-----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, AgyL93iKAnd5de0asHHXToe34a2mIUZ3E6u/nCVbkhCguEQ1Xim2ei2fZlRcQcNn Mz2iOF39l+JtBvB+uMH6vg== 0000356446-96-000014.txt : 19960816 0000356446-96-000014.hdr.sgml : 19960816 ACCESSION NUMBER: 0000356446-96-000014 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PURE WORLD INC CENTRAL INDEX KEY: 0000356446 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 953419191 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10566 FILM NUMBER: 96612280 BUSINESS ADDRESS: STREET 1: P O BOX 74 STREET 2: 376 MAIN STREET CITY: BEDMINSTER STATE: NJ ZIP: 07921 BUSINESS PHONE: 9082349220 MAIL ADDRESS: STREET 1: P O BOX 74 STREET 2: 376 MAIN STREET CITY: BEDMINSTER STATE: NJ ZIP: 07921 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19940411 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER MEMORIES INC /DE/ DATE OF NAME CHANGE: 19940411 EX-27 1 FDS --
5 This Schedule contains summary financial information extracted from the Form 10-QSB of Pure World, Inc. for the six months ended June 30, 1996 and is qualified in its entirety by reference to such financial statements. 0000356446 PURE WORLD, INC. 1000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 8,854 31 1,075 129 2,019 12,244 1,085 258 18,062 2,148 0 0 0 77 16,377 18,602 3,315 3,893 2,061 4,409 0 0 5 (521) 1 (522) 0 0 0 (522) (.07) (.07)
10QSB 2 FOR THE QUARTER ENDED JUNE 30, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 0-10566 Pure World, Inc. (Exact name of small business issuer as specified in its charter) Delaware 95-3419191 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 376 Main Street, Bedminster, New Jersey 07921 (Address of principal executive offices) (908) 234-9220 (Issuer's telephone number) N/A (Former name, former address and former fiscal year, if changed since last report) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ State the number of shares outstanding of each of the issuer's classes of common stock: As of July 31, 1996, the issuer had 7,704,957 shares of its common stock, par value $.01 per share, outstanding. Transitional Small Business Disclosure Format (check one): Yes No X PART I - FINANCIAL INFORMATION Item 1. - Financial Statements
PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) ($000 Omitted) June 30, 1996 -------- ASSETS Cash and cash equivalents $ 8,854 Trading securities 31 Accounts receivable, net of allowance for uncollectible accounts and returns and allowances of $129 946 Inventories, net 2,019 Other current assets 394 ------- Total current assets 12,244 ------- Securities available-for-sale 1,918 Furniture and equipment, net 1,547 Notes receivable from affiliates 547 Goodwill, net of accumulated amortization of $130 1,285 Other assets 1,061 ------- Total assets $18,602 ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable $ 322 Accrued expenses 1,826 ------- Total current liabilities 2,148 ------- Stockholders' equity: Common stock, par value $.01; 30,000,000 shares authorized; 7,704,957 shares issued and outstanding 77 Additional paid-in capital 43,769 Accumulated deficit ( 27,301) Unrealized losses on securities available-for-sale ( 91) ------- Total stockholders' equity 16,454 ------- Total liabilities and stockholders' equity $18,602 =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($000 Omitted, except per share data)
Three Months Ended June 30, 1996 1995 ------------------------- Revenues: Sales $ 1,702 $ 1,669 Net gains on marketable securities 17 136 Interest, dividend and other income 126 211 ------- ------- Total revenues 1,845 2,016 ------- ------- Expenses: Cost of goods sold 1,063 943 Personnel 467 363 Professional fees 280 236 Other 387 364 ------- ------- Total expenses 2,197 1,906 ------- ------- Income (loss) before income taxes ( 352) 110 Provision for income taxes - 22 ------- ------- Net income (loss) ($ 352) $ 88 ======= ======= Net income (loss) per share ($ .05) $ .01 ======= ======= Weighted average shares outstanding (in 000's) 7,705 7,705 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($000 Omitted, except per share data)
Six Months Ended June 30, 1996 1995 ----------------------- Revenues: Sales $ 3,315 $ 3,278 Net gains on marketable securities 309 142 Interest, dividend and other income 269 416 ------- ------- Total revenues 3,893 3,836 ------- ------- Expenses: Cost of goods sold 2,061 1,967 Personnel 905 764 Professional fees 661 322 Other 787 580 ------- ------- Total expenses 4,414 3,633 ------- ------- Income (loss) before income taxes ( 521) 203 Provision for income taxes 1 45 ------- ------- Net income (loss) ($ 522) $ 158 ======= ======= Net income (loss) per share ($ .07) $ .02 ======= ======= Weighted average shares outstanding (in 000's) 7,705 7,712 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ($000 Omitted)
Six Months Ended June 30, 1996 1995 ----------------------- Cash flows from operating activities: Net income (loss) ($ 522) $ 158 Adjustments: Depreciation and amortization 148 129 Net trading securities and U.S. Treasury securities transactions 1,776 ( 1,717) Change in inventories ( 458) ( 140) Change in receivables ( 93) ( 130) Change in accounts payable and other accruals ( 196) ( 758) Other, net 7 ( 73) ------- ------- Net cash provided by (used in) operating activities 662 ( 2,531) ------- ------- Cash flows from investing activities: Purchase of a business less cash acquired - ( 2,144) Purchase of furniture and equipment, net ( 226) ( 110) Purchase of securities available-for-sale - ( 28) Repayment of loans to affiliates 79 50 Investment in Gaia Herbs, Inc. ( 1,010) - Other, net ( 8) ( 86) ------- ------- Net cash used in investing activities ( 1,165) ( 2,318) ------- ------- Cash flows from financing activities: Repurchase of common stock - ( 31) Other, net - ( 5) ------- ------- Net cash used in financing activities - ( 36) ------- ------- Net decrease in cash and cash equivalents ( 503) ( 4,885) Cash and cash equivalents at beginning of period 9,357 13,427 ------- ------- Cash and cash equivalents at end of period $ 8,854 $ 8,542 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 AND 1995 (Unaudited) 1. General ------- The accompanying unaudited consolidated financial statements of Pure World, Inc. and subsidiaries (the "Company") as of June 30, 1996 and for the three and six month periods ended June 30, 1996 and 1995 reflect all material adjustments consisting of only normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1995 as filed with the Securities and Exchange Commission. The results of operations for the three and six month periods ended June 30, 1996 and 1995 are not necessarily indicative of the results to be expected for the entire year or any other period. 2. Marketable Securities ---------------------- At June 30, 1996, marketable securities consisted of the following (in $000's):
Gross Gross Amortized Holding Holding Fair Cost Gains Losses Value --------- -------- -------- ------- Trading securities $ 14 17 - 31 Available-for-sale 2,009 81 ( 172) 1,918 ------ ----- ----- ------ Total marketable securities $2,023 $ 98 ($ 172) $1,949 ====== ===== ===== ======
All marketable securities were investments in common stock. Substantially all gains recorded in the three and six month periods ended June 30, 1996 were realized. 3. Inventories ----------- Inventories are comprised of the following (in $000's): Raw materials $ 670 Finished goods 1,349 ------- Total inventories, net $ 2,019 =======
4. Other Assets ------------ In May, 1996, the Company made an investment in non-voting common stock representing 25% ownership of Gaia Herbs, Inc. ("Gaia") for approximately $1.0 million. Gaia manufactures and distributes natural products. Gaia is a privately held company and does not publish financial results. The Company is accounting for this investment by the cost method. The cost method is a method of accounting for an investment under which an investor records an investment in the stock of an investee at cost, and recognizes as income dividends received that are distributed from net accumulated earnings of the investee since the date of acquisition by the investor. The net accumulated earnings of an investee subsequent to the date of investment are recognized by the investor only to the extent distributed by the investee as dividends. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of cost of the investment. Item 2. Management's Discussion and Analysis or Plan of Operation ------------------------------------ Liquidity and Capital Resources - ------------------------------- At June 30, 1996, the Company had cash and cash equivalents of $8.9 million. Cash equivalents of $8.7 million consisted of U.S. Treasury bills with an original maturity of less than three months and yields ranging between 5.05% and 5.67%. The Company had net working capital of $10.1 million at June 30, 1996. The management of the Company believes that the Company's financial resources and anticipated cash flows will be sufficient for future operations and possible acquisitions of other operating businesses. Net cash of approximately $700,000 was provided by operations for the six months ended June 30, 1996 compared to a net use of cash of $2.5 million in the first six months of 1995. The principal reasons for the increase in net cash flows were the sale of marketable securities and the change in investments in U.S. Treasury Securities to securities with maturities of less than three months. Results of Operations - --------------------- The Company's operations resulted in a net loss of $352,000, or $.05 per share, for the three months ended June 30, 1996 compared to net income of $88,000 for the comparable period in 1995. The net loss was $522,000, or $.07 per share for the six months ended June 30, 1996, compared to net income of $158,000 for the comparable period in the prior year. Madis had sales of $1.7 million and $3.3 million for the three and six month periods ended June 30, 1996, respectively, which was comparable to the same periods of the prior years. For the three and six months ended June 30, 1996, the cost of goods sold was $1.1 million and $2.1 million, respectively, and remained consistent with 1995 levels. Gross margin was $.6 million and $1.1 million for the three and six months ended June 30, 1996, which was also comparable to the results for the respective periods in the prior year. For the three and six month periods ended June 30, 1996, the Company recorded net gains on marketable securities of $17,000 and $309,000, respectively, compared to $136,000 and $142,000 for the same periods in 1995. Substantially all of the gains recorded in 1996 were realized. The changes in net gains on marketable securities from 1996 to 1995 were due to changes in portfolio composition and general market conditions. Interest, dividend and other income was $126,000 and $269,000 for the three and six months ended June 30, 1996, respectively, compared to $211,000 and $416,000 for the three and six months ended June 30, 1995. Interest income was $263,000 during the six month period in 1996, a decrease of $70,000 from the $333,000 recorded in the comparable period of 1995. This decrease was due to lower average interest rates on the Company's cash equivalents and U.S. Treasury securities and lower invested balances. Dividend income for the six-month period was $3,000 in 1996 compared to $77,000 in 1995. All other income was $3,000 in the six months ended June 30, 1995 compared to $6,000 for the first six months of 1995. Personnel expenses were $467,000 and $905,000 during the three and six months ended June 30, 1996 compared to $363,000 and $764,000 in the comparable periods in 1995. An increase in sales and management personnel accounted for these increases. Professional fees were $280,000 and $661,000 during the three and six month periods in 1996, compared to $236,000 and $322,000 in the three and six month periods in 1995. The professional fees in 1996 were incurred to conduct litigation to protect the Company's investment in a real estate investment trust and consulting fees associated with new product introduction ("KavaPure(TM")). Other expenses were $387,000 and $787,000 for the three and six month periods ended June 30, 1996, compared to $364,000 and $580,000 for the same periods in 1995. Travel expenses increased by $78,000 in the first six months of 1996 compared to the first six months of 1995 and advertising expenses increased by $63,000 for the same period. The increase was due primarily to the introduction of a new product, KavaPure(TM) and other sales efforts. General office expenses increased by $77,000 for the first six months of 1996 compared to the first six months of 1995, for various reasons, including the new product introduction, the above-mentioned litigation, and increased equipment rental expenses. All other expenses had a net decrease of $11,000 in the first six months of 1996 compared to the first six months of 1995. New Accounting Standards - ------------------------ Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") was issued in October 1995 and was effective January 1, 1996. SFAS No. 123 requires entities that have employee stock option plans to estimate the value of grants awarded to employees and disclose in a pro forma footnote the impact on the entities' earnings per shares as if the estimated option value were expensed over the vesting period of the same. The Company has granted to key employees and directors options to buy shares of the Company's common stock at the current market value of the stock at the date of grant. Since SFAS No. 123 only requires additional disclosure of the cost of stock options, implementation will not have a material impact on the Company's results of operations. PART II - OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- 27. Financial Data Schedule for the six months ended June 30, 1996. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter for which this report is being filed. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PURE WORLD, INC. Dated: August 14, 1996 By: /s/ Mark Koscinski ----------------------------- Mark Koscinski Senior Vice President and Principal Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----