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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 000-28255
PICK-UPS PLUS, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 31-12440524
- ------------------------------- ---------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
3532 IRWIN SIMPSON ROAD, MASON, OHIO 45040
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(Address of Principal Executive Offices)
(513) 398-4344
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Issuer's Telephone Number
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 [ ].
There were 6,898,100 shares of the registrant's common stock
outstanding as of March 31, 2000.
Transitional Small Business Disclosure Format Yes [ ] No [X]
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PICK-UPS PLUS, INC.
- INDEX -
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PAGE(S)
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PART I Financial Information
Item 1 - Financial Statements
Condensed Balance Sheets - March 31, 2000 (unaudited) and December 31, 1999 3
Condensed Statements of Operations - Three-months Ended March 31, 2000
and 1999 (unaudited) 4
Condensed Statements of Cash Flows - Three-months Ended March 31,
2000 and 1999 (unaudited) 5
Notes to Interim Condensed Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations 7
PART II Other Information 9
SIGNATURES 10
EXHIBITS:
Exhibit 15 - Review Report On Interim Condensed Financial Statements
Exhibit 27 - Financial Data Schedule
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PICK-UPS PLUS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
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(UNAUDITED)
<S> <C> <C>
- ASSETS -
CURRENT ASSETS:
Cash $ 14,369 $ 11,188
Accounts receivable - net of allowance for doubtful accounts of $10,398 and
$3,344 for 2000 and 1999, respectively 82,116 7,052
Inventories 30,960 33,156
Prepaid expenses and other current assets 2,800 2,800
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TOTAL CURRENT ASSETS 130,245 54,196
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FIXED ASSETS 23,626 25,365
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OTHER ASSETS:
Franchise development costs - net 10,500 12,600
Other assets 1,905 1,905
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12,405 14,505
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$ 166,276 $ 94,066
============ ==========
- LIABILITIES AND SHAREHOLDERS' DEFICIT -
CURRENT LIABILITIES:
Note payable - bank $ 93,100 $ 93,100
Accounts payable 60,834 58,940
Accrued expenses 17,925 13,375
Loans payable - current 28,263 28,221
Capitalized lease payable - current 5,465 4,971
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TOTAL CURRENT LIABILITIES 205,587 198,607
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NON-CURRENT LIABILITIES:
Loans payable 21,980 22,812
Capitalized leases 3,401 4,623
Loans payable - officer 24,781 24,781
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50,162 52,216
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT:
Preferred stock, $1 par value; 5,000,000 shares authorized; none issued -- --
Common stock, $.001 par value; 50,000,000 shares authorized, 6,898,100 and
6,758,100 shares issued for 2000 and 1999, respectively 6,898 6,758
Additional paid-in capital 310,115 197,728
Accumulated deficit (406,486) (361,243)
------------ ----------
(89,473) (156,757)
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$ 166,276 $ 94,066
============ ==========
</TABLE>
See accompanying notes.
3
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PICK-UPS PLUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
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2000 1999
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REVENUES:
Retail sales $ 196,365 $ 205,971
Royalties 24,760 15,755
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221,125 221,726
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COSTS AND EXPENSES (INCOME):
Cost of sales 147,270 131,328
Selling, general and administrative expenses 184,595 138,456
Other income (70,578) --
Interest expense 5,081 --
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266,368 269,784
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LOSS BEFORE PROVISION (CREDIT) FOR INCOME TAXES (45,243) (48,058)
Provision (credit) for income taxes -- --
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NET LOSS $ (45,243) $ (48,058)
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BASIC LOSS PER COMMON SHARE $ (.01) $ (.01)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,779,656 6,607,825
=========== ===========
</TABLE>
See accompanying notes.
4
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PICK-UPS PLUS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
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2000 1999
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (45,243) $ (48,058)
Adjustments to reconcile net loss to net cash (utilized) by operating
activities:
Depreciation and amortization 3,839 250
Bad debt provision 7,054 --
Imputed interest on shareholder loan 527 --
Changes in assets and liabilities:
(Increase) in accounts receivable (82,118) (13,538)
Decrease (increase) in inventory 2,196 (23,247)
Increase in accounts payable 1,894 23,790
Increase in accrued expenses 4,550 2,679
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NET CASH (UTILIZED) BY OPERATING ACTIVITIES (107,301) (58,124)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures -- (550)
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NET CASH (UTILIZED) BY INVESTING ACTIVITIES -- (550)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt -- 20,000
Principal payments of long-term debt (790) --
Payments of capitalized leases (728) --
Proceeds from sale of equity units 112,000 9,100
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NET CASH PROVIDED BY FINANCING ACTIVITIES 110,482 29,100
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NET INCREASE (DECREASE) IN CASH EQUIVALENTS 3,181 (29,574)
Cash and cash equivalents, beginning of year 11,188 37,113
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 14,369 $ 7,539
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
(i) Cash paid during the year:
Interest $ 2,604 --
Taxes -- --
</TABLE>
See accompanying notes.
5
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PICK-UPS PLUS, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 1 - DESCRIPTION OF COMPANY:
Pick-Ups Plus, Inc., the Company, was incorporated in Delaware
in 1993. The Company operates and franchises retail automotive
parts and accessories stores catering to the light truck
market, which is considered to be the fastest growing segment
of the motor vehicle market in the United States. There are
currently eight franchised locations in operation and one
Company owned-store. Subject to the availability of financing,
the Company intends to pursue an aggressive expansion strategy
by opening additional company-owned stores and franchise
locations.
The accounting policies followed by the Company are set forth
in Note 2 to the Company's annual report filed on Form 10-KSB
for the year ended December 31, 1999. Specific reference is
made to this report for a description of the Company's
securities and the notes to the financial statements included
therein.
In the opinion of management, the accompanying unaudited
interim condensed financial statements of Pick-Ups Plus, Inc.,
contain all adjustments necessary to present fairly the
Company's financial position as of March 31, 2000 and the
results of its operations and cash flows for the three-month
periods ended March 31, 2000 and 1999. Our auditors have
reviewed the financial statements as of and for the three-month
period ended March 31, 2000.
The results of operations for the three-month periods ended
March 31, 2000 and 1999 are not necessarily indicative of the
results to be expected for the full year.
NOTE 2 - CAPITAL STOCK AND EQUIVALENTS:
In March 2000, the Company received $112,000 in net proceeds
and issued 140,000 shares of common stock as of result of the
exercise of common stock purchase warrants.
NOTE 3 - COMMITMENTS:
On March 28, 2000, the Company received a letter of commitment
from a bank to provide a new line of credit in the amount of
$300,000. Borrowings under this line will bear interest at an
annual rate equal to the bank's prime lending rate + 1%, and
are collateralized by all of the Company's assets as well as
144,000 shares of the Company's common stock which are held by
its President. The principal payment on this credit line is due
in June 2001. As of March 31, 2000, there were no borrowings
under this new credit line.
NOTE 4 - SUBSEQUENT EVENT - ACQUISITION:
On May 1, 2000, the Company completed the acquisition of the
operations of a franchisee. The purchase price of $285,000, was
offset by royalties owed to the Company which are being
recovered from this franchisee, aggregating approximately
$71,000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION:
Pick-Ups Plus, Inc., formed in 1993, is a franchisor,
wholesaler, retailer and installer of accessories for trucks
and sports utility vehicles. We currently have 9 franchised
stores which are located in Kentucky, Indiana, Iowa, Oregon,
Pennsylvania, Idaho and California and one Company-owned store
in Ohio, which was acquired on September 30, 1998, as the
prototype store. This acquisition was recorded under the
purchase method of accounting.
The financial information presented herein includes: (i)
Condensed Balance Sheets as of March 31, 2000 and December 31,
1999; (ii) Condensed Statements of Operations for the
three-month periods ended March 31, 2000 and 1999 and (iii)
Condensed Statements of Cash Flows for the three-month periods
ended March 31, 2000 and 1999. Information as of and for the
three-month period ended March 31, 2000, has been reviewed by
our auditors.
RESULTS OF OPERATIONS:
Revenues for the three-month period ended March 31, 2000
consist primarily of net sales generated by the retail store.
Revenues are also derived from initial franchise fees, of
which there were none during the periods being reported upon,
and continuing royalty fees. Total revenues for the
three-month period ended March 31, 2000 remained flat when
compared to the three-month period ended March 31, 1999.
Costs of sales, as a percentage of retail sales was 75% for
the three-month period ended March 31, 2000 as compared to
63.8% for the same period of the prior year. This is a result
of the product mix of items sold in the first quarter of the
current year, which yielded lower gross profit margins than
those items sold during the same period of the prior year.
Selling, general and administrative expenses increased by
$46,000 when comparing 2000 to 1999, primarily due to the
following: (i) the continuation in 2000 of an aggressive
advertising program to help accelerate the name recognition of
Pick-Ups Plus, Inc. as well as the franchise opportunity which
resulted in increased expenses of approximately $10,000; and
(ii) professional fees increased by approximately $30,000, due
primarily to expenses relating to the preparation for an
initial public offering of our common stock.
The Company was also able to recover royalties receivable,
which were written off in prior years, aggregating $70,578.
This recovery was the result of an acquisition agreement
entered into whereby the Company acquired the operations of a
franchisee. This acquisition was consummated effective May 1,
2000. See Note 4 to Notes to Interim Condensed Financial
Statements.
Interest expense of $5,000 recorded in 2000 is a result of the
borrowings under the note payable to a bank as well as the
result of equipment purchased and financed through loans as
opposed to zero interest costs in the prior year.
As a result of the above, the Company reflected a net loss of
$45,243 or $.01 per share in 2000, as compared to a net loss
of $48,058 ($.01 per share) for 1999.
7
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LIQUIDITY AND CAPITAL RESOURCES:
As of March 31, 2000, current liabilities exceeded current
assets by approximately $75,000. As of December 31, 1999,
current liabilities exceeded current assets by approximately
$144,000.
The Company used $107,000 in cash to support operating needs
in 2000 as compared to $58,000 in 1999. This use of cash was
offset by the proceeds from the sale of common stock pursuant
to exercise of purchase warrants in 2000 and a short-term loan
received from our bank in 1999 through our line of credit. The
Company expects that the exercise of additional common stock
purchase warrants still outstanding will generate additional
net proceeds of approximately $650,000 before the end of the
second calendar quarter of 2000. Also in March 2000, the
Company received a commitment from a bank to provide a new
line of credit in the amount of $300,000. Borrowings under
this line, which don't become due and payable until June 2001,
bear interest at an annual rate equal to 1% in excess of the
bank's prime lending rate. We have not utilized this line of
credit as of March 31, 2000.
The Company is not aware of any material trend, event or
capital commitment which would potentially adversely affect
liquidity.
The Company believes that its cash flows from operations,
funds from the exercise of warrants and funds available from
its new line of credit, will be sufficient for at least the
next twelve months.
RISKS ASSOCIATED WITH YEAR 2000 PROBLEM:
Computer systems and software used by many companies were
required to be upgraded to accept four digit entries to
distinguish 21st century dates from 20th century dates. Like
most other companies using computers in their operations, we
ensured that our operations were not adversely impacted by
software or system failures related to the Year 2000 problem.
We reviewed our internal computer and related information and
operational systems to ensure Year 2000 compliance and have
experienced no consequences due to untimely resolution of the
Year 2000 problem. However, even if our internal systems were
not materially affected by the Year 2000 problem, our
business, financial condition and results of operations could
be materially adversely affected if the businesses with which
we interact are disrupted by Year 2000 problems. We have
discussed this matter with those businesses upon which we are
most dependent and have been assured that no material
disruptions were experienced.
OTHER:
Except for historical information contained herein, the
matters set forth above are forward-looking statements that
involve certain risks and uncertainties that could cause
actual results to differ from those in the forward-looking
statements. Potential risks and uncertainties include such
factors as the level of business and consumer spending, the
amount of sales of the Company's products, the competitive
environment within the automotive aftermarket industry, the
ability of the Company to continue to expand its operations,
the level of costs incurred in connection with the Company's
expansion efforts, economic conditions and the financial
strength of the Company's customers and suppliers. Investors
are directed to consider other risks and uncertainties
discussed in documents filed by the Company with the
Securities and Exchange Commission.
8
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PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities and Use of Proceeds
None
Item 3. - Defaults Upon Senior Securities
N/A
Item 4. - Submission of Matters to a Vote of Security Holders
None
Item 5. - Other Information
None
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 15 - Review Report On Interim Condensed Financial
Statements
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 12, 2000 Pick-Ups Plus, Inc.
By: /s/ JOHN FITZGERALD
----------------------------
John Fitzgerald
President and Principal
Accounting Officer
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EXHIBIT 15
REVIEW REPORT ON INTERIM CONDENSED FINANCIAL STATEMENTS
To the Shareholders
Pick-Ups Plus, Inc.
We have reviewed the accompanying balance sheet, statement of operations and
statement of cash flows of Pick-Ups Plus, Inc. as of March 31, 2000, and for the
three-month period then ended. These financial statements are the responsibility
of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
/s/ LAZAR LEVINE & FELIX LLP
---------------------------------------
LAZAR LEVINE & FELIX LLP
New York, New York
May 1, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 14,369
<SECURITIES> 0
<RECEIVABLES> 92,514
<ALLOWANCES> 10,398
<INVENTORY> 30,960
<CURRENT-ASSETS> 130,245
<PP&E> 51,335
<DEPRECIATION> 27,709
<TOTAL-ASSETS> 166,276
<CURRENT-LIABILITIES> 205,587
<BONDS> 50,162
6,898
0
<COMMON> 0
<OTHER-SE> (96,371)
<TOTAL-LIABILITY-AND-EQUITY> 166,276
<SALES> 221,125
<TOTAL-REVENUES> 221,125
<CGS> 147,270
<TOTAL-COSTS> 331,865
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,054
<INTEREST-EXPENSE> 5,081
<INCOME-PRETAX> (45,243)
<INCOME-TAX> 0
<INCOME-CONTINUING> (45,243)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (45,243)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
