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: MARCH 31, 2002
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _____to______
Commission file number: 0-30629
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FIRST AID DIRECT, INC.
(Name of small business issuer in its charter)
FLORIDA 59-1796257
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(State of incorporation) (IRS employer Ident. No.)
10211 N.W. 53rd St., Sunrise, FL 33351
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(Address of principal office) (Zip Code)
Registrant's telephone number: (954) 749-9926
Indicate by check mark whether the Registrant: (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 registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of
equity as of March 31, 2002: 3,985,000 shares of Common Stock, $.001 par value.
FIRST AID DIRECT, INC.
TABLE OF CONTENTS
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Balance Sheet (Unaudited) as of March 31, 2002 Page 3
Condensed Statements of Income (Unaudited) for the three
months ended March 31, 2002 and 2001 Page 4
Condensed Statements of Cash Flows (Unaudited) for the
three months ended March 31, 2002 and 2001 Page 5
Notes to Financial Statements Page 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
FIRST AID DIRECT, INC.
CONDENSED BALANCE SHEET
MARCH 31, 2002
(UNAUDITED)
ASSETS
Current assets:
Cash $ 51,380
Accounts receivable, stockholder 74,595
Accounts receivable, net 252,240
Note receivable, employee 12,000
Inventories 484,245
Prepaid expense 41,080
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Total current assets 915,540
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Property and equipment, net 53,483
Intangible asset, net 106,142
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$ 1,075,165
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 159,925
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Total current liabilities 159,925
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Stockholders' equity:
Common stock 3,985
Additional paid-in capital 1,604,127
Deficit (692,872)
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915,240
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$ 1,075,165
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The accompanying notes are an integral part of these condensed financial
statements.
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FIRST AID DIRECT, INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
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2002 2001
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Net sales $ 886,933 $ 852,470
Cost of sales 601,574 603,907
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Gross profit 285,359 248,563
General and administrative expenses 204,661 232,866
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Income before income taxes 80,698 15,697
Provision for income taxes -- --
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Net income $ 80,698 $ 15,697
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Net income per share information:
Basic:
Net income per share $ .02 $ .00
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Weighted average number of common shares 3,985,000 3,932,556
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Diluted:
Net income per share $ .02 $ .00
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Weighted average number of common shares 3,985,000 3,985,000
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The accompanying notes are an integral part of these condensed financial
statements.
Page 4
FIRST AID DIRECT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
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2002 2001
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Cash flows from operating activities:
Net income $ 80,698 $ 15,697
Depreciation and amortization 8,555 8,455
Changes in assets and liabilities (156,794) 77,801
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Net cash provided by (used in) operating activities (67,541) 101,953
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Cash flows from investing activities:
Purchase of equipment (4,376) (1,151)
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Net cash used in investing activities (4,376) (1,151)
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Cash flows from financing activities:
Repayment on line of credit -- (33,000)
Proceeds from exercise of stock options -- 8,000
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Net cash (used in) provided by financing activities -- (25,000)
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Net increase (decrease) in cash (71,917) 75,802
Cash, beginning of period 123,297 236
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Cash, end of period $ 51,380 $ 76,038
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Supplemental Disclosure of Cash Paid:
Interest $ -- $ 3,283
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Non-cash Investing and Financing Activities:
Assets acquired in exchange for debt $ -- $ 50,000
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The accompanying notes are an integral part of these condensed financial
statements.
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FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of First Aid Direct,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Regulation S-B. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 2002 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2002. For further
information, refer to the financial statements and footnotes for the year ended
December 31, 2001 found in the Company's Form 10-KSB.
The fiscal years ended December 31, 2002 and December 31, 2001 are herein
referred to as "fiscal 2002" and "fiscal 2001", respectively.
2. INVENTORIES
Inventories are comprised primarily of first aid products held for sale, and are
stated at the lower of cost or market, determined on the FIFO method.
3. SALES TO STOCKHOLDER
During the three months ended March 31, 2002 and 2001, 31% and 30%,
respectively, of revenue was derived from sales to a stockholder.
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THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES OR OTHER FACTORS,
WHICH MAY CAUSE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS TO VARY FROM THOSE PREDICATED OR IMPLIED IN THIS
REPORT. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, WITHOUT LIMITATION,
DECLINE IN DEMAND FOR THE COMPANY'S PRODUCTS OR SERVICES, AND THE EFFECT OF
GENERAL ECONOMIC CONDITIONS AND FACTORS AFFECTING THE WHOLESALE DISTRIBUTION
INDUSTRY. FURTHER INFORMATION ON THE FACTORS AND RISKS THAT COULD AFFECT FIRST
AID DIRECT'S BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS ARE
INCLUDED UNDER THE "RISK FACTORS" SECTIONS OF FIRST AID DIRECT'S PUBLIC FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2000.
SALES. Total revenues increased 4% in the first quarter of fiscal 2002 over the
same period in fiscal 2001. Revenue increased $34,463 from $852,470 to $886,933
in the three months ended March 31, 2002 period in the prior fiscal year. The
increase in sales resulted primarily from increases in sales to new and existing
distributors.
COSTS AND EXPENSES. The cost of sales for the quarter decreased $2,333 from
$603,907 in the first quarter of fiscal 2001 to $601,574 in the first quarter of
fiscal 2002. When combined with the increase in net sales, the result was a 15%
increase in the gross profit of $36,796, from $248,563 in the first quarter of
fiscal 2001 to $285,359 in the first quarter of fiscal 2002. As a percentage,
the gross margin increased from 29% in fiscal 2001 to 32% in fiscal 2002,
principally as a result of purchase rebates and lower costs from the vendors.
General and administrative expenses decreased 12% or $28,205 from $232,866 in
the first quarter of fiscal 2001 to $204,661 in the first quarter of fiscal
2002. Also, general and administrative expenses decreased as a percent of
revenue from 27% in 2001 to 23% in 2002. The decrease primarily resulted from
holding costs constant while sales were increasing.
INCOME BEFORE INCOME TAXES. The Company's income before income taxes was
$80,698, which is an increase of $65,001 compared to $15,697 during the first
quarter of fiscal 2001. The increase was primarily a result of the increase in
sales and the ability of the Company to hold all of their costs constant.
OTHER. No income tax expense or benefit is recorded in the three-month periods
ended March 31, 2002 and 2001, as the Company will utilize net operating loss
carryforwards to offset the current tax expense.
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LIQUIDITY AND CAPITAL RESOURCES
The primary sources of the Company's cash are net cash flows from operating
activities, short-term vendor financing and a line of credit obtained from a
bank. The Company established a $250,000 line of credit with a bank that matures
in February 2003 to fund cash requirements as needed. The line requires monthly
interest payments and bears interest at the prime rate of interest (4.75% at
March 31, 2002). As of March 31, 2002, there was no amount outstanding on the
line of credit. The line is collateralized by the Company's accounts receivable
and inventory.
The Company believes its current available cash position, coupled with its cash
forecast for the year and periods beyond, is sufficient to meet its cash needs
on both a short-term and long-term basis. The balance sheet has a strong working
capital ratio (5.73 to 1) and management is not aware of any known trends or
demands, commitments, events, or uncertainties, as they relate to liquidity
which could negatively affect the Company's ability to operate and grow as
planned.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits
None
(b) Reports on Form 8-K
None
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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.
FIRST AID DIRECT, INC.,
A FLORIDA CORPORATION
Date: April 15, 2002 By /s/ Scott Siegel
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Scott Siegel, President and CEO
(Principal Executive Officer)
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