-----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, SWbchdlvhc6zpuPk2ACTdPTT1okdvrgu93wGdhYPoFrl6LyNL/XLm7owYzb1xbSA cCjM4meG3KrD5RTITv0iPQ== 0000914317-99-000662.txt : 19991117 0000914317-99-000662.hdr.sgml : 19991117 ACCESSION NUMBER: 0000914317-99-000662 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 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: 10QSB SEC ACT: SEC FILE NUMBER: 001-13112 FILM NUMBER: 99752788 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 10QSB 1 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- Form 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 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 November 11, 1999 there were 26,294,856 shares of Common Stock, $.001 par value outstanding. ================================================================================ CONTENTS PART I Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998 Unaudited Consolidated Statements of Operations and Retained Earnings For The Three Months Ended September 30, 1999, 1998 and 1997 Unaudited Consolidated Statements of Operations and Retained Earnings For The Nine Months Ended September 30, 1999, 1998 and 1997 Unaudited Consolidated Statements of Cash Flows For The Nine Months Ended September 30, 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 Item 1. Legal Proceedings Item 5. Other Information Item 6. Exhibits & Reports on Form 8-K Signatures
DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED SEPTEMBER 30, 1999 DECEMBER 31, 1998 ------------------ ------------------ ASSETS ------ CURRENT ASSETS Cash and cash equivalents ......................................... $ 658,810 $ 519,117 Marketable securities ............................................. 102,086 529,328 Accounts receivable, less allowance for doubtful accounts of $591,739 and $507,739, respectively ............. 9,675,151 8,997,354 Inventories ....................................................... 25,614,540 20,001,547 Prepaid expenses and other current assets ......................... 1,641,990 1,948,347 ------------ ------------ Total Current Assets .............................................. 37,692,577 31,995,693 PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation of $2,228,083 and $1,657,951, respectively ........................... 7,445,252 7,104,233 ------------ ------------ OTHER ASSETS Intangible assets, net ............................................ 1,149,703 1,271,668 Investments in non-marketable securities .......................... 1,688,750 1,688,750 Deferred tax assets ............................................... 449,000 334,000 Deposits and other assets ......................................... 607,642 584,891 ------------ ------------ Total Other Assets ................................................ 3,895,095 3,879,309 ------------ ------------ TOTAL ASSETS ...................................................... $ 49,032,924 $ 42,979,235 ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Note payable ...................................................... $ 5,000,000 $ 4,175,000 Current maturities of long term debt .............................. 150,614 159,607 Accounts payable .................................................. 7,989,014 6,233,131 Accrued expenses and other current liabilities .................... 4,200,981 2,324,114 ------------ ------------ Total Current Liabilities ......................................... 17,340,609 12,891,852 ------------ ------------ LONG TERM LIABILITIES Long term debt, net of current maturities ......................... 294,793 387,512 Note Payable - stockholder ........................................ 11,527,604 11,527,604 ------------ ------------ Total Long Term Debt .............................................. 11,822,397 11,915,116 ------------ ------------ Total Liabilities ................................................. 29,163,006 24,806,968 ------------ ------------ STOCKHOLDERS' EQUITY Common stock, $.001 par value, 100,000,000 shares authorized, 26,273,356 and 25,447,224, issued and outstanding, respectively .. 26,273 25,447 Additional paid-in capital ........................................ 22,841,154 21,215,849 Subscription receivable ........................................... (400,970) Accumulated deficit ............................................... (2,631,132) (3,100,898) Foreign currency translation adjustment ........................... 34,593 31,869 ------------ ------------ STOCKHOLDERS' EQUITY .............................................. 19,869,918 18,172,267 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................ $ 49,032,924 $ 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 SEPTEMBER 30, 1999 1998 1997 ------------ ------------ ------------ Net sales ..................................... $ 13,938,019 $ 10,191,753 $ 9,004,476 Cost of sales ................................. 9,245,806 5,983,494 6,320,158 ------------ ------------ ------------ Gross Profit .................................. 4,692,213 4,208,259 2,684,318 Selling, general and administrative expenses .. 3,883,991 3,553,922 2,444,343 ------------ ------------ ------------ Income (Loss) before other income (expense) ... 808,222 654,337 239,975 ------------ ------------ ------------ Other Income (Expense) Interest expense, net of interest income ...... (537,361) (381,549) (93,391) Other Income .................................. 26,965 -- 100 Foreign currency translation .................. 21,984 (9,493) 4,259 Realized gain on marketable securities ........ -- -- (28,124) Unrealized gain on marketable securities ...... -- -- 113,693 ------------ ------------ ------------ Total Other Income (Expense) .................. (488,412) (391,042) (3,463) ------------ ------------ ------------ Income (loss) before income taxes (benefit) ... 319,810 263,295 236,512 Income taxes (benefit) ........................ 10,518 7,473 10,739 ------------ ------------ ------------ Net Income .................................... 309,292 255,822 225,773 Retained Earnings (Deficit) - Beginning ....... (2,940,424) (3,607,081) (3,947,036) ------------ ------------ ------------ Retained Earnings (Deficit) - End ............. $ (2,631,132) $ (3,351,259) $ (3,721,263) ============ ============ ============ Earnings (loss) per common share Primary ....................................... $ 0.012 $ 0.010 $ 0.009 ============ ============ ============ Fully Diluted ................................. $ 0.010 $ 0.009 $ 0.007 ============ ============ ============ Primary weighted average number of shares ..... 26,013,541 24,832,394 25,775,527 Add warrants .................................. 4,306,390 4,673,200 4,402,188 ------------ ------------ ------------ Fully Diluted weighted average number of shares 30,319,931 29,505,594 30,177,715 ============ ============ ============
See accompanying notes to financial statements.
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 1998 1997 ------------ ------------ ------------ Net sales ..................................... $ 33,924,063 $ 31,310,351 $ 24,549,991 Cost of sales ................................. 22,031,942 20,707,864 16,993,707 ------------ ------------ ------------ Gross Profit .................................. 11,892,121 10,602,487 7,556,284 Selling, general and administrative expenses .. 10,134,537 9,975,477 6,826,504 ------------ ------------ ------------ Income(Loss) before other income (expense) .... 1,757,584 627,010 729,780 ------------ ------------ ------------ Other Income (Expense) Interest expense, net of interest income ...... (1,510,216) (882,795) (243,225) Other Income .................................. 271,896 19 38,851 Foreign currency translation .................. 29,437 (9,409) 3,629 Realized gain on marketable securities ........ (16,050) 119,818 (60,506) Unrealized gain on marketable securities ...... -- 43,751 720,929 ------------ ------------ ------------ Total Other Income (Expense) .................. (1,224,933) (728,616) 459,678 ------------ ------------ ------------ Income (loss) before income taxes (benefit) ... 532,651 (101,606) 1,189,458 Income taxes (benefit) ........................ 62,885 18,953 139,131 ------------ ------------ ------------ Net Income (loss) ............................. 469,766 (120,559) 1,050,327 Retained Earnings (Deficit) - Beginning ....... (3,100,898) (3,230,700) (4,771,590) ------------ ------------ ------------ Retained Earnings (Deficit) - End ............. $ (2,631,132) $ (3,351,259) $ (3,721,263) ============ ============ ============ Earnings (loss) per common share Primary ....................................... $ 0.018 $ (0.005) $ 0.043 ============ ============ ============ Fully Diluted ................................. $ 0.016 $ (0.004) $ 0.038 ============ ============ ============ Primary weighted average number of shares ..... 25,829,387 24,869,291 24,648,520 Add warrants .................................. 4,306,390 4,543,219 2,945,978 ------------ ------------ ------------ Fully Diluted weighted average number of shares 30,135,777 29,412,510 27,594,498 ============ ============ ============
See accompanying notes to financial statements.
DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, CASH FLOWS FROM OPERATING ACTIVITIES 1999 1998 1997 ----------- ----------- ----------- Net Income (loss) ................................................. $ 469,766 $ (120,559) $ 1,050,327 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ..................................... 704,859 894,763 305,313 Stock issued in settlement of a lawsuit ........................... 190,000 150,000 Stock returned in settlement of a lawsuit ......................... -- (21,131) Stock issued for services ......................................... 65,156 372,000 277,500 Unrealized loss on marketable securities .......................... -- -- (598,900) Changes in assets and liabilities (Increase) Decrease in: Accounts receivable ............................................... (677,797) (1,570,385) (2,777,321) Marketable securities ............................................. 427,242 . 1,601,720 (138,687) Inventories ....................................................... (5,612,993) (4,880,520) (2,164,571) Prepaid expenses and other current assets ......................... 306,357 (905,230) (479,472) Deferred taxes .................................................... (115,000) (22,118) 49,000 Deposits and other assets ......................................... (22,751) (97,945) (96,691) Increase (decrease) in: Accounts payable .................................................. 1,755,883 (522,225) 1,135,179 Accrued expenses and other current liabilities .................... 1,876,867 1,394,597 247,101 ----------- ----------- ----------- Net cash used by operating activities ............................. (632,411) (3,855,902) (3,062,353) CASH FLOWS FROM INVESTING ACTIVITIES Payments for purchase of assets of subsidiary, net of cash acquired -- (4,924,075) 134,356 Payments made for property and equipment .......................... (923,913) (929,755) (610,173) ----------- ----------- ----------- Net Cash used by investing activities ............................. (923,913) (5,853,830) (475,817) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of note payable- bank ....................... 825,000 2,325,000 500,000 Proceeds from shareholder note .................................... -- 9,050,900 -- Principal payments on long-term debt .............................. (101,712) (74,391) (51,231) Foreign Currency Translation ...................................... 2,724. 18,892 4,113 Purchase of treasury stock ........................................ (240,245) (2,770,002) (1,028,300) Stock warrant exercised ........................................... 361,720 66,000 Net proceeds from sale of common stock ............................ 848,530 240,000 3,248,330 ----------- ----------- ----------- Net cash provided by financing activities ......................... 1,696,017 8,856,399 2,672,912 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS ................... 139,693 (853,333) (865,258) CASH AND CASH EQUIVALENTS - BEGINNING ............................. 519,117 882,884 1,249,655 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS - END ................................... $ 658,810 $ 29,551 $ 384,397 =========== =========== ===========
Supplemental cash flow information Cash paid for: 1999 1998 1997 -------- -------- -------- Interest $251,611 $280,399 $211,414 Taxes $63,933 $ 78,877 $17,739 See accompanying notes to financial statements. DHB CAPITAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations Three Months Ended September 30, 1999, Compared to the Three Months Ended September 30, 1998 and 1997. Consolidated net sales were approximately $13,938,000, $10,192,000 and $9,004,000 for the three months ended September 30, 1999, 1998 and 1997, respectively. Gross profit for the three months ended September 30, 1999 increased approximately $484,000 to $4,692,213 over the gross profit for the three months ended September 30, 1998 and increased $2,007,895 over the gross profit for the three months ended September 30, 1997. The increase in gross profit is primarily a result of increased sales volume. Operating income increased 21% to $319,810 for the three months ended September 30, 1999 as compared to operating income of $263,295 for the three months ended September 30, 1998. The smaller percentage increase in operating income compared to gross profit is the result of the Company settling a lawsuit with the former president of one of its subsidiaries and the buyout of his employment agreement which result in a charge to operations of $90,000. Nine Months Ended September 30, 1999, Compared to the Nine Months Ended September 30, 1998 and 1997. Consolidated net sales were approximately $33,924,000, $31,310,000 and $24,550,000 for the nine months ended September 30, 1999, 1998 and 1997, respectively. Gross profit for the three months ended September 30, 1999 increased to approximately $11,892,121 over the gross profit for the nine months ended September 30, 1998 of $10,602,000 and $7,556,284 for the nine months ended September 30, 1997. Net income for the nine months ended September 30, 1999 was $469,766 as compared to a net loss of $120,559 for the nine months ended September 30, 1998. Liquidity and Capital Resources Liquidity and Capital ResourcesLiquidity 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, DHB KK and LEC in financing their working capital requirements. Working capital is needed to finance the receivables, manufacturing process and inventory. Working Capital at September 30, 1999 was approximately $20,352,000 as compared to $15,558,000 in 1998 and $13,621,000 at September 30, 1997. The current ratio at September 30, 1999 is 2.17:1 and at September 30, 1998 it was 2.2:1 as compared to 2.6:1 at September 30, 1997. Cash, cash equivalents, and marketable securities totaled $760,896 at September 30, 1999 compared to $131,637 at September 30, 1998. The 1999 increase in cash, cash equivalents and marketable securities was derived from operations. 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 all of the Company's assets. As of November 11, 1999 the Company has borrowed $5,000,000 on this line at an average rate of 7.4% interest. The line of credit expires in January of 2000. Effect of Inflation and Changing Prices. The Company did not experience increases in raw material prices during the nine months ended September 30, 1999, 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- Item 1. Legal Proceedings On or about August 3, 1999 LAX (DE) QRS 12-16 Inc. ("Landlord") commenced an action against Lanxide Electronic Components Inc. ("LEC"), a wholly owned subsidiary of the Company, in the Justice of the Peace Court of the State of Delaware, New Castle County Court No.12, CA No. JP12-99-4928. The action was commenced by the Landlord against LEC to recover possession of the space that LEC currently leases in Delaware. The case was dismissed against the Landlord on October 20, 1999. The Landlord appealed the lower courts ruling and the appeal is scheduled to be heard November 18, 1999. The Company believes it has a strong defense, however the outcome of the appeal cannot presently be determined. This action is considered by management to be material to the business of LEC and, if adversely determined, would have a material adverse effect on LEC's financial condition. Item 5. Other Information In October 1999 Lanxide Armor Products Inc., a wholly owned subsidiary of the Company, discontinued its operations, the result of which is not expected to have a material adverse effect on the financial condition of the Company. On November 17, 1999 the Company is scheduled to attend a NASDAQ Qualification Hearing regarding the Company's ability to continue to be listed on The NASDAQ Small Cap Market. While the Company plans on attending this hearing, no assurance can be given regarding the outcome of the meeting. Item 6. Exhibits and Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ender September 30, 1999. 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: November 11, 1999 DHB CAPITAL GROUP INC. /S/ David H. Brooks ------------------- 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 November 11, 1999 - ------------------- David H. Brooks /S/ Dawn M. Schlegel - -------------------- Dawn M. Schlegel Chief Financial Officer November 11, 1999 /S/ Robert A. Bruno Vice President November 11, 1999 - ------------------- Robert A. Bruno EX-27 2
5 1 6-MOS DEC-31-1999 SEP-30-1999 658,810 102,086 9,675,151 591,739 25,614,540 37,692,577 7,445,252 2,228,083 49,032,924 17,340,609 0 26,273 0 0 19,843,645 49,032,924 33,924,063 33,924,063 22,031,942 10,134,537 0 0 1,510,216 532,651 62,885 469,766 0 0 0 469,766 0.018 0.016
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