126,663 610,392
------------ ------------
Total Other Income (Expense) 1,074,606 561,094
------------ ------------
Income (loss) before income taxes 1,420,593 193,117
Income taxes 312,215 13,660
------------ ------------
Net Income (loss) 1,108,378 179,457
Retained Earnings (Deficit) - Beginning 101,938 (142,537)
------------ ------------
Retained Earnings (Deficit) - End 1,210,316 36,920
============ ============
Earnings (loss) per common share:
Primary $ 0.051 $ 0.010
Fully Diluted $ 0.050 $ 0.010
Weighted average number of common shares outstanding
after giving effect to 50% stock dividend
Primary 21,670,790 17,945,700
Fully Diluted 22,192,790 17,945,700
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DHB CAPITAL GROUP INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,108,378 $ 179,457
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 127,967 57,197
Deferred income taxes -- (5,999)
Changes in assets and liabilities (Increase) Decrease in:
Accounts receivable (1,741,348) 280,701
Marketable securities (3,127,471) (1,003,028)
Inventories 440,184 (826,515)
Prepaid expenses and other current assets (562,614) 47,417
Other assets (308,923) (918,644)
Increase (Decrease) in:
Accounts payable 319,657 551,761
Accrued expenses and other current liabilities 168,710 248,782
Deferred taxes payable 12,600 --
State income taxes payable 269,133 (19,500)
----------- -----------
Net cash provided (used) by operating activities (3,318,927) (1,408,371)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash payments for the purchase of property (666,569) (93,954)
Payments to acquire non-marketable securities (500,000) (875,000)
----------- -----------
Net cash provided (used) by investing activities (1,166,569) (968,954)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long term debt (14,970) --
Proceeds from the issuance of debt 243,573 --
Net proceeds from sale of common stock 4,449,000 2,010,000
Cost incurred from issuance of common stock -- (15,000)
----------- -----------
Net cash provided (used) by financing activities 4,677,603 1,995,000
----------- -----------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENT 192,107 (382,325)
CASH AND CASH EQUIVALENTS - BEGINNING 475,108 407,425
----------- -----------
CASH AND CASH EQUIVALENTS - END $ 667,215 $ 25,100
=========== ===========
Supplemental Cash Flow Information
Cash paid for interest and taxes
Interest 285,238 28,923
Taxes 33,301 31,101
</TABLE>
Noncash transactions: The Company had noncash transactions in March 1996 when
the Company issued 180,000 shares of their common stock in lieu of a cash
payment of $579,000 to acquire OPI and in June 1996 when the Company's preferred
stock was converted into two shares of Common Stock for each share of preferred
stock outstanding.
<PAGE>
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION/REPORTING ENTITIES
The consolidated financial statements of DHB Capital Group, Inc. and
Subsidiaries (the "Company") are unaudited and reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim period. The
consolidated Company includes the following entities:
DHB Capital Group, Inc.
DHB Capital Group Inc. ("DHB") was incorporated on October 22, 1992 under the
laws of the State of New York. DHB was organized to seek, acquire and finance,
as appropriate, one or more operating companies. On February 15, 1995, the
holders of the common stock approved a re-incorporation of DHB as a Delaware
corporation, through a merger with a newly formed Delaware corporation.
Protective Apparel Corporation of America
Protective Apparel Corporation of America ("PACA") was organized in 1975 and is
engaged in the development, manufacture and distribution of bullet and
projectile resistant garments, including bullet resistant vests, fragmentation
vests, bomb projectile blankets and tactical load bearing vests. In addition,
PACA distributes other ballistic protection devices including helmets and
shields. PACA is dependent upon a few suppliers for the raw materials utilized
to manufacture its products.
On November 6, 1992, PACA became a wholly-owned subsidiary of DHB, when DHB
purchased all of the issued and outstanding stock of PACA from PACA's former
parent, E.S.C. Industries, Inc, for $800,000. The transaction was accounted for
as a purchase and resulted in an excess purchase price over the fair market
value of the identifiable assets acquired and liabilities assumed of $465,278,
of which $312,086 was allocated to on-going government contracts and $153,192
was allocated to goodwill.
Intelligent Data Corp.
On April 1, 1994, the Company acquired 4,530,000 common shares (60.4% interest)
and 1,100,000 preferred shares of stock in Intelligent Data Corp. ("ID"), in
exchange for 425,000 shares of the Company's common stock. ID is engaged in the
development of sophisticated telecommunication systems. On July 1, 1994, a put
option was exercised by certain shareholders of ID resulting in an increase in
the Company's ownership to 89.58%. In December 1994, the Company converted all
of its preferred shares to common shares, increasing the Company's ownership to
98.35%. This transaction was accounted for as a purchase, and resulted in an
excess purchase price over the fair value of identifiable assets acquired and
liabilities assumed of $472,666 which was allocated to patents owned by ID.
DHB Media Group, Inc. On April 15, 1994, DHB Media Group, Inc. ("Media"), a
wholly-owned subsidiary of the Company acquired all of the outstanding common
stock of Royal Acquisition Corp. in exchange for 100,000 shares of the Company's
common stock, for a purchase price of $300,000. Subsequent negotiations resulted
in the reduction of the acquisition cost by $36,550. Royal Acquisition Corp.'s
primary assets were a film library and a loan receivable of $150,000. The
transaction was accounted for as a purchase and resulted in the excess purchase
price over the fair market value of $113,450, of which $54,000 was allocated to
<PAGE>
the film library and $59,450 was allocated to goodwill. Media intends to
syndicate and market these films. The loan receivable was collected in full
during the year ended December 31, 1994.
NDL Products, Inc.
On December 20, 1994, the Company through a newly organized, wholly-owned
subsidiary, DHB Acquisition, Inc., ("Acquisition") purchased certain assets from
a debtor-in-possession, N.D.L. Products, Inc. for $3,080,000. Acquisition did
not assume any continuing obligations of the debtor-in-possession, nor did the
management of the debtor-in-possession continue. On February 21, 1995,
Acquisition changed its corporate name to NDL Products, Inc. NDL manufactures
and distributes specialized protective athletic apparel and equipment.
DHB Armor Group, Inc.
On August 8, 1995, the Company started a new Delaware Corporation which is a
wholly-owned subsidiary of the Company. The subsidiary, DHB Armor Group, Inc.,
("Armor"), now wholly owns PACA and Point Blank Body Armor, Inc., ("Point
Blank").
Point Blank Body Armor, Inc.
In August 1995, the Company, through a wholly-owned subsidiary known as USA
Fitness & Protection Corp, a Delaware Corporation, acquired from a trustee in
bankruptcy certain assets of Point Blank Body Armor, L.P. and an affiliated
company ("Old Point Blank"), for a cash payment of $2,000,000, free of all
liabilities. Prior to the filing of the petition in bankruptcy, Old Point Blank
had been a leading U.S. manufacturer of bullet-resistant garments and related
accessories. After acquiring the Old Point Blank, USA Fitness & Protection
Corp., amended its articles of incorporation to change their name to Point Blank
Body Armor, Inc. ("Point Blank").
Orthopedic Products, Inc.
On March 22 and March 26, 1996, the Company exchanged a total of 180,000 shares
of its registered common stock to acquire 100% of the common stock of OPI, a
Florida Corporation engaged in the manufacturing and distribution of orthopedic
products to the medical industry. This transaction was accounted for as a
purchase, and resulted in an excess purchase price over the fair value of
identifiable assets acquired and liabilities assumed which was allocated to
goodwill. Fifty thousand of these shares are restricted as follows: 25,000
shares cannot be sold until March 22, 1997 and 25,000 shares cannot be sold
until March 22, 1998.
PRINCIPLES OF CONSOLIDATION
All material intercompany transactions have been eliminated in the consolidated
financial statements.
MARKETABLE/NON-MARKETABLE SECURITIES
Effective for calendar year 1994, the Company adopted Financial Accounting
Standards Board Statement No. 115 "Accounting for Certain Investments in Debt
and Equity Securities." In accordance with this standard, Securities which are
classified as "trading securities" are recorded in the Company's balance sheet
at fair market value, with the resulting unrealized gain or loss recognized as
income in the current period. Securities which are classified as "available for
sale" are also reported at fair market value, however, the unrealized gain or
loss on these securities is listed as a separate component of shareholder's
equity.
<PAGE>
Non-marketable securities, such as investments in privately-held companies are
carried at historical cost, if necessary, reduced by a valuation allowance to
net realizable value.
The Company actively seeks to acquire and finance, as appropriate, additional
operating companies or interest therein.
EARNINGS PER SHARE
The computation of earnings per common share is based on the weighted average
number of outstanding common shares outstanding during the period. Primary
earnings per share and fully diluted earnings per share amounts assume the
conversion of the Cumulative Convertible Preferred Stock, and the exercise of
the stock warrants.
2. SUBSEQUENT EVENTS
Private Placement-Common Stock
During July 1996 the Company sold 50,000 shares of common stock in private
placements for proceeds of $350,000. These shares have not been registered with
the Securities and Exchange Commission.
Declaration of a 50% Stock Dividend
On July 1, 1996, the Board of Directors of the Company declared a 50% Stock
Dividend payable on July 16, 1996, to shareholders of record as of July 15,
1996. As a result thereof, the number of outstanding shares of the Common Stock
has been increased from 15,303,019 to 22,954,529. The weighted average number of
shares and earnings per share have been restated to give effect to the 50% stock
dividend.
Merger with The Lehigh Group
On July 8, 1996, the Company and The Lehigh Group, Inc entered into a definitive
merger agreement whereby the Company would merge into a wholly-owned subsidiary
of Lehigh. Lehigh, whose common stock is listed on the New York Stock Exchange,
is engaged in the distribution of electrical supplies for export and import
through its wholly-owned subsidiary HallMark Electrical Supplies Corp. If the
merger is approved by the shareholders of the Company and Lehigh, then upon
completion of the proposed transaction, the shareholders of the Company would
receive shares of Lehigh which would represent approximately 97% of the issued
and outstanding shares of Lehigh, with the balance of Lehigh's shares to be
owned by the current shareholders of Lehigh including current officers and
directors. There is no assurance this transaction will be consummated.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The following analysis of the Company's financial condition and results of
operations should be read in conjunction with the financial statements,
including the notes thereto, contained elsewhere in this report.
Results of Operations
Three Months ended June 30, 1996, compared to the three months ended June 30,
1995.
Consolidated net sales of the Company for the quarter ended June 30, 1996 was
$6,604,450 versus $2,617,430 for the quarter ended June 30, 1995. This 152%
increase was primarily due to the inclusion of Point Blank, NDL and OPI. The
Company had a consolidated net income for the three months ended June 30, 1996
and 1995 of approximately $532,000 and $151,000, respectively, principally
because of the increased sales volume.
Gross profit ratio for the three months ended June 30, 1996 increased to 33%
compared to a gross profit percentage of 25% for the three months ended June 30,
1995. The Company's gross profit increased approximately $1,513,000 to
$2,158,643 for the three months ended June 30, 1996 as compared to the three
months ended June 30, 1995. The change in the gross profit ratio is primarily
due to the diversity of the product mix being sold in the different companies.
The Company's selling, general, and administrative expenses for the three months
ended June 30, 1996 increased to $2,051,217 from $1,156,454 for the three months
ended June 30, 1995. However, as a percentage of net sales, expenses decreased
to 31% of net sales for the quarter ended June 30, 1996, compared to 60% for the
quarter ended June 30, 1995. This decrease principally resulted from the
efficiencies of operating NDL, Point Blank, and OPI at the same location and
stricter fiscal controls.
Interest expense, net of interest income, for the three months ended June 30,
1996 increased to $94,072 from $69,666 for 1995, principally due to increases in
the borrowings of the Company.
The Company had a net realized gain of $108,401 and an unrealized gain on its
investments in marketable securities of $578,221 for the three months ended June
30, 1996, as compared to a net realized gain of $22,234 and an unrealized gain
of $708,952 for the three months ended June 30, 1995.
Six Months ended June 30, 1996, compared to the six months ended June 30, 1995.
Consolidated net sales of the Company for the six months ended June 30, 1996,
increased from $5,269,250 to $13,649,078. The increase was primarily due to the
inclusion of Point Blank, NDL and OPI. The Company had a consolidated net income
for 1996 and 1995 of approximately $1,108,000 and $179,000, respectively,
principally because of the appreciation of marketable securities and increased
sales volume.
Gross profit in 1996 increased to 131% over 1995 to $4,108,733. The Company's
gross profit ratio decreased from 34% in 1995 to 30% in 1996 due to the
diversity of the product mix, certain products are being sold at lower margins.
The Company's selling, general, and administrative expenses for 1996 increased
to $3,762,751 from $2,148,611 in 1995. However, as a percentage of net sales,
<PAGE>
expenses decreased to 28% of net sales in 1996, compared to 41% in 1995. This
decrease principally resulted from the efficiencies of operating NDL, Point
Blank, and OPI at the same location and management's efforts to enforce tighter
fiscal conrols.
Interest expense, net of interest income, for the six months ended June 30, 1996
increased to $162,603 from $88,385 for 1995, principally due to increases in the
borrowings of the Company.
The Company had a net realized gain of $94,416 and an unrealized gain on its
investments in marketable securities of $1,126,663 for the six months ended June
30, 1996, as compared to a net realized gain of $39,087 and an unrealized gain
of $610,392 for the six months ended June 30, 1995.
Liquidity and Capital Resources
The Company's primary requirements over the next twelve months are to assist
PACA, Point Blank, NDL, ID, Media, and OPI in financing their working capital
requirements, and to make possible acquisitions. PACA, Point Blank, NDL, and OPI
sell most of their products on 60-90 day terms, and working capital is needed to
finance the receivables and inventory.
The Company's principal sources of cash to date have been proceeds from private
offerings of the Company's securities, and, as more fully set forth below, term
bank loans of up to a year's duration, guaranteed by Mr. David H. Brooks,
Chairman of the Board, and certain affiliated persons. A term note to Chase came
due on December 4, 1995, and was paid with proceeds of a new loan (the "BNY
Loan") from the Bank of New York ("BNY"), bearing interest at 6.43%. The Chase
Loan is secured by a security interest in the marketable investment securities
of the Company and certain marketable investment securities of the majority
shareholder. The Company expects to renew these loans, at prevailing interest
rates, when they become due. Of the proceeds drawn down to date, $1,400,000 were
used by the Company to refinance PACA's obligations to another financial
institution, and $1,150,000 were used to purchase the NDL Assets and provide NDL
with working capital. The Chase note for $1,150,000 bears interest at 6.255% per
year.
Mr. David H. Brooks, Chairman of the Board, and/or his wife, Mrs. Terry Brooks,
made term loans due in April, 1997 of $1,890,000, bearing interest at 9% per
year. Mr. and Mrs. Brooks also entered into a collateral agreement [third party]
(the "Collateral Agreement") with Chase to pledge certain marketable securities
owned by Mr. Brooks and Mrs. Brooks to partially secure the term loans and other
obligations of the Company to Chase. In exchange for this, the Company granted
to Mrs. Terry Brooks, on December 20, 1994, 5-year warrants to purchase
3,750,000 shares of the Company's Common Stock, at a price of $1.33 per share.
The warrants contain provisions for a one-time demand registration, and
piggy-back registration rights. All of the aforesaid loans were made directly to
the Company, and the Company has loaned the proceeds to NDL. Mr. David Brooks
also loaned $2,000,000 to the Company to provide the funds needed to purchase
the Point Blank Assets. $1,250,000 have been repaid thus far. Mr. and Mrs.
Brooks have also pledged certain of their personal assets to secure the BNY
Loan.
The Company relocated substantially all the NDL, Point Blank, and OPI's assets
to a 67,000 square foot office and warehouse facility located at 4031 N.E. 12th
Terrace, Oakland Park, Florida 33334, which is now owned by affiliates of Mr.
Brooks. In January 1996, the Company purchased a new corporate headquarters
located in Old Westbury, New York.
<PAGE>
The Company's consolidated working capital at June 30, 1996 and 1995 were
$12,794,460 and $5,388,292, respectively. The Company believes that it has
sufficient resources to meet its working capital requirements for the next
twelve months.
ID's working capital requirements are to finance the manufacturing and marketing
costs associated with its initial product, and research and development costs
associated with product enhancements and new products. ID's principal sources of
working capital will be generated from borrowings. Media's working capital
requirements will be determined as different avenues for the exploitation of its
film library are researched and developed. The film library is not expected to
bring in significant revenues to the Company. The Company believes that it has
sufficient funds to meet Media's anticipated needs for the next twelve months.
The Company invested approximately $3,816,750 (as of June 30, 1996, on a
historical cost basis) in the securities of certain privately held companies,
which are included in "Investments in Non-marketable Securities" on the Company
balance sheet.
Effect of Inflation and Changing Prices.
The Company did not experience increases in raw material prices during the six
month period ended June 30, 1996 an 1995. The Company believes it will be able
to increase prices on their products to meet future price increases in raw
materials, should they occur.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On May 23, 1996, the Company initiated a lawsuit against the former president of
NDL, Barry Finn, for one milion dollars alleging breach of contract and failure
to perform the duties required by him. The lawsuit is in the preliminary stage
and it is too early to determine what the outcome will be.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed by the
undersigned, thereunto duly authorized.
Dated: August 15, 1996 DHB CAPITAL GROUP INC.
/S/ David Brooks
----------------
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on behalf of the Registrant and in capacities and at the dates
indicated:
Signature Capacity Date
/S/ David Brooks Chairman of the Board August 15, 1996
- ----------------
/S/ Mary Kreidell Chief Financial Officer August 15, 1996
- -----------------
/S/ Mel Paikoff Director August 15, 1996
- ---------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 667,215
<SECURITIES> 4,957,327
<RECEIVABLES> 5,560,919
<ALLOWANCES> 80,695
<INVENTORY> 7,416,015
<CURRENT-ASSETS> 19,372,600
<PP&E> 1,615,668
<DEPRECIATION> 433,196
<TOTAL-ASSETS> 25,996,089
<CURRENT-LIABILITIES> 6,678,140
<BONDS> 0
15,210
0
<COMMON> 0
<OTHER-SE> 17,344,136
<TOTAL-LIABILITY-AND-EQUITY> 25,996,089
<SALES> 13,649,078
<TOTAL-REVENUES> 13,649,078
<CGS> 9,540,335
<TOTAL-COSTS> 3,762,751
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (162,603)
<INCOME-PRETAX> 1,420,593
<INCOME-TAX> 312,218
<INCOME-CONTINUING> 1,108,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,108,375
<EPS-PRIMARY> .051
<EPS-DILUTED> .050
</TABLE>
