-----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, MGxUjqsbl/uGi425GfLWrRtuo8anbz6MqlT0xA21bQzHprz05CI87pv7PVYpLP0s +YrKxKJN/cNWhILWrdE8mg== 0000914317-99-000316.txt : 19990517 0000914317-99-000316.hdr.sgml : 19990517 ACCESSION NUMBER: 0000914317-99-000316 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DHB CAPITAL GROUP INC /DE/ CENTRAL INDEX KEY: 0000899166 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 113129361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13112 FILM NUMBER: 99624341 BUSINESS ADDRESS: STREET 1: 11 OLD WESTBURY RD CITY: OLD WESTBURY STATE: NY ZIP: 11568 BUSINESS PHONE: 5166212552 MAIL ADDRESS: STREET 1: 11 OLD WESTBURY RD CITY: OLD WESTBURY STATE: NY ZIP: 11568 10-Q 1 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1999 Commission File No. 0-22429 DHB CAPITAL GROUP INC (Exact name of Registrant as specified in its charter) Delaware 11-3129361 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 11 Old Westbury Road, Old Westbury, New York 11568 (Address of principal executive offices) Registrant's telephone number: (516) 997-1155 Former name, former address and former fiscal year, if changed since last report: Not applicable Indicate by check whether the registrant (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the preceding 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 [ X ] No [ ] As of May 14, 1999, there were 25,639,940 shares of Common Stock, $.001 par value outstanding. ================================================================================ CONTENTS PART I Financial Information Item 1. Financial Statements Consolidated Balance Sheet as of March 31, 1999 and December 31, 1998 Unaudited Consolidated Statements of Operations and Retained Earnings For The Three Months Ended March 31, 1999, 1998 and 1997 Unaudited Consolidated Statements of Cash Flows For The Three Months Ended March 31, 1999, 1998 and 1997 Unaudited Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Results of Operations Operations and Financial Condition PART II Other Information Signatures
DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED MARCH 31, 1999 DECEMBER 31, 1998 -------------- ----------------- ASSETS CURRENT ASSETS Cash and cash equivalents ...................... $ 283,795 $ 519,117 Marketable securities .......................... 606,347 529,328 Accounts receivable, less allowance for doubtful accounts of $353,320 and $303,320 ........ 8,410,087 8,997,354 Inventories .................................... 22,047,217 20,001,547 Prepaid expenses and other current assets ...... 3,152,875 1,948,347 ----------- ----------- Total Current Assets ............ 34,500,321 31,995,693 ----------- ----------- PROPERTY AND EQUIPMENT ........................ 7,088,355 7,104,233 ----------- ----------- OTHER ASSETS Intangible assets, net ....................... 1,236,351 1,271,668 Investments in non-marketable securities ..... 1,688,750 1,688,750 Deferred tax assets .......................... 458,680 334,000 Deposits and other assets .................... 560,638 584,891 ----------- ----------- Total Other Assets .............. 3,944,419 3,879,309 ----------- ----------- TOTAL ASSETS ...................................... 45,533,095 $42,979,235 =========== =========== DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Note payable ................................. $ 5,000,000 $ 4,175,000 Current maturities of long term debt ......... 153,297 159,607 Accounts payable ............................. 6,465,514 6,233,131 Accrued expenses and other current liabilities 3,185,667 2,324,114 ----------- ----------- Total Current Liabilities ....... 14,804,478 12,891,852 ----------- ----------- LONG TERM LIABILITIES Long term debt, net of current maturities ..... 369,660 387,512 Note Payable - stockholder .................... 11,421,604 11,527,604 ----------- ----------- Total Long Term Debt ............ 11,791,264 11,915,116 ----------- ----------- Total Liabilities ............... 26,595,742 24,806,968 ----------- ----------- Common stock .................................. 25,640 25,447 Additional Paid in Capital .................... 22,080,657 21,215,849 Accumulated Deficit ........................... (3,069,488) (3,100,898) Unrealized Loss ............................... (115,853) -- Foreign Currency .............................. 16,397 31,869 TOTAL STOCKHOLDERS' EQUITY ..................... 18,937,353 18,172,267 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..... $45,533,095 $42,979,235 =========== ===========
See accompanying notes to financial statements.
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 1999 1998 1997 ---------- ------------ ------------ Net sales ......................................................... 9,446,730 $ 10,595,074 $ 7,144,676 Cost of sales ..................................................... 6,208,033 7,876,092 4,762,894 ------------ ------------ ------------ Gross Profit ................................................ 3,238,697 2,718,982 2,381,782 Selling, general and administrative expenses ..................... 2,781,849 3,101,742 1,925,056 ------------ ------------ ------------ Income(Loss) before other income (expense) .................. 456,848 (382,760) 456,726 ------------ ------------ ------------ Other Income (Expense) Interest expense, net of interest income .................... (499,196) (171,571) (50,371) Dividend income ............................................. -- 8 12,617 Other income ................................................... 2,106 -- 21,131 Foreign currency translation ................................ 833 742 (4,544) Realized gain on marketable securities ...................... 113,786 46,460 229,941 Unrealized gain on marketable securities .................... -- 30,000 (288,450) ------------ ------------ ------------ Total Other Income (Expense) ....................... (382,471) (94,361) (79,676) ------------ ------------ ------------ Income (loss) before income taxes (benefit) ................. 74,377 (477,121) 377,050 Income taxes (benefit) ...................................... 42,967 7,950 13,000 ------------ ------------ ------------ Net Income (loss) ........................................... 31,410 (485,071) 364,050 Retained Earnings (Deficit) - Beginning ............ (3,100,898) (3,230,700) (4,771,590) ------------ ------------ ------------ Retained Earnings (Deficit) - End .................. (3,069,488) $ (3,715,771) $ (4,407,540) ============ ============ ============ Earnings (loss) per common share Primary ............................. .001 $ (0.018) $ 0.015 ============ ============ ============ Fully Diluted ....................... .001 $ (0.017) $ 0.015 ============ ============ ============ Weighted average number of common share outstanding: Primary ............................. 25,564,051 27,137,331 25,078,097 ============ ============ ============ Fully Diluted ....................... 44,611,319 28,053,959 25,078,097 ============ ============ ============
See accompanying notes to financial statements.
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999 1998 1997 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (loss) .................................. 31,410 $ (485,071) $ 364,050 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ............... 229,484 265,754 88,027 Stock issued in settlement of a lawsuit ..... 695,001 150,000 Stock returned in settlement of a lawsuit ... (21,131) Stock issued for services ................... 70,000 279,388 Unrealized loss ............................. (115,853) Changes in assets and liabilities (Increase) Decrease in: Accounts receivable .......................... 587,267 (610,645) (1,292,927) Marketable securities ........................ (77,019) 1,615,471 (1,313,713) Inventories .................................. (2,045,670) (606,359) (489,475) Prepaid expenses and other current assets .... (1,204,528) (718,283) (606,209) Deferred tax assets .......................... (124,681) Deposits and other assets .................... 24,253 (1,333) (22,081) Increase (decrease) in: Accounts payable ............................. 232,384 (362,034) 1,860,367 Accrued expenses and other current liabilities 861,553 (29,550) State income taxes payable ................... -- -- 349 ----------- ----------- ----------- Net cash used by operating activities ................. (836,399) (456,647) (1,032,905) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Payments for purchase of assets of subsidiary, net of cash acquired ....................... -- (4,582,402) -- Payments made for property and equipment ..... (178,289) (567,507) (118,458) ----------- ----------- ----------- Net Cash provided (used) by investing activities ...... (178,289) (5,149,909) (118,458) ----------- ----------- ----------- DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999 1998 1997 ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of note payable- bank .......... 825,000 700,000 -- Proceeds from shareholder note ....................... (106,000) 7,000,000 -- Principal payments on long-term debt ................. (24,162) (19,116) (13,910) Dividends Paid ....................................... -- -- -- Foreign Currency Translation ......................... (15,472) (10,585) 7,338 Purchase of treasury stock ........................... -- (2,384,015) -- Net proceeds from sale of common stock ............... 100,000 -- 100,000 ----------- ----------- ----------- Net cash provided (used) by financing activities .............. 779,366 5,286,284 93,428 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS ............... (235,322) (320,272) (1,057,935) CASH AND CASH EQUIVALENTS - BEGINNING ......................... 519,117 882,884 1,398,905 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS - END ............................... 283,795 $ 562,612 $ 340,970 =========== =========== =========== Supplemental Cash Flow Information Cash paid for Interest .............................................. $ 92,112 $ 123,296 $ 59,525 Taxes ................................................. $ 43,327 $ 1,817 $ 33,301
See accompanying notes to financial statements. DHB CAPITAL GROUP INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999, 1998 AND 1997 1. Consolidated Financial Statements: The consolidated balance sheet at the end of the preceding year has been derived from the audited consolidated balance sheet contained in the Company's form 10-KSB and is presented for comparative purposes. All other financial statements are unaudited. All unaudited amounts are subject to year-end adjustments and audit, but Company believes all adjustments, consisting only of normal and recurring adjustments, necessary to present fairly the financial condition, results of operations and changes in cash flows for all interim periods have been made. The results of operations for interim periods are not necessarily indicative of the operating results for the full year. Footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with published rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's form 10-KSB for the most recent fiscal year. The consolidated financial statements of DHB Capital Group, Inc. and Subsidiaries (the "Company") are unaudited and reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The consolidated Company includes the following entities: Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations Three Months Ended March 31, 1998, Compared to the Three Months Ended March 31, 1998 and 1997. Consolidated net sales were approximately $9,447,000, $10,600,000 and $7,145,000 for the three months ended March 31, 1999, March 31, 1998 and March 31, 1997. Sales decreased by approximately $1,150,000 due to delays in shipping dates for a major customer. The increase in sales of $3,450,000 for the three months ended March 31, 1998 over the three months ended March 31, 1997 was the result of DHB's February 1998 acquisition of Lanxide Electronics Components Inc. and Lanxide Armor Products, Inc. as well as improved sales in both our Armor and Sports divisions. Consolidated gross profits increased to 34% for quarter ended March 31, 1999. The increase of 8% is the result of the turn around of Lanxide Electronic Components. Net income increased $500,000 for the quarter ended March 31, 1999 primarily as a result of improved performance of our Electronics Division and Soft Armor companies. Liquidity and Capital Resources The Company's primary capital requirements over the next twelve months are to assist PACA , Point Blank, NDL, OPI, Point Blank International, LAP, DHBKKIC and LEC in financing their working capital requirements. Working capital is needed to finance the receivables, manufacturing process and inventory. Working Capital at March 31, 1999 was $19,696,000 as compared to $13,063,000 in 1998 and $10,288,700 at March 31, 1998. The current ratio at March 31, 1999 is 2.33 and at March 31, 1999 it was is 2.17:1 as compared to 2.9:1 at March 31, 1997. Cash, cash equivalents, and marketable securities totaled $283,795 at March 31, 1999. Compared to $651,000 and at March 31, 1998 and 1997 $341,000 in 1997. The 1998 increase in cash, cash equivalents and marketable securities was derived from operations and a shareholder loan. The Company obtained a line of credit with the Bank of New York in May of 1998 for up to $5,000,000. The line is secured by the Company's assets. As of May 13, 1998 the Company has borrowed $5,000,000 on this line at 7.4% interest due June 1, 1999. Effect of Inflation and Changing Prices. The Company did not experience increases in raw material prices during the three months ended March 31, 1998 and 1997. The Company believes it will be able to increase prices on their products to meet future price increases in raw materials, should they occur. PART II. OTHER INFORMATION No change. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned, thereunto duly authorized. Dated: May 14, 1999 DHB CAPITAL GROUP INC. /S/ David H. Brooks ------------------------------- Co-Chairman of the Board, and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on behalf of the Registrant and in capacities and at the dates indicated: Signature Capacity Date --------- -------- ---- /S/ David H. Brooks Co-Chairman of the Board May 14, 1999 - ---------------------- /S/ Mary Kreidell Chief Financial Officer May 14, 1999 - ---------------------- /S/ Gary Nadelman Co-Chairman of the Board May 14, 1999 - ---------------------- EX-27 2
5 3-MOS DEC-31-1999 MAR-31-1999 283,795 606,347 22,047,217 507,739 22,047,217 34,500,321 7,088,355 45,533,095 14,804,447 11,184,167 0 0 0 25,640 22,006,684 45,533,095 9,446,730 9,446,730 6,208,032 2,781,847 0 0 499,196 42,972 0 31,405 0 0 0 31,405 .001 .001
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