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FORM 10-QSB
(As last amended in Release No. 33-7505, effective January 1,1999, 63 F.R. 9632)
U. S. Securities and Exchange Commission
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 28, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _____________ to _________________
Commission file number _____________________________________
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
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(Issuer's telephone number)
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(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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes [ ] 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: AS OF NOVEMBER 30, 2000,
THERE WERE 4,078,500 OUTSTANDING SHARES OF $.001 PAR VALUE COMMON STOCK.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
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JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Consolidated Financial Statements
Balance Sheets as of July 28, 2000 and October 28,2000 .................. 3-4
Statements of Operations for the three months ended October 31, 1999
and October 28, 2000..................................................... 5
Statements of Cash Flows for the three months ended October 31, 1999
and October 28, 2000..................................................... 6
Notes to consolidated financial statements............................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on form 8-K......................................... 11
</TABLE>
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JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
July 29, 2000 and October 28, 2000
<TABLE>
<CAPTION>
JULY 29, OCTOBER 28,
2000 2000
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(AUDITED) (UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 372,552 $ 444,912
Accounts receivable 17,134 13,779
Inventory 619,153 1,014,563
Prepaid expenses 34,888 40,381
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Total current assets 1,043,727 1,513,635
Property and equipment:
Boat molds 1,057,437 1,077,757
Leasehold improvements 160,071 169,677
Machinery and equipment 148,759 153,601
Office furniture and equipment 10,112 22,284
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1,376,379 1,423,319
Less accumulated depreciation and amortization 485,917 542,017
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Property and equipment, net 890,462 881,302
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Deposits and other 35,525 34,674
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Total assets $1,969,714 $2,429,611
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
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<TABLE>
<CAPTION>
JULY 29, OCTOBER 28,
2000 2000
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(AUDITED) (UNAUDITED)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 351,538 311,240
Accrued expenses 86,605 101,898
Customer deposits 57,471 434,783
Warranty reserve 50,209 51,725
Curent portion of debt 223,200 243,000
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Total current liabilities 769,023 1,142,646
Long-term liabilities:
Accrued interest payable 54,444 73,328
Debt less current portion 350,000 350,000
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Total liabilities 1,173,467 1,565,974
Stockholders' equity
Convertible preferred stock, $.01 par value, 5,000,000 shares authorized
1,277,860 and 1,412,135 aggregate liquidation preference):
Series A, 328,000 shares issued and outstanding 328 328
Series B, 205,000 and 259,000 shares issued and outstanding 205 259
Series C, 744,860 and 825,13500 shares issued and outstanding 745 825
Common stock, $.001 par value, 50,000,000 shares authorized
4,078,500 issued and outstanding 4,079 4,079
Additional paid-in capital 2,141,356 2,189,072
Accumulated deficit (1,350,466) (1,330,926)
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Total stockholders' equity 796,247 863,637
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Total liabilities and stockholders' equity $ 1,969,714 $ 2,429,611
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</TABLE>
See accompanying notes to consolidated financial statements
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JUPITER MARINE INTERNATIONAL HOLDINGS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended October 31, 1999 and October 28, 2000
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 28, 2000
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<S> <C> <C>
Net sales $ 1,212,490 $ 1,789,950
Cost of sales 1,048,070 1,429,584
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Gross profit 164,420 360,366
Operating expenses:
Selling 35,013 33,889
Advertising 6,848 32,132
General and administrative 129,337 188,634
Depreciation 46,491 56,100
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Total operating expenses 217,689 310,755
Income (loss) from operations (53,269) 49,611
Other income (expenses):
Interest expense (9,163) (36,050)
Other -- 5,979
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Net income (loss) applicable to common stockholders $ (62,432) $ 19,540
=========== ===========
Weighted average number of shares of common
stock outstanding 4,078,500 4,078,500
Net income (loss) per common share - basic and diluted $ (0.02) $ 0.01
=========== ===========
</TABLE>
See accompanying notes to consloidated financial statements
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JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended October 31, 1999 and October 28, 2000
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 28, 2000
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(62,432) $ 19,540
adjustments to reconcile net income (loss) to
net cash (used) provided by operating activities:
Depreciation and amortization 46,491 56,100
Amortization of deemed discount on notes payable -- 19,800
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (86,371) 3,355
(Increase) decrease in inventories 53,245 (395,410)
(Increase) decrease in prepaid expenses (24,761) (5,493)
(Increase) decrease in other assets -- 851
Increase (decrease) in accounts payable 72,758 (40,298)
Decrease (increase) in payroll tax payable (33,125) --
Increase in accrued expenses 54,841 34,177
(Decrease) increase in customer deposits (60,669) 377,312
Increase (decrease) in warranty reserve 1,324 1,516
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Net cash (used in) provided by
operating activities (38,699) 71,450
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (9,832) (46,940)
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Net cash used in investing activities (9,832) (46,940)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of preferred stock -- 47,850
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Net cash provided by financing activities -- 47,850
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Net (decrease) increase in cash (48,531) 72,360
CASH, beginning of period 59,351 372,552
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CASH, end of period $ 10,820 $ 444,912
======== =========
</TABLE>
See accompanying notes to consolidated financial statements
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JUPITER MARINE INTERNATIONAL HOLDINGS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB and Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
accruals considered necessary for a fair presentation have been included.
Operating results for the three month period ended October 28, 2000 are not
necessarily indicative of the results that may be expected for the year ending
July 28, 2001. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on form
10-KSB for the year ended July 28, 2000.
In order to maintain consistence and comparability between periods presented
certain amounts have been reclassified from the previous reported financial
statements in order to conform to the financial statements presentation of the
current period.
The consolidated financial statements include Jupiter Marine International
Holdings, Inc., ("the Company") and its wholly-owned subsidiaries, Jupiter
Marine International, Inc. and Phoenix Yacht Corporation. All inter-company
balances and transactions have been eliminated.
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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.
NET SALES
The Company's net sales increased by $577,460 (or 47.6%) to $1,789,950
for the quarter ended October 28, 2000 as compared to $1,212,490 for the quarter
ended October 31, 1999. The sales increase is attributable, in part, to a
growing dealer confidence level in our boats. Additionally, our advertising
campaign, boating magazine articles and boat show participation has increased
the awareness of our product to the retail customer. The average selling price
per boat for the first quarter of this year was $105,291 as compared to $80,833
for the same quarter last year. This change is due to the sale of larger more
expensive boats in the quarter ended October 28, 2000. Dealer inventory remains
relatively low for this time of year and our order backlog is approximately
three months.
COST OF SALES
Cost of sales for the quarter ended October 28, 2000 was $1,429,584
resulting in $360,366 of gross margin or 20.1% of net sales. For the quarter
ended October 31, 1999 cost of sales was $1,048,070 and gross margin was
$164,420 or 13.6% of net sales. The improvement in gross margin dollars and 6.5%
increase in gross margin is due to improved manufacturing efficiencies and
reductions in material cost.
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses were $310,755 for the
first quarter ended October 28, 2000 compared to $217,689 for the quarter ended
October 31, 1999, an increase of $93,066, or 42.8%. This increase is due to
higher general and administrative expenses needed to support the increased sales
volume and an approximate $25,284 increase in advertising.
Depreciation and amortization expense increased $9,609 from $46,491 to
$56,100 or 21%, due primarily to additional depreciation and amortization on new
leaseholds and equipment purchased during the last three quarters of fiscal year
ended July 29, 2000 as a result of increased volume.
Interest expense increased by $26,887 because of the addition of short
term borrowings of $200,000 during July, 2000, and due to approximately $20,000
amortization of deemed discount during the first quarter ended October 28, 2000
for warrants issued in connection with notes payable.
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LIQUIDITY AND CAPITAL RESOURCES
The Company, from its inception through the end of the fiscal year
1999, had experienced negative cash flow and met its cash requirements by
issuing, through private placements, its common and preferred stock. The Company
anticipates that funds received from these sources and cash generated from
operations 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.
Inventories increased by $395,410 at October 28, 2000 compared to July
29, 2000 as a result of higher production, and the inclusion of two finished
boats not shipped until November 2000 due to a temporary scheduling conflict.
Accounts payable decreased by $40,298 during this same time period due to
increased liquidity allowing for faster payment of payables in relation to the
inventory build up. Advance payments of approximately $190,000 on the two
finished boats in inventory described above contributed to the $247,066 increase
in customer deposits. The remaining increase in customer deposits results from
the prepayment by dealers of boats in production.
During the quarter ended October 28, 2000, the Company sold through a
private placement, 55,000 shares of Series C Convertible Preferred Stock for $1
per share resulting in proceeds of $47,850, net of expenses.
The Company does not anticipate any significant purchase of equipment
in the near future. The number and level of employees at October 28, 2000 should
be adequate to fulfill the production schedule.
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PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Requlation 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
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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 12, 2000 By: /s/ Carl Herndon
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Carl Herndon, Director, CEO and President
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