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, 1999
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, 1999
Common Stock, one cent par value 9,632,561
NO DOCUMENTS INCORPORATED BY REFERENCE
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SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Jun 30 Dec 31
1999 1998
CURRENT ASSETS
Cash $ 36,673 $ 84,376
Accounts receivable 578,228 639,347
Allowance for doubtful accts (20,000) (20,000)
Inventories 432,486 333,382
Prepaid expenses 23,819 14,415
--------- ---------
TOTAL CURRENT ASSETS 1,051,206 1,051,520
EQUIPMENT, less allowances of
$113,217 and $79,878 for depreciation 41,878 49,060
DEFERRED TAXES 759,674 759,674
--------- ---------
TOTAL ASSETS $1,852,758 $1,860,254
========= =========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 325,552 $ 239,470
Accrued expenses and other current 42,917 84,059
Amount due stockholder 13,316 34,470
------- -------
TOTAL CURRENT LIABLITIES 381,785 357,999
STOCKHOLDERS' EQUITY
Common Stock (9,632,561 shares issued
including shares held in Treasury 96,326 96,326
Additional paid-in capital 6,873,887 6,873,887
Retained earnings (deficit) (5,492,105)(5,460,823)
--------- ---------
1,478,108 1,509,390
Cost of Common Stock held
in Treasury (7,135) (7,135)
--------- ---------
1,470,973 1,502,255
TOTAL LIABILITIES. PREFERRED STOCK --------- ---------
AND SHAREHOLDERS' EQUITY $1,852,758 $1,860,254
========= =========
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SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF SIX MONTHS ENDED
JUNE 30, 1999 AND 1998
(UNAUDITED)
1999 1998
Sales $1,348,375 $1,360,684
Interest Income 790 103
--------- ---------
1,349,165 1,360,787
Costs and expenses:
Cost of sales 898,150 777,927
Selling, general and administrative 481,917 480,654
Interest expense 382 112
--------- ---------
1,380,449 1,258,693
--------- ---------
Net gain (loss) $ (31,284)$ 102,094
Gain (loss) per share of Common Stock
Assuming no dilution ($0.00) $0.01
Assuming full dilution ($0.00) $0.01
- -----------------------------------------------------------
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF SIX MONTHS JUNE 30, 1999 AND 1998
(UNAUDITED)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(31,284) $ 102,094
Adjustments to reconcile net income
to net cash (used) provided by
operating activities:
Depreciation 10,050 9,600
(Increase) decrease in accounts rec 61,119 22,740
(Increase) decrease in inventories (99,104) (40,700)
(Increase) decrease in prepaid
expenses and other assets (9,404) (10,820)
Increase (decrease) in accounts pay 86,083 (55,436)
Increase (decrease) in accrued
expenses and other current
liabilities (41,142) 10,375
Increase (decrease) in amounts due
shareholder (21,154) (26,442)
------- -------
TOTAL ADJUSTMENTS (13,552) (90,683)
------ ------
NET CASH USED BY OPERATING ACTIVITIES (44,836) 11,411
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,867) (3,893)
Stock issued 0 0
------ -----
NET CASH (USED) BY INVESTING
ACTIVITIES (2,867) (3,893)
------ -----
NET CHANGE IN CASH (47,703) 7,518
CASH AT BEGINNING OF YEAR 84,376 36,686
------ ------
CASH AT END OF PERIOD $ 36,673 $ 44,204
====== ======
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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,
1999 are not necessarily indicative of the operafull 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:
* 6/30/99 12/31/98
Raw Materials $ 64,876 $ 44,316
Finished Goods & WIP 367,610 289,066
------- -------
Total Inventories $432,486 $333,382
======= =======
*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
1999 1998
Assuming no dilution
Common Stock Outstanding, July 31, 9,632,561 9,557,561
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, 1999, the Company recorded sales of
$1,348,375 compared to $1,360,684 for the six months ended June 30, 1998.
At June 30, 1999 the Company had a backlog of $97,383 compared to
$71,514 at June 30, 1998.
Cost of sales as a percentage of sales increased to 66.6% from 57.2%
for the six months ended June 30, 1999 and 1998, respectively.
This increase is due to the hiring of a new engineer & a higher material
content of products sold.
For the period of six months ended June 30, 1999, selling, general
and administrative expenses increased by $1,263 over the period of
six months ended June 30, 1998.
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 1999.
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special meeting in lieu of an annual meeting was held on May 27, 1999.
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_____August 13, 1999__ BY_/S/WILLIAM M. TETRICK____
William M. Tetrick
Chairman of the Board
DATE_____August 13, 1999 BY_/S/DAVID S. LONGWORTH____
David S. Longworth
President and Clerk
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-12-1999
<PERIOD-END> JUN-30-1999
<CASH> 36,673
<SECURITIES> 0
<RECEIVABLES> 578,228
<ALLOWANCES> 20,000
<INVENTORY> 432,486
<CURRENT-ASSETS> 1,051,206
<PP&E> 155,095
<DEPRECIATION> 113,217
<TOTAL-ASSETS> 1,852,758
<CURRENT-LIABILITIES> 381,785
<BONDS> 0
0
0
<COMMON> 96,326
<OTHER-SE> 1,374,647
<TOTAL-LIABILITY-AND-EQUITY> 1,852,758
<SALES> 1,348,375
<TOTAL-REVENUES> 1,348,375
<CGS> 898,150
<TOTAL-COSTS> 898,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 382
<INCOME-PRETAX> (31,284)
<INCOME-TAX> 0
<INCOME-CONTINUING> (31,284)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,284)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
