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 SEPTEMBER 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 SEPTEMBER 30, 2001
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COMMON STOCK
PAR VALUE: $.O1 per share 4,664,909
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheet as at September 30, 2001 and
December 31, 2000 F-1
Consolidated Statements of Income for the Three and Nine
Months ended September 30,2001 and 2000 F-2
Consolidated Statement of Cash Flows for the Nine Months
ended September 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
DAXOR CORPORATION
FINANCIAL STATEMENTS
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DAXOR CORPORATION
CONSOLIDATED BALANCE SHEETS[UNAUDITED]
September 30, December 31,
2001 2000
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ASSETS
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CURRENT ASSETS
Cash $ 55,525 $ 18,439
Marketable Securities at Fair Value
September 30,2001 and December 31,
2000. (Notes 1 and 2) 42,379,751 48,722,403
Accounts receivable 185,949 107,927
Other current assets 383,183 363,758
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Total Current Assets 43,004,408 49,212,527
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements, furniture
and equipment 837,807 836,813
Laboratory equipment 278,087 278,087
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1,241,709 1,240,715
Less: Accumulated depreciation and amortization 954,215 919,414
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Net equipment and improvements 287,494 321,301
Other Assets 40,190 41,290
Total Assets $ 43,332,092 $ 49,575,118
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 37,547 $ 42,431
Loans payable (Notes 1 and 2) 1,968,281 1,775,363
Other Liabilities 10,866 73,741
Deferred Taxes (Note 1) 6,753,673 9,011,745
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Total Liabilities 8,770,367 10,903,280
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,664,909 September 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) 13,110,085 17,493,387
Retained earnings 16,413,841 16,140,652
Treasury stock (4,813,530) (4,813,530)
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Total Shareholders' Equity 34,561,725 38,671,838
Total Liabilities and Shareholders' Equity $ 43,332,092 $ 49,575,118
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See accompanying notes to cosolidated financial statements
F-1
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
REVENUES:
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Operating revenues $ 185,705 $ 167,211 $ 464,699 $ 529,208
Other revenues 44,180 15,267 143,504 65,499
Dividend income 452,536 456,104 1,391,701 1,395,649
Gains (losses) on sale
of securities 2,171 178,238 11,902 184,243
Total Revenues 684,592 816,820 2,011,806 2,174,599
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COSTS AND EXPENSES
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Operations of Laboratories 171,577 324,846 600,790 847,146
Selling, General, and
Administrative 344,594 355,842 1,015,196 1,057,555
Interest expense, net of
interest income 32,320 57,393 101,903 157,567
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Total Costs and Expenses 548,491 738,081 1,717,889 2,062,268
----------- ----------- ----------- -----------
Net Income (Loss) Before Income
Taxes 136,101 78,739 293,917 112,331
Provision for income taxes (2,864) 12,386 20,728 13,746
----------- ----------- ----------- -----------
Net Income (Loss) $ 138,965 $ 66,353 $ 273,189 $ 98,585
=========== =========== =========== ===========
Weighted Average Number of
Shares Outstanding 4,664,909 4,672,909 4,664,909 4,679,242
Net Income or (Loss) per Common
Equivalent Share $ 0.03 $ 0.01 $ 0.06 $ 0.02
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See accompanying notes to financial statements
F-2
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income or (loss) $ 273,189 $ 98,585
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Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation equipment and improvements 34,801 42,996
(Gain) loss on sale of investments (11,902) (184,243)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (78,022) (101,834)
(Increase) decrease in other current assets (19,425) 181,886
(Increase) decrease in other assets 1,100 3,000
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" (3,784) (78,603)
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Total adjustments (77,232) (136,798)
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Net cash provided by or (used in) operating
activities 195,957 (38,213)
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Payment for purchase of equipment and
improvements (994) (2,900)
Net cash provided or (used) in purchase
and sale of investments (354,404) 922,535
Net proceeds (repayments) of loans from
brokers used to purchase investments 192,918 (687,667)
Proceeds from "short sales" not closed 3,609 27,342
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Net cash provided by or (used in) investing
activities (158,871) 259,310
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Payment for purchase of treasury stock (269,813)
Net cash provided by or (used in) financing
activities -- (269,813)
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Net increase (decrease) in cash and cash
equivalents 37,086 (48,716)
Cash and cash equivalents at beginning of year 18,439 67,783
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Cash and cash equivalents at end of period $ 55,525 $ 19,067
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See accompanying notes to financial statements
F-3
DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 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
September 30,2001, and December 31, 2000, the results of operations for the
three and nine months ended September 30,2001 and 2000 and cash flows for the
nine months ended September 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 September 30, 2001 and December 31, 2000 being increased
approximately 88.22% 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 :
September 30, 2001
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Type of Cost Fair Value Unrealized Unrealized
------- ---- ---------- ---------- ----------
security holding gains holding losses
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Equity $22,501,134 $47,378,851 $20,805,341 $ 927,624
Debt 14,859 900 -0- 13,959
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Total $22,515,993 $42,379,751 $20,805,341 $ 941,583
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September 30, 2000
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Type of Cost Fair Value Unrealized Unrealized
------- ---- ---------- ---------- ----------
security holding gains holding 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
=========== =========== =========== ===========
At September 30, 2001 the securities held by the Company had a market value
of $ 42,379,751 and a cost basis of $ 22,515,993 resulting in a net unrealized
gain of $ 19,863,758 or 88.22% 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 September 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 September 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 $968,281 at September 30, 2001 and $775,363 at December 31,
2000.
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 September 30, 2001 as compared with three months ended
September 30, 2000.
For the three months ended September 30, 2001 total revenues were $684,592
down from $816,820 in 2000. Operating revenues were $185,705 in 2001 up from
$167,211 in 2000. Dividend income was $452,536 with a net interest expense of
$32,320 in 2001, as compared to dividend income of $456,104 with a net interest
expense of $57,393 in 2000. In 2001, the Company had a net income of $136,101
before income taxes versus a net income of $78,739 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.
Nine months ended September 30, 2001 as compared with nine months ended
September 30, 2000.
For the nine months ended September 30,2001, total revenues were $2,011,806
down from $2,174,599 in 2000. Operating revenues were $464,699 down from
$529,208 in 2000. Dividend income was $1,391,701 with a net interest expense of
$101,903, as compared to the dividend income of $1,395,649 with a net interest
expense of $157,567 in 2000. In 2000, the Company had $184,243 in capital gains
vs. $11,902 in 2001. In 2001, the Company had a net income of $293,917 before
income taxes versus $112,331 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 September 30, 2001 the Company had total assets of $43,332,092 and total
liabilities of $8,770,367 with shareholders' equity of $34,561,725. The Company
has a net pre-taxed unrealized gain of $19,863,758 and $13,110,085 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 $42,379,751 with short-term
loans of $1,968,281 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.