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, 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 October 31, 1999
Common Stock, one cent par value 9,632,561
NO DOCUMENTS INCORPORATED BY REFERENCE
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Sept 30 Dec 31
1999 1998
CURRENT ASSETS
Cash $ 68,916 $ 84,376
Accounts receivable 523,239 639,347
Allowance for doubtful accts (15,419) (20,000)
Inventories 404,285 333,382
Prepaid expenses 8,267 14,415
-------- ---------
TOTAL CURRENT ASSETS 989,288 1,051,520
EQUIPMENT, less allowances of $118,242 44,018 49,060
and $79,267 for depreciation
DEFERRED TAXES 759,674 759,674
--------- ---------
TOTAL ASSETS 1,792,980 1,860,254
========= =========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 242,055 239,470
Accrued expenses and other current liabilities 53,836 84,059
Amount due stockholder 11,201 34,470
-------- --------
TOTAL CURRENT LIABLITIES 307,092 357,999
STOCKHOLDERS' EQUITY
Common Stock (9,632,561 shares issued
including shares held in Treasury) 96,326 96,326
Additional paid-in capital 6,873,886 6,873,887
Retained earnings (deficit) (5,477,189) (5,460,823)
--------- ---------
1,493,023 1,509,390
Cost of Common Stock held in Treasury (7,135) (7,135)
--------- ---------
1,485,888 1,502,255
--------- ---------
TOTAL LIABILITIES. PREFERRED STOCK
AND SHAREHOLDERS' EQUITY 1,792,980 1,860,254
========= =========
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1999 1998
Sales 2,130,967 1,958,955
Interest Income 933 245
--------- ---------
2,131,900 2,009,200
Costs and expenses:
Cost of sales 1,371,909 1,176,747
Selling, general and administrative expenses 774,615 745,310
Interest expense 1,924 172
--------- ---------
2,148,448 1,922,229
--------- ---------
Net gain (loss) (16,548) 86,971
========= =========
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 NINE MONTHS SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (16,548) 86,971
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Depreciation 15,075 14,400
(Increase) decrease in accounts receivable 111,527 (12,891)
(Increase) decrease in inventories (70,723) (85,800)
(Increase) decrease in prepaid expenses
and other assets 6,148 (7,734)
Increase (decrease) in accounts payable 2,585 (9,205)
Increase (decrease) in accrued expenses
and other current liabilities (30,223) (4,663)
Increase (decrease) in amounts due
shareholder (23,269) 61,923
-------- --------
TOTAL ADJUSTMENTS 11,120 (43,970)
NET CASH USED BY OPERATING ACTIVITIES (5,428) 43,001
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (10,032) (10,039)
------- ------
NET CASH (USED) BY INVESTING ACTIVITIES (10,032) (10,039)
NET CHANGE IN CASH (15,460) 32,962
CASH AT BEGINNING OF YEAR 84,376 36,686
------ ------
CASH AT END OF PERIOD 68,916 69,648
====== ======
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,
1999 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:
* 9/30/99 12/31/98
Raw Materials 56,600 44,316
Finished Goods & WIP 347,685 289,066
------- -------
Total Inventories 404,285 333,382
*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 Nine Months
Ended Sept. 30
1999 1998
Assuming no dilution
Common Stock Outstanding, Oct. 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 nine months ended Sept. 30, 1999, the Company recorded sales of
$2,130,967 compared to $1,958,955 for the nine months ended Sept. 30, 1998.
At Sept. 30, 1999, the Company had a backlog of $36,081 compared to
$38,644 at Sept. 30, 1998.
Cost of sales as a percentage of sales increased to 64.3% from 60.1%
for the nine months ended Sept. 30, 1999 and 1998, respectively.
This increase is due to product mix.
For the period of nine months ended Sept. 30, 1999, selling, general
and administrative expenses increased by $29,305 over the period of
nine months ended Sept. 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
nine 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____November 10, 1999___________ BY_/S/WILLIAM M. TETRICK___
William M. Tetrick
Chairman of the Board
DATE____November 10, 1999______ BY_/S/DAVID S. LONGWORTH___
David S. Longworth
President and Clerk
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-12-1999
<PERIOD-END> SEP-30-1999
<CASH> 68,916
<SECURITIES> 0
<RECEIVABLES> 523,239
<ALLOWANCES> 15,419
<INVENTORY> 404,285
<CURRENT-ASSETS> 989,288
<PP&E> 162,260
<DEPRECIATION> 118,242
<TOTAL-ASSETS> 1,792,980
<CURRENT-LIABILITIES> 307,092
<BONDS> 0
0
0
<COMMON> 96,326
<OTHER-SE> 1,389,562
<TOTAL-LIABILITY-AND-EQUITY> 1,792,980
<SALES> 2,130,967
<TOTAL-REVENUES> 2,131,900
<CGS> 1,371,909
<TOTAL-COSTS> 1,371,909
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,924
<INCOME-PRETAX> (16,548)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,548)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,548)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
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