SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarter Ended September 30, 1996 Commission File
Number 0-83903-NY
SPECTEX INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
New York
13-6186951
(State of Incorporation) (I.R.S.
Employer
Identification No.)
505 Carroll Street Brooklyn, NY
11215
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code: (718)
797-9400
Not Applicable
Former name, former address and former fiscal year, if changed
last report
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 proceeding 12 months (or for such shorter
periods 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
Number of shares outstanding of common stock - at September 30,
1996 4,138,520
shares.
-1-
INDEX
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
THREE MONTHS ENDED SEPTEMBER 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheet--September 30, 1996
(unaudited) and December 31, 1995 (audited).
Condensed consolidated statement of income (unaudited)
- Three months and nine months ended September 30, 1996
and 1995.
Consolidated statement of cash flow (unaudited) - Nine
months ended September 30, 1996 and 1995.
Notes to consolidated financial statements (unaudited)
- September 30, 1996.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
NOT APPLICABLE
SIGNATURES
-2-
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS-NOTE BELOW
ASSETS
September 30,
December 31,
Current Assets:
1996
1995
Cash in bank
$ 193,014
$ 785,764
Accounts receivable-net of allowances
for doubtful accounts
2,191,395
1,669,718
Other receivables
36,822
11,036
Inventory
1,524,298
1,667,018
Prepaid expenses
71,014
65,278
Mortgages receivable
92,540
153,540
Marketable securities
265,509
218,928
Total Current Assets
4,374,592
4,571,282
Property, plant and equipment at cost, partly
pledged, net of accumulated depreciation
3,476,043
3,666,558
Other Assets:
Loan receivable from shareholder
379,913
292,366
Deferred taxes
276,292
119,576
Deferred charges net of accumulated
amortization $354,693 in 1996;
$323,559 in 1995
138,414
169,548
Mortgages receivable
39,574
89,264
Total Other Assets
834,193
670,754
Total Assets
$8,684,828
$8,908,594
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable-trade
$1,459,153
$1,275,792
Accrued expenses
49,012
166,162
Income taxes payable
268,217
229,204
Notes payable-current portion
566,460
560,085
Total Current Liabilities
2,342,842
2,231,243
Long-term debt, notes payable-less
current portion above
1,917,721
2,119,198
Minority interests in equity of subsidiaries
776,313
747,334
Stockholders' Equity:
Capital stock-$.01 par value-authorized
5,000,000 shares and 4,338,520 shares
issued
43,383
43,383
Capital in excess of par
846,660
846,660
Retained earnings
2,778,376
2,941,243
Total
3,668,419
3,831,286
Less: Treasury stock 87,940 shares
at cost
(20,467)
(20,467)
Net Stockholders' Equity
3,647,952
3,810,819
Total
$8,684,828
$8,908,594
Note: The accompanying notes are an integral part of this
report.
-3-
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three Months Nine
Months
Ended September 30,
Ended September 30,
1996
1995
1996
1994
1995
1994
Net sales and gross revenue
$8,464,280
$8,975,063
$24,378,324
$26,143,406
Costs and expenses:
Cost of goods sold
7,282,710
7,856,948
22,376,806
23,961,505
Selling, general and
administrative
expenses
748,587
658,112
2,198,431
2,052,916
Total Costs & Expenses
8,031,297
8,515,060
24,575,237
26,014,421
Income (loss) before income taxes
and minority interests
432,983
460,003
(196,913)
128,985
Less: Provision for taxes
(recovery)
on income:
State & local taxes
81,961
95,919
(23,713)
59,543
Federal income taxes
113,965
127,956
(39,312)
43,281
Total
195,926
223,875
(63,025)
102,824
Less: Minority interests in
operations of subsidiaries
117,134
95,206
28,979
23,609
Net Reductions (Additions)
(Additions)
313,060
319,081
(34,046)
126,433
Net income (loss)
$ 119,923
$ 140,922
$ (162,867)
$ 2,552
Earnings (or loss) per share
$ .03
$ .03
$ (.04)
$ NIL
Dividends per share
$ -0-
$ -0-
$ -0-
$ -0-
Weighted average number of shares
in determining earnings (loss)
per share
4,138,520
4,138,520
4,138,520
4,138,520
Note: The accompanying notes are an integral part of this
report.
-4-
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
NINE MONTHS ENDED SEPTEMBER 30,
Operating Activities:
1996
1995
Net (Loss) Income from Operations
$(162,867)
$ 2,552
Plus: Adjustments to reconcile net income
to net cash provided by operating activities:
Minority interest in participation of
subsidiary
28,979
23,609
Depreciation & amortization
238,480
333,677
Deferred taxes
(156,716)
28,103
Loss on sale of building
- -0-
60,300
Changes in Operating Assets and Liabilities:
(Increase) in accounts receivable
(521,677)
(385,845)
Decrease (Increase) in inventory
142,720
(211,316)
(Increase) Decrease in prepaid expenses
(5,736)
14,236
Increase (Decrease) in accounts payable
183,361
(183,938)
(Decrease) Increase in accrued expenses and
taxes payable
(117,150)
2,970
Increase (Decrease) in income taxes payable
39,013
(51,916)
(Increase) Decrease in officers' and
other receivables
(113,333)
68,970
Net Cash (Used in) Operating
Activities
(444,926)
(298,598)
Investing Activities:
Purchase of fixed assets
(16,823)
(18,049)
Proceeds from sale of building
- -0-
43,046
Proceeds from mortgage receivable
110,682
72,212
Investment in marketable securities
(46,581)
(102,091)
Net Cash Provided From (Used
in) Investing Activities
47,278
(4,882)
Financing Activities:
Payments on IDA loans
(192,510)
(192,510)
Payment on mortgage debt
- -0-
(13,049)
Payments on auto & equipment loans
(2,592)
(57,307)
Net Cash (Used in) Financing
Activities
(195,102)
(262,866)
Net (Decrease) in Cash
(592,750)
(566,346)
Cash at January 1,
785,764
873,371
Cash at September 30,
$ 193,014
$ 307,025
Note: The accompanying notes are an integral part of this
report.
-5-
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 - BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements
have been prepared
in accordance with generally accepted accounting principles for
interim financial
information and in accordance with instructions to Form 10-Q
and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and
footnotes required by generally accepted accounting principles
for complete
financial statements. In the opinion of management, all
adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation, have
been included. Operating results for the three and nine month
periods ended
September 30, 1996 are not necessarily indicative of the
results that may be
expected for the year ended December 31, 1996. For further
information, refer
to the consolidated financial statements and footnotes thereto
included in the
Company's annual report on Form 10-K for the year ended
December 31, 1995.
The Company and its operating subsidiaries, with the exception
of J&J Farms
Creamery, Inc. are engaged in apparel manufacturing.
Operating data of J&J Farms Creamery, Inc. for the quarter
ending September 30,
1996, included in the consolidated operations of the Company,
are as follows:
Profit & Loss Information
Sales $7,118,423
Cost of goods sold 6,095,479
Selling, general and
administrative 588,822
Total Costs and Expenses 6,684,301
Pre-Tax Profit $ 434,122
NOTE 2: Accounts receivable are shown net of allowances for
doubtful accounts
of $-0- at September 30, 1996 and $-0- at December 31, 1995.
NOTE 3: Inventories at statement dates are shown at the lower
of cost or market
on a first-in first-out basis, and are classified and valued as
follows:
September 30, 1996 Dec. 31, 1995
Raw materials $ 347,634 $ 398,296
Supplies 80,121 95,172
Work in process 133,876 162,326
Finished goods 123,841 85,438
Dairy products 838,826 925,786
Total $1,524,298 $1,667,018
-6-
SPECTEX INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 4 - MORTGAGE RECEIVABLE:
In 1993 J&J Farms Creamery, Inc. loaned money to an unrelated
party as a mortgage
receivable of $240,000, which is self-liquidating and due in
1998. Inerest on
the mortgage is payable at the rate of 10% per annum.
In May 1995 J&J Farms Creamery, Inc. sold a building, which it
had acquired in
1993 as payment for an outstanding accounts receivable. The
building was sold
for $105,000. $30,000 remains due as a mortgage receivable due
in the current
fiscal year.
NOTE 5 - DEFERRED CHARGES:
Deferred charges include covenants not to compete and mortgage
refinancing costs
in connection with NYC Industrial Development Agency financings
and are being
amortized over their respective terms.
-7-
SPECTEX INDUSTRIES INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996
Net sales in the third quarter of 1996 were approximately 5.6%
lower as compared
to 1995. The gross profit percentage increased, while
operating expenses, as a
percentage of sales also increased as compared to 1995.
Cash flow generated by the Company's operations is deemed
adequate to meet the
Company's financial obligations.
-8-
PART II. OTHER INFORMATION
REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the
three months ended
September 30, 1996.
-9-
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.
Spectex Industries, Inc.
(Registrant)
Date: November 15, 1996
Michael Oberlander, President
Date: November 15, 1996
Simon Friedman, Chief Financial
Officer
-10-
