Washington, D.C. 20549
Form 10-QSB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1999
----------------
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _______________to_______________
Commission file number No: 0-26618
Jupiter Marine International Holdings, Inc.
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(Exact name of small business issuer as
specified in its charter)
Florida 65-0794113
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3391 S. E. 14th Avenue, Port Everglades, FL 33316
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(Address of principal executive offices)
954-523-8985
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
4,033,500 as of December 14, 1999
---------------------------------
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
Part 1. Financial Information (unaudited)
- ------ ---------------------
Item 1. Financial Statements
Balance Sheet.............................................. 3
Statement of Operations ................................... 4
Statement of Cash Flows ................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ....................... 6
Part II. Other Information.......................................... 8
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2
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 1999 and OCTOBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash $ 10,820 $ 3,304
Accounts receivable 88,107
Inventories 367,946 307,696
Prepaid expenses 36,510 13,444
----------- -----------
Total currenr assets 503,383 324,444
PROPERTY AND EQUIPMENT, at cost or allocated cost
Boat molds 917,404 910,096
Leasehold improvements 114,659 23,460
Machinery and equipment 98,750 39,700
Office equipment 9,985 7,000
----------- -----------
1,140,798 980,256
Less accumulated depreciation 351,636 145,441
----------- -----------
Total property and equipment 789,162 834,815
----------- -----------
OTHER ASSETS:
Deposits 24,000 --
----------- -----------
Total other assets 24,000 --
----------- -----------
Total assets $ 1,316,545 $ 1,159,259
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 219,239 $ 15,656
Payroll taxes payable -- 95,104
Accrued expenses 137,718 48,130
Customer deposits 187,717 162,737
Current portion of debt 50,000 50,000
Warranty reserve 51,877 49,084
Other liabilities -- 557,808
646,551 978,519
----------- -----------
DEBT, less current portion 350,000 295,000
----------- -----------
Total liabilities 996,551 1,273,519
STOCKHOLDER'S EQUITY:
Capital stock, 5,000,000 shares of $.001
par value preferred stock authorized,
500,000 shares designated as 10% cumulative
Series A preferred stock, $.001 par value
($328,000 aggregate liguidation preference),
328,000 shares issued and outstanding 328
Capital stock, 205,000 shares designated as
as 10% cumulative Series B preferred stock,
$.001 par value ($205,000 aggregate
liquidation preference), 205,000 shares
issued and outstanding 205 205
Capital stock, 50,000,000 shares of $.001
par value common stock authorized,
4,033,500 shares issued and outstanding 4,034 1,435
Additional paid-in capital 1,315,633 265,120
Accumulated deficit (1,000,206) (381,020)
----------- -----------
Total stockholder's equity 319,994 (114,260)
Total liabilities and stockholder's equity $ 1,316,545 $ 1,159,259
=========== ===========
</TABLE>
3
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED OCTOBER 31, 1999 and OCTOBER 31, 1998
<TABLE>
<CAPTION>
Quarter ended Quarter ended
October 31, 1999 October 31, 1998
<S> <C> <C>
SALES $ 1,212,490 $ --
COST OF SALES 1,048,070 --
----------- -----------
Gross income 164,420 --
GENERAL AND ADMINISTRATIVE EXPENSES, 223,638 115249
----------- -----------
including provision for depreciation of $52,440 and $49,761
Loss from operations (59,218) (115,249)
OTHER EXPENSE:
Interest expense 9,163 5,385
----------- -----------
Total other expense 9,163 5,385
Loss before provision (credit) for income taxes (68,381) (120,634)
PROVISION (CREDIT) FOR INCOME TAXES
Net Loss $ (68,381) $ (120,634)
=========== ===========
Earnings (loss) per common share - basic $ (0.01) $ (0.06)
=========== ===========
Earnings (loss) per common share - diluted $ (0.01) $ (0.06)
=========== ===========
</TABLE>
4
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTER ENDED OCTOBER 31, 1999 and OCTOBER 31, 1998
<TABLE>
<CAPTION>
Quarter ended Quarter ended
October 31, 1999 October 31, 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (68,381) $(120,634)
adjustments to reconcile net loss to
net cash (used) provided by operating activities:
Provision for depreciation 52,440 49,761
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (86,371) 411
Decrease in inventories 53,245 23,114
(Increase) decrease in prepaid expenses (24,761) 1,941
Increase (decrease) in accounts payable 72,758 (3,914)
Decrease (increase) in payroll tax payable (33,125) 48,005
Increase in accrued expenses 54,841 16,081
(Decrease) increase in customer deposits (60,669) 6,548
Increase in warranty reserve 1,324 --
Decrease in other liabilities -- (46,598)
--------- ---------
Net cash (used in) provided by
operating activities (38,699) (25,285)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Paymentd for purchase of property and equipment (9,832) (23,460)
--------- ---------
Net cash used in investing activities (9,832) (23,460)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: --
Proceeds from debt 50,000
Prrceeds from stock transactions (490)
--------- ---------
Net cash provided from financing activities -- 49,510
--------- ---------
Net decrease in cash (48,531) 765
CASH, Beginning of quarter 59,351 2,539
--------- ---------
CASH, End of quarter $ 10,820 $ 3,304
========= =========
</TABLE>
5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
Management's discussion and analysis contains various "forward-looking
statements" within the meaning of the Securities and Exchange Act of 1934. Such
statements consist of any statement other than a recitation of historical fact
and can be identified by the use of forward-looking terminology such as "may,"
"expect," "anticipate," "estimate" or "continue" or use of negative or other
variations or comparable terminology.
The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those contained in the forward-looking statements, that these forward-looking
statements are necessarily speculative, and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward-looking statements.
Comparison of the results of operations for the quarter ended October
31, 1999 to the quarter ended October 31, 1998 would not be meaningful as the
Company did commence normal business operations until May of 1999. The time from
August 1, 1998 until April 30, 1999 was devoted to reorganizing the Company,
moving its manufacturing facility from Jupiter, Florida to Port Everglades
Florida, updating the new manufacturing facility and producing boats that were
an assumed liability of Jupiter 31, Inc.
Plan of Operations
Management's operating plan for the fiscal year ending July 31, 2000 is
to be at a slight loss. Sales are expected to be about $5,339,000 with a gross
margin of approximately $1,080,000 (20.2%). Selling, general and administrative
expenses are projected to be approximately $1,100,000.
Net Sales
The Company had net sales of $1,212,490 for the quarter ended October
31, 1999, which is about equal to expectations. The Company continues to gain
the support of its dealers and its products are being well received by the
consumer. During this quarter, the 31 and 27 cuddy models were successfully
re-introduced to the market place. Orders for the Company's products continue to
remain at about these levels.
6
<PAGE>
Cost of Products Sold
The gross income for the quarter was $164,420, 13.5% of sales. The
percentage of net sales was below expectations due to production inefficiencies
related to the start up of two new models and the sales mix of lower gross
margin boats. Overhead spending was about equal to plan. A refinement of the
manufacturing process of some models has begun which will make them more
efficient to build. The Company has joined a "buying group" which will help
reduce the overall cost of some raw materials when it becomes fully operational.
Selling, General and Administrative Expenses
Selling, general and administrative expenses of $223,638, for the
quarter were about equal to management's expectations.
Liquidity and Capital Resources
The Company, since its inception, has experienced severe negative cash
flows and has met its cash requirements by issuing, through private placements,
its common and preferred stock. Additional funds were generated by borrowings of
$400,000. The Company anticipates that funds received from these sources, cash
generated from operations and additional financings of $1,000,000 should be
sufficient to satisfy the Company's contemplated cash requirements for at least
the next 12 months. After such time, the Company anticipates that cash generated
from operations will be sufficient to fund its operations, although there can be
no assurances that this will be the case.
The Company does not anticipate any significant purchase of equipment
in the near future. The number and level of employees at October 31, 1999 should
be adequate to fulfill the production schedule.
JMIH has never paid cash dividends on its Common Stock. JMIH presently
intends to retain future earnings, if any, to finance the expansion of its
business and does not anticipate that any cash dividends will be paid in the
foreseeable future. The future dividend policy will depend on JMIH's earnings,
capital requirements, expansion plans, financial condition and other relevant
factors.
Year 2000
Because of the start up nature of the Company, it has not developed,
internally, any information technology systems, but has utilized software
packages purchased from reputable third party vendors. These vendors have
assured us that their systems are Year 2000 compliant. We do not believe that
the aggregate cost for the Year 2000 issue on entities with which we transact
business, and there can be no assurance that the effect of the Year 2000 issue
on such entities will not have a material adverse effect on our business,
financial condition, or results of operations.
7
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-B
The following exhibits are filed as part of this report:
Exhibits:
(27.1) Financial Data Schedule
(b) Reports on Form 8-K
(i) None
8
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JUPITER MARINE INTERNATIONAL HOLDINGS,
INC.
Date: December 14, 1999 By: /s/ Carl Herndon
---------------------------------
Carl Herndon, CEO and President
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-END> OCT-31-2000
<CASH> 10,820
<SECURITIES> 0
<RECEIVABLES> 88,107
<ALLOWANCES> 0
<INVENTORY> 367,946
<CURRENT-ASSETS> 503,383
<PP&E> 1,140,798
<DEPRECIATION> 351,636
<TOTAL-ASSETS> 1,349,796
<CURRENT-LIABILITIES> 646,551
<BONDS> 350,000
533
0
<COMMON> 4,034
<OTHER-SE> 315,427
<TOTAL-LIABILITY-AND-EQUITY> 1,316,545
<SALES> 1,212,490
<TOTAL-REVENUES> 1,212,490
<CGS> 1,048,070
<TOTAL-COSTS> 1,048,070
<OTHER-EXPENSES> 223,638
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,163
<INCOME-PRETAX> (68,381)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
