SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File Number O-6421
March 31, 1999
SYNERGISTICS, INC.
MASSACHUSETTS 04-2283157
(State of Incorporation) (IRS Employer ID Number)
9 Tech Circle, Natick, MA 01760
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number,
including area code (508)655-1340
Securities registered pursuant to Section 12(g) of the Act.
Common Stock $0.01 Par Value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceeding 12 months (or 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
There is no public market for, and thus no aggregate market value of,
the registrants securities.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the last practicable date.
Class Outstanding at April 30, 1999
Common Stock, one cent par value 9,632,561
NO DOCUMENTS INCORPORATED BY REFERENCE
- - - -
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Mar 31 Dec 31
1999 1998
CURRENT ASSETS
Cash $ 127,946 $ 84,376
Accounts receivable 489,326 639,347
Allowance for doubtful accts (19,754) (20,000)
Inventories 393,727 333,382
Prepaid expenses 17,192 14,415
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TOTAL CURRENT ASSETS 1,008,437 1,051,520
EQUIPMENT, less allowances of $108,192 45,753 49,060
and $103,167 for depreciation
DEFERRED TAXES 759,674 759,674
-------- -------
TOTAL ASSETS 1,813,864 1,860,254
========= =========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 250,463 239,470
Accrued expenses and other current liabilities 42,809 84,059
Amount due stockholder 21,777 34,470
------- -------
TOTAL CURRENT LIABLITIES 315,049 357,999
STOCKHOLDERS' EQUITY
Common Stock ( 9,632,561 shares issued
including shares held in Treasury) 96,326 96,326
Additional paid-in capital 6,873,887 6,873,887
Retained earnings (deficit) (5,464,263) (5,460,823)
--------- ---------
1,505,950 1,509,390
Cost of Common Stock held in Treasury (7,135) (7,135)
--------- ---------
1,498,815 1,502,255
--------- ---------
TOTAL LIABILITIES. PREFERRED STOCK
AND SHAREHOLDERS' EQUITY 1,813,864 1,860,254
========= =========
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF THREE MONTHS ENDED
MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
Sales, net $ 651,259 $ 670,764
Interest income 441 62
------- -------
651,700 670,826
Costs and expenses:
Cost of sales 425,558 382,021
Selling, general and administrative expenses 229,373 237,171
Interest expense 211 71
------- -------
655,142 619,263
------- -------
Net gain (loss) (3,442) 51,563
====== =======
Gain (loss) per share of Common Stock
Assuming no dilution ($0.00) $0.01
Assuming full dilution ($0.00) $0.01
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF THREE MONTHS MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (3,442) $ 51,563
Adjustments to reconcile net loss to net cash
(used) provided by operating activities:
Depreciation 5,025 4,800
(Increase) decrease in accounts receivable 149,775 89,715
(Increase) decrease in inventories (60,345) 11,314
(Increase) decrease in prepaid expenses
and other assets (2,777) (3,620)
Increase (decrease) in accounts payable 10,993 (100,035)
Increase (decrease) in accrued expenses
and other current liabilities (41,250) 5,995
Increase (decrease) in amounts due
shareholder (12,692) (12,692)
------ -------
TOTAL ADJUSTMENTS 48,729 (4,523)
------ ------
NET CASH USED BY OPERATING ACTIVITIES 45,287 47,040
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures 1,717 809
------ ------
NET CASH (USED) BY INVESTING ACTIVITIES 1,717 809
NET CHANGE IN CASH 43,570 46,231
CASH AT BEGINNING OF YEAR 84,376 36,686
------ ------
CASH AT END OF PERIOD 127,946 82,917
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SYNERGISTICS, INC.
SELECTED INFORMATION
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report Form 10-K. The results of operations for the period ended March 31,
1999 are not necessarily indicative of the operating results for the full year.
Basis of Presentation
It is the opinion of management that all significant adjustments which are
routine recurring adjustments reflected in the accompanying March 31,
financial statements which are necessary to present fairly such interim
financial statements.
Accounting Policy for Revenues and Costs of Sales
Revenues are recognized at the time of product shipment. Cost of sales
is computed using the "gross profit" method based upon historical
results of operations. Other cost, included in costs of sales, are
based upon such costs as actually incurred.
Inventories
Inventories are comprised of the following:
* 3/31/99 12/31/98
Raw Materials $ 62,996 $ 44,316
Finished Goods & WIP 330,731 289,066
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Total Inventory $393,727 $333,382
======= =======
*Allocation Based Upon Estimate
(Loss) per Common Share
The weighted average number of shares of common stock outstanding used
in computing (loss) per share does not include the effect of the conversion
of the stock options as the exercise price exceeds the current market value
of the security.
The following schedule sets forth the number of shares used in computing
earnings per share:
Period of Three Months
Ended March 31
1999 1998
Assuming no dilution
Common Stock Outstanding April 30, 1998 9,632,561 9,557,561
Shares held in Treasury 16,445 16,445
Total Shares Authorized 12,000,000 12,000,000
PART I FINANCIAL INFORMATION
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the three months ended March 31, 1999, the Company recorded sales of
$651,259 compared to $670,764 for the three months ended March 31, 1998.
At March 31, 1999 the Company had a backlog of $52,409 compared to
$76,291 at March 31, 1998.
Cost of sales as a percentage of sales increased to 65.3% from 56.9%
for the three months ended March 31, 1999 and 1998, respectively.
This increase is due to the development of new windows products.
For the period of three months ended March 31, 1999, selling, general
and administrative expenses decreased by $7,798 over the period of
three months ended March 31, 1998.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are currently no pending legal proceedings to which the Company is
a party or to which any of its property is subject.
ITEM 2. CHANGE IN SECURITIES
There have been no changes in the instruments defining the rights of
holders of any class of securities of the Company during the first
three months of calendar year 1999.
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 4. EXHIBITS AND FORM 8-K
None.
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf, the
undersigned thereunto being duly authorized.
DATE_______April 22, 1999 /S/WILLIAM M. TETRICK
William M. Tetrick
Chairman of the Board
DATE_______April 22, 1999 /S/DAVID S. LONGWORTH
David S. Longworth
President and Clerk