UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended December 31, 2003
Commission File Number 000-20175
------------
NYER MEDICAL GROUP, INC.
----------------------- ----------
(Exact name of registrant as specified in its charter)
Florida 01-0469607
------------------ --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1292 Hammond Street, Bangor, Maine 04401
---------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(207) 942-5273 (Registrant's telephone number,
including area code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Exchange
Title of Each Class on which registered
None None
Check whether the registrant has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past twelve months (or for
such shorter periods 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 February 20, 2004, there were 3,784,962 shares of common stock
outstanding, par value $.0001 per share.
1
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
3
INDEX
PART I
FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
--------------------
Consolidated Balance Sheets, December 31, 2003
and June 30, 2003 3-4
Consolidated Statements of Operations, Three Months
Ended December 31, 2003 and December 31, 2002 5
Consolidated Statements of Operations, Six Months
Ended December 31, 2003 and December 31, 2002 6
Consolidated Statements of Cash Flows, Six Months
Ended December 31, 2003 and December 31, 2002 7-8
Selected Notes to Consolidated Financial Statements 9-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14-23
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 23
Item 4. Controls and Procedures 23-24
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 24
Item 2. Changes in Securities and Use of Proceeds 24
Item 3. Defaults upon Senior Securities 24
Item 4. Submissions of Matters to Vote of Security Holders 24
Item 5. Other information 24
Item 6. Exhibits and Reports on Form 8-K 24-25
Signatures 26
Exhibit 31.1 Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
2002 by Principal Executive Officer 27
Exhibit 31.2 Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
2002 by Principal Financial and Accounting Officer 28
Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive
Officer 29
Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial
Officer 30
2
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Item 1. Financial Statements:
--------------------
ASSETS
December 31, June 30,
2003 2003
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $ 1,367,997 $ 1,391,666
Accounts receivable, less allowance
for doubtful accounts of $374,562
at December 31, 2003 and $348,352
at June 30, 2003 4,662,361 4,357,856
Inventories, net 6,099,597 5,812,186
Prepaid expenses and other current
assets 316,552 250,585
Deferred tax asset - 185,000
Assets to be disposed of from
discontinued operation 71,000 201,281
---------- ----------
Total current assets 12,517,507 12,198,574
---------- ----------
Property, plant and equipment, net
Of accumulated depreciation 1,336,169 1,286,269
---------- ---------
Goodwill, net 104,463 104,463
Other intangible assets, net 607,677 666,281
Advances due from related
companies 44,858 44,858
----------- -----------
756,998 815,602
Total assets $14,610,674 $14,300,445
=========== ===========
See accompanying notes to consolidated financial statements.
3
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31, June 30,
2003 2003
---- ----
(Unaudited)
Current liabilities:
Current portion of long-term debt $ 267,384 $ 291,485
Accounts payable 4,168,160 3,831,147
Accrued payroll and related taxes 448,162 446,807
Other accrued expenses 212,061 259,460
Income taxes payable, net 87,185 101,753
Liabilities to be disposed of from
discontinued operation 271,170 390,873
---------- ----------
Total current liabilities 5,454,122 5,321,525
---------- ----------
Long-term debt, net of current
portion 300,533 418,425
Minority interest 1,333,884 1,243,533
Shareholders' equity:
Class A preferred stock, par value
$.0001, authorized, issued and
outstanding: 2,000 shares 1 1
Class B preferred stock, series 1,
par value $.0001, authorized:
2,500,000; issued and outstanding:
1,000 shares
Common stock, par value $.0001
authorized: 10,000,000 shares;
issued: 3,799,062 380 380
Additional paid-in capital 17,746,543 17,746,543
Treasury stock (14,100 shares) (54,573) (54,573)
Accumulated deficit (10,170,216) (10,375,389)
------------ -----------
Total shareholders' equity 7,522,135 7,316,962
----------- -----------
Total liabilities and
shareholders' equity $14,610,674 $14,300,445
=========== ===========
See accompanying notes to consolidated financial statements.
4
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
December 31, December 31,
2003 2002
---- ----
Net sales $16,146,046 $14,616,341
----------- -----------
Cost and expenses:
Cost of goods sold 12,561,483 11,457,207
Selling and retail 2,202,259 1,889,285
Warehouse and delivery 262,921 246,291
Administrative 940,036 811,895
----------- -----------
15,966,699 14,404,678
----------- -----------
Operating income 179,347 211,663
----------- -----------
Other income (expense):
Interest income 12,949 11,825
Interest expense (10,075) (10,043)
Other 3,761 _ 174
----------- -----------
Total other income 6,635 _ 1,956
----------- -----------
Income from continuing operations before
income taxes and minority interest 185,982 213,619
Provision for income taxes:
Current (67,185) (40,000)
Deferred (28,214) -
----------- -----------
(95,399) (40,000)
----------- -----------
Income from continuing operations before
minority interest 90,583 173,619
Minority interest, net of income taxes
of $32,626 and $8,000, respectively (47,497) (69,564)
----------- -----------
Income from continuing operations 43,086 104,055
----------- -----------
Discontinued operation:
Net loss from discontinued operation, net
of income tax benefit of $16,858 in 2003 (20,379) _ (20,705)
----------- -- --------
Net income $ 22,707 $ 83,350
=========== ===========
Basic and diluted income (loss) per share:
Continuing operations $ .01 $ .03
Discontinued operation (.01) (.01)
----------- -----------
Basic and diluted income (loss)
per share $ - $ .02
=========== ===========
Weighted average common shares outstanding:
Basic 3,784,962 3,756,962
=========== ===========
Diluted 4,129,028 3,760,638
=========== ===========
See accompanying notes to consolidated financial statements.
5
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended
December 31, December 31,
2003 2002
---- ----
Net sales $31,701,615 $28,612,874
----------- -----------
Cost and expenses:
Cost of goods sold 24,666,691 22,475,248
Selling and retail 4,226,410 3,645,159
Warehouse and delivery 504,074 494,560
Administrative 1,727,734 1,472,130
----------- -----------
31,124,909 28,087,097
----------- -----------
Operating income 576,706 525,777
----------- -----------
Other income (expense):
Interest income 25,392 23,057
Interest expense (22,043) (17,840)
Other 122 _ 754
----------- ----------
Total other income 3,471 _ 5,971
----------- ----------
Income from continuing operations before
income taxes and minority interest 580,177 531,748
----------- -----------
Provision for income taxes:
Current (67,185) (80,000)
Deferred (185,000) -
----------- ------------
(252,185) (80,000)
----------- -----------
Income from continuing operations before
minority interest 327,992 451,748
----------- -----------
Minority interest, net of income taxes
of $60,226 and $16,000, respectively (90,351) (139,615)
----------- -----------
Income from continuing operations 237,641 ___312,133
----------- -----------
Discontinued operation:
Net loss from discontinued operation, net
of income tax benefit of $27,644 in 2003 (32,468) _ (63,115)
----------- -----------
Net income $ 205,173 $ 249,018
=========== ===========
Basic and diluted income per share:
Continuing operations $ .06 $ .08
Discontinued operation (.01) _ (.02)
----------- ----------
Basic and diluted income
per share $ .05 $ .06
=========== ===========
Weighted average common shares
outstanding
Basic 3,784,962 3,756,962
=========== ===========
Diluted 3,960,560 3,763,556
=========== ===========
See accompanying notes to consolidated financial statements.
6
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31, December 31,
2003 2002
---- ----
Cash flows from operating activities:
Net income from continuing operations $ 237,641 $ 312,133
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 190,924 177,060
Amortization 58,604 29,392
Loss (gain) on sale of property,
plant and equipment 3,639 (300)
Minority interest 90,351 139,615
Changes in certain working capital
elements (196,482) 3,476
--------- ---------
Net cash flows provided by
operating activities from
continuing operations 384,677 661,376
Net cash used in discontinued
operation (21,890) (63,115)
--------- ---------
Net cash provided by operating
activities 362,787 598,261
Cash flows from investing activities:
Purchase of property, plant and
equipment (255,776) (205,746)
Proceeds from sale of property,
plant and equipment 11,313 2,800
--------- ---------
Net cash used in
investing activities (244,463) (202,946)
--------- ---------
Cash flows from financing activities:
Payments of long-term debt (141,993) (155,340)
--------- ---------
Net cash used in
financing activities (141,993) (155,340)
--------- ---------
Net (decrease) increase in cash
and cash equivalents (23,669) 239,975
Cash and cash equivalents,
beginning of period 1,391,666 1,536,958
---------- ----------
Cash and cash equivalents,
end of period $1,367,997 $1,776,933
========== ==========
See accompanying notes to consolidated financial statements.
7
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31, December 31,
2003 2002
---- ----
Changes in certain working capital elements:
Accounts receivable, net $ (304,505) $ 431,505
Inventories (287,411) (148,420)
Prepaid expenses (65,967) 41,187
Deferred tax asset 185,000 -
Accounts payable 337,013 (190,992)
Accrued payroll and related
taxes 1,355 3,455
Other accrued expenses (47,399) (133,259)
Income taxes payable (14,568) -
---------- ----------
Net change $ (196,482) $ 3,476
========== ==========
Supplemental cash flow information:
Cash paid during the first six months:
Interest $ 12,171 $ 12,771
========== ==========
Income taxes $ 105,250 $ 13,353
========== ==========
8
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation: The consolidated financial statements included herein
have been prepared by the Company, without audit, in accordance with accounting
principals generally accepted in the United States of America and pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principals generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are adequate
to make the information presented not to be misleading. In the opinion of
management, the amounts shown reflect all adjustments necessary to present
fairly the financial position and results of operations for the periods
presented. All such adjustments are of a normal recurring nature.
It is suggested that the financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's Form 10-K
for the year ended June 30, 2003.
2. Discontinued operations:
The Company accounts for discontinued operations in accordance with SFAS
144. In August 2003, due to continuing losses, the Company closed its Anton
Investments, Inc.'s ("Anton") Massachusetts location and transferred the assets
and personnel to Conway Associates, Inc. ("Conway"). In September 2003, the
Company closed and sold the inventory and fixed assets of Anton's New Hampshire
location. In December of 2003, the Company reevaluated the business and
determined to entirely close its component, Anton and discontinue the remaining
location. The Company is currently in the process of selling the remaining
inventory and fixed assets. This decision was made because of continuing
decreased sales and an inability to generate sufficient revenues to cover fixed
costs and operating expenses. Additionally, Anton has experienced ever
increasing competition from the nearby operations of a similar entity owned by a
minority shareholder. Sales for this component of the fire segment have been
declining for several years and recurring losses continue. Anton's operations
have been accounted for as a discontinued operation and the results of
operations have been excluded from continuing operations in the consolidated
statements of operations for all periods presented. The Company does not expect
a loss on the disposition of the component. The fire/police segment consisted
principally of Anton and Conway. The segment has been renamed fire equipment and
supplies due to the discontinuance of sales of police equipment and supplies.
Assets and Liabilities to be disposed of comprise the following at December 31,
2003:
Accounts receivable, net $ 29,586 Accounts payable $133,096
Inventories, net 23,488 Payable due related party 145,263
Property, plant and Other (7,189)
--------
equipment, net 15,499 $271,170
========
Other 2,427
---------
$ 71,000
9
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Goodwill and Other Intangible Assets:
Following is a summary of the Company's amortizable intangible assets
relating to the Pharmacy segment at:
December 31, 2003 Amortization Accumulated
Period (years) Cost Amortization Net
------------- ---- ------------ ---
Prescription lists 15 $ 528,000 $171,662 $356,338
Non-compete agreements 3-5 750,100 498,761 251,339
---------- -------- --------
Totals $1,278,100 $670,423 $607,677
========== ======== ========
June 30, 2003 Amortization Accumulated
Period (years) Cost Amortization Net
------------- ---- ------------ ---
Prescription lists 15 $ 528,000 $ 154,274 $373,726
Non-compete agreements 3-5 750,100 457,545 292,555
---------- ---------- --------
Totals $1,278,100 $ 611,819 $666,281
========== ========== ========
Aggregate amortization expense:
For the six months ended December 31, 2003 $58,604
Estimated amortization:
For the fiscal year 2004 $ 117,208
For the fiscal year 2005 100,116
For the fiscal year 2006 83,449
For the fiscal year 2007 83,449
For the fiscal year 2008 71,449
4. Earnings per share
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per share considers the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity.
The following data show the amounts used in computing earnings per share and the
weighted average number of shares of diluted potential common stock:
Three months ended Six months ended
December 31, December 31,
2003 2002 2003 2002
---- ---- ---- ----
Weighted average number of common
shares used in basic EPS 3,784,962 3,756,962 3,784,962 3,756,962
Stock options 344,066 3,676 175,598 6,594
--------- --------- --------- ---------
Weighted average number of
common shares used in
diluted EPS 4,129,028 3,760,638 3,960,560 3,763,556
========= ========= ========= =========
10
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Earnings per share continued,
Certain options were not included in the computation of diluted earnings
per share because the exercise prices of these options were greater than the
average market price of the common shares and the options were therefore
anti-dilutive.
5. Options and Warrants
Pro forma information, assuming the Company had accounted for its employee
and director stock options granted under the fair value method prescribed by
SFAS No. 123, as amended by Financial Accounting Standards Statement No. 148,
"Accounting for Stock Based Compensation - Transition and Disclosure, an
Amendment of FASB Statement No. 123", is presented below. The fair value of each
option grant is estimated on the date of each grant using the Black-Scholes
option-pricing model and amortized ratably over the option's vesting periods.
There were no stock options granted in the first quarter of fiscal 2004; there
were 12,000 options granted and 55,000 grants cancelled for the second quarter
of fiscal 2004; no stock options were granted in the first quarter of fiscal
2003 and there were 770,000 options granted in the second quarter of fiscal
2003.
Three months ended Six months ended
December 31, December 31,
2003 2002 2003 2002
---- ---- ---- ----
Net income, as reported: $ 22,707 $ 83,350 $ 205,173 $ 249,018
Add: Total stock-based employee
and director compensation
expense determined under fair
value based method for all
awards, net of taxes (14,899) (680,648) (26,314) (752,859)
--------- ---------- --------- ---------
Pro forma net income (loss) $ 7,808 $ (597,298) $ 178,859 $(503,841)
========= ========== ========= =========
Basic and diluted earnings per share:
Per reported $. - $ .02 $.05 $ .06
==== ===== ==== =====
Pro forma $. - $(.16) $.05 $(.13)
==== ===== ==== =====
6. Business Segments: The Company had three active business segments for the
three months ended December 31, 2003 and 2002 and for the six months ended
December 31, 2003 and 2002: (1) retail pharmacy chain (2) wholesale and
retail sales of surgical, medical equipment and supplies, (3) wholesale
distribution of equipment to fire departments. Business segments are
determined by the management approach which analyses segments based on
products or services offered for sale. Corporate assets include assets of a
discontinued operation.
11
FORM 10-Q NYER MEDICAL GROUP, INC 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
6. Business segments: continued,
Summary data for the three months ended December 31, 2003:
Medical Fire
Pharmacy Equipment Equipment
Chain and Supplies and Supplies Corporate Consolidated
-------- ------------- ------------- --------- ------------
Net sales $13,702,522 $ 2,117,162 $ 326,362 $ - $16,146,046
Operating
income (loss) 431,062 (76,327) 2,717 (178,105) 179,347
Total assets 11,405,342 2,326,343 403,870 475,119 14,610,674
Depreciation
and amortization 105,081 19,843 4,288 202 129,414
Interest income (5,762) (6,337) (850) (12,949)
Interest expense $ 6,716 $ 2,928 $ 431 $ - $ 10,075
Summary data for the six months ended December 31, 2003:
Medical Fire
Pharmacy Equipment Equipment
Chain and Supplies and Supplies Corporate Consolidated
-------- ------------- ------------- --------- ------------
Net sales $26,791,899 $ 4,269,708 $ 640,008 $ - $31,701,615
Operating
income (loss) 819,369 71,546 (23,819) (290,390) 576,706
Total assets 11,405,342 2,326,343 403,870 475,119 14,610,674
Depreciation
and amortization 201,465 40,672 6,987 404 249,528
Interest income (12,600) (11,047) - (1,745) (25,392)
Interest expense $ 14,409 $ 6,289 $ 1,345 $ - $ 22,043
Summary data for the three months ended December 31, 2002:
Medical Fire
Pharmacy Equipment Equipment
Chain and Supplies and Supplies Corporate Consolidated
-------- ------------- ------------- --------- ------------
Net sales $11,840,600 $ 2,479,895 $ 295,846 $ - $14,616,341
Operating
income (loss) 419,691 56,601 (36,412) (228,217) 211,663
Total assets 9,178,350 2,904,186 382,926 1,011,479 13,476,941
Depreciation
and amortization 86,282 20,563 4,524 1,344 112,713
Interest income (4,170) (5,085) - (2,570) (11,825)
Interest expense $ 3,915 $ 5,422 $ 706 $ - $ 10,043
12
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Business segments: continued,
Summary data for the six months ended December 31, 2002:
Medical Fire
Pharmacy Equipment Equipment
Chain and Supplies and Supplies Corporate Consolidated
Net sales $23,227,203 $ 4,716,266 $ 669,405 $ - $28,612,874
Operating
income (loss) 841,524 75,525 (48,936) (342,536) 525,777
Total assets 9,178,350 2,904,186 382,926 1,011,479 13,476,941
Depreciation
and amortization 157,203 43,921 4,524 804 206,452
Interest income (8,187) (9,625) - (5,245) (23,057)
Interest expense $ 7,693 $ 9,323 $ 824 $ - $ 17,840
13
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations:
The following discussion provides information with respect to our results
of operations, liquidity, and capital resources on a comparative basis for the
six months ended December 31, 2003 as compared to the six months ended December
31, 2002 as well as for the three months ended December 31, 2003 as compared to
the three months ended December 31, 2002.
Net Sales:
Sales for the six months ended December 31, 2003 increased by 10.8% to
$31,701,615 from $28,612,874 for the six months ended December 31, 2002.
Sales for the three months ended December 31, 2003 increased by 10.5% to
$16,146,046 from $14,616,341 for the three months ended December 31, 2002.
The following table shows sales by business segment for the six months
ended December 31, 2003 as compared to the six months ended December 31, 2002
and for the three months ended December 31, 2003 as compared to the three months
ended December 31, 2002:
Six months ended Three months ended
December 31, % increase December 31, % increase
Business Segment 2003 2002 (decrease) 2003 2002 (decrease)
- ---------------- ---- ---- ---------- ---- ---- ----------
Pharmacy chain $26,791,899 $23,227,203 15.3% $13,702,522 $11,840,600 15.7%
Medical equipment
and supplies 4,269,708 4,716,266 (9.5) 2,117,162 2,479,895 (14.6)
Fire equipment and
supplies 640,008 669,405 (4.4) 326,362 295,846 10.3
----------- ----------- --- ----------- ----------- ----
Total $31,701,615 $28,612,874 10.8% $16,146,046 $14,616,341 10.5%
=========== =========== ===== =========== =========== =====
The pharmacy chain segment's sales increase of $3,564,696 for the six
months ended December 31, 2003 to $26,791,899 or 15.3% as compared to the same
period ended December 31, 2002 of $23,227,203 was due to: increased sales to
non-profit organizations of $221,352; the acquisition of two pharmacies in March
2003 and June 2003 which resulted in an increase of approximately $1,614,440.
The remainder was due to continued increases of prescription drug sales.
The pharmacies expect sales growth to continue to be strong in its core
business, but expects pressures on margins. Budgetary deficits in Massachusetts
have resulted in the Executive Office of Human Services Division of Health Care
Finance and Policy reducing the reimbursement paid to pharmacies for dispensing
Medicaid prescriptions by approximately 4%. Eaton expects other third party
payors to follow.
14
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Net Sales: continued,
The pharmacy chain segment's sales increase of $1,861,922 to $13,702,522 or
15.7% for the three months ended December 31, 2003 as compared to $11,840,600
for the same period ended December 31, 2002 are the same as mentioned above.
The medical equipment and supplies segment's sales decreased $446,558 to
$4,269,708 or 9.5% for the six months ended December 31, 2003 as compared to the
same period ended December 31, 2002 of $4,716,266. This was mainly due to the
discontinuing of unprofitable items, increased competition from cut rate
competitors and lack of repeat sales on the Internet.
The medical equipment and supplies segment's sales decreased $362,734 to
$2,117,162 or 14.6% for the three months ended December 31, 2003 as compared to
the same period ended December 31, 2002 of $2,479,895. The reasons are as
mentioned above.
The fire equipment and supplies segment's sales decreased by $29,398 to
$640,008 or 4.4% for the six months ended December 31, 2003 as compared to the
same period ended December 31, 2002 of $669,405. Sales were impacted by
increased competition.
The fire equipment and supplies segment's sales increased $30,516 to
$326,362 or 10.3% for the three months ended December 31, 2003 as compared to
the same period ended December 31, 2002 of $295,846. The increase is due to a
new sales mix since one of Anton's locations was incorporated in Conway.
Gross Profit Margins:
Our overall gross margins were 22.2% for the six months ended December 31,
2003, an increase of .7% over the same period ended December 31, 2002. Overall
gross margins for the three months ended December 31, 2003 were 22.2%, an
increase of .6% for the same period ended December 31, 2002. The following is a
table of gross margins percentages by business segment for the six months ended
December 31, 2003 and 2002 and for the three months ended December 31, 2003 and
2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ----- ---- ----
Pharmacy chain 20.5% 20.1% 20.9% 20.3%
Medical equipment
and supplies 32.8 28.0 29.5 28.3
Fire equipment and
supplies 23.9 21.4 28.5 17.7
---- ---- ---- ----
Total 22.2% 21.5% 22.2% 21.6%
==== ==== ==== ====
15
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Gross Profit Margins: continued,
The pharmacy chain's gross margins increased .4% for the first six months
ended December 31, 2003 to 20.5% as compared 20.1% for the same period ended
December 31, 2002. Because of increased sales, purchase discounts increased from
suppliers. Another reason was an increase in generic pharmaceutical sales which
generally have higher gross profit margins as compared to brand pharmaceutical
sales.
The pharmacy chain's gross margins increased .6% for the three months ended
December 31, 2003 to 20.9% as compared 20.3% for the same period ended December
31, 2002. The reasons are as mentioned above.
The medical equipment and supplies segment's gross margin increased 4.8% to
32.8% for the six months ended December 31, 2003 as compared to 28.0% for the
six months ended December 31, 2002. This was due to a one time sale of
merchandise acquired in a discounted bulk purchase which was at no cost. The
cost of the merchandise was allocated to previously sold inventory. The impact
on its gross profit margins was approximately 5%.
The medical equipment and supplies segment's gross margin increased 1.2% to
29.5% for the three months ended December 31, 2003 as compared to 28.3% for the
three months ended December 31, 2002. The reasons are as mentioned above.
The fire equipment and supplies segment's gross profit margins increased to
23.9% or by 2.5& for the six months ended December 31, 2003 as compared to 21.4%
for the same period ended December 31, 2002. The increase in gross profit
margins was due to a change in the sales mix due to the incorporation of new
inventory items received from a closed location.
The fire equipment and supplies segment's gross profit margins increased to
28.5% or 10.8% for the for the three months ended December 31, 2003 as compared
to 17.7% for the same period ended December 31, 2002. The reasons are as
mentioned above.
Selling, General and Administrative Expenses:
Consolidated selling, general and administrative expenses ("S,G & A")increased
$850,205 to $5,853,666 for the six months ended December 31, 2003, as compared
to $5,003,461 for the six months ended December 31, 2002. Consolidated S,G & A
expenses increased $469,331 to $3,060,894 for the three months ended December
31, 2003, as compared to $2,591,563 for the three months ended December 31,
2002.
16
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Selling, General and Administrative Expenses: continued,
- --------------------------------------------
The following table shows the breakdown by business segment for the six
months ended December 31, 2003 and 2002 and for the three months ended December
31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ----- ---- ----
Pharmacy chain $4,660,703 $3,832,110 $2,435,377 $1,984,684
Medical equipment
and supplies 1,330,427 1,245,162 701,435 645,773
Fire equipment and
supplies 176,698 192,041 90,297 88,788
Corporate 290,390 342,536 178,107 228,226
---------- ---------- ---------- ----------
Total $6,458,218 $5,611,849 $3,405,216 $2,947,471
========== ========== ========== ==========
The pharmacy chain segment's S,G & A expenses increased $828,593 to
$4,660,703 or 21.6% for the six months ended December 31, 2003 as compared to
$3,832,110 for the six months ended December 31, 2002. The increase came from
the additional overhead costs associated with the acquisition and operation of
two additional pharmacies of $325,630, increased labor costs of approximately
$245,384 because of a shortage of available pharmacists and increased
advertising expense of $172,975.
The pharmacy chain segment's S,G & A expenses increased $450,693 to
$2,435,377 or 22.7% for the three months ended December 31, 2003 as compared to
$1,984,684 for the three months ended December 31, 2002. The reasons are as
stated above.
The medical equipment and supplies segment's S,G & A expenses increased
$85,265 or 7% to $1,330,427 for the six months ended December 31, 2003 as
compared to $1,245,162 for the six months ended December 31, 2002. This increase
is for expenses for increased advertising in an effort to offset its sales
decline and increased personnel costs.
The medical equipment and supplies segment's S,G&A expenses increased
$55,662 or 8.6% to $701,435 for the three months ended December 31, 2003 as
compared to $645,773 for the three months ended December 31, 2002. The main
reasons are mentioned above.
17
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Selling, General and Administrative Expenses: continued,
- --------------------------------------------
The fire equipment and supplies segment's S,G&A expenses decreased $15,343
or 8% to $176,698 for the six months ended December 31, 2003 as compared to
$192,041 for the six months ended December 31, 2002. This decrease was due to
lower expenses directly related to decreased sales.
The fire equipment and supplies segment's S,G&A expenses increased $1,509
or 1.7% to $90,297 for the three months ended December 31, 2003 as compared to
$88,788 for the three months ended December 31, 2002.
The corporate segment's overhead decreased $52,146 or 15.2% to $290,390 for
the six months ended December 31, 2003 as compared to $342,536 for the six
months ended December 31, 2002, due to lower legal expenses.
The corporate segment's overhead decreased $50,119 or 22% to $178,107 for
the three months ended December 31, 2003 as compared to $228,226 for the three
months ended December 31, 2002. The reason is mentioned above.
Interest income:
The following table shows the breakdown of interest income by business
segment for the six months ended December 31, 2003 and 2002 and for the three
months ended December 31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ----- ---- ----
Pharmacy chain $ 12,600 $ 8,187 $ 5,762 $ 4,170
Medical equipment
and supplies 11,047 9,625 6,337 5,085
Corporate 1,745 5,245 850 2,570
---------- ---------- ---------- ----------
Total $ 25,392 $ 23,057 $ 12,949 $ 11,825
========== ========== ========== ==========
The pharmacy chain segment's interest income increased $4,413 or 53.9% to
$12,600 for the six months ended December 31, 2003 as compared to $8,187 for the
six months ended December 31, 2002, due to increased accounts receivable
interest.
The pharmacy chain segment's interest income increased $1,592 or 38.2% to
$5,762 for the three months ended December 31, 2003 as compared to $4,170 for
the three months ended December 31, 2002. The reason is mentioned above.
The medical equipment and supplies segment's interest income increased
$1,422 or 14.8% to $11,047 for the six months ended December 31, 2003 as
compared to $9,625 for the six months ended December 31, 2002. This increase is
accounts receivable interest.
18
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Interest income: continued,
The medical equipment and supplies segment's interest income increased
$1,252 or 24.6% to $6,337 for the three months ended December 31, 2003 as
compared to $5,085 for the three months ended December 31, 2002. The reason is
mentioned above.
The corporate segment's interest income decreased $3,500 or 66.7% to $1,745
for the six months ended December 31, 2003 as compared to $5,245 for the six
months ended December 31, 2002. This decrease is due to a decline in cash to
invest.
The corporate segment's interest income decreased $1,720 or 66.9% to $850
for the three months ended December 31, 2003 as compared to $2,570 for the three
months ended December 31, 2002. The reason is mentioned above.
Interest expense:
The following table shows the breakdown of interest expense by business
segment for the six months ended December 31, 2003 and 2002 and for the three
months ended December 31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ---- ---- ----
Pharmacy chain $ 14,409 $ 7,693 $ 6,716 $ 3,915
Medical equipment
and supplies 6,289 9,323 2,928 5,422
Fire equipment and
supplies 1,345 824 431 706
---------- ---------- ---------- ----------
Total $ 22,043 $ 17,840 $ 10,075 $ 10,043
========== ========== ========== ==========
The pharmacy chain segment's interest expense increased $6,716 or 87.3% to
$14,409 for the six months ended December 31, 2003 as compared to $7,693 for the
six months ended December 31, 2002, due to debt associated with the purchase of
two pharmacies.
The pharmacy chain segment's interest expense increased $2,801 or 71.5% to
$6,716 for the three months ended December 31, 2003 as compared to $3,915 for
the three months ended December 31, 2002. The reason is mentioned above.
The medical equipment and supplies segment's interest expense decreased
$3,034 or 32.5% to $6,289 for the six months ended December 31, 2003 as compared
to $9,323 for the six months ended December 31, 2002. This was due to pay down
on its building mortgage.
19
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Interest expense: continued,
The medical equipment and supplies segment's interest expense decreased
$2,494 or 46% to $2,928 for the three months ended December 31, 2003 as compared
to $5,422 for the three months ended December 31, 2002. The reason is mentioned
above.
The fire equipment and supplies segment's interest expense increased $521
or 63.2% to $1,345 for the six months ended December 31, 2003 as compared to
$824 for the six months ended December 31, 2002 because of credit card interest.
The fire equipment and supplies segment's interest expense decreased $275
or 39% to $431 for the three months ended December 31, 2003 as compared to $706
for the three months ended December 31, 2002. This slight decrease is lower
credit card interest.
Minority interest:
The following table shows the breakdown of minority interest which
predominately represents the 20% minority interest in the pharmacy chain segment
for the six months ended December 31, 2003 and 2002 and for the three months
ended December 31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ---- ---- -----
Pharmacy chain $ 90,339 $ 139,809 $ 47,366 $ 69,704
Fire equipment and
supplies 12 (194) 131 (140)
---------- ---------- ---------- ----------
Total $ 90,351 $ 139,615 $ 47,497 $ 69,564
========== ========== ========== ==========
20
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Income tax expense:
The following table shows the breakdown of income tax expense by business
segment for the six months ended December 31, 2003 and 2002 and for the three
months ended December 31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
Business Segment 2003 2002 2003 2002
- ---------------- ---- ----- ---- ----
Pharmacy chain $ 301,130 $ 80,000 $ 163,130 $ 40,000
Medical equipment
and supplies 47,200 - (10,800) -
Fire equipment and
supplies (15,490) - (2,276) -
Corporate (80,655) - (54,655) -
---------- ---------- ---------- ----------
Total $ 252,185 $ 80,000 $ 95,399 $ 40,000
========== ========== ========== ==========
In fiscal 2003, the Company had federal and state income tax provisions
whereas in fiscal 2002, there were only state income tax provisions.
Discontinued operation:
The Company accounts for discontinued operations in accordance with SFAS
144. In August 2003, due to continuing losses, the Company closed its Anton
Investments, Inc.'s ("Anton") Massachusetts location and transferred the assets
and personnel to Conway Associates, Inc. ("Conway"). In September 2003, the
Company closed and sold the inventory and fixed assets of Anton's New Hampshire
location. In December of 2003, the Company reevaluated the business and
determined to entirely close its component, Anton and discontinue the remaining
location. The Company is currently in the process of selling the remaining
inventory and fixed assets. This decision was made because of continuing
decreased sales and an inability to generate sufficient revenues to cover fixed
costs and operating expenses. Additionally, Anton has experienced ever
increasing competition from the nearby operations of a similar entity owned by a
minority shareholder. Sales for this component of the fire segment have been
declining for several years and recurring losses continue. Anton's operations
have been accounted for as a discontinued operation and the results of
operations have been excluded from continuing operations in the consolidated
statements of operations for all periods presented. The Company does not expect
a loss on the disposition of the component.
21
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Discontinued operations: continued,
- -----------------------
The following table shows a comparison of sales, gross profit margins, S, G
& A expenses, interest expense, interest income and income taxes for the six
months ended December 31, 2003 and 2002 and for the three months ended December
31, 2003 and 2002:
Six months ended Three months ended
December 31, December 31,
2003 2002 2003 2002
---- ----- ---- ----
Sales $ 412,194 $ 924,068 $ 169,723 $ 410,751
Gross profit margin 29.2% 22.4% 16.7% 26.3%
S, G & A expenses 172,440 271,209 63,170 128,127
Interest expense 9,055 - 3,000 -
Interest income - 7 - 7
Income taxes (27,644) - (16,858) -
Liquidity and Capital Resources
Net cash provided by operating activities was $362,787 for the six months
ended December 31, 2003 as compared to $598,261 for the same period ended
December 31, 2002.
The net cash used in investing activities was $244,463 and $202,946, for
the six months ended December 31, 2003 and 2002, respectively.
Net cash used in financing activities was $141,993 for six months ended
December 31, 2003 as compared to $155,399 for the same period in 2002.
Approximately $450,000 is owed to the Company by the pharmacy chain as an
inter-company loan. The Company is presently working toward structuring a
repayment schedule which would assist the Company in meeting its current
operating needs for the next 12 months. Management believes that with such
structuring the Company's current cash resources would be adequate to fund its
current operating needs for the next 12 months.
At December 31, 2003, we had approximately $1,400,000 in cash on a
consolidated basis. Approximately $349,000 was held by the Parent Company and
approximately $1,018,000 was held by the pharmacy chain. Since the pharmacy
chain is not a wholly-owned subsidiary of the Company, the Company does not have
complete control over it, and, therefore, cannot unilaterally cause the pharmacy
chain to lend funds to the Company, if the Company should need such a loan.
The Company also has the ability to borrow based upon its assets to obtain
additional working capital. In addition, if it becomes necessary, the Company
22
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued,
Results of Operations: continued,
Liquidity and Capital Resources: continued,
- -------------------------------
may seek additional capital in the private and/or public equity markets to
sustain its operations.
Our primary source of liquidity is cash provided from operations. Our
principal uses of cash are: cash used for by operations, capital expenditures
and repayment of debt.
During the six months ended December 31, 2003, we had a decrease in cash
due the funding the losses of our fire supplies and equipment, discontinued
operation and corporate expenses.
Cash - At December 31, 2003, we had approximately $1.4 million in cash.
Accounts receivable - At December 31, 2003, we had accounts receivable of
approximately $4.6 million. Although our sales have increased, our accounts
receivables have remained relatively the same because of declining sales in the
medical and fire segments.
Debt - We had $567,917 of debt as of December 31, 2003. Our debt has decreased
due to pay down of the debt with no additional borrowing for the six months.
Because of our cash balances, we have not needed to borrow to fund operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not have any material risk with respect to changes in foreign
currency exchange rates, commodities prices or interest rates. We do not believe
that we have any other relevant market risk with respect to the categories
intended to be discussed in this item of this report.
Item 4. Controls and Procedures
The Company's management evaluated, with the participation of its principal
executive officer and principal financial officer, the effectiveness of its
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934) as of the end of the period covered
by this report. Based on such evaluation, the principal executive officer and
the principal financial officer of the Company concluded that its disclosure
controls and procedures are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and regulations of the Securities
and Exchange Commission and are operating in an effective manner.
No change in the Company's internal control over financial reporting (as
defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act
23
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 4. Controls and Procedures: continued,
------------------------
of 1934) occurred during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, its internal control
over financial reporting.
PART II
Item 1. Legal Proceedings None
Item 2. Changes in Securities and Use of Proceeds None
Item 3. Defaults upon Senior Securities None
Item 4. Submissions of Matters to Vote of Security Holders
At the Company's annual meeting of shareholders held on December 2, 2003,
the shareholders of the Company elected Donald Nicholson as a director of the
Company to serve for a three-year term until the Company's annual meeting of
shareholders for 2006 and until his successor is duly elected and qualified. The
result of the voting is as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
Donald Nicholson 7,489,836 - 3,910
Each of the following persons' terms as directors continued after
the meeting: Donald C. Lewis, John Milledge, Kenneth Nyer, Samuel Nyer,
M. Randolph Prince and James J. Schweiger.
Further, at the annual meeting of shareholders, the shareholders ratified the
selection (by the Audit Committee of the board of directors of the Company) of
Sweeney, Gates & Co. as the Company's independent auditors for the fiscal year
ending June 30, 2004, with 7,487,800 votes for ratification, 2,910 votes against
ratification and 3,036 abstentions.
Further, at the annual meeting of shareholders, the shareholders authorized the
transaction of any other lawful business that may properly come before the
Annual Meeting of shareholders with 7,441,494 votes for ratification, 28,031
votes against ratification and 24,221 abstentions.
Item 5. Other information
The Company is still actively seeking to acquire medical related companies.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 31.1 Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
2002 by Principal Executive Officer
Exhibit 31.2 Certification Pursuant to Rules 13a-14(a) and 15d-14(a) of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
2002 by Principal Financial and Accounting Officer
24
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
PART II, continued:
Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive
Officer
Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial
Officer
(b) Reports on Form 8-K None
25
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2003
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
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.
NYER MEDICAL GROUP, INC.
Date: February 20, 2004 /s/ Samuel Nyer
---------------
Samuel Nyer,
Chief Executive Officer
and Principal Executive
Officer
Date: February 20, 2004 /s/ Karen L. Wright
---------------
Karen L. Wright,
Chief Financial Officer
and Principal Financial
and Accounting Officer
26
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Samuel
Nyer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nyer Medical
Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: February 20, 2004
/s/ Samuel Nyer
Samuel Nyer, President
(Principal Executive Officer)
27
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Karen
L. Wright, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Nyer Medical
Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: February 20, 2004
/s/ Karen L. Wright
Karen L. Wright
Vice President - Finance
(Principal Financial and Accounting Officer)
28
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
2003 Quarterly Report on Form 10-Q
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nyer Medical Group, Inc. (the
"Company") on Form 10-Q for the Quarter ended December 31, 2003, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
I, Samuel Nyer, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Samuel Nyer
Samuel Nyer
Chief Executive Officer
February 20, 2004
29
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
2003 Quarterly Report on Form 10-Q
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nyer Medical Group, Inc. (the
"Company") on Form 10-Q for the quarter ended December 31, 2003, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Karen L. Wright, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Karen L. Wright
Karen L. Wright
Chief Financial Officer
February 20, 2004
30