SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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, 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 July 31, 1998
Common Stock, one cent par value 9,557,561
NO DOCUMENTS INCORPORATED BY REFERENCE
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED) (AUDITED)
Jun 30 Dec 31
1998 1997
CURRENT ASSETS
Cash 43,201 36,686
Accounts receivable 510,278 529,682
Allowance for doubtful accts (23,336) (20,000)
Inventories 375,788 335,088
Prepaid expenses 25,846 15,026
------- -------
TOTAL CURRENT ASSETS 931,777 896,482
EQUIPMENT, less allowances of $88,867
and $79,267 for depreciation 57,214 62,921
DEFERRED TAXES 817,776 817,776
------- -------
TOTAL ASSETS 1,806,767 1,777,179
========= =========
" LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY"
CURRENT LIABILITIES
Trade accounts payable 251,597 307,033
Accrued expenses and other current liabilities 67,154 56,779
Amount due stockholder 59,855 86,297
------- -------
TOTAL CURRENT LIABLITIES 378,606 450,109
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) (5,459,917) (5,561,008)
--------- ---------
1,435,296 1,334,205
Cost of Common Stock held in Treasury (7,135) (7,135)
--------- ---------
1,428,161 1,327,070
--------- ---------
TOTAL LIABILITIES. PREFERRED STOCK
AND SHAREHOLDERS' EQUITY 1,806,767 1,777,179
========= =========
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF SIX MONTHS ENDED
JUNE 30, 1998 AND 1997
(UNAUDITED) (UNAUDITED)
1998 1997
Sales 1,277,729 1,072,046
Other income 82,058 14,544
--------- --------
1,359,787 1,086,590
Costs and expenses:
Cost of sales 777,930 815,087
Selling, general and administrative expenses 480,654 422,595
Interest expense 112 875
-------- --------
1,258,696 1,238,557
--------- ---------
Net gain (loss) 101,091 (151,967)
Gain (loss) per share of Common Stock
Assuming no dilution $0.01 ($0.02)
Assuming full dilution $0.01 ($0.02)
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF SIX MONTHS JUNE 30, 1998 AND 1997
(UNAUDITED) (UNAUDITED)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 101,091 (151,967)
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Depreciation 9,600 8,400
(Increase) decrease in accounts receivable 22,740 94,607
(Increase) decrease in inventories (40,700) (26,851)
(Increase) decrease in prepaid expenses
and other assets (10,820) (5,218)
Increase (decrease) in accounts payable (55,436) (19,996)
Increase (decrease) in accrued expenses
and other current liabilities 10,375 (9,979)
Increase (decrease) in amounts due
shareholder (26,442) 132,500
------- -------
TOTAL ADJUSTMENTS (90,683) 173,463
------ -------
NET CASH USED BY OPERATING ACTIVITIES 10,408 21,497
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (3,893) (6,283)
------ ------
NET CASH (USED) BY INVESTING ACTIVITIES (3,893) (6,283)
NET CHANGE IN CASH 6,515 15,214
CASH AT BEGINNING OF YEAR 36,686 101,550
------ -------
CASH AT END OF PERIOD 43,201 116,764
====== =======
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 June 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 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:
* 6/30/98 12/31/97
Raw Materials 86,430 80,746
Finished Goods & WIP 289,358 254,342
------- -------
Total Inventories 375,788 335,088
*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
1998 1997
Assuming no dilution
Common Stock Outstanding, July 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 six months ended June 30, 1998, the Company recorded sales of
$1,277,729 compared to $1,072,046 for the six months ended June 30, 1997.
At June 30, 1998 the Company had a backlog of $71,514 compared to
$44,458 at June 30, 1997.
Cost of sales as a percentage of sales decreased to 60.9% from 76%
for the six months ended June 30, 1998 and 1997, respectively.
This decrease is due to the reduction of new product development.
For the period of six months ended June 30, 1998, selling, general
and administrative expenses increased by $58,059 over the period of
six months ended June 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
six 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
Exh 27 Financial Data Schedule
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__August 13, 1998______ BY_/S/ WILLIAM M. TETRICK
William M. Tetrick
Chairman of the Board
DATE__August 13, 1998_______ BY_/S/DAVID S. LONGWORTH
David S. Longworth
President and Clerk
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 43,201
<SECURITIES> 0
<RECEIVABLES> 510,278
<ALLOWANCES> (23,336)
<INVENTORY> 375,788
<CURRENT-ASSETS> 931,777
<PP&E> 146,081
<DEPRECIATION> 88,867
<TOTAL-ASSETS> 1,806,767
<CURRENT-LIABILITIES> 378,606
<BONDS> 0
0
0
<COMMON> 95,576
<OTHER-SE> 1,332,585
<TOTAL-LIABILITY-AND-EQUITY> 1,806,767
<SALES> 1,277,729
<TOTAL-REVENUES> 1,359,787
<CGS> 777,930
<TOTAL-COSTS> 777,930
<OTHER-EXPENSES> 480,654
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 112
<INCOME-PRETAX> 101,091
<INCOME-TAX> 0
<INCOME-CONTINUING> 101,091
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,091
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
