-----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, LprJUdj5Z77fdZMwvbg346UBAcMglGBX0QoU+kh8qcA2ys2w2wEdkYpVpFCbtvwH FqdG1z+aGq+SnodHYx3MgQ== 0000356446-97-000012.txt : 19970507 0000356446-97-000012.hdr.sgml : 19970507 ACCESSION NUMBER: 0000356446-97-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970506 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: 97596496 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 three months ended March 31, 1997 and is qualified in its entirety by reference to such financial statements. 0000356446 PURE WORLD, INC. 1000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 10,205 0 1,417 136 2,478 14,380 1,986 473 20,364 2,156 0 0 0 76 18,132 20,364 2,423 2,871 1,257 2,320 0 0 4 547 42 505 0 0 0 505 .06 .06
10QSB 2 FOR QUARTER ENDED 03/31/97 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: March 31, 1997 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) (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 April 30, 1997, the issuer had 7,505,378 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)
March 31, 1997 ------------- ASSETS Cash and cash equivalents $ 10,205 Accounts receivable, net of allowance for uncollectible accounts and returns and allowances of $136 1,281 Inventories, net 2,478 Other current assets 416 -------- Total current assets 14,380 -------- Securities available-for-sale 1,678 Investment in unaffiliated natural products company 1,010 Furniture and equipment, net 1,513 Notes receivable from affiliates 563 Goodwill, net of accumulated amortization of $201 1,214 Other assets 6 -------- Total assets $ 20,364 ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable $ 436 Accrued expenses and other liabilities 1,720 -------- Total liabilities 2,156 -------- Stockholders' equity: Common stock, par value $.01; 30,000,000 shares authorized; 7,570,378 shares issued and outstanding 76 Additional paid-in capital 43,461 Accumulated deficit ( 26,045) Unrealized gains on securities available-for-sale 716 -------- Total stockholders' equity 18,208 -------- Total liabilities and stockholders' equity $ 20,364 ========
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 March 31, ------------------------- 1997 1996 -------- ------- Revenues: Sales $ 2,423 $ 1,613 Net gains on marketable securities 71 292 Interest and dividends 137 142 Other income 240 1 ------- ------- Total revenues 2,871 2,048 ------- ------- Expenses: Cost of goods sold 1,257 998 Personnel 497 438 Professional fees 117 381 Other 453 400 ------- ------- Total expenses 2,324 2,217 ------- ------- Income (loss) before income taxes 547 ( 169) Provision for income taxes 42 1 ------- ------- Net income (loss) $ 505 ($ 170) ======= ======= Net income (loss) per share $ .06 ($ .02) ======= ======= Weighted average shares outstanding (in 000's) 7,853 7,705 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (000 Omitted)
Three Months Ended March 31, ------------------------- 1997 1996 -------- ------- Cash flows from operating activities: Net income (loss) $ 505 ($ 170) Adjustments: Depreciation and amortization 96 71 Net trading securities transactions ( 13) 1,798 Gain on sale of securities available-for-sale ( 71) - Change in inventories ( 488) ( 291) Change in receivables ( 202) ( 70) Change in accounts payable and other accruals 156 195 Other, net ( 115) 75 ------- ------- Net cash provided by (used in) operating activities ( 132) 1,608 ------- ------- Cash flows from investing activities: Purchase of furniture and equipment, net ( 75) ( 47) Proceeds from sale of securities available-for-sale 90 - Purchase of securities available- for-sale ( 415) - Repayment of loans to affiliates 40 49 Other, net 15 ( 20) ------- ------- Net cash used in investing activities ( 345) ( 18) ------- ------- Cash flows from financing activities: Repurchase of common stock ( 183) - ------- ------- Net cash used in financing activities ( 183) - ------- ------- Net increase (decrease) in cash cash and cash equivalents ( 660) 1,590 Cash and cash equivalents at beginning of period 10,865 9,357 ------- ------- Cash and cash equivalents at end of period $10,205 $10,947 ======= =======
See accompanying notes to consolidated financial statements. PURE WORLD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 AND 1996 (UNAUDITED) 1. General ------- The accompanying unaudited consolidated financial statements of Pure World, Inc. and subsidiaries (the "Company"), as of March 31, 1997 and for the quarters ended March 31, 1997 and 1996 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, 1996 as filed with the Securities and Exchange Commission. The results of operations for the quarters ended March 31, 1997 and 1996 are not necessarily indicative of the results to be expected for the entire year or any other period. Certain reclassifications have been made to the prior year's financial statements to conform to the current year's presentation. 2. Inventories, net ---------------- Inventories were comprised of the following (in 000's): Raw materials $ 565 Work-in-process 148 Finished goods 1,765 ------ Total inventories $2,478 ======
3. Securities available-for-sale ----------------------------- At March 31, 1997, securities available-for-sale were as follows (in 000's): Cost $ 962 Gross holding gains 716 ------ Fair value of securities available-for-sale $1,678 ======
4. Net earnings per common share ----------------------------- Net earnings per common share is based on the weighted average number of outstanding shares adjusted for the assumed conversion of shares issuable upon exercise of stock options where appropriate. In February 1997, the Financial Accounting Standards Board issued Financial Accounting Standards No. 129 "Disclosure of Information about Capital Structure" which establishes standards for disclosing information about an entity's capital structure. The Company does not expect the adoption of this standard to have a material impact on earnings per share as compared to primary earnings per share as reported herein. Item 2. Management's Discussion and Analysis or Plan of Operation ----------------------------------------------- Liquidity and Capital Resources - ------------------------------- At March 31, 1997, the Company had cash and cash equivalents of $10.2 million. Cash equivalents of $9.9 million consisted of U.S. Treasury bills with an original maturity of less than three months and yields ranging between 5.05% and 5.41%. The Company had net working capital of $12.2 million at March 31, 1997. 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 $132,000 was used in operations in the first quarter of 1997, due principally to an increase in inventory and accounts receivables offsetting net income of $505,000. The increases in inventory and accounts receivables is a result of the increase in sales, as the inventory and accounts receivables turnover in the first quarter of 1997 has remained relativity consistent with the inventory and accounts receivables turnover in the first quarter of 1996. Depreciation and amortization increased in the first quarter of 1997 compared to the first quarter of 1996 due to the continued additions to and enhancements of laboratory and production equipment. In the first quarter of 1996, net cash of approximately $1.6 million was provided by operations due principally to net sales of trading securities of $1.8 million. The Company repurchased 64,000 shares of its common stock in the first quarter of 1997 at an aggregate cost of approximately $183,000. The Company did not repurchase shares of its common stock in the first quarter of 1996. All shares purchased in 1997 were returned to the status of authorized but unissued shares. Results of Operations - --------------------- The Company had net income of $505,000, or $.06 per share, for the three months ended March 31, 1997 compared to a net loss of $170,000, or $.02 per share, for the comparable period in 1996. The Company through its majority owned subsidiary Madis Botanicals, Inc. ("Madis") and its wholly owned subsidiary, Pure World Botanicals, Inc., had consolidated combined sales of $2,423,000 in the first quarter of 1997, compared to sales of $1,613,000 in the first quarter of 1996, an increase of more than 50%. The growth in sales is primarily a result of the Company's sales and marketing efforts which increased the demand for many of the Company's products. Additionally, the introduction of new products such as citrus pectin, olive leaf extract and KavaPureTM had a positive impact on sales. For the three months ended March 31, 1997, gross margin (sales less cost of goods sold) was $1,166,000 or 48.12% of sales, compared to gross margin of $615,000, or 38.13% of sales for the three months ended March 31, 1996. The increase in gross margin was primarily due to the change in the product mix. For the three months ended March 31, 1997, the Company recorded net gains on marketable securities of $71,000 compared to net gains of $292,000 in the comparable period of 1996. Substantially all of the gains recorded in 1997 and 1996 were realized. The decrease in net gains on marketable securities was due to the changes in portfolio composition. Interest and dividend income was $137,000 for the three months ended March 31, 1997, compared to $142,000 for the comparable period in 1996. Interest income was $136,000 during the first quarter of 1997, a decrease of $4,000 from the $140,000 recorded in the comparable period of 1996. This decrease was due to a combination of lower average interest rates and lower invested balances of the Company's cash equivalents. Dividend income was $1,000 for the first quarter of 1997 compared to $2,000 in the first quarter of 1996. The decrease in dividends was due to a change in portfolio composition. Other income was $240,000 in the first quarter of 1997, which was revenue received in connection with the sale of a prior business in 1994. In the first quarter of 1996, other income was $1,000, which consisted of the sale of unneeded equipment. Personnel expenses were $497,000 and $438,000 during the three month periods ended March 31, 1997 and 1996 respectively, an increase of $59,000 or 13.5%. The principal reason for the increase was added management and laboratory personnel at Madis and merit increases throughout the Company. Professional fees, consisting of legal, accounting and consulting fees, were $117,000 during the first quarter of 1997, compared to $381,000 in the first quarter of 1996, a decrease of $264,000, or 69%. Legal fees decreased $250,000 from $282,000 in the first quarter of 1996 to $32,000 in the first quarter of 1997. This decrease was primarily related to the settlement in 1996 of litigations in which the Company was involved. Consulting fees, primarily associated with new product introduction, decreased by $24,000, from $76,000 in the first quarter of 1996 to $52,000 in the first quarter of 1997. Other expenses were $453,000 in the first quarter of 1997 compared to $400,000 in the first quarter of 1996, an increase of $53,000. Sales expenses, including advertising, travel and entertainment, increased by $16,000; depreciation expense increased by $13,000; minority interest in the earnings of Madis, recorded in other expenses, increased by $30,000; and all other expenses had a net decrease of $6,000. PART II - OTHER INFORMATION - --------------------------- Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits -------- 27. Financial Data Schedule for the three months ended March 31, 1997. (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 Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PURE WORLD, INC. Dated: May 6, 1997 By:/S/ MARK KOSCINSKI ---------------------------- Mark Koscinski Senior Vice President and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----