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
For Quarter Ended Commission File Number O-6421
June 30, 1997
SYNERGISTICS, INC.
MASSACHUSETTS 04-2283157
(State of Incorporation) (IRS Employer ID Number)
9 Tech Circle, Natick, MA 01760
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number,
including area code (508)655-1340
Securities registered pursuant to Section 12(g) of the Act.
Common Stock $0.01 Par Value
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 preceeding 12 months (or such shorter period
that the registrant was required to file such reports and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
There is no public market for, and thus no aggregate market value of
the registrants securities.
Indicate the number of shares outstanding of each of the registrant
classes of common stock, as of the last practicable date.
Class Outstanding at July 31,1997
Common Stock, one cent par value 9,297,561
NO DOCUMENTS INCORPORATED BY REFERENCE
- ----------------------------------------------------------
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Jun 30 Dec 31
1997 1996
CURRENT ASSETS
Cash 116,764 101,550
Accounts receivable 417,952 517,559
Allowance (20,000) (35,000)
Inventories 266,669 239,818
Prepaid expenses 25,928 20,710
------- -------
TOTAL CURRENT ASSETS 807,313 854,637
EQUIPMENT, less allowances of $68,763
and $60,363 for depreciation 60,172 62,289
DEFERRED TAXES 817,776 817,776
--------- ---------
TOTAL ASSETS 1,685,261 1,734,702
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 200,279 220,275
Accrued expenses and other current 55,284 65,263
Amount due stockholder 273,797 141,297
------- -------
TOTAL CURRENT LIABLITIES 529,360 426,835
STOCKHOLDERS' EQUITY
Common Stock (9,297,561 shares issued
including shares held in Treasury 92,976 92,976
Additional paid-in capital 6,542,237 6,542,237
Retained earnings (deficit) (5,472,177)(5,320,211)
--------- ---------
1,163,036 1,315,002
Cost of Common Stock held in
Treasury (7,135) (7,135)
--------- --------
1,155,901 1,307,867
TOTAL LIABILITIES. PREFERRED STOCK -------- ---------
AND SHAREHOLDERS' EQUITY 1,685,261 1,734,702
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SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF SIX MONTHS ENDED
JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
Sales 1,072,045 1,140,720
Other income 892 9,740
--------- ---------
1,072,937 1,150,460
Costs and expenses:
Cost of sales 794,714 658,216
Selling, general and administrative 429,314 415,161
Interest expense 875 9
--------- ---------
1,224,903 1,073,377
Net income (loss) (151,966) 77,083
Income (loss) per share of Common Stock
Assuming no dilution ($0.02) $0.01
Assuming full dilution ($0.02) $0.01
- ----------------------------------------------------------
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF SIX MONTHS JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (151,966) 77,083
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:
Depreciation 8,400 3,285
(Increase) decrease in accounts receivable 94,607 (17,890)
(Increase) decrease in inventories (26,851) (22,609)
(Increase) decrease in prepaid expenses
and other assets (5,218) (19,727)
Increase (decrease) in accounts payable (19,996) (18,955)
Increase (decrease) in accrued expenses
and other current liabilities (9,979) (8,116)
Increase (decrease) in amounts due
shareholder 132,500 (13,749)
------- ------
TOTAL ADJUSTMENTS 173,463 (97,761)
NET CASH USED BY OPERATING ACTIVITIES 21,497 (20,678)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (6,283) (6,550)
------- -------
NET CASH (USED) BY INVESTING ACTIVITIES (6,283) (6,550)
NET CHANGE IN CASH 15,214 (27,228)
CASH AT BEGINNING OF YEAR 101,550 332,151
------- -------
CASH AT END OF PERIOD 116,764 304,923
- ----------------------------------------------------------
SYNERGISTICS, INC.
SELECTED INFORMATION
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's An
Report Form 10-K. The results of operations for the period ended June
30, 1997 are not necessarily indicative of the operating results for
full year.
Basis of Presentation
It is the opinion of management that all significant adjustments which are
routine recurring adjustments reflected in the accompanying June 30
financial statements which are necessary to present fairly such interim
financial statements.
Accounting Policy for Revenues and Costs of Sales
Revenues are recognized at the time of product shipment. Cost of sales
is computed using the "gross profit" method based upon historical
results of operations. Other cost, included in costs of sales, are
based upon such costs as actually incurred.
Inventories
Inventories are comprised of the following:
* 6/30/97 12/31/96
Raw Materials 69,334 62,170
Finished Goods & WIP 197,335 177,648
------- -------
Total Inventories 266,669 239,818
*Allocation Based Upon Estimate
(Loss) per Common Share
The weighted average number of shares of common stock outstanding
used in computing (loss) per share does not include the effect of the
conversion of the stock options as the exercise price exceeds the current
market value of the security.
The following schedule sets forth the number of shares used in
computing earnings per share:
Period of Six Months
Ended June 30,
1997 1996
Assuming no dilution
Common Stock Outstanding July 31, 1997 9,297,561 9,297,561
Shares held in Treasury 16,445 16,445
Total Shares Authorized 12,000,000 12,000,000
- ----------------------------------------------------------
PART I FINANCIAL INFORMATION
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the six months ended June 30, 1997, the Company recorded sales
$1,072,045 compared to $1,140,720 for the six months ended June 30,1996
At June 30, 1997 the Company had a backlog of $44,458 compared to
$84,885 at June 30, 1996.
Cost of sales as a percentage of sales increased to 74.1% from 57.
for the six months ended June 30, 1997 and 1996, respectively.
This increase is due to the development of new products demanded by
our customers
For the period of six months ended June 30, 1997, selling, general
and administrative expenses increased by $14,153 over the period of
months ended June 30, 1996.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are currently no pending legal proceedings to which the Company
is a party or to which any of its property is subject.
ITEM 2. CHANGE IN SECURITIES
There have been no changes in the instruments defining the rights of
holders of any class of securities of the Company during the first
six months of calendar year 1997.
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting in lieu of an annual meeting was held on June 12, 1997.
William Tetrick, David Longworth, Larry Bishop, Thomas Gehmen and Robert
Pogorelc were elected as directors. No other directors had terms that continued
after the meeting.
A vote was taken to appove Livingston & Haynes, P.C. to continue as auditors for
the coming year and to award directors options of 2,000 shares perusant to the
1987 Director's stock option plan. Both votes were passed. No other votes were
held.
ITEM 4. EXHIBITS AND FORM 8-K
None.
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf,
undersigned thereunto being duly authorized.
DATE___________________________ BY/S/WILLIAM M.TETRICK_______________
William M. Tetrick
Chairman of the Board
DATE___________________________ BY_/S/DAVID S. LONWORTH____________
David S. Longworth
President and Clerk
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 116,764
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<RECEIVABLES> 417,952
<ALLOWANCES> 20,000
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<OTHER-SE> 1,062,925
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<INCOME-PRETAX> (151,966)
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (151,966)
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