FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from ______ to ______
Commission file number: 0-21327
BLOWOUT ENTERTAINMENT, INC.
---------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 87-0498950
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
7700 NE Ambassador Place
One Airport Center, 2nd Floor, Portland, Oregon 97220
- ----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(503) 331-2729
- --------------
Registrant's telephone number, including area code
---------------------------------------------------------
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 (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 ( )
As of March 31, 1997, the Registrant had 2,433,330 shares of Common Stock
($.01 par value) outstanding.
<PAGE>
BLOWOUT ENTERTAINMENT, INC.
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1. Financial Statements
Consolidated Balance Sheet
March 31, 1997 (Unaudited) and December 31, 1996 1
Consolidated Statement of Operations
Three months ended March 31, 1997 (Unaudited)
and March 31, 1996 (Unaudited) 2
Consolidated Statement of Cash Flows
Three months ended March 31, 1997 (Unaudited)
and March 31, 1996 (Unaudited) 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5 - 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
BLOWOUT ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,110,623 $ 1,379,018
Receivables 116,251 174,105
Prepaid expenses 175,202 118,605
Merchandise videocassette inventory 1,926,531 2,139,259
Other current assets 16,352 13,977
----------- -----------
Total current assets 3,344,959 3,824,964
Rental videocassette inventory, net 8,144,177 7,793,416
Equipment and leasehold improvements, net 4,287,491 4,494,933
Intangible assets, net 4,341,937 4,459,820
----------- -----------
Total assets $20,118,564 $20,573,133
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 3,105,385 $ 2,227,153
Accounts payable 3,389,255 4,342,395
Accrued liabilities 923,666 998,254
Accrued payroll 513,402 485,506
Current portion of long-term debt 471,148 414,451
----------- -----------
Total current liabilities 8,402,856 8,467,759
Deferred payables 3,286,150 3,263,575
Long-term debt 1,458,983 1,021,940
----------- -----------
Total liabilities 13,147,989 12,753,274
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.01 per
share;1,000,000 shares authorized;
no shares issued and outstanding - -
Common stock, par value $.01 per share;
10,000,000 shares authorized;
2,433,330 issued and outstanding 24,336 24,336
Additional paid-in capital 21,947,864 21,947,864
Accumulated deficit (15,001,625) (14,152,341)
----------- -----------
Total stockholders' equity 6,970,573 7,819,859
----------- -----------
Total liabilities and stockholders'
equity $20,118,564 $20,573,133
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
- 1 -
<PAGE>
BLOWOUT ENTERTAINMENT, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1997 1996
---------- -----------
<S> <C> <C>
REVENUE:
Rental revenue $5,762,248 $ 5,530,518
Product sales 1,836,408 1,351,074
---------- -----------
Total revenue 7,598,656 6,881,592
OPERATING COSTS AND EXPENSES:
Cost of sales 2,945,500 3,340,549
Operating expenses 4,489,119 3,898,187
Selling, general and administrative 811,109 1,158,182
---------- -----------
Total operating costs and expenses 8,245,728 8,396,918
---------- -----------
LOSS FROM OPERATIONS (647,072) (1,515,326)
---------- -----------
NONOPERATING (INCOME) EXPENSE:
Interest expense 214,078 99,452
Other, net (11,866) (21,229)
---------- -----------
Total nonoperating expense 202,212 78,223
---------- -----------
LOSS BEFORE INCOME TAXES (849,284) (1,593,549)
INCOME TAX PROVISION (BENEFIT) - -
---------- -----------
NET LOSS $(849,284) $(1,593,549)
========== ===========
NET LOSS PER SHARE $ (0.35) $ (0.87)
========== ===========
WEIGHTED AVERAGE COMMON SHARES 2,433,330 1,826,838
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
- 2 -
<PAGE>
BLOWOUT ENTERTAINMENT, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1997 1996
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (849,284) $(1,593,549)
Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:
Gain on disposal of assets (1,233) -
Amortization of videocassette
rental inventory 1,070,698 1,053,897
Depreciation 376,705 251,862
Amortization of intangible and other
assets 117,883 141,720
Changes in current assets and
liabilities:
Receivables 57,854 104,191
Merchandise videocassette inventory 212,728 (458,691)
Prepaids and other current assets (58,972) (153,470)
Accounts payable (953,140) 3,150,162
Accrued liabilities (74,588) (358,513)
Accrued payroll 27,896 258,601
---------- -----------
Net cash (used in) provided by
operating activities (73,453) 2,396,210
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of videocassette tapes (1,421,459) (2,306,129)
Capital expenditures (168,030) (751,443)
---------- -----------
Net cash used in investing
activities (1,589,489) (3,057,572)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Line of credit, net 878,232 -
Long-term debt and deferred payables 516,315 996,415
---------- -----------
Net cash provided by financing
activities 1,394,547 996,415
---------- -----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (268,395) 335,053
CASH AND CASH EQUIVALENTS, beginning of period 1,379,018 2,493,541
---------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,110,623 $ 2,828,594
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
- 3 -
<PAGE>
BLOWOUT ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: Basis of Presentation
The accompanying consolidated financial statements of BlowOut Entertainment,
Inc. and subsidiaries ("BlowOut" or the "Company") for the three month periods
ended March 31, 1997 and March 31, 1996 are unaudited and, in the opinion of
management, contain all adjustments that are of a normal and recurring nature
necessary to present fairly the financial position and results of operations
for such periods. The consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
contained in the Company's annual report on Form 10-K for the year ended
December 31, 1996 filed with the Securities and Exchange Commission. The
results of operations for the three month period ended March 31, 1997 are not
necessarily indicative of the results expected for the full year.
NOTE 2: Impact of Recent Accounting Developments
In March 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Standards number 128, "Earnings Per Share" (SFAS 128)
and Statement of Financials Standards number 129, "Disclosure of Information
About Capital Structure" (SFAS 129), which are effective for fiscal years
ending after December 31, 1997. The Company believes the implementation of
these statements will not have a material effect on its results of operations
or financial statement disclosures.
NOTE 3: Reclassifications
Certain amounts in the March 31, 1996 consolidated financial statements have
been reclassified to be consistent with the March 31, 1997 presentation. The
reclassifications had no effect on previously reported net loss or
stockholders' equity
- 4 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and Notes thereto appearing elsewhere in this report.
General
The Company operates retail "store within a store" video outlets located in
large mass merchant supercenters and grocery chain stores throughout the
United States. The Company was formed in 1992 as a subsidiary of Rentrak,
Inc., and opened its first store within a store in January 1993. At year end
1993 and 1994, the Company operated seven stores. During these periods, all
of the Company's stores were located in grocery stores.
During 1995, the Company experienced accelerated growth in retail stores and
revenue, primarily through (i) the acquisition by Rentrak on May 26, 1995, of
a controlling interest in Entertainment One, Inc. ("E-1"), a company whose
primary business was the operation of retail video outlets in Wal-Mart
SuperCenters, (ii) the acquisition by Rentrak on August 31, 1995, of certain
assets and assumption of certain liabilities which constituted SuperCenters
Entertainment, Inc.'s retail video business and consisted of retail video
outlets in Wal-Marts, Wal-Mart SuperCenters and Super Kmart Centers (the "SCE
Business") and (iii) new store openings in Wal-Mart SuperCenters and, to a
lesser extent, in Super Kmart Centers, Ralphs and Food 4 Less. During 1996,
and through March 31, 1997, the Company continued to expand the number of
stores it operates, and as of March 31, 1997, the Company operated 200 retail
video stores, including 159 stores located in Wal-Mart and Wal-Mart
SuperCenters, 29 stores located in Super Kmart Centers and 12 stores located
in Ralphs and Food 4 Less grocery stores.
Prior to November 25, 1996, Rentrak owned approximately 1,698,942 shares
(approximately 70%) of the issued and outstanding common stock, par value $.01
per share, of the Company (the "Common Stock"). On November 25, 1996,
pursuant to the terms of a Distribution Agreement between Rentrak and the
Company, Rentrak distributed approximately 1,457,343 shares of Common Stock to
the holders of Rentrak common stock in the form of a special dividend.
The Company's revenue consists of rental revenue and product sales. Rental
revenue includes rental of prerecorded videocassettes, video games and
computer games and programs on CD-ROMS. Product sales are derived from sale
of prerecorded videocassettes and excess rental inventory.
The Company acquires videocassettes using two types of supplier arrangements-
purchase and revenue sharing under the Rentrak Pay Per Transaction ("PPT")
System (see below). Videocassettes purchased for basic stock rental are stated
at cost and amortized over 36 months with a provision for a $6 salvage value.
New release videocassettes purchased are amortized using methods reflecting
the anticipated revenue stream to a $6 salvage value.
Since 1993, the Company has obtained a significant amount of its new release
titles through Rentrak under the PPT System. Under this system, Rentrak
provides to the Company videocassettes released by certain studios. The
Company pays a handling fee ($8 to $10) for each videocassette. During the
revenue sharing period, which does not exceed two years, the studio owns the
videocassette, and the rental revenue is shared by the studio, Rentrak and the
Company on a predetermined basis. The Company may also sell excess copies of
a video title and share the sale proceeds with Rentrak and the studio on a
predetermined basis. At the end of the revenue sharing period for a title,
the Company may purchase remaining copies of that title in the Company's
inventory, generally for less than $5 per videocassette. The handling fee per
videocassette is amortized on a straight-line basis over 36 months to a $6
salvage value. Revenue sharing payments are expensed when incurred.
As a result of the acquisitions of E-1 and the SCE business, the Company
recorded approximately $5.1 million in intangibles which are being amortized
over 10 to 15 years. The amortization expenses is expected to be
approximately $.5 million per year.
- 5 -
<PAGE>
Results of Operations
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31,
1996
The following table sets forth, for the periods indicated, (i) statement of
operations data expressed as a percentage of total revenue, (ii) the
percentage change from the prior period in this data and (iii) the number of
stores open at the end of each period.
<TABLE>
<CAPTION>
Percentage
Change in dollar
Three Months Ended March 31, Amount From
1997 1996 1996 to 1997
----- ----- ------------
<S> <C> <C> <C>
Rental revenue 75.8% 80.4% 4.2%
Product sales 24.2% 19.6% 35.9%
Total revenue 100.0% 100.0% 10.4%
Cost of rental revenue and product
sales 38.7% 48.5% -11.8%
Operating expenses 59.1% 56.6% 15.2%
Selling, general and administrative 10.7% 16.8% -30.0%
Loss from operations -8.5% -22.0% -57.3%
Number of stores open at end of
period 200 187 7.0%
</TABLE>
Revenue
Revenue for the three months of 1997 increased $717,064, or 10.4%, to
$7,598,656 from $6,881,592 for the three months of 1996. The increase
resulted from an increase in the number of stores in operation, from 187 at
March 31, 1996 to 200 at March 31, 1997. The increase in stores is the net
result of the opening of 49 stores between March 31, 1996 and March 31, 1997
offset by the closing of 36 under performing stores during this same period.
The following table sets forth the number of stores open for at least 12
months as of the end of the period and average rental and product sale revenue
for such stores for the last three years and the three month periods ended
March 31, 1996 and 1997.
<TABLE>
<CAPTION>
Three Months
Fiscal Year Ended December 31, Ended March 31,
1996 1995 1994 1997 1996
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
No. of stores open 12
months 130 3 4 151 78
Average rental revenue $129,440 $206,387 $114,640 $28,957 $35,952
Average product sales $ 39,442 $ 61,648 $ 17,505 $ 9,976 $ 8,494
Average total revenue $168,882 $268,035 $132,145 $37,818 $44,446
</TABLE>
Average rental revenue for the three month period ended March 31, 1997
decreased from the three month period ended March 31, 1996. The Company's
stores operate primarily in the South and Southeast regions of the country.
These regions experienced unseasonably warm weather for the first quarter of
1997 versus a harsh winter for the first quarter of 1996. The result was more
out-of-home activities by families in the 1997 period. In addition, the
theatrical re-release of the Star Wars Trilogy in the first quarter of 1997
also had a significant adverse impact on video rental activity as theatrical
entertainment drew a larger share of family entertainment dollars in the
period. Average product sales for the three month period ended March 31, 1997
increased from the three month period ended March 31, 1996. The Company has
pursued a more aggressive strategy in the marketing of sell-through
videocassette inventory to take advantage of the high traffic volume in most
of its locations and this emphasis has paid off in higher sales of
videocassettes.
- 6 -
<PAGE>
Operating Costs and Expenses
Cost of Sales
Cost of sales decreased from $3,340,549, or 48.5% of revenue for the three
months of 1996, to $2,945,500, or 38.7% of revenue, for the three months of
1997. The decrease in cost of sales in both absolute dollars and percentage
terms resulted from a decrease in product acquisition costs and efficiencies
created by the combination of the buying departments of the Company, E-1 and
SCE during 1996.
Operating Expenses
Operating expenses increased from $3,898,187, or 56.6% of revenue, for the
three months ended March 31, 1996 to $4,489,119, or 59.1% of revenue, for the
three months ended March 31, 1997. The increase in operating expenses in
absolute dollars is directly attributable to the increase in stores while the
increase in operating expenses as a percentage of sales is attributable to the
decrease in same store revenues for the three month period ended March 31,
1997. The primary components of operating expenses include compensation,
occupancy and fixed asset depreciation.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased from $1,158,182, or
16.8% of revenue, for the three months ended March 31, 1996, to $811,109, or
10.7% of revenue, for the three months ended March 31, 1997. The decrease in
selling, general and administrative expenses as a percentage of revenue was
primarily the result of efficiencies gained by combining the accounting and
administrative departments of the Company, E-1 and SCE.
Nonoperating Expenses, Net
Nonoperating expenses, net increased from $78,223, or 1% of revenue, for the
three months ended March 31, 1996, to $202,212, or 3% of revenue, for the
three months ended March 31, 1997. The increase is attributable to the
increase in interest bearing debt incurred by the Company to finance its
growth and operations.
Liquidity And Capital Resources
The Company's principal capital needs are for the opening of new stores. To
date, the Company has funded its expansion primarily through cash from
operations, advances from Rentrak, and, as more fully described below,
borrowings from and sales of stock to Directors, trade credit from suppliers
and financing arrangements with asset based lenders.
In March and April 1996, the Company sold $1.0 million in convertible
subordinated notes to each of Mr. Bill LeVine and Culture Convenience Club,
Ltd. ("CCC"), a Japanese corporation of which Mr. Muneaki Masuda is Chairman
(the "Notes"). Messrs. LeVine and Masuda are Directors of the Company. On
August 30, 1996, each of Mr. LeVine and CCC converted their Notes into 121,789
shares of BlowOut Common Stock. Also on August 30, 1996, CCC purchased from
the Company for $2.98 million a total of 362,931 shares of BlowOut Common
Stock at a purchase price of approximately $8.21 per share.
In August 1996, Phoenix Leasing, Inc. ("Phoenix") agreed to provide asset
based financing in an aggregate principal amount of $2.0 million for a five-
year term. Amounts outstanding under the Phoenix facility bear interest at a
fixed rate per annum equal to 14.525%. The proceeds of the Phoenix facility
are to be used to construct and open (including acquisition of inventory) new
Company stores in Wal-Mart Stores and Wal-Mart SuperCenters. The Phoenix
facility is secured by (i) a continuing guaranty of Rentrak (which Phoenix, in
its sole discretion, may release once at least 36 payments of amounts
- 7 -
<PAGE>
outstanding under the Phoenix Facility have been made or the Company's
financial condition is, in Phoenix's sole opinion, sufficient to justify such
release), and (ii) the Company's grant of a first continuing security interest
in all assets at each location to be financed with funds from the Phoenix
facility. Under the Phoenix facility, the Company cannot borrow more than
$100,000 per store location, with a minimum draw of $30,000 per store
location. As of April 30, 1997, the Company had $1,346,939 outstanding under
the Phoenix facility.
On September 12, 1996, Coast Business Credit ("CBC") entered into an agreement
with the Company to provide a revolving line of credit ("CBC Line of Credit")
in the maximum principal amount at one time outstanding of $5.0 million.
Under the CBC Line of Credit, the Company may only draw up to 80% of the
Orderly Liquidation Value (as defined by the CBC Line of Credit) of eligible
new and used videocassette inventory. As of March 31, 1997, 80% of the
Orderly Liquidation Value of the Company's inventory was approximately
$3,866,552. Advances under the CBC Line of Credit bear interest at a floating
rate per annum equal to the Bank of America Reference Rate plus 2.75% (11.25%
as of March 31, 1997). The term of the CBC Line of Credit is three years.
Rentrak has agreed, under certain circumstances in the event of a default
under the CBC Line of Credit, to repurchase BlowOut's videocassette inventory
at specified amounts. See "Rentrak Guarantee." As of April 30, 1997, the
Company had $2,949,764 outstanding under the CBC Line of Credit.
On July 22, 1996, the Company entered into an agreement with Star Video to
provide the Company with videocassettes for rental and sale and with video
games for sale ("Star Video Agreement"). Star Video paid off the balance of a
promissory note in the amount of $240,975 made by the Company to its previous
supplier. As a result, the Company executed a new promissory note to Star
Video, pursuant to which the Company is obligated to pay Star Video $120,487
on each of May 27, 1997 and 1998. Under the Star Video Agreement, Star Video
became the Company's exclusive supplier of new videocassettes for rental and
sale not purchased from Rentrak until the later of (i) July 21, 1997, or (ii)
repayment of such promissory note. This promissory note is secured by a
guaranty of Rentrak. In addition, to secure all amounts owed under the Star
Video Agreement, the Company has granted to Star Video a first priority
security interest in all of the Company's existing inventory, which security
interest Star Video will release, in exchange for a subordinated security
interest on such inventory upon (i) consummation of any secured financing, and
(ii) the Company being current in its payments to Star Video under the Star
Video Agreement at such time.
During the first three months of 1997, the Company opened eight stores,
primarily in Wal-Mart SuperCenters. The Company does not expect to open a
significant number of additional stores during the remainder of 1997. The
Company is aware of one other retailer, Blockbuster, which operates store
within a store video outlets in Wal-Mart stores.
Also, during the first three months of 1997, the Company closed nine stores
which did not meet certain performance levels (consisting of two stores in
Wal-Mart and seven stores in Kmart). The Company has notified Kmart of its
intention to close five additional underperforming stores by October 1997.
During the three months ended March 31, 1997, cash and cash equivalents
decreased by $268,395 primarily due to the purchase of $1,421,459 in
videocassette inventory and a $168,030 investment in capital items which was
partially offset by additional borrowings of $1,394,547. The Company had cash
and cash equivalents of $1,110,623 at March 31, 1997. The Company expects to
meet its short-term liquidity requirements through net cash provided by
operations (including the extension of trade credit), cash on hand and
advances under the Phoenix facility and CBC Line of Credit. Management
believes that these sources of cash will be sufficient to meet its operating
needs at least through February of 1998. There can be no assurance that funds
will be available in sufficient amounts to finance the acquisition or opening
of additional video outlets to sustain the Company's growth or that funds will
be available to satisfy the Company's liquidity needs beyond February 1998.
- 8 -
<PAGE>
At March 31, 1997, the Company had a working capital deficit of $5,057,897.
Videocassette rental inventories are treated as noncurrent assets under
generally accepted accounting principles because they are not assets which are
reasonably expected to be completely realized in cash or sold in the normal
business cycle. Although the rental of this inventory generates a substantial
portion of the Company's revenue, the classification of these assets as
noncurrent excludes them from the computation of working capital. The
acquisition cost of videocassette rental inventories, however, is reported as
a current liability until paid and, accordingly, included in the computation
of working capital. Consequently, the Company believes working capital is not
as significant a measure of financial condition for companies in the video
retail industry as it is for companies in other industries because of the
accounting treatment of videocassette rental inventory as a noncurrent asset.
The Company expects to operate with a working capital deficit as it expands
its store base.
Statements made in this document that present information that is not
historic, including among other things, anticipated financial performance,
sources and extent of liquidity and capital, business prospects, new products
and markets, and anticipated store openings are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements can be identified by the use of forward-looking terminology
such as "may", "will", "expect", "anticipate", "estimate" or "continue" or the
negative thereof or other variations thereon, or comparable terminology.
There are numerous risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking statements. Reference is
made to the Company's Registration Statement on Form 10 and the Company's
Annual Report on Form 10-K as filed with the Securities and Exchange
Commission for a discussion of such risk factors and uncertainties.
- 9 -
<PAGE>
PART II
Item 5. Other Information
On April 22, 1997, Thomas D. Berkompas, age 35, was named Chief Financial
Officer of the Company. He replaced Karl Wetzel who resigned to pursue other
opportunities. Mr. Berkompas, a certified public accountant, most recently
served as Vice President of Finance, Chief Financial Officer, Secretary and
Treasurer of Western Power & Equipment Corp. of Vancouver, Washington, a
corporation engaged in the sale, rental and servicing of light to heavy
construction equipment and related products. Prior to that, Mr. Berkompas was
a Senior Audit Manager with Price Waterhouse in San Jose, California and
Portland, Oregon. Mr. Berkompas earned his bachelor's degree in business
economics with an accounting emphasis from Calvin College in Grand Rapids,
Michigan in 1983.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
- 10 -
<PAGE>
SIGNATURE
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.
BLOWOUT ENTERTAINMENT, INC.
May 14, 1997
By: /s/Thomas D. Berkompas
------------------------------------
Thomas D. Berkompas
Vice President, Chief Accounting and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOUND ON PAGES 1 AND 3 OF THE COMPANY'S FORM
10-Q FOR THE YEAR-TO-DATE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,110,623
<SECURITIES> 0
<RECEIVABLES> 116,251
<ALLOWANCES> 0
<INVENTORY> 10,070,708
<CURRENT-ASSETS> 3,344,959
<PP&E> 6,021,181
<DEPRECIATION> 1,733,690
<TOTAL-ASSETS> 20,118,564
<CURRENT-LIABILITIES> 8,402,856
<BONDS> 4,745,133
0
0
<COMMON> 24,336
<OTHER-SE> 6,946,237
<TOTAL-LIABILITY-AND-EQUITY> 20,118,564
<SALES> 7,598,656
<TOTAL-REVENUES> 7,598,656
<CGS> 2,945,500
<TOTAL-COSTS> 8,245,728
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 214,078
<INCOME-PRETAX> (849,284)
<INCOME-TAX> 0
<INCOME-CONTINUING> (849,284)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (849,284)
<EPS-PRIMARY> (0.35)
<EPS-DILUTED> (0.35)
</TABLE>
