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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, 2004
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 11, 2005 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, 2004
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets, December 31, 2004
and June 30, 2004 4
Consolidated Statements of Operations, Three Months
Ended December 31, 2004 and December 31, 2003 6
Consolidated Statements of Operations, Six Months
Ended December 31, 2004 and December 31, 2003 7
Consolidated Statements of Cash Flows, Six Months
Ended December 31, 2004 and December 31, 2003 8
Selected Notes to Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 24
Item 4. Controls and Procedures 25
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 26
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds 26
Item 3. Defaults upon Senior Securities 27
Item 4. Submissions of Matters to Vote of Security Holders 27
Item 5. Other Information 27
Item 6. Exhibits 27
Signatures 28
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 and
Principal Financial and Accounting Officer 29
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
President, Chief Executive Officer and Chief Financial Officer 30
2
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
Certain statements contained in this report are forward-looking in nature.
These statements are generally identified by the inclusion of phrases such as
"we expect", "we anticipate", "we believe", "we estimate" and other phrases of
similar meaning. Whether such statements ultimately prove to be accurate
depends upon a variety of factors that may affect our business and operations.
Many of these factors are described in our most recent Annual Report on Form
10-K as filed with Securities and Exchange Commission.
We make available on our internet website free of charge our annual report
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to such reports as soon as practicable after we electronically file
such reports with the SEC. Our website address is www.nyermedicalgroup.com.
The information contained in our website is not incorporated by reference in
this Report.
3
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
PART I - Financial Information
Item 1. Financial Statements:
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, June 30,
2004 2004
---- ----
(Unaudited)
Current assets:
Cash $ 751,974 $ 1,270,082
Accounts receivable, less allowance
for doubtful accounts of $488,000
at December 31, 2004 and $461,000
at June 30, 2004 4,338,583 4,228,977
Inventories 5,758,708 5,674,550
Prepaid expenses and other current
assets 223,555 349,379
Deferred tax asset 15,000 151,000
Assets to be disposed of from
discontinued operations 108,024 160,634
----------- -----------
Total current assets 11,195,844 11,834,622
----------- -----------
Property, plant and equipment, net 1,477,265 1,364,776
----------- -----------
Goodwill 104,463 104,463
Other intangible assets 490,470 549,073
----------- -----------
594,933 653,536
----------- -----------
Total assets $13,268,042 $13,852,934
=========== ===========
See accompanying notes to consolidated financial statements.
4
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31, June 30,
2004 2004
---- ----
(Unaudited)
Current liabilities:
Current portion of long-term debt $ 170,845 $ 213,523
Accounts payable 3,149,362 3,819,088
Accrued payroll and related taxes 475,500 424,115
Accrued expenses and other liabilities 145,487 286,214
Income taxes payable 81,412 20,000
Liabilities to be disposed of from
discontinued operations 505,173 555,556
----------- -----------
Total current liabilities 4,527,779 5,318,496
----------- -----------
Long-term debt, net of current
portion 146,866 210,119
----------- -----------
Minority interest 1,507,858 1,432,576
----------- -----------
Shareholders' equity:
Preferred stock 1 1
Common stock 379 379
Additional paid-in capital 17,691,972 17,691,972
Accumulated deficit (10,606,813) (10,800,609)
----------- -----------
Total shareholders'
equity 7,085,539 6,891,743
----------- -----------
Total liabilities and
shareholders' equity $13,268,042 $13,852,934
=========== ===========
See accompanying notes to consolidated financial statements.
5
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the three months ended
December 31, December 31,
2004 2003
---- ----
Net sales $15,528,903 $15,819,684
Cost and expenses:
Cost of goods sold 11,958,175 12,363,033
Selling and retail 2,461,589 2,553,299
Warehouse and delivery 245,044 244,625
Administrative 589,652 493,353
----------- -----------
15,254,460 15,654,310
----------- -----------
Operating income 274,443 165,374
Other income (expense):
Interest expense (6,039) (9,644)
Interest income 12,044 12,949
Other (1,239) 3,761
----------- -----------
Total other income (loss) 4,766 7,066
----------- -----------
Income from continuing operations
before income taxes 279,209 172,440
Provision for income taxes (112,000) (97,675)
Minority interest, net of
income taxes expense (37,463) (47,366)
----------- -----------
Income from continuing
operations 129,746 27,399
Discontinued operations - (4,692)
----------- -----------
Net income $ 129,746 $ 22,707
=========== ===========
Basic and diluted
income per share:
Continuing operations $ .03 $ .01
Discontinued operations - -
----------- -----------
Basic and diluted income
per share $ .03 $ .01
=========== ===========
Weighted average common
shares outstanding, basic 3,784,962 3,784,962
=========== ===========
Weighted average common
shares outstanding, diluted 3,882,444 4,129,028
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
6
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the six months ended
December 31, December 31,
2004 2003
---- ----
Net sales $30,717,514 $31,061,607
Cost and expenses:
Cost of goods sold 23,895,115 24,214,461
Selling and retail 4,782,946 4,547,215
Warehouse and delivery 493,656 479,713
Administrative 1,101,983 1,219,699
----------- -----------
30,273,700 30,461,088
----------- -----------
Operating income 443,814 600,519
Other income (expense):
Interest expense (12,301) (20,698)
Interest income 22,857 25,392
Other (5,292) 122
----------- -----------
Total other income (loss) 5,264 4,816
----------- -----------
Income from continuing operations
before income taxes 449,078 605,335
Provision for income taxes (180,000) (267,675)
Minority interest, net of
income taxes expense (75,282) (90,339)
----------- -----------
Income from continuing
operations 193,796 247,321
Discontinued operations - (42,153)
----------- -----------
Net income $ 193,796 $ 205,168
=========== ===========
Basic and diluted (loss)
income per share:
Continuing operations $ .05 $ .06
Discontinued operations - (.01)
----------- -----------
Basic and diluted income
per share $ .05 $ .05
=========== ===========
Weighted average common
shares outstanding, basic 3,784,962 3,784,962
=========== ===========
Weighted average common
shares outstanding, diluted 3,882,444 3,960,560
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
7
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, (unaudited)
For the six months ended
December 31, December 31,
2004 2003
---- ----
Cash flows from operating activities:
Net income from continuing operations $ 193,796 $ 247,321
Adjustments to reconcile net income to
net cash (used in) provided by
operating activities:
Depreciation 214,901 183,937
Amortization 58,603 58,604
Deferred income tax 136,000 185,000
Minority interest 75,282 90,339
Changes in working capital (765,596) 241,634
------------ ------------
Net cash flows (used in) provided by
operating activities from continuing
operations (87,014) 1,006,835
Net cash flows used in discontinued
activities (2,555) (670,126)
------------ ------------
Net cash flows (used in) provided by
operating activities (89,569) 336,709
------------ ------------
Cash flows from investing activities:
Purchase of property, plant and
equipment, net (322,607) (244,463)
------------ ------------
Net cash flows used in investing
activities (322,607) (244,463)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of long-term
debt 17,075 -
Payments on long-term debt (123,007) (141,993)
------------ ------------
Net cash flows used in financing
activities (105,932) (141,993)
------------ ------------
Net decrease in cash (518,108) (49,747)
Cash at beginning of period 1,270,082 1,417,744
------------ ------------
Cash at end of period $ 751,974 $ 1,367,997
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
continued
8
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, (unaudited), continued
For the six months ended
December 31, December 31,
2004 2003
---- ----
Changes in working capital:
Accounts receivable $ (109,606) $ (326,713)
Inventories (84,158) (230,614)
Prepaid expenses and other current
assets 125,824 (67,122)
Accounts payable (669,726) 303,189
Accrued payroll and related taxes 51,385 (10,748)
Accrued expenses and other liabilities (79,315) 573,642
------------ ------------
Net change $ (765,596) $ 241,634
============ ============
Supplemental disclosures of cash flow information:
For the six months ended
December 31, December 31,
2004 2003
---- ----
Cash paid during the period for:
Interest $ 13,381 $ 11,257
============ ============
Income taxes $ 50,000 $ 105,250
============ ============
9
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
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, 2004.
2. Going Concern and Management's Plans: The Company has guaranteed certain
obligations from its discontinued operations, and the Company had a loss in
its medical and corporate segments in recent years and has a cash flow
deficiency in those segments. The continued existence of the Company and
specifically, the medical and corporate segments, is dependent upon the medical
segment obtaining profitability, up streaming funds from its Pharmacy segment
or raising capital. The Company's Pharmacy subsidiary has an operating
agreement with the Parent which includes cash management. The Pharmacy
segment's minority shareholders have declined to provide the Parent with
sufficient cash to sustain its present operations and fund the medical segment,
if necessary. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
In order to increase working capital in the medical and corporate
segments, a Company subsidiary obtained a $300,000 line of credit in October
2004. The line of credit is collateralized by property owned by the subsidiary
and is guaranteed by the Company. The Company cannot draw on the line without
approval from a committee of the board established for this purpose. As of the
date of this report, the line of credit has not been used.
Management's plan to return to profitability includes: 1) revamping
management at the corporate and medical segments, 2) instituting cost cutting
measures to reduce and control general and administrative costs; and 3)
raise additional capital.
There is no assurance that management's plan will be successful or that
the Company will maintain profitability. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
10
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Recent Accounting Pronouncements:
On December 16, 2004, the FASB issued Statement No. 123R, "Share-Based
Payment" which requires companies to record compensation expense for stock
options issued to employees at an amount determined by the fair value of the
options. SFAS No. 123R is effective for interim or annual periods beginning
after June 15, 2005.
As such, effective with the Company's first fiscal quarter of 2006, SFAS
No. 123R will eliminate our ability to account for stock options using the
method permitted under APB 25 and instead require us to recognize compensation
expense should the Company issue stock options to its employees or non-employee
directors. The Company is in the process of evaluating the impact adoption of
SFAS No. 123R will have on the consolidated financial statements
4. Goodwill and Other Intangible Assets:
Following is a summary of the Company's amortizable intangible assets
relating to the Pharmacy segment at:
December 31, 2004 Amortization Accumulated
Period (years) Cost Amortization Net
Prescription lists 15 $ 528,000 $206,438 $321,562
Non-compete agreements 3-5 750,100 581,192 168,908
---------- -------- --------
Totals $1,278,100 $787,630 $490,470
========== ======== ========
June 30, 2004 Amortization Accumulated
Period (years) Cost Amortization Net
Prescription lists 15 $ 528,000 $189,050 $338,950
Non-compete agreements 3-5 750,100 539,977 210,123
---------- -------- --------
Totals $1,278,100 $729,027 $549,073
========== ======== ========
Aggregate amortization expense for the six months ended December 31, 2004
was $58,603.
Based on the balance of intangible assets at December 31, 2004, the
annual amortization expense for each of the succeeding five years is estimated
to be as follows:
Year Amortization amount
---- -------------------
2005 $100,000
2006 83,000
2007 83,000
2008 71,000
2009 35,000
11
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
5. Discontinued operations:
The following table shows assets and liabilities of discontinued
operations (fire and police segment) at December 31, 2004:
Accounts receivable $ -
Inventory 37,293
Prepaid expenses and other
current assets 70,731
Property and equipment,
net of accumulated depreciation -
--------
Total assets $108,024
========
Note payable to related party $157,543
Accounts payable 278,021
Accrued expenses and other
liabilities 69,609
--------
Total liabilities $505,173
========
The note payable to related party pertains to the purchase of a
discontinued subsidiary's inventory. There is a continuing dispute with
the note holder as to the amount owed. The above balance is the Company's
estimate which includes unpaid principal and interest at 7% and payments
made on behalf of the note holder. The note holder has demanded payment
of $233,157, plus accrued interest. The Company intends to attempt settlement
or litigate this matter.
6. 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 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 2005; there were 16,000 options
granted and 10,000 grants cancelled for the second quarter of fiscal 2005; no
stock options were granted in the first quarter of fiscal 2004 and there were
12,000 options granted and 55,000 grants cancelled in the second quarter of
fiscal 2004.
12
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
6. Options and Warrants: continued,
Three months ended Six months ended
December December
2004 2003 2004 2003
---- ---- ---- ----
Net income, as reported: $129,746 $ 22,707 $193,796 $205,168
Add: Total stock-based
compensation expense determined
under fair value based method
for all awards, net of taxes (4,044) (14,899) (8,540) (26,314)
-------- -------- -------- --------
Pro forma net income $125,702 $ 7,808 $185,256 $178,854
======== ======== ======== ========
Basic and diluted income
per share:
As reported $ .03 $ .01 $ .05 $ .05
===== ===== ===== =====
Pro forma $ .03 $ - $ .05 $ .05
===== ===== ===== =====
7. Earnings per share:
The following data show the amounts used in computing earnings per share
and the weighted average number of share of diluted potential common stock
at December 31:
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Weighted average number of common
shares used in basic EPS 3,784,962 3,784,962 3,784,962 3,784,962
Stock options 97,482 344,066 97,482 175,598
--------- --------- --------- ---------
Weighted average number of common
shares used in diluted EPS 3,882,444 4,129,028 3,882,444 3,960,560
========= ========= ========= =========
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.
8. Contingencies:
Legal proceedings
The Company and its subsidiaries are subject to various legal proceedings
and threatened legal proceedings from time to time as part of their businesses.
Currently, the Company and certain subsidiaries have been threatened with
legal proceedings. The Company believes an adverse outcome of any proceedings,
individually or in the aggregate, could have a material effect on the
businesses, financial condition and results of operations. Any potential
litigation, regardless of its merits, could result in costs to the Company
and its subsidiaries and divert management's attention from operations.
13
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
9. Business Segments:
The Company had two business segments for three and six months ended
December 31, 2004 and 2003: (1) pharmacies and (2) wholesale and retail sales
of surgical, medical equipment and supplies ("medical"). Business segments
are determined by the management approach which analyses segments based
onproducts or services offered for sale. Corporate assets include assets of
discontinued operations.
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Net Sales
Pharmacies $13,303,086 $13,702,522 $26,292,445 $26,791,899
Medical 2,225,817 2,117,162 4,425,069 4,269,708
----------- ----------- ----------- -----------
$15,528,903 $15,819,684 $30,717,514 $31,061,607
=========== =========== =========== ===========
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Operating income (loss)
Pharmacies $ 372,179 $ 431,062 $ 662,696 $ 819,369
Medical 63,498 (76,327) 37,855 71,546
Corporate (161,234) (189,361) (256,737) (290,396)
----------- ----------- ----------- -----------
$ 274,443 $ 165,374 $ 443,814 $ 600,519
=========== =========== =========== ===========
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Identifiable assets
Pharmacies $11,172,372 $11,405,342 $11,172,372 $11,405,342
Medical 1,828,486 2,326,343 1,828,486 2,326,343
Corporate 267,184 878,989 267,184 878,989
----------- ----------- ----------- -----------
$13,268,042 $14,610,674 $13,268,042 $14,610,674
=========== =========== =========== ===========
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Capital expenditures
Pharmacies $ 134,515 $ 181,891 $ 307,811 $ 240,901
Medical - 11,590 26,808 14,875
----------- ----------- ----------- -----------
$ 134,515 $ 193,481 $ 334,619 $ 255,776
=========== =========== =========== ===========
14
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Business Segments: continued,
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Depreciation and Amortization
Pharmacies $ 119,438 $ 105,081 $ 231,553 $ 201,465
Medical 18,758 19,843 40,666 40,672
Corporate 173 202 1,285 404
----------- ----------- ----------- -----------
$ 138,369 $ 125,126 $ 273,504 $ 242,541
=========== =========== =========== ===========
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Interest expense
Pharmacies $ 3,835 $ 6,716 $ 8,099 $ 14,409
Medical 2,204 2,928 4,202 6,289
----------- ----------- ----------- -----------
$ 6,039 $ 9,644 $ 12,301 $ 20,698
=========== =========== =========== ===========
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Interest income
Pharmacies $ 4,763 $ 5,762 $ 9,729 $ 12,600
Medical 7,281 6,337 13,128 11,047
Corporate - 850 - 1,745
----------- ----------- ----------- -----------
$ 12,044 $ 12,949 $ 22,857 $ 25,392
=========== =========== =========== ===========
15
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
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
three months ended and the six months ended December 31, 2004 and 2003.
Net Sales. Total sales for the three months ended December 31, 2004 decreased
by $290,781 to $15,528,903 from $15,819,684 for the three months ended December
31, 2003. Total sales for the six months ended December 31, 2004 decreased by
$344,093 to $30,717,514 from $31,061,607 for the six months ended December 31,
2003.
The following table shows sales by business segment for the three months
ended and the six months ended December 31:
Business Segment
Three months ended % increase Six months ended % increase
December 31, (decrease) December 31, (decrease)
2004 2003 2004 2003
Pharmacies $13,303,086 $13,702,522 (2.9)% $26,292,445 $26,791,899 (1.9)%
Medical 2,225,817 2,117,162 5.1 4,425,069 4,269,708 3.6
----------- ----------- ----------- -----------
$15,528,903 $15,819,684 (1.8)% $30,717,514 $31,061,607 (1.1)%
=========== =========== =========== ===========
The pharmacies' sales decreased $399,436 to $13,303,086 or 2.9% for the
three months ended December 31, 2004 as compared to $13,702,522 for the three
months ended December 31, 2003. The main reason for the decline was the
conversion of a contractual arrangement with one federally qualified health
center (FQHC) from a replenishment model to a segregated inventory model.
Under the former arrangement, the pharmacies dispensed prescriptions from its
inventory and recognized as sales the gross value of the prescription
dispensed. Under the latter arrangement, the pharmacies dispensed
prescriptions from a segregated inventory owned by the FQHC and recognized as
revenues the dispensing fee paid it by the FQHC. The dispensing fees totaled
approximately $147,000. Had the previous replenishment model and corresponding
revenue recognition been employed, sales of approximately $735,000 would have
been recognized as opposed to the approximately $147,000 in dispensing fees. As
such pharmacies sales would have been approximately $13,900,000, $200,000 or
approximately 1.5% greater than the same period the previous year. Management
expects prescriptions to increase due to an aging population, increased
Medicare prescription benefits and additional prescription drugs coming to
market point to increasing the prescription drug market.
The pharmacies' sales decreased $499,454 to $26,292,445 or 1.9%
for the six months ended December 31, 2004 as compared to $26,791,899 for the
six months ended December 31, 2003. The main reason for the decrease of
approximately $1,455,600, or 5.5% of sales, was due to a conversion of a
contract as mentioned above.
16
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
In recent years, the pharmacies have experienced robust "same store" sales
while at the same time growing sales through acquisitions and opening of new
locations (start-up). Same store sales growth have recently slowed as the
total number of prescriptions dispensed within the United States remained
relatively constant and many Pharmacy Benefit Management Companies (PBM's)
increased the percentage of prescription insurance plans with a required
mail-order component.
As mentioned above, management expects prescriptions to increase due to an
aging population, increased Medicare prescription benefits and additional new
prescription drugs coming to the market place. Management plans to mitigate
the effects of mandatory mail-order components within the prescription
insurance plans by continuing to seek out niches within the market that it is
uniquely qualified to service. In late November of 2004, the pharmacy segment
opened a pharmacy within a medical center in Waltham, MA, recently acquired by
Boston Children's Hospital. Management expects that its presence within this
unique medical community will result in added sales volume and incremental
profits.
The medical segment's sales increased $108,655 for the three months ended
December 31, 2004 to $2,225,817 or 5.1% as compared to $2,117,162 for the
three months ended December 31, 2003, primarily due to its Internet sales
increase of approximately $138,180.
The medical segment's sales increased $155,361 for the six months ended
December 31, 2004 to $4,425,069 or 3.6% as compared to $4,269,708 for the
six months ended December 31, 2003. The increase was due to a combination
of increased Internet sales of approximately $361,000 and a decrease of
its non Internet sales of approximately $206,000. The medical segment's
sales continues to experience increased pressure from larger competitors who
offer lower prices.
Gross Profit Margins. The overall gross profit margins were 23.0% for the
three months ended December 31, 2004 as compared to 21.9% for the same period
in 2003. The overall gross profit margins were 22.2% for the six months ended
December 31, 2004 as compared to 22.0% for the same period in 2003.
The following is a table of gross profit margin percentages by business
segment for the three months ended and six months ended December 31:
Business Segment
Three months ended Six months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Pharmacies 21.7% 20.9% 21.0% 20.5%
Medical 31.5% 29.5% 29.3% 32.8%
17
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Gross Profit Margins: continued,
The pharmacies' gross profit margins increased .8% to 21.7% for the three
months ended December 31, 2004 as compared to 20.9% for the three months ended
December 31, 2003. The increase was due to larger volume discounts from
suppliers.
The pharmacies' gross profit margins increased .5% to 21.0% for the six
months ended December 31, 2004 as compared to 20.5% for the six months ended
December 31, 2003. The increase can be attributed to larger sales volume
discounts from suppliers as mentioned above.
The medical segment's gross profit margins increased 2.0% to 31.5%
for the three months ended December 31, 2004 as compared to 29.5% for the
same period in 2003. This increase was the result of increased gross profit
margins on Internet division sales. Approximately $25,500 in sales of bulk
inventory recorded at no cost was recorded in the three months ended December
31, 2004. The impact on the gross profit margin from the sales was
approximately .5%. The cost of the merchandise was allocated to previously
sold inventory. The medical segment's margins declined approximately
1.5%. This segment continues to experience increasing pressure on its gross
profit margins as described in the net sales section above.
The medical segment's gross profit margins decreased 3.5% to 29.3%
for the six months ended December 31, 2004 as compared to 32.8% for the
same period in 2003. This decrease was the result of a $96,500 sale for bulk
inventory recorded at no cost at December 31, 2003. The impact on the gross
profit margin of this sale was approximately 5%. The cost of the merchandise
was allocated to previously sold inventory. This segment continues to
experience increasing pressure on its gross profit margins as described in the
net sales section above.
Selling, General and Administrative Expenses. Consolidated selling, general
and administrative expenses increased $5,008 or .2% for the three months ended
December 31, 2004 to $3,296,285 as compared to $3,291,277 for the three months
ended December 31, 2003. Consolidated selling, general and administrative
expenses increased $131,958 or 2.1% for the six months ended December 31, 2004
to $6,378,585 as compared to $6,246,627 for the six months ended December 31,
2003.
18
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. 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 three
months ended and the six months ended December 31:
Business Segment
Three months ended % increase Six months ended % increase
December 31, (decrease) December 31, (decrease)
2004 2003 2004 2003
---- ---- ---- ----
Pharmacies $ 2,513,932 $ 2,400,481 4.7% $ 4,868,131 $ 4,625,805 5.2%
Medical 621,118 701,435 (11.5) 1,253,716 1,330,427 (5.8)
Corporate 161,235 189,361 (14.9) 256,738 290,395 (11.6)
----------- ----------- ----------- -----------
$ 3,296,285 $ 3,291,277 .2% $ 6,378,585 $ 6,246,627 2.1%
=========== =========== =========== ===========
The pharmacies' selling, general and administrative expenses increased
$113,451 to $2,513,932 or 4.7% for the three months ended December 31, 2004
as compared to $2,400,481 for the three months ended December 31, 2003. The
increase consisted of labor costs of approximately $144,600, rent of $39,500,
depreciation of $14,400, while advertising decreased approximately $70,100,
and equipment rental decreased by $12,800.
19
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Selling, General and Administrative Expenses: continued,
The pharmacies' selling, general and administrative expenses increased
$242,326 to $4,868,131 or 5.2% for the six months ended December 31, 2004
as compared to $4,625,805 for the six months ended December 31, 2003. The
increases consisted of labor costs of approximately $325,000, rent of $55,000,
depreciation of $30,100, while advertising decreased by approximately $146,600
and equipment rental decreased by $19,225.
The medical segment's selling, general and administrative expenses
decreased $80,317 or 11.5% to $621,118 for the three months ended December 31,
2004 as compared to $701,435 for the three months ended December 31, 2003.
The main reasons were personnel cuts and reduced commissions in its Nevada
division of approximately $48,000. Sales related expenses, including
personnel, resulted in a reduction to selling, general and administrative
expenses of approximately $38,000.
The medical segment's selling, general and administrative expenses
decreased $76,711 or 5.6% to $1,253,716 for the six months ended December 31,
2004 as compared to $1,330,427 for the six months ended December 31, 2003.
The main reason for this decrease was the decline in sales in its Nevada
division
and the associated expenses and personnel cuts resulting in a reduction of
approximately $14,000. Sales related expenses, including personnel, resulted
in a reduction of approximately $55,800 and reduced overhead associated with
its storage of its bulk inventory purchase of approximately $10,000.
Corporate overhead decreased by $28,126 or 14.9% to $161,235 for the
three months ended December 31, 2004 as compared to $189,361 for the three
months ended December 31, 2003. The decrease was due to a combination of
the following: personnel costs of approximately $35,000, public relation fees
and stock related expenses of $23,556, insurance of $4,343. There was an
increase in legal and audit expense of $43,757.
Corporate overhead decreased by $33,657 or 11.6% to $256,738 for the six
months ended December 31, 2004 as compared to $290,395 for the six months ended
December 31, 2003. The decrease was due to a combination of the following:
reduction in personnel costs of approximately $35,000, reduction in public
relation fees and stock related expenses of approximately $35,000, reduction
in insurance of $5,500. Legal and audit fees increased approximately $34,200.
Interest Income. Interest income decreased by $905 or 7.0% to $12,044 for
the three months ended December 31, 2004 as compared to $12,949 for the three
months ended December 31, 2003. Interest income decreased by $2,535 or 10.0%
20
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Interest Income: continued,
to $22,857 for the six months ended December 31, 2004 as compared to $25,392 for
the six months ended December 31, 2003.
The following table shows the breakdown of interest income by business
segment for the three months ended and six months ended December 31:
Business Segment
Three months ended % increase Six months ended % increase
December 31, (decrease) December 31, (decrease)
2004 2003 2004 2003
---- ---- ---- ----
Pharmacies $ 4,763 $ 5,762 (17.3)% $ 9,729 $ 12,600 (22.8)%
Medical 7,281 6,337 14.9 13,128 11,047 18.8
Corporate - 850 (100.0) - 1,745 (100.0)
--------- --------- --------- ---------
$ 12,044 $ 12,949 ( 7.9)% $ 22,857 $ 25,392 (10.0)%
========= ========= ========= =========
The pharmacies' interest income decreased by $999 or 17.4% to $4,763 for
the three months ended December 31, 2004 as compared to $5,762 for the three
months ended December 31, 2003, due to lower accounts receivable interest
revenues.
The pharmacies' interest income decreased by $2,871 or 22.8% to $9,729 for
the six months ended December 31, 2004 as compared to $12,600 for the six months
ended December 31, 2003, due to higher accounts receivable interest revenues.
The medical segment's interest income increased by $944 or 14.9% to $7,281
for the three months ended December 31, 2004 as compared to $6,337 for the
three months ended December 31, 2003, due to higher accounts receivable
interest revenues.
The medical segment's interest income increased by $2,081 or 18.8% to
$13,128 for the six months ended December 31, 2004 as compared to $11,047 for
the six months ended December 31, 2003, due to increased accounts receivable
interest.
Corporate interest income decreased by $850 or 100% to $0 for the three
months ended December 31, 2004 as compared to $850 for the three months ended
December 31, 2003 due to a lower cash balances.
Corporate interest income decreased by $1,745 or 100% to $0 for the six
months ended December 31, 2004 as compared to $1,745 for the six months ended
December 31, 2003 due to a lower cash balances.
21
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Interest Expense. Interest expense decreased by $3,605 or 37.4% to $6,039 for
the three months ended December 31, 2004 as compared to $9,644 for the three
months ended December 31, 2003. Interest expense decreased by $8,397 or 40.6%
to $12,301 for the six months ended December 31, 2004 as compared to $20,698 for
the six months ended December 31, 2003.
The following table shows the breakdown of interest expense by business
segment for the three months ended and the six months ended December 31:
Business Segment
Three months ended % increase Six months ended % increase
December 31, (decrease) December 31, (decrease)
2004 2003 2004 2003
---- ---- ---- ----
Pharmacies $ 3,835 $ 6,716 (42.9)% $ 8,099 $ 14,409 (43.8)%
Medical 2,204 2,928 (24.7) 4,202 6,289 (33.2)
--------- --------- --------- ---------
$ 6,039 $ 9,644 (37.4)% $ 12,301 $ 20,698 (40.6)%
========= ========= ========= =========
The pharmacies' interest expense decreased by $2,881 or 42.9% to $3,835
for the three months ended December 31, 2004 as compared to $6,716 for the
three months ended December 31, 2003 due to debt pay down.
The pharmacies' interest expense decreased by $6,310 or 43.8% to $8,099
for the six months ended December 31, 2004 as compared to $14,409 for the
six months ended December 31, 2003 due to debt pay down.
The medical segment's interest expense decreased by $724 or 24.7% to
$2,204 for the three months ended December 31, 2004 as compared to $2,928 for
the three months ended December 31, 2003 due to debt pay down on its building
mortgage.
The medical segment's interest expense decreased by $2,087 or 33.2% to
$4,202 for the six months ended December 31, 2004 as compared to $6,289 for
the six months ended December 31, 2003 due to debt pay down on its building
mortgage.
Income Tax Expense. Income tax expense increased by $14,325 or 14.7% to
$112,000 for the three months ended December 31, 2004 as compared to $97,675
for the three months ended December 31, 2003. Income tax expense decreased
by $87,675 or 32.8% to $180,000 for the six months ended December 31,
2004 as compared to $267,675 for the six months ended December 31, 2003.
22
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Results of Operations: continued,
Income Tax Expense: continued,
The following table shows the breakdown of income tax expense by
businesssegment for the three months ended and the six months ended December 31:
Business Segment
Three months ended % increase Six months ended % increase
December 31, (decrease) December 31, (decrease)
2004 2003 2004 2003
---- ---- ---- ----
Pharmacies $ 171,000 $ 163,130 4.8% $ 239,000 $ 301,130 (20.6)%
Medical 19,000 (10,800) 275.9 19,000 47,200 (59.7)
Corporate (78,000) (54,655) (42.7) (78,000) (80,655) 3.3
--------- --------- --------- ---------
$ 112,000 $ 97,675 14.7% $ 180,000 $ 267,675 (32.8)%
========= ========= ========= =========
Minority Interest. Minority interest for the pharmacy segment decreased by
$9,903 or 20.9% to $37,463 for the three months ended December 31, 2004 as
compared to $47,366 for the three months ended December 31, 2003.
Minority interest for the pharmacy segment decreased by $15,057 or 16.7%
to $75,282 for the six months ended December 31, 2004 as compared to $90,339
for the six months ended December 31, 2003.
Liquidity and Capital Resources
Net cash flows used in operating activities were $89,569 for the six
months ended December 31, 2004 as compared to net cash flows provided of
$336,709 for the six months ended December 31, 2003. The primary uses of cash
were to fund operations for the medical and corporate segments and to purchase
pharmacy inventory.
Net cash flows used in investing activities were $322,607 for the six
months ended December 31, 2004 as compared $244,463 for the six months ended
December 31, 2003.
Net cash flows used in financing activities were $105,932 for six months
ended December 31, 2004 as compared to $141,993 for the six months ended
December 31, 2003.
At December 31, 2004, cash on a consolidated basis was $751,974 as
compared to $1,270,082 at June 30, 2004. Approximately $59,800 was held by
the parent company and approximately $566,500 was held by the pharmacies.
Because the pharmacies are not a wholly-owned subsidiary of the Company and
the Company does not have operating control, it cannot unilaterally cause
the pharmacies to loan funds to the Company should the Company should require a
loan. Approximately $269,500 is owed to the Company by the pharmacies. The
Company has structured a repayment schedule.
23
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued,
Liquidity and Capital Resources: continued,
Our primary source of liquidity is cash provided from operations. Our
principal uses of cash are: operations, capital expenditures and repayment of
debt.
In order to increase working capital in the medical and corporate
segments, a Company subsidiary obtained a $300,000 line of credit in October
2004. The line of credit is collateralized by property owned by the subsidiary
and is guaranteed by the Company. The Company cannot draw on the line without
approval from a committee of the board established for this purpose. As of the
date of this report, the line of credit has not been used.
Management's plan of continued profitability includes: 1) revamping
management at the corporate and medical segments, 2) instituting cost cutting
measures to reduce and control general and administrative costs; and 3)
raising additional capital. There is no assurance that management's plan
will be successful or that the Company will continue profitability.
At December 31, 2004, accounts receivable was $4,338,583 as compared to
$4,228,977 at June 30, 2004. Accounts receivable increased due to timing of
insurance reimbursements in the pharmacy segment.
At December 31, 2004, debt was $317,711 as compared to $423,642 at June
30, 2004. Debt decreased due to debt pay downs. The Company purchased a
delivery vehicle in July 2004 for $17,075 to be repaid over a period of 36
months.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk.
Cash: Cash is either in checking accounts or money market accounts.
Investment Securities:
Cash as of December 31, 2004 was $751,974.
** - The Company had approximately $29,000 in a money market account at
December 31, 2004. The interest yield rate was less than 1%.
Debt: Company debt is not subject to market risk and fluctuations because all
of the debt has fixed maturity dates and fixed interest rates. The difference
between the Company's carrying amount and fair value of its long-term debt was
immaterial at December 31, 2004.
24
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Debt: continued,
The Company has no material risk with respect to changes in foreign
currency exchange rates, commodities prices or interest rates. Management
believes that there are no 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 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
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.
25
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
PART II - Other Information
Item 1. Legal Proceedings
We are not a party to any material litigation.
However, as first reported in our report on Form 10-K filed with the
Securities and Exchange Commission on October 18, 2004 and noted in our report
on Form 10Q filed with the Securities and Exchange Commission on November 15,
2004, the Company, Eaton, Anton and Conway have had litigation threatened
against them with respect to separate matters (i.e., the Company: a contract
claim; Eaton: primarily statutory claims; Anton and Conway: contract claims).
Such entities have not yet determined the likelihood of success of these
potential litigation matters against the Company and/or its subsidiaries. With
respect to the threatened litigation against Eaton, the potential dollar amount
of damages is not readily determinable. The Company does not believe that the
dollar amount of possible damages with respect to any one of the litigation
matters threatened against the Company, Anton and Conway would exceed ten
percent of the current assets of the Company and its subsidiaries on a
consolidated basis. If any of these threatened litigation matters were decided
in a manner adverse to the Company or its subsidiaries, the result would likely
be materially adverse to the Company and its subsidiaries. For further
information with respect to this paragraph, please see Item 7 (Contingencies)
in the Selected Notes to Consolidated Financial Statements.
It should be noted that the immediately preceding paragraph describes
litigation which has been threatened but for which no complaint has been
filed against the Company or any of its subsidiaries. It is possible that
no suit will be filed with respect to these matters.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The foregoing equity repurchases by the Company during the fiscal quarter
ended December 31, 2004 have been reflected as follows:
ISSUER PURCHASES OF EQUITY SHARES
(d)Maximum Number
(or) Approximate
c) Total Number of Dollar Value)of
Shares Purchased as Shares that May
Part of Publicly Yet Be Purchased
(a)Total Number of (b)Average Price Announced Plans or Under the
Plans or
Shares Purchased Paid Per Share Programs Programs
October 1 - 31 0 $ - 0 148,000
November 1 - 30 0 $ - 0 148,000
December 1 - 31 0 $ - 0 148,000
On May 12, 2003, the Company announced that the Board of Directors of the
Company had authorized the repurchase of up to 150,000 shares of the Company's
outstanding common stock from time-to-time in open market transactions at
prevailing market prices. There was no expiration date established for this
repurchase plan. As of the date of this report, the plan has not been
terminated.
26
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
NYER MEDICAL GROUP, INC. AND SUBSIDIARIES
PART II
Item 3. Defaults upon Senior Securities None
Item 4. Submissions of Matters to Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits
Exhibit 10.1 Agreement, dated October 6, 2004, between KeyBank, NA
and ADCO Surgical Supply, Inc. - Promissory Note
contained in Form 10-K filed October 2004).
Exhibit 10.2 Agreement, dated October 6, 2004, by Nyer Medical Group,
Inc. in favor of KeyBank, NA - Commercial Guaranty
(contained in Form 10-K filed October 2004).
Exhibit 10.3 Agreement, dated October 6, 2004, between KeyBank, NA
and ADCO Surgical Supply, Inc. Mortgage (contained in
Form 10-K filed October 2004).
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 and Principal Financial and Accounting Officer.
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 President, Chief Executive Officer and
Chief Financial Officer.
27
FORM 10-Q NYER MEDICAL GROUP, INC. 000-20175 DECEMBER 31, 2004
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.
Registrant
Date: February 14, 2005 By:/s/ Karen L. Wright
Karen L. Wright, President,
Principal Executive Officer,
Chief Executive Officer,
Principal Financial and Accounting
Officer and Chief Financial
Officer
28
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, 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
valuation; 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 14, 2005
/s/ Karen L. Wright
Karen L. Wright
President
(Principal Executive Officer)
Vice President - Finance
(Principal Financial and Accounting Officer)
29
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, 2004, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Karen L. Wright, President, Chief Executive Officer and 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.
Date: February 14, 2005
/s/ Karen L. Wright
Karen L. Wright,
President, Chief Executive Officer
and Chief Financial Officer
30