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 Quarterly Period Ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-10475
PAGES, INC.
Incorporated - Delaware I.R.S. Identification No. 34-1297143
1915 N. Dale Mabry Hwy, Tampa, Florida 33607
Registrant's Telephone Number (813) 875-5407
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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of latest practicable date: 6,564,009 common shares
outstanding, each $0.01 par value, as of August 8, 1998.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PAGES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30,1997
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues $ 726,836 $ 762,672 $ 1,916,216 $ 2,343,958
Cost of goods sold 306,514 323,547 831,407 956,044
------------- ------------- ------------- ------------
Gross profit 420,322 439,125 1,084,809 1,387,914
Operating Expenses:
Selling, general and administrative 519,561 412,206 1,306,056 1,651,742
Depreciation and amortization 32,681 32,761 117,388 115,578
------------- ------------- ------------- ------------
Total Operating Expenses 552,242 444,967 1,423,444 1,767,320
Other (income) expense:
Interest, net 46,149 (62,736) 261,208 (188,918)
Other - Litigation proceeds (450,000) ------- (450,000) ----
Total Other (Income) expense (403,851) (62,736) (188,792) (188,918)
Income(loss) from continuing operations 271,930 56,894 (149,844) (190,488)
Discontinued operations:
Income(loss) from operations of discontinued subsidiary (157,401) (1,824,114) (2,226,108) (2,661,635)
Income(loss) on disposal of subsidiary assets ------- ------ (1,515,396) -------
Income (loss) before income taxes 114,529 (1,767,220) (3,891,348) (2,852,123)
Provision for income taxes ----- ----- ----- -----
------------- ------------- ------------- ------------
NET INCOME (LOSS) 114,529 (1,767,220) (3,891,348) (2,852,123)
============= ============= ============= ============
Income(loss) per common share:
Income(loss) from continuing operations $ .04 $ .01 $ (.02) $ (.03)
Discontinued operations (.02) (.29) (.57) (.43)
------------- ------------- ------------- ------------
Income(loss) per common share $ .02 (.28) (.59) $ (.46)
============= ============= ============= ============
Weighted average common and common
equivalent shares 6,564,000 6,194,000 6,564,000 6,196,000
============= ============= ============= ============
</TABLE>
See accompanying notes.
<PAGE>
PAGES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1998 1997
------------- ------------
ASSETS
Current Assets:
Cash $ 661,795 $ 412,060
Accounts receivable, net of allowance for
doubtful accounts of $90,000 and
$356,000, respectively 1,372,000 2,662,140
Inventory 1,546,983 12,991,795
Prepaid expenses 180,257 1,429,726
Note receivable from CASCO ---- 3,500.000
------------- ------------
Total current assets 3,761,035 20,995,721
------------- ------------
Property and equipment:
Buildings ------- 1,070,201
Equipment 900,156 1,988,863
------------- ------------
900,156 3,059,064
Less accumulated depreciation (694,909) (1,100,657)
------------- ------------
205,247 1,958,407
Land ------ 420,000
------------- ------------
Total property and equipment, net 205,247 2,378,407
------------- ------------
Other assets:
Assets held for disposal 1,269,198 -------
Cost in excess of net assets acquired,
net of accumulated amortization of $196,000
and $899,000, respectively 1,727,161 4,441,484
Other 122,159 267,654
------------- ------------
3,118,518 4,709,138
------------- ------------
TOTAL ASSETS $ 7,084,800 $28,083,266
See accompanying notes
<PAGE>
PAGES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1998 1997
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 870,658 $ 6,173,483
Short-term debt obligations 0 11,082,227
Accrued liabilities 644,142 880,693
Accrued tax liabilities 501,434 1,103,501
Deferred revenue 1,464,386 1,265,366
Current portion of long-term debt obligations 98,949 256,488
Current portion of capital lease obligations 70,372 74,872
------------- ------------
Total current liabilities 3,649,941 20,836,630
------------- ------------
Long-term debt and capital lease obligations 2,124,023 2,044,452
------------- ------------
Total liabilities 5,773,964 22,881,082
------------- ------------
Commitments and contingencies
Stockholders' Equity:
Preferred stock: $.01 par value; authorized
300,000 shares; none issued and outstanding
Common stock: $.01 par value; authorized
20,000,000 shares; issued 6,862,722 68,627 68,627
Capital in excess of par value 21,908,833 21,908,833
Notes receivable from stock sales (902,373) (902,373)
Accumulated deficit (19,523,128) (15,631,780)
------------- ------------
1,551,959 5,443,307
Less 298,713 shares of common stock in
treasury, at cost (241,123) (241,123)
------------- ------------
Total stockholders' equity 1,310,836 5,202,184
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,084,800 $28,083,266
============= ============
See accompanying notes
<PAGE>
PAGES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
------------- ------------
Cash Flow (Used In) Operations:
Net income (loss) ($ 3,891,348) ($ 2,852,123)
Reconciliation to net cash flow used in
continuing operations:
Depreciation and amortization 117,388 115,578
Loss on sale of distribution channel 1,515,396 -------
Changes in working capital items of continuing operations:
Accounts receivable 2,533,705 (1,250,299)
Inventory 4,177,290 (4,371,325)
Prepaid expenses and other assets 6,670,581 1,842,593
Receipt of CASCO note receivable 3,500,000 ------
Accounts payable and accrued liabilities (10,483,974) 4,733,200
Deferred revenue 199,020 221,310
------------- ------------
Net cash from (used in)
continuing operations 4,338,058 (1,561,066)
------------- ------------
Net cash from (used in)
discontinued operations (3,741,504) (2,661,635)
------------- ------------
Net cash from (used in) operations 596,553 (4,222,701)
------------- ------------
Cash Flow From (Used In) Investing Activities:
Proceeds from sale of property and equipment 53,912 -------
Payments for purchases of property and equipment (11,036) (170,011)
Proceeds from disposition of
distribution channel 10,500,000 --------
------------- ------------
Net cash flow from (used in)
investing activities 10,542,876 (170,011)
------------- ------------
Cash Flow From (Used In) Financing Activities:
Proceeds from issuance of stock 467,700
Proceeds from debt obligations 20,171,596 17,426,406
Proceeds from subordinated debt issued 3,000,000 980,000
Payments on debt and lease obligations (31,336,290) (14,622,023)
Payments on subordinated debt issued (2,725,000) --------
------------- ------------
Net cash flow from (used in)
financing activities (10,889,695) 4,252,083
------------- ------------
Increase in cash 249,735 (140,629)
Cash, beginning of period 412,060 317,911
------------- ------------
Cash, end of period $ 661,795 177,282
============= ============
See accompanying notes
<PAGE>
PAGES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying condensed consolidated financial statements have not been
audited, but reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation of financial position, results of operations
and cash flows. All adjustments are of a normal and recurring nature, except
for those related to discontinued operations.
Pages, Inc. (the "Company"), through Pages Library Services, Inc., its
wholly-owned subsidiary, operates Junior Library Guild, a subscription service
that distributes first print, award winning childrens' books. The Company has
its own editorial division that reviews books in the manuscript stage and makes
selections for nine reading levels. The Company markets most of its products
directly to schools and public libraries but has plans to expand into other
segments.
The interim consolidated condensed financial statements and notes thereto
are presented as permitted by the Securities and Exchange Commission and do not
contain certain information included in the Company's annual financial
statements and notes thereto. These financial statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the fiscal year ended December 31, 1997.
Note 2. Discontinued Operations
Effective on the close of business on June 25, 1998, the Company sold
certain of its assets relating to the book fair business, operated by Pages
Book Fairs, Inc., its wholly-owned subsidiary, for $10.5 million, $1.0 million
of which was placed in escrow and subsequently released in August 1998
following delivery of certain book inventory and book cases. These assets
included inventory, display cases, and customer lists. The Company has
discontinued its book fair business and the accompanying financial statements
reflect the results from the book fair business as discontinued operations.
The comparative 1997 statements have been reclassed to reflect the discontinued
operations on a proforma basis.
The sale of assets, during second quarter ended June 30, 1998, resulted in
a gain of $2.3 million. Related to discontinuing its book fair operations, the
Company wrote off related assets of approximately $4.0 million. This write-off
included $3.2 million of goodwill and related costs, $819,000 of prepaid
selling costs, and various other related assets. The Company also established
a $580,000 reserve for expenses (of which $260,000 remains at third quarter
ended September 30, 1998) to be incurred in effecting the transfer of inventory
to the buyer and in discontinuing the book fair business. This resulted in a
net loss of $1.5 million related to the disposal of the book fair business.
The discontinued operations also incurred a net loss from operations for the
nine months ended September 30, 1998 of $2.0 million for a total reported loss
on discontinued operations of $3.5 million.
The Company will continue to operate its book publishing business and,
through its Pages Library Services, Inc. subsidiary, Junior Library Guild.
Note 3. Debt Obligations
The Company has a $200,000 Note Payable bearing interest at the lender's
prime rate plus 1%, due July 31, 2001. $24,300 was unused at September 30,
1998.
In January, 1998, the Company borrowed $3.0 million of 12.5% convertible
debt due January 21, 2004, from Provident Bank. Warrants to purchase shares of
the Company's common stock were issued in connection with this subordinated
debt financing. Interest was payable monthly. This convertible debt was paid
off and settled for a total of $2.7 million on June 26, 1998 and the Provident
warrants were canceled.
Note 4. Supplemental Cash Flow Information
Cash payments during the nine months ended September 30, 1998 and 1997,
included interest of $660,000 and $430,000, respectively, and income taxes of
$340,000 and $725,000, respectively.
Note 5. Stock Appreciation Rights
Included in the results of operations for the nine months ended September
30, 1997, is a reduction in administrative compensation expense of $431,287
associated with the Company's Stock Appreciation Rights issued under the
executive incentive compensation plan in October, 1996. Effective April 1,
1997, the Stock Appreciation Rights program dated November 1, 1996, was
canceled.
Note 6. Income Taxes
There was no income tax provision for the three and nine months ended
September 30, 1998, due to the Company's net operating loss position and the
full valuation of any resulting deferred tax benefit. Estimated income tax
rates based on annualized income were taken into consideration.
Note 7. Earnings Per Share
The following table represents the computation of basic and diluted
earnings per share:
Three Months Nine Months
Ended Ended
September 30, September 30,
1998 1998
------------- ------------
Basic Earnings per Share:
Weighted average number of common
shares outstanding 6,564,000 6,564,000
Net income(loss) available to common
stockholders $ 114,529 $(3,891,348)
============ ===========
Basic earnings(loss) per share $ .02 $ (.59)
============ ===========
Diluted Earnings Per Share:
Weighted average number of common
shares outstanding - basic 6,564,000 6,564,000
Net income(loss) available to common
stockholders and assumed conversions $ 114,529 $(3,891,348)
============ ============
Diluted earnings(loss) per share $ .02 $ (.59)
============ ============
Options and warrants were outstanding during the periods but were not
included in the computation of dilutive EPS because at September 30, 1998, the
exercise price was substantially above market price and at September 30, 1997,
the potential common stock would be antidilutive.
Note 8. Assets Held For Disposition
Assets held for disposition at September 30, 1998 consist of a warehouse,
office facility and real estate in Worthington, Ohio currently being used by
the Junior Library Guild subsidiary on a temporary basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements contained in this Form 10-Q under "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding matters that are not historical facts are "forward looking
statements" (as such term is defined in the Private Securities Litigation
Reform Act of 1995) and because such statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Those statements include remarks
regarding the intent, belief, or current expectations of the Company, its
directors, or its officers with respect to, among other things, the Company's
ability to raise additional capital and future operating cash flows.
Prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from those projected, anticipated
or expected in the forward-looking statements as a result of various factors,
many of which, such as the Company's ability to raise additional capital, are
beyond the control of the Company. The accompanying information contained in
this Form 10-Q, including, without limitation, the information set forth under
the heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations", identifies important factors that could cause such
differences.
Three Months Ended September 30, 1998 Compared with Three Months Ended
September 30, 1997
Revenues from continuing operations for the three months ended September
30, 1998, approximated $720,000 compared to approximately $760,000 for the
three months ended September 30, 1997, a decrease of 5% or approximately
$40,000. The decrease in revenues is partly attributed to a $115,000 reduction
in sales from a product line discontinued in 1997.
Cost of goods sold was approximately $300,000 for the three months ended
September 30, 1998, compared to approximately $320,000 for the three months
ended September 30, 1997, a decrease of 5% or approximately $20,000. The
decrease in costs of goods sold is due to the reduction in revenues discussed
above. As a percentage of revenues, cost of goods sold was 42% during the
third quarter of 1998 and 1997.
Selling, general, and administrative expense was approximately $520,000
for the three months ended September 30, 1998, compared to approximately
$410,000 for the three months ended September 30, 1997, an increase of 26% or
approximately $110,000. This increase was primarily related to the attorney
fees incurred by the Company in connection with a lawsuit filed by it against
its former auditors.
Interest expense was approximately $45,000 for the three months ended
September 30, 1998, compared to interest income of $60,000 for the three months
ended September 30, 1997, an increase of 170% or $105,000. The average
outstanding debt for the three months ended September 30, 1998, approximated
$1.8 million compared to $1.9 million for the three months ended September 30,
1997. Additionally, the average interest rate for the three months ended
September 30, 1998, approximated 10.71% compared to approximately 10.67% for
the three months ended September 30, 1997. Netted in interest expense for the
three months ended September 30, 1997, is approximately $90,000 of interest
income earned on the $5.0 million note receivable from the former subsidiary,
CASCO.
Depreciation and amortization expense was approximately $33,000 for the
three months ended September 30, 1998, compared to $33,000 for the three months
ended September 30, 1997.
There was no income tax provision for the three months ended September 30,
1998, due to the Company's net operating loss position and the full valuation
of any resulting deferred tax benefit. Estimated income tax rates based on
annualized income were taken into consideration.
The three months ended September 30, 1998, resulted in operating gain of
$270,000 compared to an operating gain of $57,000 in the three months ended
September 30, 1997. The increase in operating loss is directly related to
the net gain on the settlement of the Company's litigation against its former
auditors.
The three months ended September 30, 1998, resulted in a net gain of
$115,000 versus a net loss of $1.7 million in the three months ended September
30, 1997. Included in these results for the third quarter, was $150,000 of
loss in 1998 and $1.8 million of loss in 1997 from the discontinued operations
of the Company's book fair business (which was sold at June 25, 1998), as well
as the net gain on the settlement of the Company's litigation against its
former auditors. Without the two items mentioned previously, net results for
the three months ended September 30, 1998 have declined as compared to the same
period in 1997. Basic and diluted loss per share changed from $.28 in the
comparable quarter last year to a net gain per share of $.02.
Third Quarter 1998 Compared with Third Quarter 1997
Revenues from continuing operations for the nine months ended September
30, 1998, approximated $1.9 million compared to approximately $2.3 million for
the nine months ended September 30, 1997, a decrease of 18% or approximately
$400,000. The decrease in revenues is principally attributable to the $460,000
decrease in year to date sales from discontinued product lines. Year to date
revenues for 1998 from continuing lines approximate year to date 1997 revenue
levels.
Cost of goods sold was approximately $830,000 for the nine months ended
September 30, 1998, compared to approximately $950,000 for the nine months
ended September 30, 1997, a decrease of 13% or approximately $120,000. The
decrease in cost of goods sold is due to the reduction in year to date revenues
discussed above. Cost of goods sold as a percentage of revenues was 43% for
the nine months ended September 30, 1998, compared to 41% for the nine months
ended September 30, 1997.
Selling, general and administrative expense was approximately $1.3 million
for the nine months ended September 30, 1998, compared to $1.6 million for the
nine months ended September 30, 1997, a decrease of 21% or approximately
$300,000. The net decrease in selling, general and administrative expense is
attributable to the reduction in expenses of approximately $431,000 in March
1997, to record the current value of Stock Appreciation Rights issued in 1996.
Interest expense was approximately $260,000 for the nine months ended
September 30, 1998, compared to interest income of approximately $190,000 for
the nine months ended September 30, 1997, an increase of 240% or approximately
$450,000. The average outstanding debt for the nine months ended September 30,
1998, approximated $3.5 million compared to $1.3 million for the nine months
September 30, 1997. The average interest rate for the nine months ended
September 30, 1998, approximated 11.41% compared to approximately 10.67% for
the nine months ended September 30, 1997. Netted in interest expense for the
nine months ended September 30, 1997 is approximately $270,000 of interest
income earned on the $5.0 million note receivable from the former subsidiary,
CASCO.
Depreciation and amortization expense was approximately $117,000 for the
nine months ended September 30, 1998, compared to $115,000 for the nine months
ended September 30, 1997, an increase of 2% or $2,000.
The nine months ended September 30, 1998, resulted in operating loss of
$150,000 compared to operating loss of $190,000 for the nine months ended
September 30, 1997.
The nine months ended September 30, 1998, resulted in a net loss of $3.9
million versus a net loss of $2.8 million for the nine months ended September
30, 1997. Included in the net loss, was $3.7 million of loss in 1998 and $2.7
million of loss in 1997 from the discontinued operations of the Company's book
fair business (which was sold at June 25, 1998), as well as income in the nine
months ended September 30, 1998 resulting from the settlement of the Company's
litigation against its former auditors. Without the two items mentioned
previously, net results have increased in the nine months ended September 30,
1998, over the nine months ended September 30, 1997. Basic and diluted loss
per share increased from $.46 for the third quarter 1997, to a net loss per
share of $.59 for the third quarter 1998.
Liquidity and Capital Resources
The Company had a net increase in cash for the nine months ended September
30, 1998, of $250,000, compared to a net decrease for the comparable period in
the prior year of $140,000. Cash provided by operating and investing
activities funded the net cash used in financing activities during the nine
months ended September 30, 1998.
For the nine months ended September 30, 1998, continuing operations
provided $4.3 million in cash as compared to $1.6 million used during the nine
months ended September 30, 1997. Included in operating cash outlays in the
nine months ended September 30, 1998, was $3.7 million related to discontinued
book fair operations. The decrease in cash used in operations for the third
quarter of 1998 resulted primarily from sale of assets from operations
(approximately $8.0 million) and an increase in the days outstanding of trade
accounts payable.
Cash from investing activities was $10.5 million for the nine months ended
September 30, 1998, representing sale of the Company's book fair business
assets. The nine months ended September 30, 1997 had cash used in investing
activities of $170,000, primarily representing the payments for fixed assets.
For the nine months ended September 30, 1998, net cash used in financing
activities was $10.9 million. This compares to net cash provided by financing
activities of $4.2 million for the nine months ended September 30, 1997.
Financing activities consisted primarily of borrowings and paydowns on the
revolving line of credit in 1998 and 1997. At third quarter ended September
30, 1998, the Company had a $200,000 Note Payable (of which $24,300 was unused)
bearing interest at the lender's prime rate plus 1%, due July 31, 2001.
The Company does not anticipate any material expenditures for property and
equipment during the next twelve months.
As previously reported on Form 8-K filed July 10, 1998, and in the
Discontinued Operations footnote to the attached financial statements, on June
25, 1998 the Company sold certain of its book fair business assets for $10.5
million, $1.0 million of which was placed in escrow pending delivery of certain
book inventories and book cases. The inventory and book cases were held at
over 70 locations throughout the United States, most of which were owned by
independent distributors.
As of the date of this filing, the Company and the buyer have finalized
the inventory collection and valuation, and the funds in escrow were released
in August 1998.
The Company used the proceeds from the sale of its book fair assets to
satisfy its secured subordinated debt held by Provident Bank and to pay $7.8
million toward the outstanding balance due on its primary secured debt to The
Huntington National Bank.
The Company is in the process of restructuring after the closure of its
book fair business and has reduced its workforce from approximately 150 to
approximately 20 employees. The Company will continue to operate its Junior
Library Guild subsidiary.
At September 30, 1998, Pages Book Fairs, Inc., a subsidiary of the
Company, had trade payables of $765,000, in addition to, sales tax liabilities
and lease obligations, of which nearly all were past normal terms. Since Pages
Book Fairs, Inc. has virtually no assets and substantial liabilities, the
Company is currently seeking professional advice as to what legal manner it
should pursue in order to resolve or discharge these payables.
During the nine months ended September 30, 1998, the Company was not in
compliance with its senior and subordinated debt covenants related to its
tangible capital base, but has not received a notice of default from its
lenders. This condition has been alleviated by the payoff of the subordinated
debt and the substantial reduction in the senior debt to The Huntington
National Bank.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
On September 16, 1998, Pages, Inc. settled litigation it commenced
against its former auditors for the payment to the Company of $450,000. The
litigation was discussed in the Company's Annual Report on Form 10-K, for the
fiscal year ended December 31, 1997. The Company incurred attorney's fees and
expenses of $160,000 related to the litigation.
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
Warrants to purchase 391,514 shares issued on January 21, 1998 to
Provident Bank were canceled on June 25, 1998.
ITEM 2: OTHER INFORMATION
As previously reported on form 8-K dated July 10, 1998, Pages, Inc.
no longer meets the net asset continued listing criteria for the NASDAQ Stock
Market. Accordingly, the Company's common stock has been delisted from the
NASDAQ National Market as of July 28, 1998. However, the Company's common
stock is traded on the OTC Bulletin Board.
Steven L. Canan, Chief Financial Officer and Treasurer of Pages, Inc. announced
his resignation effective October 30, 1998.
ITEM 3: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The following exhibits are filed as part of this report:
Exhibit
Number Description of Document
*2.1 Asset Purchase Agreement dated June 25, 1998 for
purchase of certain book fair assets from Pages Book
Fairs, Inc., subsidiary of Pages, Inc.
27 Financial Data Schedule as of September 30, 1998
(filed only electronically with the SEC)
(b) Reports on 8-K:
A report on Form 8-K dated June 17, 1998 was filed on June 17,
1998 reporting the elimination of the position of Senior Vice
President.
A report on Form 8-K dated June 25, 1998 was filed on July 10,
1998 reporting the sale of certain of the Company's book fair
assets and that the Company no longer met the listing criteria
for the NASDAQ stock market.
* Previously filed as part of Form 8-K, dated June 25, 1998, filed on July
10, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Pages, Inc.
- ----------------------------------
(Registrant)
Dated: November 13, 1998 By: /s/ S. Robert Davis
-------------------------- -----------------------------
S. Robert Davis
President, Chief Executive Officer
and Chairman of the Board
Pages, Inc.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 661,795
<SECURITIES> 0
<RECEIVABLES> 1,372,000
<ALLOWANCES> 90,000
<INVENTORY> 1,546,983
<CURRENT-ASSETS> 3,761,035
<PP&E> 900,156
<DEPRECIATION> 694,909
<TOTAL-ASSETS> 7,084,800
<CURRENT-LIABILITIES> 3,649,941
<BONDS> 2,124,023
0
0
<COMMON> 68,627
<OTHER-SE> 1,242,209
<TOTAL-LIABILITY-AND-EQUITY> 7,084,800
<SALES> 1,916,216
<TOTAL-REVENUES> 1,916,216
<CGS> 831,407
<TOTAL-COSTS> 831,407
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 261,208
<INCOME-PRETAX> (3,891,348)
<INCOME-TAX> 0
<INCOME-CONTINUING> (149,844)
<DISCONTINUED> (3,741,504)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,891,348)
<EPS-PRIMARY> (.59)
<EPS-DILUTED> (.59)
</TABLE>
