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, 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 ----------------------------------------------------------------------- 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 ================================================================================ 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 ------------ ------------ 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 ------------ ------------ 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: ------------------------------------------------------------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------------------------------------------------------------ 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 ================================================================================ DAXOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, JUNE 30, 2001 2000 ---- ---- ------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES ------------------------------------------------------ Net income or (loss) $ 134,224 $ 32,232 --------- --------- 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) --------- --------- Total adjustments 10,331 90,324 --------- --------- Net cash provided by or (used in) operating activities 144,555 122,556 --------- --------- ------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: ------------------------------------------------------ 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 --------- --------- Net cash provided by or (used in) investing activities (118,754) 74,699 --------- --------- ------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: ------------------------------------------------------ Payment for purchase of treasury stock -- (228,413) Net cash provided by or (used in) financing activities -- (228,413) --------- --------- Net increase (decrease) in cash and cash equivalents 25,801 (31,158) Cash and cash equivalents at beginning of year 18,439 67,783 --------- --------- 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 ----- ------ 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