UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE PERIOD ENDED FEBRUARY 29, 2000
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
COMMISSION FILE NUMBER 000-29883
IMPRESO.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2849585
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
652 SOUTHWESTERN BOULEVARD
COPPELL, TEXAS 75019
(Address of principal executive offices)
TELEPHONE NUMBER (972) 462-0100
(Registrant's telephone number, including area code)
(Formerly known as TST/Impreso, Inc.)
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 [ ]
Indicate the number of shares outstanding of each of the issuers' classes of
Common Stock as of the latest practical date.
Class of Common Stock Shares outstanding at April 13, 2000
--------------------- ------------------------------------
$0.01 Par Value 5,292,780
<PAGE>
IMPRESO.COM, INC. AND SUBSIDIARIES
FORM 10-Q
FEBRUARY 29, 2000
INDEX
PART 1. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Consolidated Financial Statements:
Interim Consolidated Balance Sheets as of February 29,
2000, (Unaudited) and August 31, 1999 1
Interim Consolidated Statements of Operations for the
Three Months and Six Months Ended February 29, 2000,
and February 28, 1999 (Unaudited) 3
Interim Consolidated Statements of Cash Flows for the
Six Months Ended February 29, 2000, and February 28, 1999
(Unaudited) 4
Notes to Interim Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
<TABLE>
<CAPTION>
IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
ASSETS
February 29, August 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 215,665 $ 22,629
Trade accounts receivable, net of allowance for doubtful
accounts of $203,170 at February 29, 2000 and $130,397
at August 31, 1999 6,519,328 6,295,988
Income tax receivable -- 478,909
Investments in marketable securities 11,088 11,088
Inventories 25,882,899 18,801,015
Prepaid expenses and other 244,993 200,739
Deferred income tax assets 95,598 44,335
------------ ------------
Total current assets 32,969,571 25,854,703
------------ ------------
Property, plant and equipment, at cost 17,410,016 16,845,961
Less-Accumulated depreciation (9,704,120) (9,635,739)
------------ ------------
Net property, plant and equipment 7,705,896 7,210,222
------------ ------------
Other assets 45,555 19,453
------------ ------------
Total assets $ 40,721,022 $ 33,084,378
============ ============
The accompanying notes are in integral part of these consolidated balance sheets.
1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
February 29, August 31,
2000 1999
----------- ----------
(Unaudited)
Current Liabilities:
<S> <C> <C>
Accounts payable $12,469,266 $9,053,907
Accrued liabilities 1,268,360 1,678,862
Current maturities of long-term debt 147,322 28,179
Line of credit 10,379,162 6,357,787
Prepetition liabilities:
Current maturities of long-term debt 6,961 35,233
----------- -----------
Total current liabilities 24,271,071 17,153,968
----------- -----------
Deferred income tax liability 761,450 727,865
Long-term portion of prepetition debt, net of
current maturities 256,500 884,785
Long-term debt, net of current maturities 2,594,654 1,744,487
----------- -----------
Total liabilities 27,883,675 20,511,105
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value; 5,000,000 shares authorized;
0 shares issued and outstanding --- ---
Common Stock, $.01 par value; 15,000,000 shares authorized;
5,292,780 shares issued and outstanding 52,928 52,928
Warrants 110 110
Additional paid-in-capital 6,319,572 6,319,572
Retained earnings 6,464,737 6,200,663
----------- -----------
Total stockholders' equity 12,837,347 12,573,273
----------- -----------
Total liabilities and stockholders' equity $40,721,022 $33,084,378
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
2
<PAGE>
<TABLE>
<CAPTION>
IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 16,321,696 $ 13,750,604 $ 32,830,049 $ 28,022,626
Cost of sales 14,148,293 11,858,679 28,752,285 24,474,747
------------ ------------ ------------ ------------
Gross profit 2,173,403 1,891,925 4,077,764 3,547,879
Other costs and expenses:
Selling, general
and administrative 1,683,706 1,357,208 3,164,886 2,589,453
Interest expense 313,878 172,859 557,284 354,592
Other income, net (77,652) (36,272) (74,704) (17,051)
------------ ------------ ------------ ------------
Total other costs and 1,919,932 1,493,795 3,647,466 2,926,994
expenses
Income before income tax expense 253,471 398,130 430,298 620,885
Income tax expense (benefit):
Current 108,102 136,455 183,902 220,654
Deferred 6,946 2,239 (17,678) 4,095
------------ ------------ ------------ ------------
Net income $ 138,423 $ 259,436 $ 264,074 $ 396,136
============ ============ ============ ============
Net income per common share
(basic and diluted) $ 0.03 $ 0.05 $ 0.05 $ 0.07
============ ============ ============ ============
Weighted average shares outstanding 5,292,780 5,292,780 5,292,780 5,292,780
The accompanying notes are an integral part of these consolidated financial
statements.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
--------------------------
February 29, February 28,
2000 1999
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 264,074 $ 396,136
Adjustments to reconcile net income to net cash
used in operating activities-
Depreciation and amortization 324,774 251,010
Increase (decrease) in deferred income taxes (17,678) 4,095
(Increase) decrease in accounts receivable, net (223,340) 535,725
Increase in inventories (7,081,884) (3,650,309)
Increase in prepaid expenses and other (44,254) (43,177)
Increase in other non current assets (26,102) (56,544)
Increase in accounts payable 3,415,359 2,089,546
Decrease in accrued liabilities (410,502) (149,299)
(Increase) decrease in Federal Income Tax receivable 478,909 (61,846)
----------- -----------
Net cash used in operating activities (3,320,644) (684,663)
----------- -----------
Cash Flows From Investing Activities:
Additions to property, plant, and equipment (848,936) (252,996)
Sales of property, plant and equipment, net 28,488 11,150
----------- -----------
Net cash used in investing activities (820,448) (241,846)
----------- -----------
Cash Flows From Financing Activities:
Borrowings on line of credit, net 4,021,375 961,445
Payments on prepetition debt (656,557) (26,295)
Borrowings (payments) on post petition debt, net 969,310 (16,025)
----------- -----------
Net cash provided by financing activities 4,334,128 919,125
----------- -----------
Net increase (decrease) in cash and cash equivalents 193,036 (7,384)
Cash and cash equivalents, beginning of period 22,629 117,840
----------- -----------
Cash and cash equivalents, end of period $ 215,665 $ 110,456
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
4
<PAGE>
IMPRESO.COM, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND NATURE OF BUSINESS
-----------------------------------
On March 7, 2000, at TST/Impreso, Inc.'s annual meeting, the shareholders voted
in favor of the proposal to create a parent holding company named Impreso.com,
Inc. As a result of this approval, existing TST/Impreso, Inc. shareholders
received an equal number of shares in Impreso.com, Inc., and Impreso.com, Inc.
now holds the shares of TST/Impreso, Inc. Also in March 2000, TST/Impreso, Inc.
exchanged all of its interest in the Hotsheet web portal for a majority of the
outstanding common shares of a newly formed Texas corporation, Hotsheet.com,
Inc., and in a subsequent transaction, declared an upstream dividend
distribution from TST/Impreso, Inc. to Impreso.com, Inc., of all of its shares
of the common stock in Hotsheet.com, Inc. The effect of these transactions was
to create a holding company structure with two subsidiaries.
Impreso.com, Inc., a Delaware corporation, is the parent holding company of
TST/Impreso, Inc., a manufacturer and distributor to dealers and other resellers
of paper and film products for commercial and home use in domestic and
international markets and Hotsheet.com, Inc., the owner and operator of the
Hotsheet web portal. TST/Impreso, Inc.'s product line consists of standard
continuous computer stock business forms; thermal facsimile paper; cut sheet
products such as copy paper, ink jet paper, digital photo paper and
transparencies; fine business stationary; point of sale and cash register
machine rolls; high speed laser roll paper; wide format engineering rolls; wide
format ink jet media; and processed laser cut sheets. TST/Impreso, Inc. has
three wholly owned subsidiaries: Big Time Paper, Inc., TST/Impreso of
California, Inc., and Texas Stock Tab of West Virginia, Inc. (referred to
collectively with its consolidated subsidiaries as the "Company").
2. INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------
In the opinion of management, the unaudited Interim Consolidated Financial
Statements of the Company include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the Company's
financial position as of February 29, 2000, and its results of operations for
the three and six months ended February 29, 2000, and February 28, 1999. Results
of the Company's operations for the interim period ended February 29, 2000, may
not be indicative of results for the full fiscal year. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations promulgated by the Securities and
Exchange Commission (the "SEC").
The unaudited Interim Consolidated Financial Statements should be read in
conjunction with the audited Consolidated Financial Statements and accompanying
notes of the Company and its subsidiaries, included in the Company's Form 10-K,
as amended by Form 10-K/A (the "Company's Form 10-K"), for the fiscal year ended
August 31, 1999 ("Fiscal 1999"), File Number 0-26774. Accounting policies used
in the preparation of the unaudited Interim Consolidated Financial Statements
are consistent in all material respects with the accounting policies described
in the Notes to Consolidated Financial Statements in the Company's Form 10-K.
5
<PAGE>
3. INVENTORIES
-----------
Inventories are stated at the lower of cost (principally on a first-in,
first-out basis) or market and include material, labor, and factory overhead.
Inventories consisted of the following:
February 29, August 31,
2000 1999
----------- -----------
Finished Goods $ 6,769,126 $ 5,126,046
Raw Materials 18,360,002 12,826,083
Supplies 723,825 783,964
Work-in-process 29,946 64,922
----------- -----------
Total $25,882,899 $18,801,015
=========== ===========
4. LONG-TERM DEBT AND LINE OF CREDIT:
---------------------------------
The following is a summary of the Company's long-term debt and line of
credit:
February 29, August 31,
2000 1999
---- ----
Note payable to a commercial financial
corporation under a revolving credit line
maturing May 2001, secured by inventories,
trade accounts receivable, equipment,
goodwill associated with the Company's
trademark IMPRESO (no value on financial
statements), and a personal guarantee by the
trustee of a trust which is a principal
shareholder of Impreso.com, Inc., interest
payable monthly at prime plus 0.25% (9% at
February 29, 2000). $10,379,162 $6,357,787
Note payable to a commercial financial
corporation, secured, payable in monthly
installments, interest at 1.3%, maturing June
2001. 7,542 9,862
Note payable to a commercial financial
corporation, payable in monthly installments,
interest at 7.25%, maturing December 2002. 41,718 48,980
Note payable to a bank secured by property,
payable in monthly installments of $14,391
(including interest at 4.5% above the 11th
District Cost of Funds rate, 9.5% at February
29, 2000) maturing August 2008. 1,691,347 1,698,720
Note payable to a commercial financial
corporation, secured, payable in monthly
installments, interest rate of 6.7%, maturing
July 2003. 13,388 15,103
Note payable to a bank, secured by property,
payable in monthly installments, interest
rate at 8.5% for 5 years, interest at prime
plus 0.25% thereafter, maturing December
2009. 636,153 ---
Note payable to a commercial financial
corporation, payable in monthly installments,
interest rate at 10.27%, maturing September
2004. 234,035 ---
Note payable to a commercial financial
corporation, payable in monthly installments,
interest rate at 11.17%, maturing November
2004. 102,562 ---
Note payable to a commercial financial
corporation, payable in monthly installments,
interest rate at 6.9%, maturing August 2004. 15,231 ---
6
<PAGE>
Prepetition-
Note payable to a bank, secured by property,
payable in monthly installments of $4,815
(including interest at 6%) through May 2003,
at which time the remaining balance becomes
due and payable. --- 546,120
Other notes payable, secured by one or more
of the following: a personal guarantee by the
trustee of a trust which is a principal
shareholder of Impreso.com, Inc., and certain
property, plant, and equipment, maturity
dates to 2023, interest rates ranging from 4%
to 8%. 263,461 373,899
------------ ----------
Total 13,384,599 9,050,471
Less-Current maturities (10,533,445) (6,421,199)
------------ ----------
Long term debt $ 2,851,154 $2,629,272
As of February 29, 2000, the revolving credit line is limited to the lesser of
$13,000,000 or a percentage of eligible trade accounts receivable and
inventories, as defined. The remaining availability under the revolving credit
line was $1.1 million. The line of credit, as amended, has restrictive covenants
requiring the maintenance of a minimum tangible net worth and working capital
requirements, as defined. As of February 29, 2000, the Company was in compliance
with all covenants.
In March 2000, the Company amended it's revolving line of credit to increase the
line from $13 million to $14.9 million. The amended loan's available borrowings
under eligible inventories is limited by a staggered declining cap based upon
certain dates.
5. SUPPLEMENTAL CASH FLOW INFORMATION
----------------------------------
Six Months Ended
February 29, February 28,
2000 1999
-------- --------
Cash paid during the period for:
Interest $557,284 $354,592
Income taxes $ 79,606 $285,632
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE INTERIM PERIODS ENDED FEBRUARY 29, 2000
AND FEBRUARY 28, 1999
Net Sales---Net sales increased from $13.8 million in the three months ended
February 28, 1999, to $16.3 million in the same period in fiscal 2000, an
increase of $2.6 million or 18.7%. Net sales increased from $28 million in the
six months ended February 28, 1999, to $32.8 million in the same period in
fiscal 2000, an increase of $4.8 million, or 17.2%. Net sales increased in the
first and second quarters of fiscal 2000, as a result of the expanding
distribution and sales of the Company's branded and specialty imaging products.
Gross Profit--- Gross profit increased from $1.9 million in the three months
ended February 28, 1999, to $2.2 million in the three months ended February 29,
2000, an increase of 14.9%. Gross profit increased from $3.5
7
<PAGE>
million in the six months ended February 28, 1999, to $4.1 million in the same
period in 2000, an increase of $530,000, or 14.9%. Gross profit margin decreased
from 13.8%, in the second quarter of fiscal 1999, to 13.3% in the corresponding
period of 2000. Gross profit margin decreased from 12.7% in the six month period
ended February 28, 1999, to 12.4% in the same period in fiscal 2000. Gross
profit margins decreased in the three and six month periods ended February 29,
2000, as compared to the corresponding period of the prior year, as a result of
increased raw material costs which were not fully passed onto the Company's
customers.
Selling, General, and Administrative Expenses---- SG&A expenses increased from
$1.4 million in the three months ended February 28, 1999, to $1.7 million in the
corresponding period of fiscal 2000, an increase of $326,000 or 24.1%. SG&A as a
percentage of net sales increased from 9.9% in the second quarter of fiscal
1999, to 10.3% in the corresponding period of fiscal 2000. SG&A increased from
$2.6 million, or 9.2% of net sales for the six months ended February 28, 1999 to
$3.2 million, or 9.6% of net sales in the same period of fiscal 2000. The
increase in SG&A as a dollar amount and as a percentage of net sales for the
three and six month periods of February 29, 2000, resulted primarily from the
addition of new employees in the Company's Marketing department and increased
expenses associated with a larger sales force.
Interest Expense----Interest expense increased from $173,000 in the three months
ended February 28, 1999, to $314,000 in the same period of fiscal 2000, an
increase of 81.6%. Interest expense increased from $355,000, in the six months
ended February 28, 1999, to $557,000 in the corresponding period of fiscal 2000,
an increase of 57.2%. The increase in interest expense for the three and six
month periods ended February 29, 2000, was primarily attributable to increased
borrowings under the Company's revolving line of credit. The increased
borrowings reflected the Company's increased inventory, which increased 37.7% as
of February 29, 2000, as compared to August 31, 1999, and increased accounts
receivable. Financed acquisitions of property and equipment also contributed to
the increase in interest expense.
Income Taxes--- Income tax expense decreased from $139,000 for the three months
ended February 28, 1999, to $115,000 in the second quarter of fiscal 2000.
Income tax expense decreased from $225,000 for the six months ended February 28,
1999, to $166,000 in the six months ended February 29, 2000. The decrease in
income tax expense was the result of a decrease in taxable income.
LIQUIDITY AND CAPITAL RESOURCES
Working capital remained constant at $8.7 million at February 29, 2000 and
August 31, 1999.
In May 1999, the Company entered into an agreement with a bank for a two-year
renewal of its revolving line of credit. The loan is secured by, among other
things, inventory, trade receivables, equipment and a personal guarantee of
Marshall Sorokwasz, Chairman of the Board and President of the Company and
Impreso.com, Inc., and trustee of a trust which is a principal shareholder of
Impreso.com, Inc.. Available borrowings under this line of credit, which accrues
interest at the prime rate of interest plus .25% (8.75% at February 29, 2000),
are based upon specified percentages of eligible accounts receivable and
inventories. As of February 29, 2000, there was a $1.1 million borrowing
capacity remaining under the $13 million line of credit.
In March 2000, the Company amended its revolving line of credit to increase the
line from $13 million to $14.9 million. The amended loan's available borrowings
under eligible inventories is limited by a staggered declining cap based upon
certain dates.
Impreso.com, Inc. believes that the funds available under the loan and loan
commitment for the addition to the Company's West Virginia facility, the
revolving credit facility, cash and cash equivalents, trade credit, and
internally generated funds will be sufficient to satisfy Impreso.com, Inc.'s
requirements for working capital and capital expenditures for at least the next
twelve months. Such belief is based on certain
8
<PAGE>
assumptions, including the continuation of current operations and no
extraordinary adverse events. There can be no assurance that such assumptions
are correct. In addition, expansion of Impreso.com, Inc.'s operations due to
growth of the TST/Impreso, Inc. business or capital requirements for launching
Hotsheet.com, Inc., may require Impreso.com, Inc. to obtain additional capital
for expansion purposes. It is anticipated if that should occur, the funds
required would be generated through securities offerings or additional debt.
There can be no assurance that any additional financing will be available if
needed, or, if available, will be on acceptable terms.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not exposed to market risks such as foreign currency exchange
rates, but is exposed to risks such as variable interest rates. Market risk is
the potential loss arising from adverse changes in market prices and rates. The
Company does not have supply contracts with any of the Company's foreign
vendors. All foreign vendors are paid in United States currency. In addition,
the Company's international sales of finished goods are insignificant.
Accordingly, there are not sufficient factors to create a material foreign
exchange rate risk; therefore, the Company does not use exchange commitments to
minimize the negative impact of foreign currency fluctuations.
The Company had both fixed-rate and variable-rate debts as of February 29, 2000.
The fair market value of long-term variable interest rate debt is subject to
interest rate risk. Generally the fair market value of variable interest rate
debt will decrease as interest rates fall and increase as interest rates rise.
The estimated fair value of the Company's total long-term fixed rate and
floating rate debt approximates fair value.
As of February 29, 2000, the Company did not own derivative or other financial
instruments for trading or speculative purposes.
Based upon the Company's market risk sensitive debt outstanding at February 29,
2000, there was no material exposure to the Company's financial position or
results of operations.
INVENTORY MANAGEMENT; RAW MATERIALS
The Company believes that it is necessary to maintain a large inventory of
finished goods and raw materials to adequately service the Company's customers.
Because the Company has in the past and is currently expanding the manufacturing
and distribution of new brands and types of products, the Company's raw material
and finished goods inventory requirements have increased over prior years.
Therefore, the Company has substantially increased its inventory levels. In
addition, increasing international sourcing of raw materials has impacted
delivery cycles resulting in the Company's expanding inventory to accommodate
less frequent, larger shipments. The Company bears the risk of increases in the
prices charged by the Company's suppliers and decreases in the prices of raw
materials held in the Company's inventory. If prices for products held in the
Company's finished goods inventory decline or if prices for raw materials
required by it increase, or if new technology is developed that renders obsolete
products distributed by the Company and held in inventory, the Company's
business could be materially adversely affected.
MARKET CONDITIONS
Continuing consolidation within the paper industry is creating significant
opportunities for the Company to expand its customer base and increase its
market share. The recent initiation of the liquidation of a major Midwestern
competitor of the Company has resulted in the Company being approached by a
substantial number of new customers which may be captured without compromise to
the Company's profit margins and
9
<PAGE>
additional SG&A expenses.
The price of raw materials that the Company utilizes has been steadily
increasing since the second quarter of fiscal 1999. The Company has responded to
each increase from its suppliers by implementing price increases on its finished
goods . In the first quarter 2000, the Company's suppliers implemented an
increase which the Company was only partially successful in passing on to its
customers. In the second quarter 2000, the Company delayed implementing to its
largest customer another increase from its suppliers, which contributed to
smaller profit margins for the reporting period . Resistance by customers to
finished goods price increases will continue to create downward pressure on
finished goods selling prices, which could result in lower profit margins for
the Company in future reporting periods. If selling prices for products
manufactured by the Company cannot increase in relationship to raw material cost
increases, or if prices for products manufactured by us decline as a result of
market pressures, the Company's results of operations could be materially
adversely affected.
Management believes that raw material paper costs will continue to increase
throughout the remainder of the Company's fiscal year. Market indications are
that pulp wood product is currently in tight supply, and the supply will
continue to decrease. In addition, there is new market pressure created by the
striking of workers of a major manufacturer in Europe. Management has increased
its inventory at competitive prices and believes it has advantageously
positioned itself to capitalize on current market trends.
SEASONALITY
The Company may be subject to certain seasonal fluctuations in that orders for
products may decline over the summer months. However, the Company does not
believe that such fluctuations have a material adverse effect on the Company's
results of operations.
YEAR 2000
On January 1, 2000, the Company's computer system transitioned into the year
2000 without any material business interruptions.
SUBSEQUENT EVENTS
On March 7, 2000, at TST/Impreso, Inc.'s annual shareholder meeting, the
shareholders voted in favor of the proposal to create a parent holding company,
Impreso.com, Inc. As a result of this shareholder approval, existing
TST/Impreso, Inc. shareholders received shares in Impreso.com, Inc., and
Impreso.com, Inc. now holds the shares of TST/Impreso, Inc. In a separate
transaction, TST/Impreso, Inc. issued a dividend to its parent corporation,
Impreso.com, Inc. Impreso.com, Inc. received from TST/Impreso, Inc., a majority
of the outstanding shares of common stock in Hotsheet.com, Inc., which owns as
its primary asset the Hotsheet.com web portal. These transactions resulted in a
holding company structure with two subsidiaries.
FORWARD-LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and the Results of
Operations and the sections of this Form 10-Q contain "forward-looking
statements" about the Company's prospects for the future, such as the Company's
ability to generate sufficient working capital, the Company's ability to
continue to maintain sales to justify capital expenses, and the Company's
ability to generate additional sales to meet business expansion. Such statements
are subject to certain risks and uncertainties which could cause actual results
to differ materially from those projected, including availability of raw
materials, availability of thermal facsimile, computer, laser and color ink jet
paper, to the cyclical nature of the
10
<PAGE>
industry in which the Company operates, the potential of technological changes
which would adversely affect the need for the Company's products, price
fluctuations which could adversely impact the large inventory the Company
requires, loss of any significant customer, and termination of contracts
essential to the Company's business. Parties are cautioned not to rely on any
such forward-looking statements or judgments in making investment decisions.
11
<PAGE>
PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------
(a) 27 Financial data schedule.
(b) No reports on Form 8-K were filed during the quarter ended
February 29, 2000.
12
<PAGE>
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.
Dated: April 14, 2000
Impreso.com, Inc.
(Registrant)
/s/Marshall Sorokwasz
----------------------------
Marshall Sorokwasz
Chairman of the Board, Chief
Executive Officer, President
and Director
/s/Susan Atkins
----------------------------
Susan Atkins
Vice President and
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- -----------------------
27 Financial data schedule.
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001108345
<NAME> IMPRESO.COM, INC.
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> FEB-29-2000
<EXCHANGE-RATE> 1
<CASH> 215,665
<SECURITIES> 11,088
<RECEIVABLES> 6,722,498
<ALLOWANCES> 203,170
<INVENTORY> 25,882,899
<CURRENT-ASSETS> 32,969,571
<PP&E> 17,410,016
<DEPRECIATION> 9,704,120
<TOTAL-ASSETS> 40,721,022
<CURRENT-LIABILITIES> 24,271,071
<BONDS> 0
0
0
<COMMON> 53,038
<OTHER-SE> 12,784,309
<TOTAL-LIABILITY-AND-EQUITY> 40,721,022
<SALES> 16,321,696
<TOTAL-REVENUES> 16,321,696
<CGS> 14,148,293
<TOTAL-COSTS> 14,148,293
<OTHER-EXPENSES> (77,652)
<LOSS-PROVISION> 230,170
<INTEREST-EXPENSE> 313,878
<INCOME-PRETAX> 253,471
<INCOME-TAX> 115,048
<INCOME-CONTINUING> 138,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 138,423
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>