SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934
FOR QUARTER ENDED JUNE 30, 2001
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 30,2001
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COMMON STOCK
PAR VALUE: $.01 per share 4,664,909
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheet as at June 30, 2001 and
Balance Sheet as at December 31, 2000 F-1
Consolidated Statements of Income for the
Three and Six Months ended June 30,2001 and 2000 F-2
Consolidated Statement of Cash Flows for the Six Months
ended June 30, 2001 and 2000 F-3
Notes to Consolidated Financial Statements (Unaudited) F-4
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS; RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
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, 2001 as compared with three months ended June 30,
2000.
For the three months ended June 30, 2001 total revenues were $679,558, up
from $640,043 in 2000. Operating revenues were $138,917 in 2001 down from
$150,438 in 2000. Dividend income was $465,246 with a net interest expense of
$35,174 in 2001, as compared to dividend income of $466,051 with a net interest
expense of $55,092 in 2000. In 2001, the Company had a net income of $93,713
before income taxes versus a net loss of $61,761 before income taxes in 2000.
The Company anticipates that it's sales of equipment and kits will become the
major source of income for the Company. The Company is currently initiating
distribution networks.
Six months ended June 30, 2001 as compared with six months ended June 30, 2000.
For the six months ended June 30, 2001, total revenues were $1,327,214 down
from $1,357,779 in 2000. Operating revenues were $278,994 down from $361,997 in
2000. Dividend income was $939,165 with a net interest expense of $69,583, as
compared to the dividend income of $939,545 with a net interest expense of
$100,174 in 2000. In 2000, the Company had $6,005 in capital gains vs $9,731 in
2001. In 2001, the Company had a net income of $157,816 before income taxes
versus $33,592 before income taxes in 2000. Operations income in 2000 was
greater than in 2001 because of direct sales of the BVA-100. The company has
adopted a policy that encourages leasing or renting of equipment to enable
hospitals to test the equipment. This results in a sale of kits but a slower
recognition of operating income, from BVA sales.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2001 the Company had total assets of $48,207,158 and total
liabilities of $10,538,927 with shareholders' equity of $37,668,231. The Company
has a net pre-taxed unrealized gain of $24,781,146 and $16,355,556 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 $47,271,440 with short-term
loans of $1,985,679 with 4,664,909 shares outstanding.
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 in regard to
establishing a nationwide sales force as opposed to utilizing independent local
dealer distribution networks for marketing the Blood Volume Analyzer. The
Company is currently negotiating a possible agreement in the near future for
distribution of the Blood Volume Analyzer in Japan. 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.
DAXOR CORPORATION
FINANCIAL STATEMENTS
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DAXOR CORPORATION
CONSOLIDATED BALANCE SHEETS[UNAUDITED]
June 30, December 31,
2001 2000
---- ----
================================================================================
ASSETS
CURRENT ASSETS
Cash $ 44,240 $ 18,439
Marketable Securities at Fair Value
June 30,2001 and December 31,
2000. (Notes 1 and 2) 47,271,440 48,722,403
Accounts receivable 147,876 107,927
Other current assets 404,505 363,758
------------ ------------
Total Current Assets 47,868,061 49,212,527
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements, furniture
and equipment 837,457 836,813
Laboratory equipment 278,087 278,087
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1,241,359 1,240,715
Less: Accumulated depreciation and amortization 942,452 919,414
------------ ------------
Net equipment and improvements 298,907 321,301
Other Assets 40,190 41,290
Total Assets $ 48,207,158 $ 49,575,118
============ ============
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
================================================================================
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 118,451 $ 42,431
Loans payable (Notes 1 and 2) 1,985,679 1,775,363
Other Liabilities 9,207 73,741
Deferred Taxes (Note 1) 8,425,590 9,011,745
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Total Liabilities 10,538,927 10,903,280
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,664,909 June 30,
2001 and 4,664,909 December 31, 2000 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) 16,355,556 17,493,387
Retained earnings 16,274,876 16,140,652
Treasury stock (4,813,530) (4,813,530)
------------ ------------
Total Shareholders' Equity 37,668,231 38,671,838
Total Liabilities and Shareholders' Equity $ 48,207,158 $ 49,575,118
============ ============
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
2001 2000 2001 2000
---- ---- ---- ----
REVENUES:
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Operating revenues $ 138,917 $ 150,438 $ 278,994 $ 361,997
Other revenues 56,990 25,791 99,324 50,232
Dividend income 465,246 466,051 939,165 939,545
Gains (losses) on sale
of securities 18,435 (2,237) 9,731 6,005
Total Revenues 679,588 640,043 1,327,214 1,357,779
---------- ----------- ---------- ----------
COSTS AND EXPENSES
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Operations of Laboratories 208,973 315,706 429,213 522,300
Selling, General, and
Administrative 337,405 331,006 670,602 701,713
Interest expense, net of
interest income 35,174 55,092 69,583 100,174
---------- ----------- ---------- ----------
Total Costs and Expenses 581,552 701,804 1,169,398 1,324,187
---------- ----------- ---------- ----------
Net Income (Loss) Before Income
Taxes 98,036 (61,761) 157,816 33,592
Provision for income taxes 4,323 -- 23,592 1,360
---------- ----------- ---------- ----------
Net Income (Loss) $ 93,713 $ (61,761) $ 134,224 $ 32,232
========== =========== ========== ==========
Weighted Average Number of Shares
Outstanding 4,664,909 4,679,242 4,664,909 4,682,409
Net Income or (Loss) per Common Equivalent
Share $ 0.02 $ (0.01) $ 0.03 $ 0.01
========== =========== ========== ==========
See accompanying notes to financial statements
F-2
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DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income or (loss) $ 134,224 $ 32,232
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Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation equipment and improvements 23,038 28,664
(Gain) loss on sale of investments (9,731) (6,005)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (39,949) (39,483)
(Increase) decrease in other current assets (40,747) 181,206
(Increase) decrease in other assets 1,100 --
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" 76,620 (74,058)
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Total adjustments 10,331 90,324
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Net cash provided by or (used in) operating activities 144,555 122,556
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Payment for purchase of equipment and
improvements (644) (2,900)
Net cash provided or (used) in purchase
and sale of investments (330,876) (160,578)
Net proceeds (repayments) of loans from
brokers used to purchase investments 210,316 193,189
Proceeds from "short sales" not closed 2,450 44,988
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Net cash provided by or (used in) investing activities (118,754) 74,699
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Payment for purchase of treasury stock -- (228,413)
Net cash provided by or (used in) financing activities -- (228,413)
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Net increase (decrease) in cash and cash equivalents 25,801 (31,158)
Cash and cash equivalents at beginning of year 18,439 67,783
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Cash and cash equivalents at end of period $ 44,240 $ 36,625
========= =========
See accompanying notes to financial statements
F-3
DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
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 30,2001, and December 31, 2000, the results of operations for the three and
six months ended June 30,2001 and 2000 and cash flows for the six months ended
June 30,2001 and 2000. The consolidated financial statements include the
accounts of the Company and its subsidiary. All significant intercompany
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, 2001 and December 31, 2000 being increased
approximately 110.19 % and 119.30 % 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, 2001
Type of security Cost Fair Value Unrealized holding Unrealized holding
---------------- ---- ---------- ------------------- ------------------
gains losses
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Equity $22,475,435 $47,270,540 $25,524,380 $729,275
Debt 14,859 900 -0- 13,959
----------- ----------- ----------- --------
Total $22,490,294 $47,271,440 $25,524,380 $743,248
=========== =========== =========== ========
December 31, 2000
Type of security Cost Fair Value Unrealized holding Unrealized holding
---------------- ---- ---------- ------------------- ------------------
gains losses
----- ------
Equity $22,202,412 $48,721,503 $27,425,484 $906,393
Debt 14,859 900 0 13,959
Total $22,217,271 $48,722,403 $27,425,484 $920,352
=========== =========== =========== ========
F-4
At June 30, 2001 the securities held by the Company had a market value of
$47,271,440 and a cost basis of $22,490,294 resulting in a net unrealized gain
of $ 24,781,146 or 110.19% of cost. At December 31, 2000 the securities held by
the Company had a market value of $48,722,403 and a cost basis of $22,217,271
resulting in a net unrealized gain of $26,505,132 or 119.30% of cost. At June
30, 1999 and December 31, 1998 marketable securities, primarily consisting of
preferred and common stocks of utility companies, are valued at fair value .
(2) LOANS PAYABLE
As at June 30, 2001 and December 31, 2000, the Company had loans
outstanding aggregating $1,000,000 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 7.1875%.
Short term margin debt due to brokers ,secured by the Companies marketable
securities, totaled $985,679 at June 30, 2001 and $775,363 at December 31, 2000
F-5