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 MARCH 31, 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 MARCH 31, 2002
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COMMON STOCK
PAR VALUE: $.O1 per share 4,664,909
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
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Balance Sheets as at March 31, 2002 and
December 31, 2001 F-1
Consolidated Statement of Income
For the Three Months ended March 31,2002 and 2001 F-2
Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 2002 and 2001 F-3
Notes to Financial Statements F-4-5
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
ITEM 2. RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
DAXOR CORPORATION
FIANNCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
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ASSETS
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CURRENT ASSETS
Cash $ 300,850 $ 431,949
Marketable Securities at Fair Value
March 31,2002 and December 31,
2001. (Notes 1 and 2) 45,231,112 42,271,902
Accounts receivable 177,099 174,242
Other current assets 315,825 312,310
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Total Current Assets 46,024,886 43,190,403
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements,furniture
and equipment 845,195 837,807
Laboratory equipment 290,104 288,087
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1,261,114 1,251,709
Less: Accumulated depreciation and amortization 989,090 975,593
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Net equipment and improvements 272,024 276,116
Other Assets 73,051 73,634
Total Assets $ 46,369,961 $ 43,540,153
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LIABILITIES AND SHAREHOLDER' EQUITY
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CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 78,262 $ 52,855
Loans payable (Notes 1 and 2) 719,485 1,000,000
Other Liabilities 51,472 22,885
Deferred Taxes (Note 1) 8,163,523 7,135,446
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Total Liabilities 9,012,742 8,211,186
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,664,909 March 31,
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) 15,846,839 13,851,161
Retained earnings 16,472,581 16,440,007
Treasury Stock (4,813,530) (4,813,530)
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Total Shareholders' Equity 37,357,219 35,328,967
Total Liabilities and Shareholders' Equity $ 46,369,961 $ 43,540,153
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See accompanying notes to consolidated financial statements
(F-1)
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31,
2002 2001
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Revenues
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Operating revenues $ 193,063 $ 140,077
Other revenues $ 11,986 $ 42,334
Dividend income 455,986 473,919
Gains/(losses) on sale of securities 803 (8,704)
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Total Revenues 661,838 647,626
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Costs and Expenses
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Operations of Laboratories & Costs of Production 202,748 220,240
Selling, General, and Administrative 399,198 333,197
Interest expense, net of interest income 11,572 34,409
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Total Costs and Expenses 613,518 587,846
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Net Income Before Income Taxes 48,320 59,780
Provision for income taxes 15,746 19,269
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Net Income $ 32,574 $ 40,511
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Weighted Average Number of Shares Outstanding 4,664,909 4,664,909
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Net Income per Common Equivalent Share $ 0.01 $ 0.01
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See accompanying notes to consolidated financial statements
F-2
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31,
2002 2001
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Cash flows from operating activities:
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Net Income or (loss) $ 32,574 $ 40,511
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation & Amortization 14,080 11,519
(Gain) loss on sale of investments (803) 8,704
Change in assets and liabilities:
(Increase) decrease in accounts receivable (2,857) (16,881)
(Increase) decrease in other current assets (3,515) 33,523
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" 26,750 47,434
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Total adjustments 33,655 84,299
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Net cash provided by operating activities 66,229 124,810
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Cash flows from investing activities:
Payment for purchase of equipment and
improvements (9,405) (202)
Net cash provided or (used) in purchase and
sale of investments 49,220 (277,510)
Net proceeds (repayments) of loans from brokers
used to purchase investments 19,485 110,374
Proceeds from "short sales" not closed 43,372 81,101
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Net cash provided by/ (used in) investing activities 102,672 (86,237)
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Cash flows from financing activities
Repayment of bank loan (300,000) 0
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Net cash provided by/ (used in) financing activities (300,000) 0
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Net increase (decrease) in cash and cash equivalents (131,099) 38,573
Cash and cash equivalents at beginning of year 431,949 18,439
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Cash and cash equivalents at end of period $ 300,850 $ 57,012
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See accompanying notes to consolidated financial statements
F-3
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2002 AND 2001
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March
31,2002, and December 31, 2001, the results of operations for the three months
ended March 31,2002 and 2001 and cash flows for the three months ended March
31,2002 and 2001.
(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 March 31, 2002 and December 31, 2001 being
increased approximately 113.15 % 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 :
March 31, 2002
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
-------- ----------- ----------- ------------- --------------
Equity $21,205,891 $45,230,212 $24,134,750 $ 110,429
Debt 14,859 900 13,959
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Total $21,220,750 $45,231,112 $24,134,750 $ 124,388
=========== =========== =========== ===========
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
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Total $21,285,295 $42,271,902 $21,182,144 $ 195,537
=========== =========== =========== ===========
At March 31, 2002 the securities held by the Company had a market value of
$45,231,112 and a cost basis of $21,220,750 resulting in a net unrealized gain
of $24,010,362 or 113.15% 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 March 31, 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 March 31, 2002 and December 31, 2001, the Company had loans
outstanding aggregating $700,000 and $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 5.7%.
Short term margin debt due to brokers, secured by the Companies marketable
securities, totaled $19,485 at March 31, 2002 and $-0- at December 31, 2001.
F-5
Part II OTHER INFORMATION
Item 1.
Legal Proceedings
There are no current legal proceedings. The Company is not aware of any pending
legal proceedings.
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 2.
RESULTS OF OPERATIONS
Three months ended March 31, 2002 as compared with three months ended March 31,
2001.
For the three months ended March 31, 2002, total revenues were $661,838 up
from $647,626 in 2001. Increased kit sales were a factor resulting in increased
revenues. There were Capital gains in 2002 of $803 vs. a loss of ($8,704) in
2001. Operating revenues were $193,063 in 2002 up from $140,077 in 2001. The
Company is now focusing on a lease or loaner plan for its Blood Volume Analyzer
which results in less immediate income from instrument sales, but greater income
from the kits. The Company may elect to directly lease its own equipment. Under
such plans, income would be recorded over the term of the lease. If equipment
was sold to a leasing company, then it would be recorded as a direct sale.
Dividend income in 2002 was $455,986 with a net interest expense of $11,572, as
compared to dividend income of $473,919 with a net interest expense of $34,409
in 2001. In 2002, the Company had a net profit before income taxes of $48,320
versus $59,780 in 2001. The Company anticipates that it's sales of instruments
and kits will become the major source of income for the Company. The Company is
currently initiating distribution networks but no income has yet been received
from sales by non-Company personnel.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002 the Company had total assets of $46,369,961 and total
liabilities of $9,012,742 with shareholders' equity of $37,357,219. The Company
has a net pre-taxed unrealized gain of $24,010,362 and $ 15,846,839 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 $45,231,112 with short-term
loans of $719,485 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. The Company is evaluating the possibility of
acquiring additional capital which would enable it to undertake a more rapid
marketing program nationally as well as internationally. The Company has an
instrument loaner plan which requires use of the Company's reserves. Such plans,
however, have the potential for an ultimate higher return for the Company. The
Company will arrange some 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
financial reserves primarily for developing and marketing the Blood Volume
Analyzer, but will begin to develop blood banking programs in conjunction with
hospitals.
The Company did not file any reports on form 8-K during the first three
months of 2002.
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.
DAXOR CORPORATION
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(Registrant)
DATE: May 14,2002
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JOSEPH FELDSCHUH, M.D.
President
DATE: May 14,2002
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GARY FISCHMAN, Ph.D.
Vice President
DATE: May 14,2002
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OCTAVIA ATANASIU
Treasurer
DATE: May 14,2002
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DIANE MEEGAN
Secretary