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
September 30, 1998
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's
classes of common stock, as of the last practicable date.
Class Outstanding at October 31, 1998
Common Stock, one cent par value 9,557,561
NO DOCUMENTS INCORPORATED BY REFERENCE
- ---
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Sept 30 Dec 31
1998 1997
CURRENT ASSETS
Cash 69,648 36,686
Accounts receivable 522,573 529,682
Allowance for doubtful accts 0 (20,000)
Inventories 420,887 335,088
Prepaid expenses 22,761 15,026
------- -------
TOTAL CURRENT ASSETS 1,035,869 896,482
EQUIPMENT, less allowances of $93,667
and $79,267 for depreciation 58,560 62,921
DEFERRED TAXES 817,776 817,776
------- -------
TOTAL ASSETS $ 1,912,205 $ 1,777,179
============ ============
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 297,827 $ 307,033
Accrued expenses and other current liabilities 50,341 56,779
Amount due stockholder 148,220 86,297
--------- ---------
TOTAL CURRENT LIABLITIES 496,388 450,109
STOCKHOLDERS' EQUITY
Common Stock (9,557,561 shares issued
including shares held in Treasury) 95,576 95,576
Additional paid-in capital 6,799,637 6,799,637
Retained earnings (deficit) (5,472,261) (5,561,008)
--------- ---------
1,422,952 1,334,205
Cost of Common Stock held in Treasury (7,135) (7,135)
--------- ---------
1,415,817 1,327,070
TOTAL LIABILITIES. PREFERRED STOCK --------- ---------
AND SHAREHOLDERS' EQUITY $ 1,912,205 $ 1,777,179
========= =========
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF NINE MONTHS ENDED
SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
1998 1997
Sales $ 1,911,049 $ 1,609,146
Other income 98,151 31,531
--------- ---------
2,009,200 1,640,677
Costs and expenses:
Cost of sales 1,176,747 1,226,261
Selling, general and administrative expenses 743,535 669,318
Interest expense 172 965
-------- ---------
1,920,454 1,896,544
--------- ---------
Net gain (loss) $ 88,746 $ (255,867)
========= =========
Gain (loss) per share of Common Stock
Assuming no dilution $ 0 $ (0)
Assuming full dilution $ 0 $ (0)
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF NINE MONTHS SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 88,746 $ (255,867)
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Depreciation 14,400 12,600
(Increase) decrease in accounts receivable (12,891) 125,332
(Increase) decrease in inventories (85,798) (50,525)
(Increase) decrease in prepaid expenses
and other assets (7,735) 2,431
Increase (decrease) in accounts payable (9,206) (33,559)
Increase (decrease) in accrued expenses
and other current liabilities (6,438) (6,280)
Increase (decrease) in amounts due
shareholder 61,923 (41,250)
------- -------
TOTAL ADJUSTMENTS (45,745) 8,749
------- -------
NET CASH USED BY OPERATING ACTIVITIES 43,001 (247,118)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (10,039) (8,853)
Stock issued 0 210,000
------ -------
NET CASH (USED) BY INVESTING ACTIVITIES (10,039) 201,147
NET CHANGE IN CASH 32,962 (45,971)
CASH AT BEGINNING OF YEAR 36,686 101,550
------- -------
CASH AT END OF PERIOD $ 69,648 $ 55,579
======= =======
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 Annual
Report Form 10-K. The results of operations for the period ended Sept. 30,
1998 are not necessarily indicative of the operating results for the full year.
Basis of Presentation
It is the opinion of management that all significant adjustments which are
routine recurring adjustments reflected in the accompanying Sept. 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:
* 9/30/98 12/31/97
Raw Materials $ 105,200 $ 80,746
Finished Goods & WIP $ 315,687 $ 254,342
Total Inventories $ 420,887 $ 335,088
*Allocation Based Upon Estimate
Gain per Common Share
The weighted average number of shares of common stock outstanding used
in computing gain 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 Nine Months
Ended Sept. 30
1998 1997
Assuming no dilution
Common Stock Outstanding, October 31, 9,557,561 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 nine months ended September 30, 1998, the Company recorded sales of
$1,911,049 compared to $1,609,146 for the nine months ended September 30, 1997.
At September 30, 1998 the Company had a backlog of $38,643 compared to
$88,376 at September 30, 1997.
Cost of sales as a percentage of sales decreased to 61.6% from 76.2% for
the nine months ended September 30, 1998 and 1997, respectively.This
decrease is due to the reduction of new product development.
For the period of nine months ended September 30, 1998, selling, general
and administrative expenses increased by $74,217 over the period of
nine months ended September 30, 1997.
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
nine months of calendar year 1998.
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special meeting in lieu of an annual meeting was held on May 28, 1998.
William Tetrick, Dave Longworth, Larry Bishop, Thomas Gehman and Robert
Pogorelc were re-elected as directors.
A vote was taken to approve Livingston & Haynes, P.C. to continue as auditors
for the coming year.
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, the
undersigned thereunto being duly authorized.
DATE November 13,1998 BY/S/WILLIAM M. TETRICK
William M. Tetrick
Chairman of the Board
DATE November 13, 1998 BY/S/DAVID S. LONGWORTH
David S. Longworth
President and Clerk
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 69,648
<SECURITIES> 0
<RECEIVABLES> 522,573
<ALLOWANCES> 0
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<CURRENT-ASSETS> 22,761
<PP&E> 152,227
<DEPRECIATION> 93,667
<TOTAL-ASSETS> 1,912,205
<CURRENT-LIABILITIES> 496,388
<BONDS> 0
0
0
<COMMON> 95,576
<OTHER-SE> 1,320,241
<TOTAL-LIABILITY-AND-EQUITY> 1,912,205
<SALES> 1,911,049
<TOTAL-REVENUES> 2,009,200
<CGS> 1,176,747
<TOTAL-COSTS> 1,176,747
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 88,746
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 88,746
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
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