<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended February 28, 1997
-----------------
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
For the transition period from to
--------------- ------------------
Commission File Number: 0-5531
----------------------
FLORAFAX INTERNATIONAL, INC.
------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 41-0719035
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8075 20th Street, Vero Beach, Florida 32966
- --------------------------------------------------------------------------------
(Address of principal executive offices)
561-563-0263
------------
(Issuer's telephone number)
-------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
--- ---
The registrant had 8,022,597 shares of common stock, $0.01 par value,
outstanding at February 28, 1997.
Transitional Small Business Disclosure Format (Check one): Yes ; No X
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<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION Page No.
---------------------
<S> <C> <C> <C>
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
February 28, 1997 and August 31, 1996 1 - 2
Consolidated Statements of Income and
Accumulated Deficit
Three Months and Six Months Ended February 28, 1997
and February 29, 1996 3 - 4
Consolidated Statements of Cash Flows
Six Months Ended February 28, 1997
and February 29, 1996 5 - 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 12
PART II OTHER INFORMATION
-----------------
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13 - 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14 - 16
Signatures 17
</TABLE>
<PAGE> 3
FLORAFAX INTERNATIONAL, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(IN THOUSANDS)
ASSETS FEBRUARY 28 AUGUST 31
1997 1996
------------ ---------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,585 $ 3,671
Restricted cash 77 99
Accounts receivable:
Members, less allowance of $468
at February 28, 1997 and $532 at
August 31, 1996 1,045 1,202
Charge card issuers 1,060 326
Other 85 73
------------ ---------
2,190 1,601
Deferred tax asset 271 261
Prepaid and other assets 146 54
------------ ---------
TOTAL CURENT ASSETS 8,269 5,686
Property and equipment, at cost:
Fixtures and equipment 1,241 1,188
Computer systems 761 670
Communication systems 971 929
Leasehold improvements 267 25
------------ ---------
3,240 2,812
Accumulated depreciation
and amortization 2,611 2,534
------------ ---------
629 278
Other assets:
Excess of cost over net assets
of acquired business 1,995 1,995
Defferred tax asset, net of allowance 627 602
Other 118 261
------------ ---------
2,740 2,858
------------ ---------
TOTAL ASSETS $ 11,638 $ 8,822
============ =========
</TABLE>
See accompanying notes.
1
<PAGE> 4
FLORAFAX INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(IN THOUSANDS)
LIABILITIES AND STOCKHOLDERS' EQUITY FEBRUARY 28 AUGUST 31
1997 1996
----------- ---------
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt $ 79
Accounts payable 4,877 3,913
Unearned directory income 28
Accrued liabilities:
Member benefits 183 170
Other 1,381 1,036
----------- ---------
TOTAL CURRENT LIABILITIES 6,469 5,198
Long term debt, less current maturities 80 334
Membership security deposits 58 53
----------- ---------
TOTAL LIABILITIES 6,607 5,585
STOCKHOLDERS' EQUITY
Preferred stock ($10 par value, 600,000
shares authorized, none issued)
Common stock - ($.01 par value, 70,000,000 shares
authorized, 8,243,597 and 8,232,727 issued at
February 28, 1997 and August 31, 1996, respectively,
8,220,597 and 8,209,727 outstanding at February 28, 1997
and August 31, 1996, respectively 83 83
Additional paid-in capital 10,098 10,087
Accumulated deficit (5,150) (6,933)
----------- ---------
TOTAL STOCKHOLDERS' EQUITY 5,031 3,237
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,638 $ 8,822
=========== =========
</TABLE>
See accompanying notes.
2
<PAGE> 5
FLORAFAX INTERNATIONAL, INC.
Consolidated Statements of Income and Accumulated Deficit
(In Thousands Except per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
February 28 February 29 February 28 February 29
1997 1996 1997 1996
----------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Net revenues:
Member dues and fees $ 624 $ 507 $ 1,134 $ 976
Floral and other order
processing 1,915 1,764 2,923 2,698
Directory and advertising fees 353 296 656 593
Charge card processing 395 359 792 679
Other revenue 8 13 12 37
----------- ----------- ----------- -----------
3,295 2,939 5,517 4,983
Expenses:
General and administrative 1,669 1,414 2,843 2,535
Selling, advertising and promotion 950 806 1,561 1,330
Directory publishing 97 81 187 157
Depreciation, amortization 67 103 127 206
and retirements
----------- ----------- ----------- -----------
2,783 2,404 4,718 4,228
----------- ----------- ----------- -----------
Operating income 512 535 799 755
Other income (expense):
Interest expense (1) (80) (4) (158)
Other 915 916 1
Interest income 45 26 74 46
----------- ----------- ----------- -----------
959 (54) 986 (111)
----------- ----------- ----------- -----------
Income before taxes and
extraordinary item $ 1,471 $ 481 $ 1,785 $ 644
Income taxes 33 23 2 29
----------- ----------- ----------- -----------
Income before extraordinary item 1,438 458 1,783 615
Extraordinary item 128 128
----------- ----------- ----------- -----------
Net income $ 1,438 $ 586 $ 1,783 $ 743
</TABLE>
(Continued)
3
<PAGE> 6
FLORAFAX INTERNATIONAL, INC.
Consolidated Statements of Income and Accumulated Deficit
(In Thousands Except per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
February 28 February 29 February 28 February 29
1997 1996 1997 1996
----------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Net income $ 1,438 $ 586 $ 1,783 $ 743
Accumulated deficit at beginning of period (6,588) (9,038) (6,933) (9,195)
----------- ----------- ----------- -----------
Accumulated deficit at end of period $ (5,150) $ (8,452) $ (5,150) $ (8,452)
=========== =========== =========== ===========
Primary earnings per common share:
Income before extraordinary item $ 0.16 $ 0.06 $ 0.20 $ 0.09
Extraordinary item 0.02 0.02
----------- ----------- ----------- -----------
Net Income $ 0.16 $ 0.08 $ 0.20 $ 0.11
=========== =========== =========== ===========
Weighted average shares outstanding 8,737,000 6,993,000 8,707,000 6,671,000
Fully diluted earnings per common share:
Income before extraordinary item $ 0.16 $ 0.06 $ 0.20 $ 0.09
Extraordinary item 0.02 0.02
----------- ----------- ----------- -----------
Net Income $ 0.16 $ 0.08 $ 0.20 $ 0.11
=========== =========== =========== ===========
Weighted average shares outstanding 8,806,000 7,117,000 8,797,000 6,755,000
</TABLE>
See accompanying notes.
4
<PAGE> 7
FLORAFAX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28 FEBRUARY 29
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,783 $ 743
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation, amortization, and retirements 76 150
Provision for doubtful accounts 99 103
Deferred tax benefit (35)
Increase (decrease) in cash
flows due to changes in:
Accounts receivable (688) (1,147)
Prepaid and other assets (92) (78)
Other assets 143 50
Accounts payable 964 1,534
Accrued liabilties 386 152
Membership security deposits 5 (10)
----------- ---------
Net cash provided by
operating activities $ 2,641 1,497
INVESTING ACTIVITIES
Capital expenditures (427) (53)
Release of restricted cash 22 459
----------- ---------
Net cash (used in) provided by
investing activities $ (405) $ 406
</TABLE>
(Continued)
5
<PAGE> 8
FLORAFAX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28 FEBRUARY 29
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
FINANCING ACTIVITIES
Proceeds from issuing debt 2,500
Proceeds from issuing stock 11 31
Payments of debt (333) (3,057)
----------- -----------
Net cash used in
financing activities (322) (526)
----------- -----------
Net increase in
cash and cash equivalents 1,914 1,377
Cash and cash equivalents
at begining of year 3,671 1,972
----------- -----------
Cash and cash equivalents
at end of period $ 5,585 $ 3,349
=========== ===========
Supplemental disclosures of
cash flow information:
Cash paid during the period for interest $ 1 $ 208
Cash paid during the period for income tax $ 24 $ 6
=========== ===========
</TABLE>
See accompanying notes.
6
<PAGE> 9
FLORAFAX INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED FEBRUARY 28, 1997
Note (1) Management's Opinion and Accounting Policies
The accompanying interim financial statements should be read in conjunction
with the Florafax International, Inc. (the Company's) Form 10-KSB for the year
ended August 31, 1996.
In the opinion of Management the unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the Company's consolidated financial position as of
February 28, 1997 and the consolidated results of operations and cash flows for
the six months ended February 28, 1997.
Historically, the Company's flowers-by-wire operation is seasonal in that its
member florists send a much larger volume of orders during Thanksgiving, the
Christmas season, Valentine's Day, Easter and Mother's Day. Therefore, the
results of operations of an interim period may not necessarily be indicative of
the results expected for a full year. In an effort to increase orders to member
florists the Company continues to engage in non traditional campaigns through
it's wholly owned subsidiary, The Flower Club (800 800 SEND). The Flower Club,
Inc. was formed to generate additional orders by pursuing relationships with
nationally recognized corporations. The Company engages in joint marketing
campaigns with these corporations not only during holidays, but also during non
seasonal periods in an effort to provide member florists with orders during
slow periods of the year. Floral orders and handling fees generated through The
Flower Club are significant, representing 60% of gross floral order revenue
for the six months ended February 28, 1997 compared to 56% for the six months
ended February 29, 1996.
Note (2) Contingencies
Florafax International, Inc. vs. Bellerose Floral Inc. and GTE Market Resources
Inc., et al.
During 1990 the Company filed a lawsuit against GTE Market Resources, Inc.
(GTE/MR) for failure on the part of GTE/MR to fulfill certain contractual
telecommunication services on behalf of Florafax. On November 23, 1993 a jury
awarded Florafax $1,481,000 in net damages against GTE/MR. GTE/MR appealed the
case and the case was ultimately ruled on by the Oklahoma Supreme Court. During
the quarter ended February 28, 1997 the Oklahoma Supreme Court upheld the
decision of the trial court, and ruled in favor of Florafax.
The Company's legal counsel tried this case on a contingency fee basis. The
agreement between the Company and its legal counsel stipulated that the
Company's attorneys were to receive 40% of the net proceeds if the case reached
the appellate court. Consequently, during the quarter ended February 28, 1997
the Company received 60% of the ultimate proceeds, which amounted to
$1,041,000.
7
<PAGE> 10
FLORAFAX INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of February 28, 1997 was $5,585,000, compared to $3,671,000 at
August 31, 1996, and $3,349,000 at February 29, 1996. Due to the amount of cash
on hand, during the six months ended February 28, 1997 the Company retired
$333,000 of its outstanding debt. As a result, the Company's long term debt at
February 28, 1997 was only $80,000.
The Company continues to generate positive cash flow from operations. Cash
provided by operations for the six months ended February 28, 1997 was
$2,641,000 compared to $1,497,000 for the six months ended February 29, 1996.
Included in the $2,641,000 generated during the six months ended February 28,
1996 were the proceeds from the GTE/MR judgment in the amount of $1,041,000
(as more fully discussed in note 2).
The Company is in the process of expanding its facilities in Vero Beach,
Florida by approximately 8,000 square feet. The expansion is expected to be
complete by April 1997. At the present time the Vero Beach facilities include
the Company's headquarters and an order center capable of employing up to 50
telephone sales representatives. The expansion will provide for additional
administrative and marketing offices and increase the call center to allow for
up to 125 telephone sales representatives. The total cost of the expansion is
estimated to be $425,000. As of February 28, 1997 the Company has expended
approximately $240,000 on the building addition, and has used operating cash to
fund the addition.
Operating cash flows historically have been generated primarily from processing
floral orders and charge card transactions for the Company's member florists,
as well as collecting dues, fees and directory advertising from the members.
Floral order processing may require settlement with the fulfilling florist
before collection of funds from the sending florist. Charge card processing,
however, generally allows the Company to collect funds from the charge card
issuer prior to settlement with the merchant. Since in both types of
transactions the Company is both collecting and settling funds, the timing of
these cash flows has a significant impact on the Company's liquidity.
As discussed in Note 1 to the consolidated financial statements the Company
continues to engage in non traditional campaigns through it's wholly owned
subsidiary, The Flower Club (800 800 SEND). This has helped to improve the
Company's cash flow as the majority of orders generated through The Flower
Club are paid for by credit cards. This allows the Company to receive a
significant portion of its funds within days after processing the transaction.
For the six months ended February 28, 1997 floral orders and handling fees
generated through The Flower Club amounted to approximately $8,947,000 compared
to $7,662,000 for the six months ended February 29, 1996, an increase of 17%.
8
<PAGE> 11
FLORAFAX INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
General Comments
Revenues are up in every material category for the six and three month periods
ended February 28, 1997 when compared to the same periods in the previous year.
Operating income for both the six and three month periods remained relatively
constant when compared to the same periods in the previous year. Management
explains that, due to the Company's sustained profitability and cash position
(cash comprises nearly 50% of total assets as of February 28, 1997), the
Company remained focused on long term growth and made certain expenditures,
primarily in the marketing and personnel areas, to allow the Company to
continue to increase revenues. The growth in floral order revenues over the
last two years has been significant. The Company is committed to continuing
this growth and, accordingly, has launched campaigns with new marketing
partners. Many of these industries have little or no history in marketing
floral arrangements through billing inserts. The ultimate success of such
endeavors may not be known until after major floral sending holidays. As a
result of adding new marketing partners and in an effort to take advantage of
anticipated increased floral orders, the Company increased telephone order
entry staff. While order volume was up (15% and 17% increase for the quarter
and six months, respectively), the increase was not as significant as
anticipated, resulting in excess staffing expense.
In addition, the Company continues to engage in it's current floral membership
expansion program as well as expansion in the credit card processing business
segment. There are a number of up front costs necessary to increase revenues in
these areas. Consequently, the long term effect on operating income from these
new florists and credit card merchants may not be recognized until future
periods.
Net Revenues
Revenue from member dues and fees has increased for both the six and three
month periods ended February 28, 1997 when compared to the same periods in the
prior year. This increase is attributable to two revenue areas. First, there
has been a slight increase in dues and also an increase in dues paying
members. Second, there has been an increase in certain order fees resulting
from increased order volume.
Floral order revenue increased by 9% and 8% for the quarter and six months
ended February 28, 1997, respectively, when compared to the same periods in the
previous year. This increase is primarily a result of orders generated by The
Flower Club. Orders and handling fees generated by The Flower Club increased by
15% and 17% for the quarter and six months ended February 28, 1997,
respectively, when compared to the same period in the previous year.
9
<PAGE> 12
FLORAFAX INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net revenues from credit card operations increased by 10% and 17% for the
quarter and six months ended February 28, 1997, respectively, when compared to
the same periods in the previous year. This is due primarily to the increase in
gross dollars processed.
Expenses
Member support, general and administrative expenses increased by 18% for the
quarter ended February 28, 1997 when compared to the same quarter in the prior
year. The primary component causing the increase was labor costs associated
with the increase in The Flower Club orders. As previously mentioned the
Company increased its order entry personnel in anticipation of a significant
increase in order volume during the Christmas season and Valentines Day. Member
support, general and administrative expenses increased by 12% for the six
months ended February 28, 1997 when compared to the same period in the prior
year. While labor costs associated with The Flower Club orders increased
significantly, they were offset somewhat by a decrease in telephone expense due
to a rate decrease from the Company's long distance carrier. This lower rate
was in place for the entire six month period ending February 28, 1997, but was
in place for only a portion of the six months ended February 29, 1996.
Selling and advertising expenses show an increase for both the quarter and six
months ended February 28, 1997 when compared to the same period in the prior
year. The increase is primarily attributable to expenses related to orders
generated by The Flower Club. The main components of these increases were costs
associated with producing and distributing flyers to customers of corporate
partners and commissions paid to an outside marketing firm whose
responsibilities include attracting and maintaining Flower Club corporate
partners.
Depreciation and amortization declined significantly for both the quarter and
six months ended February 28, 1997 when compared to the prior year. Many of the
Company's depreciable assets have becoming fully depreciated. In addition, a
significant portion of the decline is a result of terminating the Floranet 5000
program in the last quarter of fiscal 1996. At the time this program was
terminated all Floranet 5000 equipment and related software development costs
were charged to expense. At the present time the Company is expanding its
operational facilities. Once the expansion is complete depreciation should be
expected to increase as a result of depreciation on the building itself as well
as the related furniture and equipment that will be used in the new facility.
Other income (expense)
Interest expense has been virtually eliminated during the quarter and six
months ended February 28, 1997. During the last quarter of fiscal 1996 the
majority of the Company's debt was converted to equity, thereby eliminating the
interest expense associated with this debt. In addition, shortly after
10
<PAGE> 13
FLORAFAX INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
year end the Company retired another $333,000 of debt, bringing the total long
term debt of the Company to $80,000 as of February 28, 1997.
The primary components of other income for the quarter and six months ended
February 28, 1997 are as follows. First, during February 1997 the Company
received the proceeds from the GTE/MR litigation in the amount of $1,041,000
(see note 2). Second, the Company terminated a consulting agreement with a
marketing consultant in Westlake Village, California. At the time the
agreement was terminated the Company charged to earnings $87,000 which had been
capitalized at the time the agreement was entered into.
Income Taxes
The Company accounts for income taxes using Financial Accounting Standard Board
Statement No. 109, Accounting for Income Taxes, which requires the asset and
liability method of accounting for income taxes. Under the asset and liability
method deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Historically, the Company had provided the full valuation allowance on
net deferred tax assets based on the Company's history of losses and the
uncertainty surrounding the Company's ability to recognize such assets.
However, during the year ended August 31, 1996 the Company re-evaluated its
historical losses, and its projected future earnings, and reached the
conclusion that it was more likely than not that some portion of the deferred
tax asset would be realized. At that time the valuation allowance was reduced
resulting in a net deferred tax benefit. For the quarter ended February 28,
1997 the Company has recorded income tax expense related primarily to
alternative minimum tax. Based on facts and circumstances at February 28, 1997
it appears that the Company may have no material tax liability during the
fiscal year ended August 31, 1997. Consequently, for the six months ended
February 28, 1997 the Company has recorded no income tax expense other than
alternative minimum tax. The Company will continue to evaluate the valuation
allowance based on current and projected future earnings and will make
adjustments to the allowance based on the evidence and circumstances at that
time.
Forward-looking statements
When used in this report, the words "plan(s)", "intends(s)", "expect(s)",
"feel(s)", "will", "may", "believe(s)", "anticipate(s)", and similar
expressions are intended to identify forward-looking statements. The events
described in such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. The Company undertakes no
obligation to republish revised forward-looking statements to reflect
11
<PAGE> 14
FLORAFAX INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events. Readers are also urged to carefully review and consider
the various disclosures made by the Company which attempt to advise interested
parties of the factors which affect the Company's business, including the
disclosures made under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the report, as well as the
Company's periodic reports of Form 10-KSB, 10-QSB and 8-K filed with the
Securities and Exchange Commission.
12
<PAGE> 15
PART II OTHER INFORMATION
Item 1. Legal Proceedings
For a summary of legal proceedings, reference is made to Item 3, Legal
Proceedings, included in the Company's annual report on Form 10-KSB for the
year ended August 31, 1996 and to Note 2 of the Notes to Consolidated Financial
Statements included in this filing.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. The Submission of Matters to a Vote of Security Holders
An annual meeting of the shareholders of the Company was held on January 28,
1997 pursuant to notice of the meeting and the proxy statement for the annual
meeting first mailed on or about December 11, 1996 to all shareholders of
record as of November 29, 1996.
The meeting was held:
1) To elect six directors;
2) To consider and vote upon a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of common stock from
18,000,000 to 70,000,000; and
3) To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
The following individuals were nominated as directors and were the only
nominees submitted to the shareholders. The number of shares voted and those
withheld from each such nominee are listed below:
13
<PAGE> 16
<TABLE>
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C>
T. Craig Benson 7,682,080 5,744
Solomon O. Howell, Jr. 7,682,080 5,744
William E. Mercer 7,682,080 5,744
James H. West 7,682,080 5,744
Andrew W. Williams 7,681,893 5,931
Kenneth G. Puttick 7,682,080 5,744
</TABLE>
There were no abstentions or broker non votes.
Other matters submitted to a vote by the shareholders are shown below, along
with the votes for and against each matter.
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON VOTES
--- ------- ------- ---------
<S> <C> <C> <C> <C>
To amend the Company's Certificate of
Incorporation to increase the number of
authorized common shares from
18,000,000 to 70,000,000 7,433,608 248,862 4,792 562
</TABLE>
There was no other business to come before the meeting. The total number of
shares present at the meeting in person or by proxy was 7,687,824 representing
94% of the shares outstanding, 8,220,597.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(27) Financial Data Schedule (for SEC use only).
The following items have been included as exhibits in filings by the Company in
a previous filing and, accordingly, are incorporated here by reference.
14
<PAGE> 17
Exhibit Reference
(3) Articles of incorporation and Bylaws of the Registrant, as
amended.
(10) Material Contracts
(a) Convertible subordinated notes due to Clark Estates
maturing June 30, 1996.
(b) Subordinated debentures maturing in 1998.
(c) Agreement dated December 3 1993, Addendum, Second
Addendum, Third Addendum, Fourth Addendum and Fifth
Addendum thereto by and between the Registrant and
Citizens Fidelity Bank and Trust Company (now PNC
Bank, Kentucky, Inc.).
(d) Purchase Agreement for certain assets formerly owned by
Savannah Floral Services, Inc. dated March 10, 1994.
(e) Note Payable to Andrew Williams dated March 10, 1994.
(f) Promissory Note to Citrus Bank dated November 9, 1993.
(g) Promissory Note to Citrus Bank dated November 17, 1993.
(h) Promissory Note to Citrus Bank dated January 25, 1994.
(i) Loan to James H. West, Director, President and Chief
Financial Officer, dated August 28, 1994.
(j) Consulting agreement with David Harper of Ventura County
California dated December 10, 1993.
(k) Promissory Note to Citrus Bank dated August 31, 1995.
(l) Operating lease agreement between Registrant and Alvin
Wunderlich dated April 1995.
15
<PAGE> 18
Exhibit Reference
(m) Agreement of Purchase and Sale made and entered into to be
effective December 29, 1995 by and between Registrant
and St. James Partners, LTD. 7% Convertible
Promissory Note in the amount of $2,500,000 dated
Dated February 28, 1996 due February 28, 1997.
(n) Security agreement dated February 28, 1996 executed in
connection with the $2,500,000 Convertible Promissory
Note.
(o) Common Stock Purchase Warrant for 250,000 shares of the
registrants common stock expiring January 1, 2001.
(p) Common Stock Purchase Warrant for 400,000 shares of the
registrants common stock expiring January 1, 2001.
(22) Subsidiaries of the Registrant
Reports on Form 8-K
No reports on Form 8-K were filed during the second quarter of fiscal 1997.
16
<PAGE> 19
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.
Florafax International, Inc.
Date: April 2, 1997 /s/ James H. West
----------------------------
James H. West
President and Chief
Financial Officer
17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
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