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 June 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
801 94th Avenue North, St. Petersburg, Florida 33702
Registrant's Telephone Number (813) 578-3300
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>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 701,172 $ 807,765 $ 1,189,380 $ 1,581,286
Cost of goods sold 300,553 357,666 524,893 632,497
------------- ------------- ------------- -------------
Gross profit 400,619 450,099 664,487 948,789
Operating Expenses:
Selling, general and administrative 452,667 758,138 786,495 1,239,536
Depreciation and amortization 42,816 32,711 84,707 82,817
------------- ------------- ------------- -------------
Income(loss) from continuing operations (94,864) (340,750) (206,715) (373,564)
Discontinued operations:
Income(loss) from operations of discontinued
subsidiary (1,001,018) (569,929) (1,802,722) (837,521)
Income(loss) on disposal of subsidiary assets (2,250,263) ----- (2,250,263) ----
Other (expense)income:
Interest, net (132,908) 65,402 (215,059) 126,182
------------- ------------- ------------- -------------
Income (loss) before income taxes (3,479,053) (845,277) (4,474,759) (1,084,903)
Provision for income taxes - 0 - - 0 - - 0 - - 0 -
------------- ------------- ------------- -------------
NET INCOME (LOSS) (3,479,053) (845,277) (4,474,759) (1,084,903)
============= ============== =============== ==============
Income(loss) per common share:
Income(loss) from continuing operations $ (.03) $ (.05) $ (.06) $ (.04)
Discontinued operations (.50) (.09) (.62) (.14)
------------- ------------- ------------- -------------
Income(loss) per common share $ (.53) $ (.14) $ (.68) $ (.18)
============= ============== =============== ==============
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)
June 30, December 31,
ASSETS 1998 1997
------------ --------------
Current Assets:
Cash $ 2,243,256 $ 412,060
Accounts receivable, net of allowance for
doubtful accounts of $100,000 and $356,000,
respectively 938,464 2,662,140
Inventory 2,021,919 12,991,795
Prepaid expenses 142,862 1,429,726
Notes receivable from CASCO ---- 3,500.000
------------ --------------
Total current assets 5,346,501 20,995,721
------------ --------------
Property and equipment:
Buildings ---- 1,070,201
Equipment 1,637,462 1,988,863
------------ --------------
1,637,462 3,059,064
Less accumulated depreciation (520,800) (1,100,657)
------------ --------------
1,116,662 1,958,407
Land ----- 420,000
------------ --------------
Total property and equipment, net 1,116,662 2,378,407
------------ --------------
Other assets:
Assets held for disposal 805,245 ------
Cost in excess of net assets acquired, net
of accumulated amortization of $184,000
and $899,000, respectively 1,739,212 4,441,484
Other ----- 267,654
------------ --------------
2,544,457 4,709,138
------------ --------------
TOTAL ASSET $ 9,007,620 $28,083,266
============ ==============
See accompanying notes
<PAGE>
PAGES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
------------ --------------
Current Liabilities:
Accounts payable $ 2,598,794 $ 6,173,483
Short-term debt obligations 891,997 11,082,227
Accrued liabilities 1,508,843 880,693
Accrued tax liabilities 169,703 1,103,501
Deferred revenue 968,334 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 6,306,992 20,836,630
------------ --------------
Long-term debt and capital lease obligations 1,973,201 2,044,452
------------ --------------
Total liabilities 8,280,193 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 (20,106,538) (15,631,780)
------------ --------------
968,549 5,443,307
Less 298,713 shares of common stock in
treasury, at cost (241,123) (241,123)
------------ --------------
Total stockholders' equity 727,426 5,202,184
------------ --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,007,620 $28,083,266
=========== ============
See accompanying notes
<PAGE>
PAGES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1998 1997
------------ --------------
Cash Flow (Used In) Operations:
Net income (loss) ($ 4,474,758) ($ 1,084,903)
Reconciliation to net cash flow used in
continuing operations:
Depreciation and amortization 84,707 82,817
Loss on sale of distribution channel 2,250,263 -------
Changes in working capital items of continuing operations:
Accounts receivable 2,967,240 605,339
Inventory 3,102,354 836,537
Prepaid expenses and other assets 6,764,200 733,359
Receipt of CASCO note receivable 3,500,000 ------
Accounts payable and accrued liabilities (8,370,124) (899,253)
Deferred revenue (297,032) (310,370)
------------ --------------
Net cash from (used in)
continuing operations 5,526,849 (36,474)
------------ --------------
Net cash from (used in)
discontinued operations (4,052,985) (837,521)
------------ --------------
Net cash from (used in) operations 1,473,864 (873,995)
------------ --------------
Cash Flow From (Used In) Investing Activities:
Proceeds from sale of property and equipment 16,887 -------
Payments for purchases of property and
equipment (11,036) (90,754)
Proceeds from disposition of distribution
channel 10,500,000 ------
------------ --------------
Net cash flow from (used in)
investing activities 10,505,851 (90,754)
------------ --------------
Cash Flow From (Used In) Financing Activities:
Proceeds from debt obligations 19,490,057 12,748,906
Proceeds from subordinated debt issued 3,000,000 --------
Payments on debt and lease obligations (29,913,576) (11,911,951)
Payments on subordinated debts issued (2,725,000) -----
------------ --------------
Net cash flow from (used in)
financing activities (10,148,519) 836,955
------------ --------------
Increase in cash 1,831,196 (127,794)
Cash, beginning of period 412,060 317,911
------------ --------------
Cash, end of period $ 2,243,256 $ 190,117
============= =============
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. is a publisher and distributor of childrens books. The
Company markets most of its products directly to children in elementary and
secondary schools and as a result its business cycle correlates closely to the
school year. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the full year.
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 its Book Fair business to Scholastic, Inc.
for $10.5 million, $1.0 million of which was placed in escrow pending
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 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 to be
incurred in effecting the transfer of inventory to Scholastic, Inc. and in
discontinuing the book fair business. This resulted in a net loss of
$2.25 million related to the disposal of the book fair business. The
discontinued operations also incurred a net loss from operations for the
six months ended June 30, 1998 of $1.8 million for a total reported loss on
discontinued operations of $4.0 million.
Pages, Inc. will continue to operate its book publishing business and its
Junior Library Guild subsidiary, which have been historically profitable.
Note 3. Debt Obligations
The Company has a $1.2 million Revolving Note Agreement bearing interest
at the lender's prime rate plus 1%, due January 1, 2000. $305,000 was unused
at June 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 25, 1998 and the
Provident warrants were cancelled.
Note 4. Supplemental Cash Flow Information
Cash payments during the six months ended June 30, 1998 and 1997, included
interest of $595,000 and $475,000, respectively, and income taxes of $340,000
and $560,000, respectively.
Note 5. Stock Appreciation Rights
Included in the results of operations for the six months ended June 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
cancelled.
Note 6. Income Taxes
There was no income tax provision for the three and six months ended June
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 Six Months
Ended Ended
June 30, 1998 June 30, 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 $(3,479,053) $(4,474,759)
============ ============
Basic earnings(loss) per share $ (.53) $ (.68)
============ ============
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 $ (3,479,053) $(4,474,759)
============ ============
Diluted earnings(loss) per share $ (.53) $ (.68)
============ ============
At June 30, 1998 and 1997, options and warrants were outstanding during
the periods but were not included in the computation of dilutive EPS because the
potential common stock would be antidilutive.
Note 8. Assets Held For Disposition
Assets held for disposition at June 30, 1998 are a vacant warehouse, office
facility and real estate in Worthington, Ohio associated with the book fair
business.
<PAGE>
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.
Second Quarter 1998 Compared with Second Quarter 1997
Revenues from continuing operations for the three months ended June 30,
1998, approximately $700,000 compared to approximately $800,000 for the three
months ended June 30, 1997, a decrease of 13% or approximately $100,000. The
decrease in revenues is attributable to a $185,000 reduction in sales from a
product line discontinued in 1997.
Cost of goods sold was approximately $300,000 for the three months ended
June 30, 1998, compared to approximately $350,000 for the three months ended
June 30, 1997, a decrease of 16% or approximately $50,000. 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 43% during the second quarter of
1998, compared to the same period in 1997 of 44%.
Selling, general, and administrative expense was approximately $450,000
for the three months ended June 30, 1998, compared to approximately $750,000
for the three months ended June 30, 1997, a decrease of 40% or approximately
$300,000. This decrease was also primarily related to the discontinued product
line.
Interest expense was approximately $130,000 for the three months ended
June 30, 1998, compared to interest income of $65,000 for the three months
ended June 30, 1997, an increase of 300% or $195,000. The average outstanding
debt for the three months ended June 30, 1998, approximated $9.0 million
compared to $11.7 million for the three months ended June 30, 1997.
Additionally, the average interest rate for the three months ended June 30,
1998, approximated 10.4% compared to approximately 9.50% for the three months
ended June 30, 1997. Netted in interest expense for the three months ended
June 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 $43,000 for the
three months ended June 30, 1998, compared to $33,000 for the three months
ended June 30, 1997, an increase of 31% or approximately $10,000.
There was no income tax provision for the three months ended June 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 second quarter ended June 30, 1998, resulted in an operating loss of
$95,000 compared to an operating loss of $340,000 in the second quarter ended
June 30, 1997. Without the gross profit from discontinued product lines
included in the second quarter ended June 30, 1996, operating results for the
second quarter ended June 30, 1997, approximated the results for the same
period in 1996.
The second quarter ended June 30, 1998, resulted in a net loss of $3.5
million versus a net loss of $845,000 in the second quarter ended June 30,
1997. Included in the net loss for the second quarter ended June 30, 1998 and
June 30, 1997, was $3.3 million and $570,000, respectively, of loss from the
discontinued operations of the Company's book fair business (which was sold to
Scholastic, Inc. at June 25, 1998). Without the loss from discontinued
operations and the gross profit from discontinued product lines mentioned
above, net results for the second quarter ended June 30, 1998, approximated the
same as the period in 1997. Basic and diluted loss per share increased
from $.14 in the comparable quarter last year to a net loss per share of $.53.
Six Months Ended June 30, 1998 Compared with Six Months Ended June 30, 1997
Revenues for the six months ended June 30, 1998, approximated $1.2 million
compared to approximately $1.6 million for the six months ended June 30, 1997,
a decrease of 25% or approximately $400,000. Considering the comparative
quarterly discussion above, the decrease in revenues is principally
attributable to the $300,000 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 $520,000 for the six months ended
June 30, 1998, compared to approximately $630,000 for the six months ended June
30, 1997, a decrease of 17% or approximately $110,000. Considering the
comparative quarterly discussion above, 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 44% for the six months ended June 30,
1998, compared to 40% for the six months ended June 30, 1997.
Selling, general and administrative expense was approximately $780,000 for
the six months ended June 30, 1998, compared to $1.2 million for the six months
ended June 30, 1997, a decrease of 37% or approximately $420,000. Considering
the comparative quarterly discussion above, 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 $215,000 for the six months ended June
30, 1998, compared to interest income of approximately $126,000 for the six
months ended June 30, 1997, an increase of 270% or approximately $340,000. The
average outstanding debt for the six months ended June 30, 1998, approximated
$10.4 million compared to $11.7 million for the six months June 30, 1997. The
average interest rate for the six months ended June 30, 1998, approximated
10.46% compared to approximately 9.38% for the six months ended June 30, 1997.
Netted in interest expense for the six months ended June 30, 1998 is
approximately $180,000 of interest income earned on the $5.0 million note
receivable from the former subsidiary, CASCO.
Depreciation and amortization expense was approximately $85,000 for the
six months ended June 30, 1998, compared to $83,000 for the six months ended
June 30, 1997, an increase of 2% of $2,000.
The six months ended June 30, 1998, resulted in an operating loss of
$200,000 compared to operating loss of $370,000 for the six months ended June
10, 1997.
The six months ended June 30, 1998, resulted in a net loss of $4.5 million
versus a net loss of $1.1 million for the six months ended June 30, 1997.
Included in the net income for the six months ended June 30, 1998 and June 30,
1997, was $4.1 million and $830,000, respectively, of loss from the
discontinued operations of the Company's book fair business (which was sold to
Scholastic, Inc. at June 25, 1998). Without the loss from discontinued
operations mentioned above, net results improved in the six months ended June
30, 1998, over the six months ended June 30, 1997. Basic and diluted
loss per share increased from $.18 for the six months ended June 30, 1997, to a
net loss per share of $.68 for the six months ended June 30, 1998.
Liquidity and Capital Resources
The Company had a net increase in cash for the six months ended June 30,
1998, of $1.8 million, compared to a net decrease for the comparable period in
the prior year of $128,000. Cash provided by operating and investing
activities funded the net cash used in financing activities during the six
months ended June 30, 1998.
For the six months ended June 30, 1998, continuing operations provided
$1.7 million in cash as compared to $720,000 used during the six months ended
June 30, 1997. Included in operating cash outlays in the six months
ended June 30, 1998, was $4.0 million related to discontinued book fair
operations. The decrease in cash used in operations for the second 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 six months ended
June 30, 1998, representing sale of the Company's book fair business. The six
months ended June 30, 1997 had cash used in investing activities of $90,000,
primarily representing the payments for fixed assets.
For the six months ended June 30, 1998, net cash used in financing
activities was $10.4 million. This compares to net cash provided by financing
activities of $800,000 for the six months ended June 30, 1997. Financing
activities consisted primarily of borrowings and paydowns on the revolving line
of credit in 1998 and 1997. The Company had a $1.2 million revolving credit
facility ($305,000 unused at June 30, 1998) bearing interest at the lender's
prime rate plus 1%, due January 1, 2000.
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 funds are still in escrow while the
Company and Scholastic, Inc. finalize the inventory collection and valuation.
Pages used the proceeds from the sale to satisfy its subordinated debt
held by Provident Bank and to pay $6.8 million toward the outstanding balance
due on its secured debt to The Huntington Bank. Funds released from escrow
will be applied toward the reduction of the debt held by The Huntington Bank.
Pages 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. Pages will continue to operate its Junior Library
Guild subsidiary which has historically been profitable.
At June 30, 1998, the Company held trade payables of $2.3 million of which
$900,000 was over 90 days past normal terms.
During the six months ended June 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 Bank.
Pages may have a liquidity problem during the next twelve months. The
Company will assess its requirements under its reduced structure and then pursue
areas where it may raise capital.
Seasonality
The childrens literature business is highly seasonal and correlated
closely to the school year. As a result, most of the income is generated
between the months of September and May. Due to the seasonality, the Company
experiences negative cash flow during the summer months. Further, in order to
build its inventory for its Fall sales, the Company's borrowing increases over
the summer and generally peak during late Fall. Inventory and receivables
reach peak levels during the months of October through December.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: 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 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.
ITEM 3: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The following exhibits are filed as part of this report:
Number Description of Document
------ ------------------------
*2.1 Asset Purchase Agreement dated June 25, 1998 by
Scholastic, Inc. for purchase of certain book fair
assets from Pages Book Fairs, Inc., subsidiary of
Pages, Inc.
27 Financial Data Schedule as of June 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: August 14, 1998 By: /s/ Steven L. Canan
------------------- -----------------------
Steven L. Canan
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,243,256
<SECURITIES> 0
<RECEIVABLES> 938,464
<ALLOWANCES> 100,000
<INVENTORY> 2,021,919
<CURRENT-ASSETS> 5,346,501
<PP&E> 1,116,662
<DEPRECIATION> 520,800
<TOTAL-ASSETS> 9,007,620
<CURRENT-LIABILITIES> 6,306,992
<BONDS> 1,973,201
0
0
<COMMON> 68,627
<OTHER-SE> 658,799
<TOTAL-LIABILITY-AND-EQUITY> 9,007,620
<SALES> 1,189,380
<TOTAL-REVENUES> 1,189,380
<CGS> 524,893
<TOTAL-COSTS> 524,893
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 215,059
<INCOME-PRETAX> (4,474,759)
<INCOME-TAX> 0
<INCOME-CONTINUING> (421,774)
<DISCONTINUED> (4,052,985)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,474,759)
<EPS-PRIMARY> (.68)
<EPS-DILUTED> (.68)
</TABLE>
