-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GcGopAgpDhqM1jSdHB5hQ1KuWN7fm9pk3DHDPVyUPrPhyygeCKqkGniZDrveCNvD IObnNu3ozJKYoxywBVDv+w== 0001009191-02-000002.txt : 20020414 0001009191-02-000002.hdr.sgml : 20020414 ACCESSION NUMBER: 0001009191-02-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYNASIL CORP OF AMERICA CENTRAL INDEX KEY: 0000030831 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 221734088 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27503 FILM NUMBER: 02540089 BUSINESS ADDRESS: STREET 1: 385 COOPER RD CITY: WEST BERLIN STATE: NJ ZIP: 08009 BUSINESS PHONE: 8567674600 MAIL ADDRESS: STREET 1: 385 COOPER RD CITY: WEST BERLIN STATE: NJ ZIP: 08091 10QSB 1 dyn10q-1st2002.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______. Commission file number 000-27503 ____________________ DYNASIL CORPORATION OF AMERICA ------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) New Jersey 22-1734088 -------------- ------------------------------- (State or other jurisdiction (IRS Employer Identification No.) of incorporation) 385 Cooper Road, West Berlin, New Jersey, 08091 ---------------------------------------------------------- (Address of principal executive offices) (856) 767-4600 -------------------------------------------------- (Registrant's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 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 XX No ---- ---- The Company had 2,391,603 shares of common stock, par value $.0005 per share, outstanding as of January 31, 2002. 1 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES INDEX PAGE PART 1. FINANCIAL INFORMATION ---- ITEM 1. FINANCIAL STATEMENTS DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES ----------------------------------------------- CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2001 AND SEPTEMBER 30, 2001 1 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000 2 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000 3 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS 7 PART II. OTHER INFORMATION 11 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 11 SIGNATURES 12 2 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS PAGE 1 (UNAUDITED) ASSETS December 31 September 30 2001 2001 ---------- ---------- Current assets Cash and cash equivalents $ 406,489 $ 473,385 Accounts receivable 418,214 469,030 Inventory 748,658 768,707 Other current assets 41,848 26,577 ---------- ---------- Total current assets 1,615,209 1,737,699 Property, Plant and Equipment, net 1,679,614 1,701,730 Other assets Restricted Cash 200,000 200,000 Other assets 18,021 18,873 ---------- ---------- Total Assets $3,512,844 $3,658,302 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion - long-term debt $411,493 $419,493 Accounts payable 201,351 139,736 Accrued expenses 54,421 120,527 ---------- ---------- Total current liabilities 667,265 679,756 Long-term Debt, net 1,064,378 1,116,187 Stockholders' Equity Common Stock, $.0005 par value, 25,000,000 shares authorized, 3,032,227 and 3,018,383 shares issued 2,391,603 and 2,377,759 shares outstanding 1,516 1,509 Additional paid in capital 1,086,435 1,082,542 Retained earnings 1,652,553 1,737,611 ---------- ---------- 2,740,504 2,821,662 Less 640,624 shares in treasury - at cost (959,303) (959,303) ---------- ---------- Total stockholders' equity 1,781,201 1,862,359 ---------- ---------- Total Liabilities and Stockholders' Equity $3,512,844 $3,658,302 ========== ==========
3 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS PAGE 2 (UNAUDITED) Three Months Ended December 31 2001 2000 -------- --------- Sales $ 638,581 $1,317,617 Cost of Sales 545,029 918,535 -------- -------- Gross profit 93,552 399,082 Selling, general and administrative 157,524 192,974 -------- -------- Income (loss) from Operations (63,972) 206,108 Interest expense - net ( 21,086) ( 44,315) -------- -------- Income (loss) before Income Taxes ( 85,058) 161,793 Income Taxes 0 0 -------- -------- Net income (loss) $ ( 85,058) $ 161,793 ======== ======== Net income (loss) per share Basic $ ( 0.04) $ 0.07 Diluted $ ( 0.04) $ 0.07 Weighted average shares outstanding 2,387,856 2,356,738
4 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS PAGE 3 (UNAUDITED) Three Months Ended December 31 2001 2000 ---------- ----------- Cash flows from operating activities: Net income (loss) $( 85,058) $ 161,793 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 83,100 83,745 Amortization expense 852 852 Allowance for doubtful accounts (Increase) decrease in: Accounts receivable 50,816 ( 96,724) Inventories 20,049 43,376 Prepaid expenses and other current assets ( 15,271) 4,376 Other assets 0 Increase (decrease) in: Accounts payable 61,615 62,538 Accrued expenses (66,107) (14,277) --------- ----------- Net cash provided by operating activities 49,996 245,679 --------- ----------- Cash flows from investing activities: Acquisition of property, plant and equipment ( 60,983) ( 8,615) --------- ----------- Net cash (used in) investing activities ( 60,983) ( 8,615) --------- ----------- Cash flows from financing activities: Issuance of common stock 3,900 132 Repayments of long-term debt ( 59,809) ( 40,579) --------- ----------- Net cash (used in) financing activities ( 55,909) (40,447) --------- ----------- Net increase (decrease) in cash (66,896) 196,617 Cash - beginning of period 473,385 249,695 --------- ----------- Cash - end of period $ 406,489 $ 446,312 ========= ===========
5 DYNASIL CORPORATION OF AMERICA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS PAGE 4 (UNAUDITED) 1. Basis of Presentation The consolidated balance sheet as of September 30, 2001 was audited and appears in the Form 10-KSB previously filed by the Company. The consolidated balance sheet as of December 31, 2001 and the consolidated statements of operations and cash flows for the three months ended December 31, 2001 and 2000, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of December 31, 2001 and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2001 Annual Report on Form 10-KSB previously filed by the Company. 2. Inventories Inventories are stated at the lower of average cost or market. Cost is determined using the first-in, first-out (FIFO) method. Inventories consist primarily of raw materials, work-in-process and finished goods. The Company evaluates inventory levels and expected usage on a periodic basis and records adjustments for impairments as required. Inventories consisted of the following: December 31, 2001 September 30, 2001 ----------------- ------------------ Raw Materials $ 337,065 $ 379,899 Work-in-Process 251,644 224,739 Finished Goods 159,949 164,069 ------- ------- $ 748,658 $ 768,707 ======= ======= 3. Net Income Per Share Basic net income per share is computed using the weighted average number of common shares outstanding. The dilutive effects of potential common shares outstanding are included in diluted net earnings per share. Diluted net earnings per share exclude the impact of potential common shares since they would have resulted in an antidilutive effect. 6 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Results of Operations Sales were $638,581 for the three months ended December 31, 2001, a decrease of 51.5% over sales of $1,317,617, for the three months ended December 31, 2000. The decrease in sales is a result of the continued slow down of our traditional optics market, including the semiconductor and telecommunications industries. Cost of sales were $545,029, or 85.3% of sales, for the three months ended December 31, 2001 and $918,535, or 69.7% of sales, for the three months ended December 31, 2000. The substantial increase in cost can be attributed to a unique situation during the quarter. Necessary repairs required us to shut down our furnaces for most of the quarter. Loss of production had a two- fold effect: (1) no inventory to spread fixed cost over and (2) need to procure material from an outside source. Both had the effect to increase our cost of sales for the quarter. The work on the furnaces was completed in January and production has resumed. Gross profit decreased to $93,552, or 14.7% of sales, for the three months ended December 31, 2001. This is a decrease of $305,530, or 76.5%, over the $399,082 gross profit for the three months ended December 31, 2000. See above discussion for explanation of decrease. Selling, general and administrative expenses were $157,524, or 24.6% of sales, for the three months ended December 31, 2001. This is a decrease of $35,450, over the three months ended December 31, 2000 when expenses were $192,974, or 14.6% of sales. The decrease of $35,450 is primarily related to reduced wages as a result of reduced manpower and the elimination of bonuses for the current quarter. Interest expense decreased to $21,086 for the three months ended December 31, 2001, from $44,315 for the three months ended December 31, 2000. The lower interest expense is a direct result of reducing and restructuring our debt during fiscal year 2001, as discussed in previous filings, and lower overall interest rates. The net loss of $85,058 for the three months ended December 31, 2001, compared to earnings of $161,793, for the three months ended December 31, 2000, generated a loss per share of $0.04, for the three months ended December 31, 2001 compared to income per share of $0.07 for the three months ended December 31, 2000. 7 The Company has no provision for income taxes for either period in 2001 or 2000. As of September 30, 2001, we have approximately $585,000 of net operating loss carryforwards to offset future income for federal tax purposes expiring in various years through 2019. In addition, the Company has approximately $17,000 of net operating loss carryforwards to offset certain future states' taxable income, expiring in various years through 2007. Liquidity and Capital Resources Cash decreased by $66,896 for the three months ended December 31,2001. Cash provided from operations of $49,996 was primarily used to reduce debt by $59,809 and acquire property plant and equipment for $60,983. The Company believes that its current cash and cash equivalent balances, and net cash generated by operations, will be sufficient to meet its anticipated cash needs for working capital for at least the next 12 months. Any business expansion will require the Company to seek additional debt or equity financing. Forward-Looking Statements The statements contained in this Quarterly Report on Form 10-QSB which are not historical facts, including, but not limited to, certain statements found under the captions "Results of Operations" and "Liquidity and Capital Resources" above, are forward-looking statements that involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are the risks and uncertainties discussed in this Quarterly Report on Form 10-QSB, including, without limitation, the portions of such reports under the captions referenced above, and the uncertainties set forth from time to time in the Company's filings with the Securities and Exchange Commission, and other public statements. Such risks and uncertainties include, without limitation, seasonality, interest in the Company's products, consumer acceptance of new products, general economic conditions, consumer trends, costs and availability of raw materials and management information systems, competition, litigation and the effect of governmental regulation. The Company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 8 PART II OTHER INFORMATION - ------------------ ITEM 1 LEGAL PROCEEDINGS NONE ITEM 2 CHANGES IN SECURITIES NONE ITEM 3 DEFAULTS ON SENIOR SECURITIES NONE ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE ITEM 5 OTHER INFORMATION NONE ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Reports on Form 8-K None 9 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DYNASIL CORPORATION OF AMERICA BY: /s/ John Kane DATED: February 14,2002 --------------------------------- ----------------- John Kane, President, CEO, Treasurer, Chief Financial Officer and Principal Accounting Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----