UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC
20549
Form 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
____________ to ____________
For the quarterly period ended: June 30, 2001
Commission File No.: 0-6421
SYNERGISTICS, INC.
Massachusetts 04-2283157
(State of Incorporation) (IRS Employer I.D. Number)
9 Tech Circle, Natick, MA 01760
(Address of Principal Executive (Zip Code)
Office)
Registrant's telephone number (508) 655-1340
Indicate by check mark 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. [ X ] Yes [ ] No
Indicate the number of shares Common Stock $0.01 Par Value
outstanding of each of the 9,632,561 shares outstanding
registrant's classes of common as of July 31, 2001
stock, as of the latest
practicable date.
Transitional Small Business Disclosure Format (check one);
[ X] Yes [ ] No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
June 30, 2001 Dec 31, 2000
CURRENT ASSETS
Cash $ 33,820 64,881
Accounts receivable 420,837 470,958
Allowance for doubtful (26,000) (20,000)
accounts
Inventories 411,334 466,916
Prepaid expenses 20,592 11,013
-------- --------
TOTAL CURRENT ASSETS 860,583 993,768
EQUIPMENT, less allowances 26,888 33,683
of $93,435 and $84,435 for
depreciation
DEFERRED TAXES 759,674 759,674
-------- --------
TOTAL ASSETS 1,647,145 1,787,125
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $328,610 $317,010
Accrued expenses and other 76,045 140,135
current liabilities
-------- --------
TOTAL CURRENT LIABILITIES 404,655 457,145
STOCKHOLDERS' EQUITY
Common stock (9,632,561 96,326 96,326
shares issued including
shares held in Treasury)
Common stock subscribed 700,000 500,000
Additional paid-in capital 6,873,887 6,873,887
Retained earnings
(deficit) (6,420,588) (6,133,098)
Cost of Common Stock
held in Treasury (7,135) (7,135)
-------- --------
TOTAL CAPITAL 1,242,490 1,329,980
-------- --------
TOTAL LIABILITIES AND 1,647,145 1,787,125
SHAREHOLDERS' EQUITY
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
Six Months Ended June 30,
2001 (Unaudited) 2000
Sales, net $1,110,736 $1,322,841
Interest income 352 365
-------- --------
TOTAL REVENUE 1,111,088 1,323,206
Costs and expenses:
Cost of sales 857,277 949,724
Selling, general and 540,035 617,199
administrative expenses
Interest expense 1,265 1,028
-------- --------
TOTAL EXPENSES 1,398,577 1,567,951
-------- --------
NET INCOME (LOSS) $(287,489) $(244,745)
Gain (loss) per share of
Common Stock
Assuming no dilution ($0.03) ($0.02)
Assuming full dilution ($0.03) ($0.02)
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
Six Months Ended June 30
2001 (Unaudited) 2000
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $(287,489) $(244,745)
Adjustments to reconcile net
loss to net cash (used)
provided by operating
activities:
Depreciation 9,000 8,970
(Increase) decrease in 56,121 (38,092)
accounts receivable
(Increase) decrease in 55,582 (19,267)
inventories
(Increase) decrease in (9,580) (11,024)
prepaid expenses and other
assets
Increase (decrease) in 11,599 118,762
accounts payable
Increase (decrease) in (64,089) (30,402)
accrued expenses and other
current liabilities
Increase (decrease) in 200,000 200,000
amounts due shareholders
-------- --------
TOTAL ADJUSTMENTS 258,633 228,947
-------- --------
NET CASH USED BY OPERATING (28,856) (15,798)
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures (2,204) (9,008)
-------- --------
NET CASH (USED) BY INVESTING (2,204) (9,008)
ACTIVITIES
-------- --------
NET CHANGE IN CASH (31,060) (24,806)
CASH AT BEGINNING OF YEAR 64,880 52,325
-------- --------
CASH AT END OF PERIOD $33,820 $27,519
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-KSB. The
results of operations for the period ended June 30, 2001 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 which are necessary to present fairly
such interim financial statements are reflected in the
accompanying June 30, 2001 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 are comprised of
the following:
(Unaudited)
June 30, December 31,
2001 2000
Raw Materials $ 54,296 $ 60,232
Finished Goods & WIP 357,038 406,684
-------- --------
Total Inventories $411,334 $466,916
*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:
Six Months Ended June 30,
2001 2000
Assuming no dilution
Common Stock Outstanding 9,632,561 9,632,561
April 30, 2001
Shares held in Treasury 16,445 16,445
Total Shares Authorized 12,000,000 12,000,000
Item 2. Management's Discussion and Analysis or Plan of
Operation.
For the six months ended June 30, 2001, the Company recorded
sales of $1,110,736 compared to $1,322,841 for the six
months ended June 30, 2000.
In the 2nd Quarter of the year 2001 decreases in sales
continued. This sales trend contributed significantly
towards a loss in revenue in Q2 of 2001. The Company
believes that this decrease in sales was due to downward
trends in the National economy and not due to any changes in
the Company's products or it's marketing of same. Because
this trend has continued for the first 2 quarters of 2001,
corrective action will be taken in Q3 to bring expenses more
in line with sales.
At June 30, 2001 the Company had a backlog of $184,798
compared to $32,262 at June 30, 2000.
Cost of sales as a percentage of sales increased to 77% from
72% for the three months ended June 30, 2001 and 2000,
respectively. This is mainly due to New Product Development
expense, lower sales then expected and lower margins on some
products sold, mostly in the overseas market.
For the period of six months ended June 30, 2001, selling
and general and administrative expenses decreased by $77,164
over the period of six months ended June 30, 2000. This was
mainly due to a decrease in the sales force during the 4th
quarter of 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the
Company is a party or to which any of its property is
subject.
Item 2. Changes in Securities and Use of Proceeds
There have been no changes in the instruments defining the
rights of holders of any class of securities of the Company
during the first six months of calendar year 2001.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of the security holders
during the Second Quarter of 2001.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date August 24, 2001 By:/S/WILLIAM M. TETRICK
____________________________
William M. Tetrick Chairman of
the Board
Date August 24,2001__ By:/S/DAVID S. LONGWORTH
____________________________
David S. Longworth President
and Clerk