-----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, NpTTDvlrMgpF3/77xfmgV0TeNsQ5/rXQ9WYQVoTR8FUU3DefHc6hIrQO060/fh8w EW9bv8tlOXYka1HVZ9+v0w== 0001092306-01-500024.txt : 20010509 0001092306-01-500024.hdr.sgml : 20010509 ACCESSION NUMBER: 0001092306-01-500024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010508 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: 1625241 BUSINESS ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 BUSINESS PHONE: 5166212552 MAIL ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 10-Q 1 form10q0301.txt FIRST QUARTER 2001 FORM 10-Q ================================================================================ 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, 2001 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 (I.R.S. Employer of incorporation) Identification No.) 555 WESTBURY AVENUE, CARLE PLACE, NEW YORK 11514 (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 April 23, 2001, there were 31,459,547 shares of Common Stock, $.001 par value outstanding. ================================================================================ CONTENTS PAGE PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet as of March 31, 2001 and December 31, 2000 2 Unaudited Consolidated Statements of Income and Retained Earnings For The Three Months Ended March 31, 2001, 2000 and 1999 3 Unaudited Consolidated Statements of Cash Flows For The Three Months Ended March 31, 2001, 2000 and 1999 4 Unaudited Notes to Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 5-6 PART II OTHER INFORMATION 7 Signatures 7
DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Unaudited March 31, December 31, ASSETS 2001 2000 ------ ----------- ------------ CURRENT ASSETS Cash and cash equivalents $ 683,214 $ 566,887 Marketable securities 712,645 368,996 Accounts receivable, less allowance for doubtful accounts of $689,384 and $653,384 6,951,939 8,121,188 Inventories 17,238,926 14,297,059 Prepaid expenses and other current assets 839,200 1,091,952 ----------- ----------- Total Current Assets 26,425,924 24,446,082 ----------- ----------- PROPERTY AND EQUIPMENT, net 2,001,455 1,940,326 ----------- ----------- OTHER ASSETS Investments in non-marketable securities 941,750 941,750 Deferred tax assets 429,300 429,300 Deposits and other assets 298,350 298,813 ----------- ----------- Total Other Assets 1,669,400 1,669,863 ----------- ----------- TOTAL ASSETS $30,096,779 $28,056,271 =========== =========== CURRENT LIABILITIES Accounts payable $13,686,150 $11,257,987 Accrued expenses and other current liabilities 4,878,262 5,547,759 Current maturities of long term debt 76,672 143,748 ----------- ----------- Total Current Liabilities 18,641,084 16,949,494 ----------- ----------- LONG TERM LIABILITIES Long term debt, net of current maturities 14,157 15,356 Note Payable - stockholder 16,046,469 16,046,469 ----------- ----------- Total Long Term Debt 16,060,626 16,061,825 ----------- ----------- Total Liabilities 34,701,710 33,011,319 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIENCY Common stock $.001 par value, 100,000,000 shares authorized, 31,463,947 issued and outstanding 31,464 31,674 Additional paid in capital 23,869,881 24,535,500 Accumulated deficit (28,192,903) (29,215,460) Other comprehensive income (loss) (313,373) (306,762) ----------- ----------- STOCKHOLDERS' DEFICIENCY (4,604,931) (4,955,048) ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS DEFICIENCY $30,096,779 $28,056,271 =========== =========== See accompanying notes to financial statements.
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DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2001 2000 1999 ---- ---- ---- Net sales $ 20,174,944 $ 13,575,648 $7,370,132 Cost of sales 15,223,433 9,594,341 4,697,820 ------------ ------------ ----------- Gross Profit 4,951,511 3,981,307 2,672,312 Selling, general and administrative expenses 3,333,258 2,886,689 1,941,518 ------------ ------------ ----------- Income before other income (expense) 1,618,253 1,094,618 730,794 ------------ ------------ ----------- Other Expenses (589,795) (785,034) (322,546) ------------ ------------ ----------- Income from Continuing Operations 1,028,458 309,584 408,248 Discontinued operations Loss from discontinued operations (517,288) (333,871) Gain on disposal of discontinued operations - 857,860 - ------------ ------------ ----------- Total income (loss) from discontinued operations - 340,572 (333,871) Income before income taxes 1,028,458 650,156 74,377 Income taxes 5,901 27,773 42,967 ------------ ------------ ----------- Net income 1,022,557 622,383 31,410 Accumulated Deficit Beginning (29,215,460) (35,222,811) (3,100,898) ------------ ------------ ----------- Accumulated Deficit Ending (28,192,903) (34,600,428) $(3,069,488) ============ ============ =========== Earnings per common share Basic shares .033 .019 0.001 ============ ============ =========== Diluted shares .028 .019 0.001 ============ ============ =========== Weighted shares outstanding Basic shares 31,230,898 32,332,181 25,555,440 Warrants 5,529,725 -- 4,519,056 ------------ ------------ ----------- Diluted shares 36,760,623 32,332,181 30,074,496 ============ ============ =========== See accompanying notes to financial statements.
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DHB CAPITAL GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, CASH FLOWS FROM OPERATING ACTIVITIES 2001 2000 1999 ---- ---- ---- Net Income (loss) $ 1,022,557 $ 622,383 $ 31,410 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 112,893 105,025 229,484 Stock issued in settlement of a lawsuit -- -- 695,001 Stock issued for services 109,680 -- 70,000 Unrealized loss on marketable securities -- -- (115,853) Changes in assets and liabilities (Increase) Decrease in: Accounts receivable 1,169,249 (378,362) 587,267 Marketable securities (343,649) -- (77,019) Inventories (2,941,867) (454,090) (2,045,670) Prepaid expenses and other current assets 252,752 (3,041) (1,204,528) Deferred taxes -- -- (124,680) Deposits and other assets 192 28,279 24,253 Increase (decrease) in: Accounts payable 2,428,163 219,443 232,384 Accrued expenses and other current liabilities (669,497) 412,263 861,552 ----------- ----------- ----------- Net cash provided (used) by operating activities 1,140,473 551,900 (836,399) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Payments for purchase of assets of subsidiary, net of cash acquired -- 3,933,980 -- Payments made for property and equipment (173,751) (160,034) (178,289) ----------- ----------- ----------- Net Cash provided (used) by investing activities (173,751) 3,773,946 (178,289) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of note payable- bank -- (5,000,000) 825,000 Proceeds from shareholder note -- -- (106,000) Principal payments on long-term debt (68,275) (173,158) (24,162) Other comprehensive income (6,611) (37,627) (15,472) Purchase of treasury stock (775,509) -- -- Net proceeds from sale of common stock 691,125 100,000 ----------- ----------- ----------- -- Net cash provided by financing activities (850,395) (4,519,660) 779,366 =========== =========== =========== NET DECREASE IN CASH AND EQUIVALENTS 116,327 (193,814) (235,322) CASH AND CASH EQUIVALENTS - BEGINNING 566,887 473,441 519,117 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS - END $ 683,214 $ 279,626 $ 283,795 =========== =========== =========== Supplemental cash flow information Cash paid for: Interest $ 6,606 $ 88,272 $ 92,112 Taxes $ 4,704 $ 23,829 $ 43,327 See accompanying notes to financial statements. 5
DHB CAPITAL GROUP INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2001, 2000 AND 1999 ITEM 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-K and is presented for comparative purposes. All other financial statements are unaudited. All unaudited amounts are subject to year-end adjustments and audit, but the 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-K 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: DHB Capital Group Inc., Lanxide Armor Products Inc., Lanxide Electronic Components Inc., NDL Products Inc., Orthopedic Products Inc., Point Blank Body Armor Inc. and Protective Apparel Corporation of America. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001, COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2000 Consolidated net sales increased 48% to $20,174,944 for the three months ended March 31, 2001 as compared to consolidated net sales of $13,575,648 for the three months ended March 31, 2000. This increase is attributable to the increase volumes from Military Customers for the Companies ballistic apparel. Gross profit improved by approximately one million dollars to $4,952,000 for the first quarter of 2001 versus $3,981,000 for the first quarter of 2000. Operating income also increased by 48% to approximately $1,618,000 for 6 the first three months of 2001 over $1,095,000 for the first three months of 2000. These increases are a direct result of the manufacturing operating efficiencies resulting from higher sales volumes, volume discounts from our vendors as a result of the increases in our purchasing volumes, and management control of expenses. The effective tax rate for 2001 was nominal due to the utilization of net operating loss carryforwards. The Company has an estimated loss carryforward of $25 million, which can be utilized until 2019 to offset taxable income in those years. Net income increased to $1,023,000 for the three months ended March 31, 2001 as compared to $622,000 for the three months ended March 31, 2000 as a result of the increased sales volumes and operating efficiencies mentioned above. THREE MONTHS ENDED MARCH 31, 2000, COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1999. Consolidated net sales increased 84% to $13,575,648 for the three months ended March 31, 2000 as compared to $7,370,132 for the three months ended March 31, 1999 primarily as a result of shipments on the "Interceptor Contract". The Interceptor Contract's is a current contract with the US Military expiring in 2004. Operating income rose to approximately $1,090,000 for the first quarter of 2000 versus $730,764 for the first quarter of 1999. The Company incurred legal fees during the first quarter of 2000 for cases, which have since been resolved. Net income was approximately $622,000 for the three months ended March 31, 2000 as compared to approximately $31,000 for the three months ended March 31, 1999. On March 10, 2000 the Company sold its Electronics Division. For the period ended March 31, 2000, the company showed a gain from discontinued operations of $340,572 as compared to a loss of $333,871 for the three months ended March 31, 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's primary capital requirements over the next twelve months are to assist PACA, Point Blank, NDL, and Point Blank International in financing their working capital requirements. Working capital is needed to finance the receivables, manufacturing process and inventory. Working capital at March 31, 2001 was approximately $7.79 million as compared to $3.2 million at March 31, 2000. The current ratio at March 31, 2001 was 1.42 as compared to 1.44 as of December 31, 2000. The Company's cash flow statement showed net cash provided by operating activities for the three months ended March 31, 2001 of approximately $1,140,000 as compared to cash provided (used) by operating activities of approximately $552,000 and ($836,000) for the periods ended March 31, 2000 and 1999, respectively. Cash, cash equivalents, and marketable securities totaled $683,214 at March 31, 2001 as compared to $279,626 at March 31, 2000. During the first quarter of 2001, the Company repurchased and retired 275,063 shares in the open market for an aggregate price of approximately $775,500. 7 EFFECT OF INFLATION AND CHANGING PRICES. The Company did not experience any measurable increases in raw material prices during the three months ended March 31, 2001, 2000 and 1999. The Company believes it will be able to increase prices on its products to meet future price increases in raw materials, should they occur. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report contains certain forward-looking statements and information relating to the Company that is based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this document, the words "anticipate," "believe," "estimate", "expect", "going forward", and the similar expressions, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements. PART II. OTHER INFORMATION No change. 8 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 April 23, 2001 DHB CAPITAL GROUP INC. /s/ DAVID H. BROOKS ----------------------------------- David H. Brooks Chief Executive Officer, 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 Chief Executive Officer April 23, 2001 - ------------------- Chairman of the Board David H. Brooks /s/ DAWN SCHLEGEL Chief Financial Officer April 23, 2001 - ----------------- Dawn Schlegel 9 -----END PRIVACY-ENHANCED MESSAGE-----