<PAGE> 1
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 JANUARY 31, 2000
----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
COMMISSION FILE Number 0-22964
-------
SEL-DRUM INTERNATIONAL, INC.
----------------------------
(Exact name of small business issuer as specified in its charter)
NEW YORK 84-1236134
-------- ----------
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
501 AMHERST STREET, BUFFALO, NEW YORK 14207-2913
------------------------------------------------
(Address of principal executive offices)
905-335-2766
------------
(Issuer's telephone number)
---------------------------------------------------------------------
(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 for each of the issuer's classes
of common equity, as of the latest practicable date;
COMMON STOCK, $.01 PAR VALUE
7,417,500 SHARES ISSUED AND OUTSTANDING AS OF MARCH 10, 2000
Transitional Small Business Disclosure Format (check one:)
Yes [ ] No [X]
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Unaudited Consolidated Balance Sheets as of July
31,1999 and January 31, 2000
Unaudited Consolidated Statements of Income for the
six months ended January 31, 1999 and January 31,
2000 and for the quarter ended January 31, 1999 and
January 31, 2000
Unaudited Consolidated Statements of Cash Flow for
the six months ended January 31, 1999 and January 31,
2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
<PAGE> 3
SEL-DRUM INTERNATIONAL, INC. AND SUBSIDIARIES
---------------------------------------------
PART 1: FINANCIAL INFORMATION
-----------------------------
ITEM 1: FINANCIAL STATEMENTS
----------------------------
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
CURRENT ASSETS JANUARY 31, 2000 JULY 31, 1999
- -------------- ---------------- -------------
Cash and Cash equivalents $ 702,870 $ 202,965
Accounts receivable, net 2,133,665 1,877,050
Notes Receivable from related parties 1,000,500 --
Inventories 3,027,574 3,007,597
Refundable sales taxes 17,873 49,027
Deferred income taxes 38,000 38,000
Other current assets 59,067 101,710
----------- -----------
6,979,549 5,276,349
PROPERTY
- --------
Equipment 1,037,680 989,118
Vehicles 13,922 13,922
Furniture and fixtures 83,001 80,050
Leasehold improvements 412,887 412,109
----------- -----------
1,547,490 1,495,199
Less accumulated depreciation and amortization (1,019,781) (930,822)
----------- -----------
527,709 564,377
OTHER ASSETS
- ------------
Non-competition agreement, net 18,702 24,936
Sundry, principally deposits 11,885 11,885
----------- -----------
30,587 36,821
----------- -----------
$ 7,537,845 $ 5,877,547
=========== ===========
2
<PAGE> 4
SEL-DRUM INTERNATIONAL, INC. AND SUBSIDIARIES
---------------------------------------------
PART 1: FINANCIAL INFORMATION
-----------------------------
ITEM 1: FINANCIAL STATEMENTS
----------------------------
UNAUDITED CONSOLIDATED BALANCE SHEETS (CONT'D)
----------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES JANUARY 31, 2000 JULY 31, 1999
------------------- ---------------- -------------
Bank overdraft $ 174,712 $ --
Notes payable to bank 955,460 --
Current portion of long-term debt 71,211 31,827
Accounts payable 278,244 404,162
Income Taxes Payable 82,580 --
Other current liabilities 303,564 321,878
----------- -----------
1,865,771 757,867
OTHER LIABILITIES
-----------------
Long Term Debt 250,126 --
SHAREHOLDERS' EQUITY
--------------------
Common stock 74,175 76,425
Additional paid-in capital 609,096 706,846
Preferred stock 4,499,805 4,499,805
Retained earnings 512,784 211,222
Accumulated other comprehensive loss (273,912) (274,618)
----------- -----------
5,421,948 5,219,680
Less: Common stock in treasury -- (100,000)
----------- -----------
5,421,948 5,119,680
----------- -----------
$ 7,537,845 $ 5,877,547
=========== ===========
3
<PAGE> 5
SEL-DRUM INTERNATIONAL, INC. AND SUBSIDIARIES
---------------------------------------------
PART 1: FINANCIAL INFORMATION
-----------------------------
ITEM 1: FINANCIAL STATEMENTS
----------------------------
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
<TABLE>
<CAPTION>
(U.S.$)
SIX MONTHS ENDED JANUARY 31
2000 1999
---- ----
<S> <C> <C>
Net Sales $ 7,466,715 $ 6,702,882
Cost of goods sold 5,247,799 4,812,978
----------- -----------
GROSS PROFIT 2,218,916 1,889,904
Selling, operating and general and administrative expenses 1,665,346 1,570,830
Provision for bad debts 32,157 32,469
----------- -----------
INCOME FROM OPERATIONS 521,413 286,605
Other income (expense):
Interest Income 9,443 880
Interest Expense (33,541) (27,993)
Foreign currency Transaction Gain(Loss) 11,630 8,674
----------- -----------
(12,468) (18,439)
----------- -----------
INCOME BEFORE INCOME TAXES 508,945 268,166
Income Taxes:
Current 207,383 119,168
Deferred -- --
----------- -----------
207,383 119,168
----------- -----------
NET INCOME $ 301,562 $ 148,998
=========== ===========
Number of common shares outstanding 7,417,500 7,542,500
Net income per common share $ 0.04 $ 0.02
=========== ===========
</TABLE>
4
<PAGE> 6
SEL-DRUM INTERNATIONAL, INC. AND SUBSIDIARIES
---------------------------------------------
PART 1: FINANCIAL INFORMATION
-----------------------------
ITEM 1: FINANCIAL STATEMENTS
----------------------------
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
<TABLE>
<CAPTION>
(U.S.$)
QUARTER ENDED JANUARY 31
2000 1999
---- ----
<S> <C> <C>
Net Sales $ 3,725,190 $3,461,092
Cost of goods sold 2,643,723 2,537,335
----------- ----------
GROSS PROFIT 1,081,467 923,757
Selling, operating and general and administrative expenses 856,798 798,606
Provision for bad debts 10,386 14,611
----------- ----------
INCOME FROM OPERATIONS 214,283 110,540
Other income (expense):
Interest Income 8,936 572
Interest Expense (21,364) (12,668)
Foreign currency Transaction Gain(Loss) (2,875) 11,315
----------- ----------
(15,303) (781)
----------- ----------
INCOME BEFORE INCOME TAXES 198,980 109,759
Income Taxes:
Current 84,601 46,581
Deferred -- --
----------- ----------
84,601 46,581
----------- ----------
NET INCOME $ 114,379 $ 63,178
=========== ==========
Number of common shares outstanding 7,417,500 7,542,500
Net income per common share $ 0.01 $ 0.01
=========== ==========
</TABLE>
5
<PAGE> 7
SEL-DRUM INTERNATIONAL, INC. AND SUBSIDIARIES
---------------------------------------------
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
<TABLE>
<CAPTION>
(U.S. $)
SIX MONTHS ENDED JANUARY 31
2000 1999
---- ----
CASH FLOWS - OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 301,562 $ 148,998
Adjustments to reconcile net income to net cash provided
from (used for) operating activities:
Provision for bad debts 32,157 32,469
Depreciation and amortization 94,157 120,572
Deferred income taxes -- 50,620
Gain on Disposal of Property -- --
Changes in certain assets and liab. affecting operations:
Accounts receivable (258,409) (282,891)
Inventories (19,977) (55,497)
Other current assets 73,797 50,277
Deposits -- 389
Accounts payable (125,918) (473,872)
Income taxes payable 82,580 60,614
Other current liabilities (18,314) 77,560
----------- -----------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 161,635 (270,761)
CASH FLOWS - INVESTING ACTIVITIES
- ---------------------------------
Purchases of property (49,796) (78,106)
----------- -----------
NET CASH (USED FOR) INVESTING ACTIVITIES (49,796) (78,106)
CASH FLOWS - FINANCING ACTIVITIES
- ---------------------------------
Long Term Borrowings 333,500 --
Bank overdraft 174,712 32,832
Notes receivable - related parties (1,000,500) 10,227
Short-Term borrowings net 955,460 217,999
Repayments on long-term debt (43,990) (121,315)
Repurchase of common stock -- (50,000)
----------- -----------
NET CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES 419,182 89,743
Effect of exchange rate changes on cash (31,116) 58,218
----------- -----------
NET (DECREASE) INCREASE IN CASH 499,905 (200,906)
Cash and Cash Equivalents at beginning of period 202,965 285,750
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 702,870 $ 84,844
=========== ===========
</TABLE>
6
<PAGE> 8
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
Sel-Drum International, Inc., a New York Corporation ("Sel-Drum" or the
"Company") is the successor corporation to Dakota Equities, Ltd., a publicly
held "blind pool." On February 1, 1995, the Company acquired all the outstanding
common shares of Sel-Drum Imaging Corporation, the parent corporation of a
privately held Canadian corporation which was founded in 1978. The Company
amalgamated Micron Imaging Corporation (now the Kelowna Facility) and Sel-Drum
Corporation on November 1, 1996.
A Stock Puchase Agreement (the "Agreement") was executed on July 30, 1999 with
respect to the shares of Common Stock between C. Cotran Holding inc., a company
incorporated under the laws of Canada and Robert E. Asseltine, 547118 0ntario
Limited represented by Brian F. Turnbull and the other selling shareholders of
the Company and with respect to the Preferred Stock of Sel-Drum Imaging
Corporation, between Densigraphix Kopi inc. ("Densigraphix") a company
incorporated under the laws of Canada and Robert E .Asseltine, Geraldine
Asseltine and 547118 Ontario Limited.
The Agreement provided for the acquisition of 97% of the issued and outstanding
Common Stock of the Company by C. Cotran Holding inc. and all of the outstanding
shares of Preferred Stock of Sel-Drum Imaging Corporation by Densigraphix.
Subject to post-closing adjustments, the aggregate purchase price for the Common
Stock and Preferred Stock was $5,702,472 US, that is $0.40 per share for the
Common Stock and $457.90 US per share for the Preferred Stock of Sel-Drum
Imaging Corporation.
The National Bank of Canada (the "Bank") agreed to make available a global
financing in the amount of $6,000,000.00 CDN for the acquisition of the Company
through C. Cotran Holding inc., Densigraphix and Sel-Drum Corporation. To secure
the payment of various loans made for the purpose of the acquisition, the Offer
of Financing by the Bank provides for certain undertakings by the Company, C.
Cotran Holding inc., Densigraphix, Sel-Drum Corporation and Sel-Drum Corporation
(U.S.A.), Inc. which include a moveable hypothec with delivery (pledge) of all
the shares of the Company owned or to be owned by each of the respective
borrowers.
On January 13, 2000, an amending agreement was signed whereby the purchase price
was adjusted by $20,000 as a final post-closing adjustment in accordance with
the terms of the Stock Purchase Agreement.
At a Board or Directors meeting held on November 17, 1999, the directors
approved a resolution to cancel 225,000 shares of common stock held by the
Company as treasury stock and these shares were restored to authorized but
unissued shares.
Sel-Drum is a leading independent distributor of high mortality copier and
printer replacement parts and supplies. As one of the largest independent high
mortality copier parts distribution companies in North America, Sel-Drum
provides a link between parts manufacturers, sellers and buyers. Sel-Drum is
also developing strong relationships with suppliers who seek advanced inventory
management and order processing. Through its strategic alliance with
Densigraphix, the Company strengthened its hold in the toner segment of the
market and positioned itself for a year of strong growth in the US market.
The Board of Directors of the Company, at a meeting held on November 17, 1999
reviewed the terms and conditions of all transactions taking place between the
Company and Densigraphix to ascertain their fairness for the Company. All sales
from Densigraphix to Sel-Drum are executed at terms at least as good as if they
were negotiated at arms' length between independent parties.
Through its Sel-Drum Imaging Corporation subsidiary, the Company has two wholly
owned subsidiaries, Sel-Drum Corporation (U.S.A.), Inc. and Sel-Drum
Corporation. Unless otherwise indicated, all references to "Sel-Drum" or the
"Company" include the Company, Sel-Drum Imaging Corporation, Sel-Drum
Corporation and Sel-Drum Corporation (U.S.A.), Inc. It should be noted that
approximately 95% of the Kelowna Facility's
7
<PAGE> 9
refurbished products are sold directly to the other operating divisions.
Sel-Drum Corporation (U.S.A.), Inc. and Sel-Drum Corporation employ a number of
sales agents and telemarketers who directly contact the copier machine dealers
throughout North America. There are approximately 7,000 such dealers marketing
various brands of copier products. The Company estimates that the potential
marketplace for high mortality replacement parts, drums and toner, not
controlled by the Original Equipment Manufacturers ("O.E.M's") to be
approximately $750 million in North America.
The Company's primary business is the distribution of high mortality copier and
printer replacement parts and toner. The Company also refurbishes facsimile and
laser printer and fax cartridges. During the course of last year, the Company
discontinued its drum manufacturing activities. This decision was motivated by a
change in technology and did not affect the Company's operations, as it had been
ready to use the appropriate facilities for its cartridges refurbishing
activities. The technology and equipment affiliated with the drum manufacturing
operations have been written off and as of the year ended July 31, 1999 and in
consequence a loss of $394,006.00 was recorded against earnings. In line with
its aim of bolstering the Company's core business, the Company signed a
cartridge sales contract in January 1999 with an important authorized dealer
thus taking advantage of the under-utilized Kelowna Facility refurbishing and
distribution capacity. The second tier of the contract, increasing the number of
cartridges processed in the Kelowna Facility, took effect in early September
1999.
The Company markets in the United States and Canada through a direct network of
sales agents and telemarketers. Outside of North America, the Company is
represented by several distributors with their sales accounting for less than 5%
of the total revenues.
The Company is also looking at the possibility of seeking a listing on the
Chicago Stock Exchange, the Nasdaq SmallCap Market or a national or other
regional exchange. Although not pursued during the past year in view of its
acquisition by Cotran Holding inc., this goal remains an integral part of the
Company's development strategy.
A new computer system was introduced in 1999. Training is completed. This system
is now fully functional in Burlington and Buffalo.
At the Annual Meeting of Shareholders of the Company held on January 17, 2000,
four nominees were proposed for election as directors. Prior to the vote on the
election of directors, Mr. Gilles Carli's appointment was postponed for
technical reasons. The Board of Directors was authorized to decide on the timing
of Mr.Carli's appointment. Camille Cotran, John Brohman and Louise
Vaillancourt-Chatillon were elected directors to serve until the next Annual
Meeting of Shareholders and until their successors are elected or appointed and
qualify.
Following the Annual Meeting of Shareholders on January 17, 2000, Mr. Camille
Cotran was reappointed Chairman and Chief Executive Officer and Mr. Raymond
Sparks was reappointed President and Chief Operating Officer of the Company.
RESULTS OF OPERATIONS
The Company's results of operations are affected by numerous factors such as
general economic conditions, competition and inventory costs. The largest
component of the Company's cost of sales is inventory cost, which may vary
slightly from period to period based upon timing of purchases and exchange rate
fluctuations which indirectly affect the Company's inventory costs.
The following table sets forth for each of the periods presented, certain income
statement data for the Company expressed as a percentage of net sales.
8
<PAGE> 10
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
January 31, January 31, January 31, January 31,
Statement of Operations Data 2000 1999 2000 1999
- ---------------------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
As a Percentage of Net Sales:
Cost of Goods Sold 71.0% 73.3% 70.3% 71.8%
Gross Profit 29.0% 26.7% 29.7% 28.2%
Selling, General and Administrative Expenses 23.0% 23.1% 22.3% 23.4%
Provision for Bad Debt 0.3% 0.4% 0.4% 0.5%
Income from Operations 5.7% 3.2% 7.0% 4.3%
Other Income (Expense) (0.4)% -- (0.2)% (0.3)%
Income before Taxes 5.3% 3.2% 6.8% 4.0%
Net Income 3.1% 1.8% 4.0% 2.2%
</TABLE>
Net sales for the three months ended January 31, 2000 were $3,725,190 as
compared with $3,461,092 for the three months ended January 31, 1999, an
approximately 8% increase. For the six months ended January 31, 2000 net sales
were $7,466,715, as compared with $6,702,882 for the six months ended January
31, 1999 an increase of approximately 11%. The increase in sales is the result
of a combination of factors such as the strategic alliance with Densigraphix for
the sales of toner products, a stronger demand for replacement parts and other
products as well as general economic conditions.
Gross profit margin for the three months ending January 31, 2000 was 29.0%, as
compared to 26.7% for the same period last year. For the six months ended
January 31, 2000, gross profit margin was 29.7% as compared to 28.2% for the six
months ended January 31, 1999. The gross profit in absolute dollars increased by
$157,710 and $329,012 for the three and six month periods, respectively.
Selling, general, and administrative expenses for the three months ended January
31, 2000 increased 7.3% from the prior comparable period. As a percentage of net
sales, selling, general and administrative expenses remain stable at 23% as a
result of the increase in net sales. For the six months ended January 31, 2000,
selling, general and administrative expenses in absolute dollars increased by
$94,516 or 6.0%. The increases for the six-month period resulted primarily from
timing of sales commissions and bonuses following the trend in sales, and
increased sales and computer training expenses for new products and the new
computer system.
The interest expense for the three months ended January 31, 2000 increased by
$8,696 as a result of the new financing put in place October 31, 1999 but was
partly offset by an increase in interest income of $8,364. For the six months
ended January 31, 2000, the interest expense increased by $5,548 and was offset
by interest income of $8,563.
As a result of the foregoing, net income for the three months ended January 31,
2000 increased from $63,178 to $114,379 and represents 3.1% of net sales. For
the six months ended January 31, 2000 net income increased from $148,998 to
$301,562 and represents 4% of net sales.
YEAR 2000 COMPLIANCE ISSUES
The Company has examined the risks associated with the year 2000 with regards to
computer systems and applications.
After evaluating the Company's internal computer systems, it was decided to
change the whole system in order to be year 2000 compliant. The Company has
invested approximately $177,000 to change its computer system in order to be
year 2000 compliant. An amount of $149,000 has been capitalized and the
9
<PAGE> 11
Company expects to be within its budget of $200,000 by the time the
implementation is completed in connection with hardware and software upgrades
relative to the establishment of an integrated data system.
During the year 2000 date change and the leap year 2000, no problems with the
internal systems nor disruptions with respect to the computer systems of vendors
or customers were experienced by the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's principal capital requirements are to fund its working capital
needs and material inventory requirements and to fund the improvement of
facilities, machinery and equipment. Historically the Company has used income
generated by operations as well as bank financing to fund these capital needs.
Net cash provided by operating activities primarily represents net income plus
changes in working capital positions. Net cash provided by operating activities
showed an improvement for the six months ended January 31, 2000 at $161,635
compared to net cash used in operations of ($270,261) for the previous period.
The Company's arrangements with its North American customers typically provide
that payments are due within 30 days following the date of the Company's
shipment of goods, while arrangements with overseas customers are generally on a
letter of credit basis or sight draft. Due to the Company's expansion strategy,
management believes that the Company's working capital requirements will
increase. These requirements will be met with cash generated through operations
or bank loans.
The Company currently has a revolving demand loan arrangement with the National
Bank of Canada in the amount of $2,801,400 U.S. ($4,200,000 Canadian dollars).
These borrowings generally assist the Company with funding of accounts
receivable and inventory purchases for an amount of $2,134,400 U.S. ($3,200,000
Canadian dollars). As at October 29,1999, the revolving demand loan was
increased by $333,500 U.S. ($500,000 Canadian dollars) according to the terms of
the financing provided by the National Bank of Canada for the acquisition by
C. Cotran Holding inc. and Densigraphix of Sel-Drum International, Inc. In
addition, as part of the financing, a new term loan of $339,000 U.S. ($500,000
Canadian dollars) was granted to the Company.
As at January 31, 2000 outstanding borrowing of $955,460 us existed under this
arrangement. An amount of $667,000 ($1,000,000 Canadian dollars) was used as
part of the stock purchase financing and the balance $288,460 U.S. ($432,475
Canadian dollars) was used in operations.
The additional financing provided by the Bank was used to lend to Densigraphix
an amount of $1,000,500 U.S. ($1,500,000 Canadian dollars) in consideration
for the issuance of a note receivable which carries an interest rate of prime +
1% and the interest will be payable monthly.
Cash flow from operations coupled with cash flow generated by bank financing has
provided the Company with the cash necessary to meet its cash requirements.
Risks
- -----
Sel-Drum faces the financial risks inherent to the nature of its activities. The
Company also faces risks stemming from other factors such as fluctuations in
exchange rates and economic market conditions in general.
10
<PAGE> 12
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On January 17, 2000, the Shareholders of the Company approved the following
proposals at the Annual Meeting:
PROPOSAL 1: TO ELECT DIRECTORS TO SERVE UNTIL THE NEXT ANNUAL MEETING:
For Authority
--- Withheld
---------
Camille Cotran 7,307,703 100
Louise Vaillancourt-Chatillon 7,307,703 100
John Brohman 7,307,703 100
Gilles Carli 7,307,703 100
This proposal was amended at the meeting to the effect that Gilles Carli's
appointment was postponed pending a decision of the Board of Directors. The
Board of Directors was authorized to decide on the timing of the appointment of
Mr.Carli.
PROPOSAL 2: TO APPROVE AND RATIFY THE SELECTION OF MENGEL, METZGER, BARR & CO.
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JULY 31,
2000:
For Against Abstain
--- ------- -------
7,307,653 50 100
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index to Exhibits.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the quarter for which this
report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SEL-DRUM INTERNATIONAL INC.
Date March 16, 2000 /s/ Camille Cotran, Chairman and CEO
- ------------------- ------------------------------------
Date March 16, 2000 /s/ John C. Hall, Vice-President, Finance
- ------------------- -----------------------------------------
11
<PAGE> 13
INDEX TO EXHIBITS
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
Not applicable.
(3) (a) ARTICLES OF INCORPORATION
Restated Certificate of Incorporation is incorporated by
reference to Exhibit 3(a) to the Registrant's Form 10-QSB
filed for the quarterly period ended January 31, 1998.
(b) BY - LAWS
Amended and Restated By-Laws are incorporated by reference to
Exhibit 3(b) to the Registrant's Form 10-QSB filed for the
quarterly period ended January 31, 1998.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
The documents listed under Item 3 of this index are incorporated
herein by reference.
(10) MATERIAL CONTRACTS
Not applicable.
(11) STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Computation can be clearly determined in the Financial Statements
included herein under Item 1.
(15) LETTER ON UNAUDITED INTERIM FINANCIAL STATEMENTS
Not applicable.
(18) LETTER ON CHANGE IN ACCOUNTING PRINCIPLES
Not applicable
(19) REPORTS FURNISHED TO SECURITY HOLDERS
Not applicable.
(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO VOTE
Not applicable.
(23) CONSENT OF EXPERTS AND COUNSEL
Not applicable.
(24) POWER OF ATTORNEY
Not applicable.
12
<PAGE> 14
*(27) FINANCIAL DATA SCHEDULE
The Financial Data Schedule is included herein as Exhibit 27.
(99) ADDITIONAL EXHIBITS
Not applicable.
* Exhibit filed with this Report
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF SEL-DRUM INTERNATIONAL, INC. FOR THE SIX MONTH PERIOD ENDED
JANUARY 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 702,870
<SECURITIES> 0
<RECEIVABLES> 2,235,459
<ALLOWANCES> 101,794
<INVENTORY> 3,027,574
<CURRENT-ASSETS> 6,979,549
<PP&E> 1,547,490
<DEPRECIATION> 1,019,781
<TOTAL-ASSETS> 7,537,845
<CURRENT-LIABILITIES> 1,865,771
<BONDS> 0
0
4,499,805
<COMMON> 74,175
<OTHER-SE> 847,968
<TOTAL-LIABILITY-AND-EQUITY> 7,537,845
<SALES> 7,466,715
<TOTAL-REVENUES> 7,466,715
<CGS> 5,247,799
<TOTAL-COSTS> 5,247,799
<OTHER-EXPENSES> 1,665,346
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,541
<INCOME-PRETAX> 508,945
<INCOME-TAX> 207,383
<INCOME-CONTINUING> 301,562
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 301,562
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
