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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934
FOR QUARTER ENDED JUNE 30, 2002
Commission File Number 0-12248
DAXOR CORPORATION
(Exact Name as Specified in its Charter)
New York 13-2682108
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
350 Fifth Ave
Suite 7120
New York, New York 10118
(Address of Principal Executive Offices & Zip Code)
Registrant's Telephone Number: (212) 244-0555
(Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JUNE 30,2002
- --------------------------------------------------------------------------------
COMMON STOCK
PAR VALUE: $.O1 per share 4,664,909
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheet as at June 30, 2002 and
Balance Sheet as at December 31, 2001 F-1
Consolidated Statements of Income for the
Three and Six Months ended June 30,2002 and 2001 F-2
Consolidated Statement of Cash Flows for the Six Months
ended June 30, 2002 and 2001 F-3
Notes to Consolidated Financial Statements
(Unaudited) F-4 to F-5
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS: RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
DAXOR CORPORATION
FINANCIAL STATEMENTS
================================================================================
DAXOR CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2002 2001
ASSETS
==================================================================================
CURRENT ASSETS
Cash $ 387,535 $ 431,949
Marketable Securities at Fair Value
June 30,2002 and December 31,
2001. (Notes 1 and 2) 42,319,877 42,271,902
Accounts receivable 138,663 174,242
Other current assets 305,090 312,310
------------ ------------
Total Current Assets 43,151,165 43,190,403
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements, furniture
and equipment 869,358 837,807
Laboratory equipment 290,104 288,087
------------ ------------
1,285,277 1,251,709
Less: Accumulated depreciation and amortization 1,002,587 975,593
------------ ------------
Net equipment and improvements 282,690 276,116
Other Assets 72,467 73,634
Total Assets $ 43,506,322 $ 43,540,153
============ ============
- ----------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
==================================================================================
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 39,109 $ 52,855
Loans payable (Notes 1 and 2) 730,318 1,000,000
Other Liabilities 106,813 22,885
Deferred Taxes (Note 1) 7,154,147 7,135,446
------------ ------------
Total Liabilities 8,030,387 8,211,186
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,664,909 June 30,
2002 and 4,664,909 December 31, 2001 53,097 53,097
Additional Paid in capital 9,798,232 9,798,232
Net unrealized holding gains
on available-for-sale securities (Note 1) 13,887,464 13,851,161
Retained earnings 16,550,672 16,440,007
Treasury stock (4,813,530) (4,813,530)
------------ ------------
Total Shareholders' Equity 35,475,935 35,328,967
Total Liabilities and Shareholders' Equity $ 43,506,322 $ 43,540,153
============ ============
See accompanying notes to cosolidated financial statements
F-1
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
2002 2001 2002 2001
---- ---- ---- ----
REVENUES:
- ---------------------------------------------------------------------------------------------
Operating revenues $ 196,441 $ 138,917 $ 389,504 $ 278,994
Other revenues 9,829 56,990 21,815 99,324
Dividend income 452,557 465,246 908,543 939,165
Gains (losses) on sale
of securities 94,261 18,435 95,064 9,731
Total Revenues 753,088 679,588 1,414,926 1,327,214
----------- ---------- ---------- ----------
- ---------------------------------------------------------------------------------------------
COSTS AND EXPENSES
- ---------------------------------------------------------------------------------------------
Operations of Laboratories and
Cost of Production 200,036 208,973 402,784 429,213
Selling, General, and
Administrative 468,573 337,405 867,771 670,602
Interest expense, net of
interest income 7,221 35,174 18,793 69,583
----------- ---------- ---------- ----------
Total Costs and Expenses 675,830 581,552 1,289,348 1,169,398
----------- ---------- ---------- ----------
Net Income (Loss) Before Income
Taxes 77,258 98,036 125,578 157,816
Provision for income taxes (833) 4,323 14,913 23,592
----------- ---------- ---------- ----------
Net Income (Loss) $ 78,091 $ 93,713 $ 110,665 $ 134,224
=========== ========== ========== ==========
Weighted Average Number of
Shares Outstanding 4,664,909 4,664,909 4,664,909 4,664,909
Net Income or (Loss) per Common
Equivalent Share $ 0.01 $ 0.02 $ 0.02 $ 0.03
=========== ========== ========== ==========
See accompanying notes to financial statements
F-2
================================================================================
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
2002 2001
---- ----
- -----------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
- -----------------------------------------------------------
Net income or (loss) $ 110,665 $ 134,224
--------- ---------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation & Amortization 28,161 23,038
(Gain) loss on sale of investments (95,064) (9,731)
Change in assets and liabilities:
(Increase) decrease in accounts receivable 35,579 (39,949)
(Increase) decrease in other current assets 7,220 (40,747)
(Increase) decrease in other assets net of amortization -- 1,100
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" (13,246) 76,620
--------- ---------
Total adjustments (37,350) 10,331
--------- ---------
Net cash provided by or (used in) operating activities 73,315 144,555
--------- ---------
- -----------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -----------------------------------------------------------
Payment for purchase of equipment and
improvements (33,568) (644)
Net cash provided or (used) in purchase
and sale of investments 85,965 (330,876)
Net proceeds (repayments) of loans from
brokers used to purchase investments 30,318 210,316
Proceeds from "short sales" not closed 99,556 2,450
--------- ---------
Net cash provided by or (used in) investing activities 182,271 (118,754)
--------- ---------
- -----------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -----------------------------------------------------------
Repayment of Bank Loan (300,000) --
Net cash provided by or (used in) financing activities (300,000) --
--------- ---------
Net increase (decrease) in cash and cash equivalents (44,414) 25,801
Cash and cash equivalents at beginning of year 431,949 18,439
--------- ---------
Cash and cash equivalents at end of period $ 387,535 $ 44,240
========= =========
See accompanying notes to financial statements
F-3
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 31, 2002 AND 2001
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
June 30,2002, and December 31, 2001, the results of operations for the three and
six months ended June 30,2002 and 2001 and cash flows for the six months ended
June 30,2002 and 2001. The consolidated financial statements include the
accounts of the Company and its subsidiary. All significant inter-company
transactions and balances have been eliminated in consolidation.
(1) MARKETABLE SECURITIES
Upon adoption of FASB No. 115, management has determined that the
Company's portfolio is best characterized as "Available-For-Sale". This has
resulted in the balance sheet carrying value of the Company's marketable
securities investments, as of June 30, 2002 and December 31, 2001 being
increased approximately 98.88 % and 98.60 % respectively over its historical
cost. A corresponding increase in shareholders' equity has been effectuated. In
accordance with the provisions of FASB No. 115, the adjustment in shareholders'
equity to reflect the Company's unrealized gains has been made net of the tax
effect had these gains been realized.
The following tables summarize the company's investments as of :
June 30, 2002
-------------
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
- -------- ---- ---------- ------------- --------------
Equity $21,263,407 $42,318,977 $21,366,314 $310,744
Debt 14,859 900 -0- 13,959
--------------------------------------------------------------
Total $21,278,266 $42,319,877 $21,366,314 $324,703
=========== =========== =========== ========
December 31, 2001
-----------------
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
- -------- ---- ---------- ------------- --------------
Equity $21,270,436 $42,271,002 $21,182,144 $181,578
Debt 14,859 900 -0- 13,959
--------------------------------------------------------------
Total $21,285,295 $42,271,902 $21,182,144 $195,537
=========== =========== =========== ========
At June 30, 2002 the securities held by the Company had a market value of
$42,319,877 and a cost basis of $21,278,266 resulting in a net unrealized gain
of $21,041,611 or 98.88 % of cost.
At December 31, 2001, the securities held by the Company had a market
value of $42,271,902 and a cost basis of $21,285,295 resulting in a net
unrealized gain of $20,986,607 or 98.60% of cost.
At June 30, 2002 and December 31, 2001 marketable securities, primarily
consisting of preferred and common stocks of utility companies, are valued at
fair value.
F-4
(2) LOANS PAYABLE
As at June 30, 2002 and December 31, 2001, the Company had loans
outstanding aggregating $700,000 borrowed on a short term basis from a bank,
which are secured by certain marketable securities of the Company. The loans
bear interest at approximately 5.7%.
Short term margin debt due to brokers, secured by the Companies marketable
securities, totaled $30,318 at June 30, 2002 and $-0- at December 31, 2001.
F-5
Part II OTHER INFORMATION
Item 1.
Legal Proceedings
None
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 2.
RESULTS OF OPERATIONS
Three months ended June 30, 2002 as compared with three months ended June 30,
2001.
For the three months ended June 30, 2002 total revenues were $753,088, up
from $679,588 in 2001. Operating revenues were $196,441 in 2002 up from $138,917
in 2001. Dividend income was $452,557 with a net interest expense of $7,221 in
2002, as compared to dividend income of $465,246 with a net interest expense of
$35,174 in 2001. In 2002, the Company had a net income before income taxes of
$77,258 versus a net income before income taxes of $98,036 in 2001. The Company
anticipates that it's sales of BVA-100 Blood Volume Analyzers and kits will
become the major source of income for the Company. The Company is currently in
the process of expanding its sales and marketing force. The Company has engaged
a search firm for a National Sales and Marketing Director.
Six months ended June 30, 2002 as compared with six months ended June 30, 2001.
For the six months ended June 30,2002, total revenues were $1,414,926 up
from $1,327,214 in 2001. Operating revenues were $389,504 up from $278,994 in
2001. Selling and administrative expenses were $867,771 in 2002, vs. $670,602 in
2001. The increased expenses were related to the employment of additional sales
and marketing personnel. In 2002, Dividend income was $908,543 with a net
interest expense of $18,793 as compared to the dividend income of $939,165 with
a net interest expense of $69,583 in 2001. In 2002, the Company had $95,064 in
capital gains vs $9,731 in 2001. In 2002, the Company had a net income of
$125,578 before income taxes versus $157,816 before income taxes in 2001. The
Company has adopted a policy that encourages leasing or renting of BVA-100
equipment to enable hospitals to obtain the equipment. This results in sales of
kits but a slower recognition of operating income, from BVA sales.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2002 the Company had total assets of $43,506,322 and total
liabilities of $8,030,387 with shareholders' equity of $35,475,935. The Company
has a net pre-taxed unrealized gain of $21,041,611 and $13,887,464 of net after
tax unrealized capital gains on available-for-sale securities in its portfolio.
This amount is included in the calculation of Total Shareholders' Equity. The
Company's stock portfolio had a market value of $42,319,877 with short-term
loans of $730,318 with 4,664,909 shares outstanding. The Company has the current
liabilities of $8,030,387. Included in these liabilities are deferred taxes of
$7,154,147. These deferred taxes would occur if the Company chose to sell it's
entire portfolio. Current liabilities minus these deferred taxes equals
$876,240.
The Company has adequate resources for the current marketing level of its
Blood Volume Analyzer as well as capital to sustain its localized semen and
blood banking services. The Company is reviewing various options to establish a
national sales force as well as utilizing independent local dealer distribution
networks for marketing the Blood Volume Analyzer. The Company has an instrument
loaner reagent plan which requires use of the Company's reserves. Under a sale
or a lease plan, the Company receives income immediately on its equipment. The
equipment loaner reagent plan permits a user to make a minimal initial capital
commitment. This results in a slower return on capital expenditure for the
Company. The Company is currently leasing its equipment directly. If the leasing
program becomes more widely accepted, then the Company will attempt to arrange
for leases through independent leasing companies, to whom it will sell the
BVA-100. The Company is evaluating blood volume instrumentation management
programs for hospitals. Under such a plan, the Company would provide equipment
and personnel on a sub-contract basis. The Company will use its current
financial reserves primarily for developing and marketing the Blood Volume
Analyzer. The Company is evaluating various options to expand blood banking
services in conjunction with the use of the Blood Volume Analyzer.
The Company did not file any reports on form 8-K.
F-6