<PAGE>
UNITED STATES
Securities and Exchange Commission
Washington, DC 20549
FORM 10-QA2
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended: July 31, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
0-3255
(Commission File Number)
JAYARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-1863419
(State or other jurisdiction of incorporation) (IRS Employer Identification No)
Post Office Box 741528, Houston, Texas 77274
(Address of principal executive offices ) (Zip Code)
(713) 783-9184
(Registrant's telephone number, including area code)
(Former name, former address and fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
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 issuer's classes
of common stock, as of the following dates:
Class Outstanding at 7/31/95 7,978,799
Common Stock $0.30 Par Value Outstanding at amendment date 5/3/96 7,978,799
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Item 1. Financial Statements.
Part I.
Item 1
JAYARK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars Expressed In Thousands)
<TABLE>
<CAPTION>
7/31/95 4/30/95
(unaudited) (audited)
<S> <C> <C>
Assets
Current Assets:
Cash and Cash Equivalents $ 404 $ 1,177
Accounts & Other Receivables - Net 6,659 5,769
Inventories 8,526 8,533
Deferred Federal Income Taxes 296 296
Other Current Assets 306 379
----------- ---------
Total Current Assets 16,191 16,154
Non Current Assets
Plant & Equipment - Net 982 988
Excess Cost Over Net Assets of Bus Acq-Net 327 333
Invest In & Advances In Certain Assets Acq 2,055 0
Deferred Federal Income Taxes 52 52
----------- ---------
Total Non Current Assets 3,416 1,373
----------- ---------
Total Assets $19,607 $17,527
----------- ---------
----------- ---------
Liabilities & Stockholders' Equity
Current Liabilities
Notes Payable & Lines of Credit $ 5,783 $ 5,545
Current Maturities of Long Term Obligations 0 24
Trade Accounts Payable 1,763 998
Accrued Liabilities 312 339
Federal & State Income Taxes Payable (93) 464
Other Current Liabilities 727 0
----------- ---------
Total Current Liabilities 8,492 7,370
Non Current Liabilities
Long Term Obligations 47 43
Subordinated Debentures 1,500 1,500
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Total Non Current Liabilities 1,547 1,543
----------- ---------
Total Liabilities 10,039 8,913
Stockholders' Equity
Common stock of $.30 par value. Authorized
10,000,000 Shares; Issued and Outstanding
7,978,799 at January 31, 1996 and 6,978,799
at April 30, 1995 2,394 2,094
Additional paid-in capital 7,967 7,110
Retained Earnings (Deficit) ( 793) (590)
----------- ---------
Total Stockholders' Equity 9,568 8,614
----------- ---------
Total Liabilities & Stockholders' Equity $19,607 $17,527
----------- ---------
----------- ---------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JAYARK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Results of Operations
(Dollars Expressed in Thousands Except per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
7/31/95 7/31/94
<C> <C>
Continuing Operations:
Net Revenues $ 9,839 $10,674
Costs & Expenses
Cost of Revenues 7,601 8,066
Selling, General and Admin 2,133 2,441
Interest 308 166
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Total Costs & Expenses 10,042 10,673
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Pre Tax Earnings (losses) (203) 1
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Provision (Credit) For Income Taxes 0 0
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Income (Loss) From Continuing Op (203) 1
Discontinued Operations:
Income From Discontinued Operations,
Net of Income Taxes 0 8
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Net Income (loss) (203) 9
--------- ---------
--------- ---------
Primary Earnings (losses) per Com Sh:
Continuing Operations $ (0.03) $ 0.00
Discontinued Operations 0.00 0.00
--------- ---------
Net Income $ (0.03) $ 0.00
--------- ---------
--------- ---------
Weighted Average Common Shares 7,402,712 6,614,079
--------- ---------
--------- ---------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JAYARK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
For The Three Months Ended
(Dollars Expressed in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
7/31/95 7/31/94
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (loss) From Continuing Operations $ (203) $ 1
Depreciation and Amortization 78 6
Changes In:
Accounts and Other Receivables (890) 55
Federal & State Income Taxes Receivable 0 0
Inventories 7 (706)
Other Current Assets 73 (100)
Notes Payable 238 (321)
Current Maturities of Long Term Obligations (24) (39)
Accounts Payable 765 (183)
Accrued Liabilities (27) 94
Federal & State Income Taxes Payable (557) (82)
Other Liabilities 727 109
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Net Cash Provided By (Used In) Operating Activities 187 (1,166)
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Net Income (Loss) From Discontinued Operations 0 8
Cash Flows From Investing Activities
Capital Expenditures (66) 30
Invest In & Advances In Certain Assets Acq (2,055) 0
Issuance Of Common Stock 1,157 0
Net Assets of Discontinued Operations 0 399
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Net Cash Provided By (Used In) Investing Activities (964) 429
-------- --------
Cash Flows From Financing Activities
Long Term Obligations 4 37
Acquisition of Treasury Stock 0 (13)
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Net Cash Provided By (Used In) Financing Activities 4 24
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Net Increase (Decrease) in Cash (773) (705)
Cash & Equivalents at Beginning of Period 1,177 777
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Cash & Equivalents at End of Period $ 404 $ 72
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-------- --------
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The condensed balance sheet of Jayark Corporation and subsidiaries (the
"Company"), as of July 31, 1995, and the related condensed statements of
operations and cash flows for the three months ended July 31, 1995
and 1994 are unaudited. The condensed consolidated balance sheet as of April
30, 1995 has been derived from audited financial statements. The condensed
consolidated financial statements should be read in conjunction with the
audited financial statements and footnotes for the year ended April 30, 1995,
included in the Company's report on Form 10-K, as filed with the Securities
and Exchange Commission.
2. The interim financial statements reflect all adjustments (consisting of
only normal and recurring accruals and adjustments) which are, in the opinion
of management, necessary to a fair statement of the results for the interim
periods presented. The Company's operating results for any particular interim
period may not be indicative of results for the full year.
3. The provision for income taxes is calculated using the estimated annual
effective Federal tax rate. The Company adopted Statement of Financial
Accounting Standard Number 109 ("SFAS 109") effective May 1, 1993. SFAS 109
changes the criteria for the recognition and measurement of deferred tax assets,
including net operating loss carry forward.
4. During fiscal 1993, the Company sold substantially all operating assets and
discontinued operations of its Printing & Graphics and Sportswear subsidiaries.
5. Certain reclassifications have been made in the 1994 financial statements
to conform and be consistent with the presentation used in 1995.
6. In March, 1995, the Company announced that it had abandoned its investment
in and written off its advances in certain assets and a business acquired in
June, 1995. Also, in March, 1996, this business filed for Chapter 11 Bankruptcy
protection and is currently in the process of winding down its operations and is
liquidating all of its assets.
<PAGE>
Item 2.
Management's Discussion & Analysis of Results of Operations
Three Months Ended July 31, 1995 as compared to July 31, 1994
NET REVENUES
Consolidated Revenues of $9,839,000 represents a decrease of
$835,000, or 7.8%, as compared to the same period in 1994. The
Audio Visual subsidiary's revenues increased $68,000, or 2.4%,
compared to last year. The Household subsidiary's revenues decreased
$903,000, or 11.5%, as compared to the same period last year as the
retail economy has softened coupled with credit restraints on certain
customers.
COST OF REVENUES
Consolidated Cost of Revenues of $7,601,000 decreased $465,000, or 5.8%,
as compared to the same period last year. The Audio Visual subsidiary's
cost of revenues increased $80,000, or 3.4%, compared to last year.
The cost of revenues for the Household subsidiary increased $545,000, or
9.5%, which is directly associated with the decrease in sales.
GROSS MARGIN
Consolidated Gross Margin of $2,238,000 was 22.7% of revenues, and
decreased $370,000, or 14.2%, as compared to the same period last
year. The Audio Visual subsidiary decreased its margin by $13,000, or
2.6% as compared with the same period last year. The Household
subsidiary margin decreased by $357,000, or 17.0% due to a change in
product mix and competitive pressures.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Consolidated Expenses of $2,133,000 decreased $308,000, or 14.4%, as
compared to the same period last year. The Audio Visual subsidiary
decreased its expenses by $20,000, or 8.7% as compared to the same
period last year. The Household subsidiary expenses decreased by
$254,000 or 14.6%. Corporate expenses decreased by $34,000, or 15.5%,
and accounted for the balance of the change in expenses.
<PAGE>
INTEREST EXPENSE
Consolidated Interest Expense of $308,000 increased $142,000, or 85.5%
due to increased levels of borrowings.
PRE-TAX INCOME (LOSS)
Consolidated Pre-Tax Losses (from continuing operations) of ($203,000)
was incurred as compared to a pre-tax profit of $1,000 the same period
last year primarily due to lower revenues as compared to the prior year.
NET INCOME
Consolidated Net Losses of ($203,000) was incurred compared to net
income of $9,000 during the same period last year primarily due to lower
revenues as compared to the prior year.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital amounted to $7,699,000 at July 31, 1995, compared to
$8,784,000 at April 30, 1995. The $1,085,000 decrease is principally
due to the higher payables and other current liabilties. Cash and cash
equivalents totaled $404,000, which was down $773,000 from the
$1,177,000 balance on April 30, 1995.
In January of 1992, the Company renewed and extended a financing
arrangement with a financial institution to make available a total of
$20,300,000 in a combination of revolving lines of credit and term
loans. The term loans were repaid in January 1995. This financing
arrangement was used to consolidate existing financing, to pay for the
Household subsidiary acquisition, and to provide available working
capital for continuing operations.
The arrangement with the financial institution was amended in March
1993, to make available a total of $16,325,000 in combination of
revolving lines of credit and term loans. The loan agreement was revised
to reflect the payoff of the revolving line and term loan associated
with the sale of the Printing & Graphics subsidiary.
The financing arrangement, was further amended in December 1993, to make
available a total of $13,075,000 in combination of revolving lines of
credit and term loan. The loan agreement was revised to reflect the
recollateralization od certain manufacturing assets of the Household
subsidiary, as well as restructuring certain portions of the Company
debt from demand notes to revolving lines of credit.
The current financing arrangement was further amended in December 1994:
the loan agreement was revised to reflect the renewal and extension of
the maturity dates of lines of credit to December 1995, to make
available a total of $13,000,000 maximum in revolving lines of credit,
reduce the rate of interest charged on the lines of credit, approve the
repayment schedule of the Company's subordinated convertible debentures,
and reflect the payoff of the term loans.
Consolidated open lines of credit, available to the Audio Visual and
Household subsidiaries from their associated financing agreements,
were $1,083,000 on July 31, 1995, as compared to $3,355,000 the
previous year. It is management's opinion that operating expenses, as
well as obligations coming due, will be met by cash on hand, future cash
flows from operations and available lines of credit.
<PAGE>
The Company's original forecast had anticipated modest profitability for
the remainder of fiscal 1996, however, as of the date of amendment, the
Company has abandoned its investment in certain assets and now forecasts
losses for the remainder of fiscal 1996, but has adequate cash flow and
borrowing capacity to fund its operations for the remainder of the year.
To the extent that the Company's assumptions underlying its operating
budget are not achieved, its operating results may be adversely
affected, but the Company will continue to reduce costs where
appropriate.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
Not Applicable
ITEM 2. Changes in Securities.
Not Applicable
ITEM 3. Defaults Upon Senior Securities.
Not Applicable
ITEM 4. Submission of Matter to a Vote of Security Holders.
Not Applicable
ITEM 5. Other Information.
Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None
(b) Report on Form 8-K - October 23, 1995
<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.
JAYARK CORPORATION
Registrant
May 3, 1996
David L. Koffman, President
Chief Executive Officer
May 3, 1996
David Golden, Executive VP
Principal Financial Officer
<PAGE>
Financial Data Schedule
[ARTICLE] 5
[LEGEND]
[RESTATED]
[CIK] 0000053260
[NAME]
<MULIPLIER> 1000.0
[CURRENCY] USD
[FISCAL-YEAR-END] 04/30/96
[PERIOD-START] 05/01/95
[PERIOD-END] 07/31/96
[PERIOD-TYPE] 3-mos
[EXCHANGE-RATE]
[CASH] 404
[SECURITIES] -
[RECEIVABLES] 6,659
[ALLOWANCES] -
[INVENTORY] 8,526
[CURRENT-ASSETS] 16,191
[PP&E] 982
[DEPRECIATION] -
[TOTAL-ASSETS] 19,607
[CURRENT-LIABILITIES] 8,492
[BONDS] -
[COMMON] 2,394
[PREFERRED-MANDATORY] -
[PREFERRED] -
[OTHER-SE] -
[TOTAL-LIABILITY-AND-EQUITY] 19,607
[SALES] 9,839
[TOTAL-REVENUES] 9,839
[CGS] 7,601
[TOTAL-COSTS] 10,042
[OTHER-EXPENSES] -
[LOSS-PROVISION] -
[INTEREST-EXPENSE] 308
[INCOME-PRETAX] (203)
[INCOME-TAX] -
[INCOME-CONTINUING] (203)
[DISCONTINUED] -
[EXTRAORDINARY] -
[CHANGES] -
[NET-INCOME] (203)
[EPS-PRIMARY] -0.03
[EPS-DILUTED] -0.01
[TEXT]
