SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 30, 1995 Commission File No. 0-6882
URT INDUSTRIES, INC.
- -------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Florida 59-1167907
- ------------------------------------------------ -------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER I.D. NO.)
ORGANIZATION)
3451 Executive Way, Miramar, Florida 33025
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (305) 432-4200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to the filing requirements for
at least 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.
At December 30, 1995, there were outstanding:
10,857,068 shares of Class A common stock
1,301,141 shares of Class B common stock
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
URT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 30, 1995 and April 1, 1995
December 31, April 1,
ASSETS 1995 1995
------ ---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,667,980 2,014,147
Marketable securities 2,660,059 2,649,534
Inventories 5,344,525 5,578,737
Current portion of due from officers/shareholders 28,470 28,470
Land held for sale - 300,000
Prepaid expenses and other current assets 355,520 368,205
Refundable income taxes 248,194 257,229
------------ ------------
Total current assets 11,304,748 11,196,322
Property and equipment, net 2,259,117 3,102,928
Due from officers/shareholders 118,418 139,550
Other assets 146,711 208,995
------------ ------------
$ 13,828,994 14,647,795
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations 62,726 110,028
Accounts payable 4,860,125 4,130,530
Accrued liabilities 1,669,274 1,787,628
----------- -----------
Total current liabilities 6,592,125 6,028,186
Long-term obligations, less current portion 918,180 929,654
Accrued rent 489,851 500,470
Minority interest in a subsidiary (note 2) 312,387 486,644
------------ -------------
8,312,543 7,944,954
------------ -------------
Shareholders' equity:
Common stock, Class A, $.01 par value. Authorized
20,000,000 shares; issued 13,764,588 shares; outstand-
ing 10,857,068 shares at December 31, 1995 and
11,222,918 shares at April 1, 1995 137,646 137,646
Common stock, Class B, $0.1 par value. Authorized
10,000,000 shares; issued 1,552,866 shares; outstand-
ing 1,301,141 at December 30, 1995 and 1,313,283 at
April 1, 1995 15,529 15,529
Capital in excess of par 5,542,152 5,542,152
Retained earnings 839,459 1,987,944
------------- -----------
6,534,786 7,683,271
Less stock held in treasury, at cost (note 6) (1,018,335) (980,430)
----------- ------------
5,516,451 6,702,841
Commitments and contingencies (note 5)
------------ -------------
$ 13,828,994 14,647,795
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
-1-
<PAGE>
<TABLE>
<CAPTION>
URT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
Nine months ended December 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
---- ----
<S> <C> <C>
Net sales $ 18,911,992 25,360,425
------------------ ----------
Costs and expenses:
Cost of sales 12,194,083 16,126,310
Selling, general and administrative 7,915,568 9,625,176
Loss on litigation - 431,456
Store closing costs 191,693 43,707
------------------ ----------
20,301,344 26,226,649
------------------ ----------
Loss from operations (1,389,352) (866,224)
------------------ ----------
Other (charges) credits:
Interest expense (84,875) (61,228)
Interest income 151,485 143,187
------------------ ----------
66,610 81,959
------------------ ----------
Loss before benefit for income taxes and
minority interest in net loss of
consolidated subsidiary (1,322,742) (784,265)
Benefit for income taxes (note 4) - (189,000)
------------------ ----------
Loss before minority interest in net loss of
consolidated subsidiary (1,322,742) (595,265)
Minority interest in net loss of consolidated subsidiary
(note 2) (174,257) (77,099)
------------------ ----------
Net loss (1,148,485) (518,166)
Retained earnings, beginning of period 1,987,944 3,747,029
------------------ ----------
Retained earnings, end of period $ 839,459 3,228,863
================== ==========
Loss per common share (note 3) $ (.01) (.04)
======= ====
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
URT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
Three months ended December 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
---- ----
<S> <C> <C>
Net sales $ 7,316,776 10,350,616
--------- ----------
Costs and expenses:
Cost of sales 4,812,032 6,780,453
Selling, general and administrative 2,452,532 3,192,644
Loss on litigation - 431,456
Store closing costs 191,693 43,707
----------- --------------
7,456,257 10,448,260
----------- --------------
Loss from operations (139,481) (97,644)
---------- -------------
Other (charges) credits:
Interest expense (27,458) (20,088)
Interest income 45,092 56,488
----------- -------------
17,634 36,400
------------ ------------
Loss before benefit for income taxes and minority
interest in net loss of consolidated subsidiary
(121,847) (61,244)
Provision for income taxes (note 4) - 27,000
-------- ------------
Loss before minority interest in net loss of
consolidated subsidiary (note 2) (121,847) (88,244)
Minority interest in net loss of consolidated subsidiary (18,707) (13,983)
------------ ------------
Net loss (103,140) (74,261)
Retained earnings, beginning of period 942,599 3,303,124
----------- -----------
Retained earnings, end of period $ 839,459 3,228,863
=========== ===========
Loss per common share $ (.09) (.01)
=== ===
</TABLE>
-3-
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
URT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended December 30, 1995 and December 31, 1994
(Unaudited)
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,148,485) (518,166)
---------- -----------
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 358,171 424,555
Minority interest in net loss of subsidiary (174,257) (77,099)
Loss on write-off of leasehold improvements 190,601 -
Changes in operating assets and liabilities:
(Increase) decrease in:
Marketable securities (10,525) (2,901,290)
Inventories 234,212 (560,701)
Prepaid expenses and other current assets 12,685 (16,262)
Other assets 62,284 99,387
Refundable income taxes 9,035 (215,600)
Increase (decrease) in:
Accounts payable 729,595 1,740,718
Accrued liabilities 5,031 626,922
Accrued rent (10,619) 21,341
Long-term obligations 51,252 -
----------- -----
Total adjustments 1,457,465 (858,029)
--------- ----------
Net cash provided by (used in) operating
activities 308,980 (1,376,195)
---------- ---------
Cash flows from investing activities:
Purchase of property and equipment (143,589) (902,866)
Repayment of due from officers/shareholders 21,132 19,517
Proceeds from sale of land, property and equipment 615,243 -
---------- ------
Net cash provided by (used in) investing
activities 492,786 (883,349)
---------- -----------
Cash flows from financing activities:
Repayment of note payable - (56,250)
Repayment of long-term debt (110,028) (120,495)
Acquisition of treasury stock (37,905) (44,923)
Acquisition of subsidiary stock - (13,222)
Issuance of common stock - 17,250
-------- ------------
Net cash used in financing activities (147,933) (217,640)
---------- ----------
Net increase (decrease) in cash 653,833 (2,477,184)
Cash, beginning of period 2,014,147 6,723,034
--------- ---------
Cash, ending of period $ 2,667,980 4,245,850
========= =========
Supplementary disclosures of cash flow information:
Cash paid during the period for:
Interest $ 84,875 61,228
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 30, 1995 and December 31, 1994
(Unaudited)
(1) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared without audit in accordance with the instructions to
Form 10-Q and, therefore, do not include all footnotes and information
necessary for a fair presentation of financial position, results of
operations, and cash flows in conformity with generally accepted
accounting principles. However, in the opinion of management, all
adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation have been made.
The results of operations for the nine months ended December 30, 1995,
are not necessarily indicative of the operating results to be expected
for the year ending March 30, 1996. The Company's business is seasonal.
Historically, approximately 30% of the Company's sales have occurred in
the third fiscal quarter.
The condensed consolidated financial statements include the accounts of
URT Industries, Inc. and its wholly owned nonoperating subsidiary,
whose business was discontinued in 1984, and its 87% owned subsidiary,
Peaches Entertainment Corporation. All significant intercompany
balances and transactions have been eliminated. Reference to the
Company encompasses any or all of the aforementioned entities.
Inventories, which consist of compact discs, tapes and accessories, are
stated at the lower of cost (principally average) or market.
(2) PETITION FOR RELIEF UNDER CHAPTER 11
On January 16, 1996 (the "Petition Date"), Peaches Entertainment
Corporation ("Peaches") filed a voluntary petition for relief under
Chapter 11 of Title 11 of the United States Code in the United States
Bankruptcy Court for the Southern District of Florida, seeking to
reorganize under Chapter 11. In Chapter 11, Peaches will continue to
manage its affairs and operate its business as debtor-in-possession
while it attempts to develop a reorganization plan that will
restructure and allow its emergence from Chapter 11. As
debtor-in-possession in Chapter 11, Peaches may not engage in
transactions outside of the ordinary course of business without
approval, after notice and hearing, of the Bankruptcy Court.
As of the Petition Date, payment of pre-petition liabilities of
unsecured creditors of Peaches, and pending litigation against Peaches
are stayed while Peaches continues its business operations as
debtor-in-possession.
As a result of the Chapter 11 filing on January 16, 1996, payments with
respect to the mortgage payable have become accelerated, not
withstanding the fact that the Company is continuing to make and will
continue to make all payments due under the mortgage in accordance with
the terms of the note. It is currently the Company's intent to
reinstate the mortgage on terms no less favorable to the Company than
the original mortgage note upon confirmation of the reorganization
plan.
-5-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
In accordance with the Bankruptcy Code, Peaches can seek court approval
for the rejection of pre-petition executory contracts, including real
property leases. Any such rejection may give rise to a pre-petition
claim for damages pursuant to the Bankruptcy Code. In connection with
the Chapter 11 proceeding, Peaches is seeking approval to reject 5
store leases consisting of 2 stores which were closed previous to
January 16, 1996 and 3 stores which were closed on January 16, 1996.
Peaches is also seeking rejection of an employment contract with a
former officer/director. Refer to Employment Agreement in Peaches'
April 1, 1995 Form 10-K. Other real property leases may be rejected in
the future subject to Bankruptcy Court approval. In connection with
Peaches' Chapter 11 case, the United States trustee has appointed a
committee for Peaches' general unsecured creditors.
As a result of the reorganization proceedings, Peaches may sell or
otherwise realize assets and liquidate or settle liabilities for
amounts other than those reflected in the consolidated financial
statements. Further, a plan of reorganization could materially change
the amounts currently recorded in the consolidated financial
statements. The consolidated financial statements do not give effect to
any adjustments to the carrying value of assets, or amounts and
classification of liabilities that might be necessary as a consequence
of these matters.
(3) NET LOSS PER COMMON SHARE
Net loss per common share was computed by dividing net loss by the
weighted average number of total common shares outstanding during the
periods.
(4) INCOME TAXES
The Company follows Statement of Financial Accounting Standard ("SFAS
109"), "Accounting for Income Taxes" and files a consolidated tax
return with its subsidiaries.
Based upon current operations of the Company and other factors, the
Company did not record an income tax benefit for the quarter ended
December 30, 1995, and does not anticipate doing so for the remainder
of the current fiscal year. The Company anticipates that pre-tax
losses, if any, which may be realized during the fiscal year ending
March 30, 1996 will not result in the recording of any additional tax
benefit by the Company. Further, any net operating loss carryforwards
prior to, and subsequent to the filing date, may be severely reduced by
the bankruptcy case. Under certain circumstances, the Company could
incur significant tax liabilities from the forgiveness of indebtedness
as a result of the bankruptcy case, the eventual outcome of which is
unknown at this time.
(5) COMMITMENTS AND CONTINGENCIES
The Company is a lessee under various operating leases. Several of them
contain escalation clauses principally tied to the Consumer Price
Index. Several of the leases contain renewal options. See note 2 for
discussion of Petition for Relief Under Chapter 11 with respect to 5
store leases.
-6-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
The aggregate minimum rental commitments provided for in such leases at
December 30, 1995 are as follows:
FISCAL YEAR ENDING AMOUNT
------------------ ------
1996 $ 451,391
1997 1,695,177
1998 1,561,568
1999 1,340,440
2000 1,181,966
Thereafter 5,799,015
-----------------
$ 12,029,557
=================
Rent expense under operating leases amounted to $1,463,344 and
$1,832,000 for the nine months ended December 30, 1995 and December
31, 1994.
The Company has been notified of a Florida sales and use tax audit for
the periods January 1990 through 1996 which respect to use tax and ad
valorem tax. As of the date of these consolidated financial statements,
no assessments have been made.
(6) TREASURY STOCK
Treasury stock consists of the following number of shares:
DECEMBER 30, 1995 APRIL 1, 1995
----------------- -------------
Class A common stock 2,907,520 2,541,670
Class B common stock 251,725 239,583
-7-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 30,
1995, COMPARED TO THE NINE MONTHS ENDED DECEMBER 31, 1994
INTRODUCTION
This discussion should be read in conjunction with the consolidated financial
statements, related notes and Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Annual Report on
Form 10-K for the year ended April 1, 1995.
PETITION FOR RELIEF UNDER CHAPTER 11
On January 16, 1996 (the "Petition Date"), Peaches Entertainment Corporation
filed a voluntary petition for relief under Chapter 11 of Title 11 of the United
States Code in the United States Bankruptcy Court for the Southern District of
Florida, seeking to reorganize under Chapter 11. In Chapter 11, Peaches will
continue to manage its affairs and operate its business as debtor-in-possession
while it attempts to develop a reorganization plan that will restructure and
allow its emergence from Chapter 11. As debtor-in-possession in Chapter 11,
Peaches may not engage in transactions outside the ordinary course of business
without approval, after notice and hearing, of the Bankruptcy Court.
As of the Petition Date, payment of pre-petition liabilities of unsecured
creditors of Peaches, and pending litigation against Peaches are stayed while
Peaches continues its business operations as debtor-in-possession.
As a result of the Chapter 11 filing on January 16, 1996, payments with respect
to the mortgage payable have become accelerated, not withstanding the fact that
the Company is continuing to make and will continue to make all payments due
under the mortgage in accordance with the terms of the note. It is currently the
Company's intent to reinstate the mortgage on terms no less favorable to the
Company than the original mortgage note upon confirmation of the reorganization
plan.
In accordance with the Bankruptcy Code, Peaches can seek court approval for the
rejection of pre-petition executory contracts, including real property leases.
Any such rejection may give rise to a pre-petition claim for damages pursuant to
the Bankruptcy Code. In connection with the Chapter 11 proceeding, Peaches is
seeking approval to reject 5 store leases consisting of 2 stores which were
closed previous to January 16, 1996 and 3 stores which were closed on January
16, 1996. Peaches is also seeking rejection of an employment contract with a
former officer/director. Refer to Employment Agreement in Peaches' April 1, 1995
Form 10-K. Other real property leases and certain executory contracts may be
rejected in the future subject to Bankruptcy Court approval.
As a result of the reorganization proceedings, Peaches may sell or otherwise
realize assets and liquidate or settle liabilities for amounts other than those
reflected in the financial statements. Further, a plan of reorganization could
materially change the amounts currently recorded in the consolidated financial
statements. The consolidated financial statements do not give effect to any
adjustments to the carrying value of assets, or amounts and classification of
liabilities that might be necessary as a consequence of these matters.
-8-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
Upon commencement of the filing, Peaches sought and received authorization from
the Bankruptcy Court to continue certain employee and customer related policies
which Peaches deemed necessary for its survival. These included its policies
related to employee wages, benefits and out-of-pocket business expenses. They
also included its customer benefit programs, including Peaches' gift certificate
program and its merchandise return program. To date, the Company does not
believe that it has experienced any material negative impact from its customers
or employees because of the filing.
Since the filing WEA and Polygram Distribution Group ("PGD"), two of the
Company's six major distributors (PGD, WEA, BMG, Sony, UNI and CEMA) are
shipping merchandise on a cash in advance basis to the Company. However, many of
the Company's vendors have requested changes in the trade credit terms offered
to the Company. Where previously the Company was paying for most vendor
shipments on an average of 60-75 days, it now finds that it is being required in
a majority of its shipments to make payment on a cash-in-advance basis. The
Company is currently involved in negotiations with its vendors to set up normal
terms for post-petition shipments and services. In addition, the Company is
negotiating with both major suppliers and non major suppliers to enter into
vendor agreements under 546(g) of the Bankruptcy Reform Act of 1994 which permit
returns of inventory for credit against pre-petition indebtedness in exchange
for the granting of normal terms on a post-petition basis which requires court
approval. As of February 13, 1996, the Company completed an agreement with PGD
which provides for a credit facility of up to $200,000. The agreement also
requires returns for inventory to PGD of up to $200,000 for credit against
pre-petition indebtedness. This agreement will require approval by the court as
set forth under 546(g) of the Bankruptcy Reform Act of 1994. Since the filing
the Company has had to purchase a majority of its inventory from alternative
sources which are more costly to the Company. Changes in credit terms have had a
material impact on the Company's liquidity, and there can be no assurance as to
the effect which any future changes in trade credit terms imposed by the
Company's vendors or change in vendors could have on the Company's liquidity or
its operations.
On January 16, 1996, the Company closed 3 stores. Total store count as of
February 13, 1996 is 13.
RESULTS OF OPERATIONS
Net sales for the nine months ended December 30, 1995 ("1995") decreased by
approximately 25.4% compared to the nine months ended December 31, 1994
("1994"). Such decrease is attributed to a decrease in comparable store sales
(19%), and a decrease in sales in those stores that opened or closed during 1995
versus 1994 (6.4%) principally due to decreased customer traffic caused by a
lack of new "hit" release music products and continued competitive and economic
pressures in certain of the Company's markets.
During the last few years, nontraditional music retailers such as appliance and
computer retailers and super bookstores have begun to sell prerecorded music and
video products. They have adopted policies of selling music products at near or
below wholesale cost as a means of attracting customers to sell other products.
During the current fiscal year, the effect of this competition was encountered
in some of our markets and it is anticipated it will be expanded to some other
markets. The Company has reduced prices which has resulted in lower sales and
lower gross profit. The Company believes that it will remain competitive due to
its locations, selection of product and superior customer service.
-9-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
The cost of sales for 1995 was lower than that for 1994 due to decrease net
sales. Cost of sales as a percentage of net sales has increased from 63.6% in
1994 to 64.5% in 1995 due to a reduction in retail pricing in an effort to meet
the increased competition as discussed above.
Selling, general and administrative (SG&A) expenses in 1995 decreased by
approximately 17.7% compared to 1994. Such decrease is primarily attributable to
a decrease in store expenses of stores that opened or closed during 1995 versus
1994 (8%), and a decrease in corporate expenses (3.8%). Comparable store expense
in 1995 decreased by approximately 5.9% compared to 1994. As a percentage of net
sales, SG&A expenses increased from 38% in 1994 to 41.9% in 1995 due to the
fixed nature of certain expenses and the decrease in net sales.
The Company incurred a net loss of approximately $1,148,485 in 1995 versus a net
loss of approximately $518,166 in 1994 due to the decrease in net sales and
gross profit as described above.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $4,712,623 at December 30, 1995 compared to
working capital of $5,168,136 at April 1, 1995 and a current ratio (the ratio of
total current assets to total current liabilities) of 1.71 to 1 at December 30,
1995 compared to a current ratio to 1.86 to 1 at April 1, 1995.
The Company's business is seasonal in nature, with the highest sales and
earnings occurring in the third fiscal quarter, which includes the Christmas
selling season. The Company believes that in the future its business will
continue to be impacted by various competitive and economic factors, including,
but not limited to, consumer tastes, new releases of music available for sale
and general economic tends impacting retailers and consumers. In addition, in
more recent years The Company's revenues have been influenced by increased
competition from other music and video specialty retail chains, as well as
discounters and mass merchandisers. Further, any possible store closures that
may be approved by the court during the bankruptcy case would impact future
revenues.
Management anticipates that cash generated from operations and cash equivalent
on hand will provide sufficient liquidity to maintain adequate working capital
for operations. Management would attempt to obtain financing for the opening of
any new stores during the next few years.
For a discussion of recent developments and uncertainties effecting the
Company's liquidity and capital resources, see note 2 to the condensed financial
statements and "Petition for Relief Under Chapter 11" above.
-10-
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(A) BANKRUPTCY PROCEEDINGS
On January 16, 1996 (the "Petition Date"), Peaches Entertainment Corporation
("Peaches") filed a voluntary petition for relief under Chapter 11 of Title 11
of the United States Code in the United States Bankruptcy Court for the Southern
District of Florida, seeking to reorganize under Chapter 11. In Chapter 11,
Peaches will continue to manage its affairs and operate its business as
debtor-in-possession while it attempts to develop a reorganization plan that
will restructure and allow its emergence from Chapter 11. As
debtor-in-possession in Chapter 11, Peaches may not engage in transactions
outside the ordinary course of business without approval, after notice and
hearing, of the Bankruptcy Court.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBIT NO. DESCRIPTION
----------- -----------
10.61 Termination of Management Fee Agreement, dated
January 1, 1996, between URT Industries, Inc. and
Peaches Entertainment Corporation.
10.62 Agreement letter between URT Industries, Inc. and
Peaches Entertainment Corporation, dated January 1,
1996, for services to be performed by Allan Wolk
and paid by Peaches Entertainment Corporation.
10.63 Agreement letter between Alan Wolk and URT Industries,
Inc. dated January 1, 1996 agreeing to perform services
for the Company.
27.0 Financial Data Schedule
(B) CURRENT REPORTS ON FORM 8-K
None.
-11-
<PAGE>
URT INDUSTRIES, INC. AND SUBSIDIARIES
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.
URT INDUSTRIES, INC.
----------------------------------
Registrant
Date: February 13, 1996 /s/ Allan Wolk
-------------------------------------------
Allan Wolk, Chairman of the Board
(PRINCIPAL EXECUTIVE OFFICER)
Date: February 13, 1996 /s/ Jason Wolk
-------------------------------------------
Jason Wolk, Vice President
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
-12-
EXHIBIT 10.61
January 1, 1996
It is the purpose of this letter to confirm the following agreement between
our two companies, URT Industries, Inc. ("URT") and Peaches Entertainment
Corp. ("PEC"):
1. The Management and Intercorporate Agreement dated as of March 29,
1993, as heretofore amended (the "Management Agreement"), between
URT and PEC terminated effective as of the close of business on
December 31, 1995 and has no further force or effect.
2. So long as URT and PEC file a consolidated Federal Tax Return:
(a) If such consolidated return shows a tax to be payable and if
both PEC and URT and its subsidiaries other that PEC ("URT
Consolidated") would have paid taxes if they had filed
separate returns, then the gross savings resulting from
filing a consolidated return ("Tax Saving") shall be
computed and each party shall pay a tax equal to the amount
which it would have paid if it had filed separately less its
pro-rata share of the Tax Saving.
(b) If such consolidated return shows a tax to be payable and if
only either URT Consolidated or PEC (but not both) would
have paid a tax if they had filed separate returns, then the
party which would have had to pay a tax if it had filed a
separate return shall pay the entire tax and, in addition,
pay to the other party the amount of the Tax Saving which it
realized as a result of the filing of the consolidated tax
return.
(c) If such consolidated return shows no tax to be payable but
if either PEC or URT consolidated would have had to pay a
tax if it had filed separately, then no tax shall be paid by
either party and the party which would have had to pay a tax
shall pay to the other party the amount of the Tax Saving
which it realized as a result of the filing of the
consolidated tax return.
(d) All state taxes shall be similarly adjusted.
(e) All determinations provided for hereunder shall be made by
the independent public accountants who are hired by the
parties to prepare the consolidated tax return and such
determinations by such accountants shall be final and
binding upon the parties.
<PAGE>
(f) URT will use its best efforts to timely prepare and file the
consolidated tax return for URT and subsidiaries and PEC
hereby agrees that it will cooperate with URT in the
preparation and filing of same. PEC shall provide to URT
promptly upon request, all financial and other information
required by URT for such purpose.
Please sign below to evidence our agreement.
Very truly yours,
URT INDUSTRIES, INC.
BY:
/s/ Brian Wolk
- ------------------------------------------------------------
Brian Wolk, Vice President
AGREED AND APPROVED:
PEACHES ENTERTAINMENT CORPORATION
BY:
/s/ Jason Wolk
- ------------------------------------------------------------
Jason Wolk, Vice President
EXHIBIT 10.62
January 1, 1996
It is the purpose of this letter agreement to confirm that for the period from
January 1, 1995 through March 31, 2000, URT Industries, inc. ("URT") will
provide to Peaches Entertainment Corporation ("PEC") the services of Allan Wolk
("Wolk"), as PEC's Chairman, President and Chief Executive Officer and that, in
consideration thereof, PEC agrees to:
(a) pay to Wolk during such period, so long as he continues to provide
such services, a salary at the rate of Five Hundred Thousand
Dollars ($500,000) per annum, payable monthly, on the first day of
each month;
(b) issue to Wolk annually a form W-2 with respect thereto; and
(c) make all other required filings with all governmental authorities
which relate thereto.
Please sign below to evidence our agreement.
Very truly yours,
URT INDUSTRIES, INC.
BY:
/s/ Brian Wolk
- -------------------------------------------------------------
Brian Wolk, Vice President
AGREED AND APPROVED:
PEACHES ENTERTAINMENT CORPORATION
BY:
/s/ Jason Wolk
- -------------------------------------------------------------
Jason Wolk, Vice President
EXHIBIT 10.63
January 1, 1996
I understand that URT is simultaneously entering into a letter agreement dated
January 1, 1996 (the "Intercorporate Agreement") with its subsidiary, Peaches
Entertainment Corporation ("PEC"), which provides that URT will make available
to PEC, for the balance of the Period of Employment described in my Employment
Agreement with URT dated October 1, 1994 (the "Employment Agreement"), my
services as PEC's Chairman, President and Chief Executive Officer and that PEC
will pay directly to me, as compensation for such services, the amount described
in the Intercorporate Agreement.
It is the purpose of this letter agreement to confirm that:
1. I agree to perform for PEC the services described in the
Intercorporate Agreement.
2. If, and to the extent that and so long as I receive from PEC the
compensation described in the Intercorporate Agreement, as it may
be increased or decreased from time to time, it shall be credited
against the base salary which is payable to me by URT under the
Employment Agreement.
3. URT may rely on this letter agreement in executing the
Intercorporate Agreement.
Please sign below to evidence the foregoing.
Sincerely yours,
BY:
/s/ Allan Wolk
- ----------------------------------------------------------
Allan Wolk
AGREED AND APPROVED:
URT INDUSTRIES, INC.
BY:
/s/ Brian Wolk
- ------------------------------------------------------------
Brian Wolk, Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTH PERIOD ENDED
DECEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-30-1996
<PERIOD-END> DEC-30-1995
<CASH> 2,667,980
<SECURITIES> 2,660,059
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 5,344,525
<CURRENT-ASSETS> 11,304,748
<PP&E> 5,262,126
<DEPRECIATION> 3,003,009
<TOTAL-ASSETS> 13,828,994
<CURRENT-LIABILITIES> 6,592,125
<BONDS> 0
0
0
<COMMON> 153,175
<OTHER-SE> 5,363,276
<TOTAL-LIABILITY-AND-EQUITY> 13,828,994
<SALES> 18,911,992
<TOTAL-REVENUES> 18,911,992
<CGS> 12,194,083
<TOTAL-COSTS> 12,194,083
<OTHER-EXPENSES> 8,007,261
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 84,875
<INCOME-PRETAX> (1,322,742)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,322,742)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,322,742)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
