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 December 31, 2003
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File No. 0-17629
ADM TRONICS UNLIMITED, INC.
(Exact name of registrant as specified in its Charter)
Delaware 22-1896032
(State or Other Jurisdiction (I.R.S. Employer Identifi-
of Incorporation or organization) cation Number)
224-S Pegasus Ave., Northvale, New Jersey 07647
(Address of Principal Executive Offices)
Issuer's Telephone Number, including area code: (201) 767-6040
Check whether the Issuer (1) has 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 the 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 equity, as of the latest practicable date:
51,882,037 shares of Common Stock, $.0005 par value,
as of February 4, 2004
ADM TRONICS UNLIMITED, INC.
INDEX
Page Number
Part I. Financial Information
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - December 31, 2003
and March 31, 2003 2
Consolidated Statements of Operations - For the
three months and nine months ended December
31, 2003 and 2002 3
Consolidated Statement of Changes in Stockholders'
Equity - For the nine months ended December 31, 2003 3
Consolidated Statements of Cash Flows - For the
nine months ended December 31, 2003 and 2002 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-7
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
DECEMBER MARCH
ASSETS 30, 2003 31, 2003
Current assets:
Cash and equivalents $ 68,080 $ 49,765
Accounts receivable--trade, less allowance
for doubtful accounts of $39,000 76,010 75,622
Inventories:
Raw materials and supplies 89,009 201,409
Finished goods 67,669 46,928
Equipment held for sale 390,831 404,771
Other current assets 56,527 57,348
Total current assets 748,126 835,843
Property and equipment at cost, net of
accumulated depreciation of $458,764 and
$443,184, respectively 8,575 24,155
Equipment in use and under lease agreements, net
of accumulated depreciation of $726,598 and
$631,365 respectively 211,627 306,860
Loan receivable from officer, bearing
interest at 3% per annum, unsecured 49,188 49,891
Other assets 91,507 95,621
Total assets 1,109,023 1,312,370
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable-trade 149,760 200,631
Accrued expenses and other 38,528 59,579
Total current liabilities 188,288 260,210
Notes payable - long term 135,000 135,000
Stockholders' equity 785,735 917,160
Total liabilities and
stockholders' equity $1,109,023 $1,312,370
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
Revenues $237,021 $245,802 $830,803 $674,543
Costs and expenses:
Cost of sales 126,425 180,423 457,999 334,650
Selling, general and
administrative 187,659 140,092 530,913 663,658
Total costs and expenses 314,084 320,515 988,912 998,308
Operating (loss) (77,063) (74,713) (158,109) (323,765)
Other income:
Interest and other income 3,770 18,589 3,934 88,032
Net (loss) (73,293) (56,124) (154,175) (235,733)
Net (loss) per common share $(0.001) $(0.001) $(0.003) $(0.005)
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 2003
(UNAUDITED)
Preferred Common
Shares Shares Capital
5,000,000 150,000,000 in
Authorized Authorized excess
$.01 Par $.0005 Par of Par Accumulated
Value Par Value Value Value Deficit Total
Balance,
March 31,
2003 - 50,382,037 $25,191 $6,792,118 $(5,900,149) $917,160
Shares
issued 1,500,000 750 22,000 22,750
Net loss for
the period
ended
December
31, 2003 (154,175) (154,175)
Balances,
December
31, 2003 - 51,882,037 $25,941 $6,814,118 $(6,054,324) $785,735
3
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
DECEMBER 31,
2003 2002
Cash flows from Operating activities:
Net (loss) $(154,175) $(235,733)
Adjustments to reconcile net (loss)
to net cash from operating activities:
Depreciation and amortization 110,813 125,386
Value of common stock issued
for services rendered 22,000 -
Changes in operating assets and liabilities:
Accounts receivable (388) 86,958
Inventories 91,659 33,520
Other current assets 821 1,717
Equipment held for sale 13,940 (521)
Other assets 4,816 12,315
Accounts payable (50,871) (5,308)
Accrued expenses and other (21,050) (32,364)
Net cash flows provided by (used in)
operating activities 17,565 (14,030)
Cash flows from Investing activities:
Purchases of property and equipment - (811)
Repayments of loan to officer - 3,500
Net cash flows provided by (used in)
investing activities - 2,689
Cash flows from Financing activities:
Issuance of common stock for cash 750 15,000
Net cash flows provided by
financing activities 750 15,000
Net change in cash and cash equivalents $ 18,315 $ 3,659
Cash and cash equivalents--beginning of year $ 49,765 $ 51,565
Cash and cash equivalents--end of period $ 68,080 $ 55,224
Supplemental disclosure of cash flow activities:
Interest paid - 4,227
4
ADM TRONICS UNLIMITED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1-Basis of Presentation:
The consolidated balance sheet at the end of the preceding fiscal year has
been derived from the audited consolidated balance sheet contained in the
Company's annual report on Form 10-KSB for the fiscal year ended March 31,
2003 (the "Form 10-KSB") and is presented for comparative purposes. All
other financial statements are unaudited. In the opinion of management,
all adjustments which include only normal recurring adjustments necessary to
present fairly the financial position, results of operations and changes in
financial positions for all periods presented 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 the published rules and regulations of the Securities and
Exchange Commission. These consolidated financial statements should be read
in conjunction with the financial statements and notes thereto included in
the Form 10-KSB.
Note 2. Segment Information
Information about segment information is as follows:
Nine Months Ended December 31, 2003: CHEMICAL MEDICAL TOTAL
Revenues from external customers 667,635 163,168 830,803
Segment profit (loss) (83,339) (48,836) (132,175)
Nine Months Ended December 31, 2002:
Revenues from external customers 606,536 68,007 674,543
Segment profit (loss) 140,280 (95,453) (235,733)
Three Months Ended December 31, 2003:
Revenues from external customers 200,888 36,133 237,021
Segment profit (loss) (25,022) (26,271) (51,293)
Three Months Ended December 31, 2002:
Revenues from external customers 220,892 24,910 245,802
Segment profit (loss) 85,105 (141,229) (56,124)
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At December 31, 2003 the Company had cash and equivalents of $68,080 as
compared to $49,765 at March 31, 2003. This increase was the result of net
cash flows provided by operating and financing activities of $17,565 and
$750, respectively.
Operating Activities
Net cash flows provided by operating activities aggregated $17,565 for
the nine months ended December 31, 2003 as compared to $14,030 used in
operating activities for the nine months ended December 31, 2002. Cash
flows used in operating activities primarily resulted from the net loss
for the period of $154,175 a reduction in accounts payable of $50,871 and
accrued expenses of $21,050, collectively offset by a reduction in
inventories, equipment and other assets of $92,570, depreciation and
amortization of $110,813 and $22,000 the value of common stock issued for
services rendered.
Investing Activities
There were no investing activities for the period.
Financing Activities
Cash flows provided by financing activities consisted of $750 received
from the issuance of common stock.
The Company does not have any material external sources of liquidity or unused
sources of funds.
Results of Operations
Quarter Ended December 31, 2003
Revenues
Revenues were $237,021 in 2003 as compared to $245,802 in 2002 representing a
decrease of $8,781 or 4%. Revenues from the Company's medical electronics
activities increased $11,223 and chemical revenues decreased $20,004 in 2003
as compared to 2002 primarily due to the timing of purchases by customers that
were influenced by negative weather conditions during the period.
Gross Profit
Gross profit of $110,596 in 2003 as compared to $65,379 in 2002 was $45,217 or
69% above the gross profit in 2002. Gross profit was 47% of revenues in 2003
as compared with 27% of revenues in 2002. The increase in gross profit margin
was primarily due to certain inventory write-offs during 2002 and the
maintenance of manufacturing labor overhead with reduced contract manufacturing
revenues.
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Operating (Loss)
Operating loss in 2003 was ($77,063) compared to ($74,713) in 2002. Selling,
general and administrative expenses increased by $47,567 primarily due to
consulting fees, increased legal fees and an increase in certain facility and
energy costs.
Other Income
Other income in 2003 was $3,770 as compared to $15,589 in 2002. The decrease
was primarily due to reduced amounts received from a joint venture in 2002.
Results of Operations
Nine Months Ended December 31, 2003
Revenues
Revenues were $830,803 as compared to $674,543 in 2002 representing an
increase of $156,260 or 23%. Revenues from the Company's medical electronics
activities increased $95,161 and chemical revenues increased $61,099.
Gross Profit
Gross profit of $372,804 in 2003 as compared to $339,893 in 2002 was $32,911
or 10% higher than the gross profit in 2002. Gross profit was 45% of revenues
in 2003 and 50% in 2002. The decrease in gross profit margin is due to the mix
in product sales with higher sales of products with a lower gross margin and
certain write-offs of inventory at March 31, 2003.
Operating (Loss)
Operating loss was ($158,109) in 2003 compared to ($323,765) in 2002. Selling,
general and administrative expenses decreased by $132,745 due to a reduction in
personnel and related overhead expenses offset by an increase in consulting
fees.
Other Income
Other income of $3,934 in 2003 decreased $84,098 from $88,032 in 2002. The
decrease was primarily due to a reduction in revenues received from a joint
venture in 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ADM Tronics Unlimited, Inc.
By:\s\ Andre' DiMino
Andre' DiMino, Chief
Dated: Northvale, New Jersey Executive Officer and
February 12, 2004 Chief Financial Officer
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