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 March 31, 2000
----------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- ---------
Commission File No. 811-08469
ACORN HOLDING CORP.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-2332857
- ---------------------------------- -----------------------------------
(State or other jurisdiction of (IRS Employer Identifi-
incorporation or organization) cation No.)
1251 Avenue of the Americas, 45th Floor, New York, New York 10020-1104
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code (212) 536-4089
--------------------
N/A
- -------------------------------------------------------------------------------
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 Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the issuer 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: State the number of shares outstanding of
each of the issuer's classes of common equity, as of the latest practicable
date: 1,627,359 shares of common stock, $.01 par value, as of May 12, 2000.
(which reflects the two-for-five reverse stock split effective April 19, 1999).
<PAGE>
Acorn Holding Corp. and Subsidiaries
CONSOLIDATED INTERIM BALANCE SHEETS
March 31, 2000 and December 31, 1999
March 31,
2000 December 31,
ASSETS (unaudited) 1999
-------------- ------------
CURRENT ASSETS
Cash and cash equivalents $ 853,841 $ 956,357
Investment securities 203,956 208,601
Accounts receivable - trade 404,655 355,259
Current portion of note receivable
from sale of subsidiary 110,236 110,236
Current portion of note receivable
- employee 40,000 40,000
Inventories 2,280,225 2,073,308
Prepaid expenses 63,829 20,482
Deferred income tax asset 121,770 121,770
------------ ------------
Total current assets 4,078,512 3,886,013
------------ ------------
MACHINERY AND EQUIPMENT, net of accumulated
depreciation of $1,090,453 as of
March 31, 2000 and $1,016,755 as
of December 31, 1999 1,781,163 1,832,326
------------ ------------
OTHER ASSETS
Note receivable, less current portion
- employee -- 40,000
Other investments 9,108 9,108
Deposits 35,000 --
Goodwill, net of amortization of
$662,860 as of March 31, 2000 and
$641,477 as of December 31, 1999 192,444 213,827
Deferred income tax asset 1,513,695 1,544,542
------------ ------------
1,750,247 1,807,477
------------ ------------
$ 7,609,922 $ 7,525,816
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 150,000 $ 150,000
Current maturities of long-term debt 90,798 121,062
Accounts payable 221,339 138,257
Accrued expenses
Salaries and bonuses 98,970 136,144
Other 134,350 39,820
Deferred income 300,000 300,000
------------ ------------
Total current liabilities 995,457 885,283
------------ ------------
DEFERRED INCOME 150,000 225,000
------------ ------------
DEFERRED INCOME TAX LIABILITY 209,530 206,800
------------ ------------
COMMITMENTS -- --
------------ ------------
STOCKHOLDERS' EQUITY
Common stock - 20,000,000 shares of
$.01 par value authorized, 1,628,002
shares issued and outstanding 16,280 16,280
Additional paid-in capital 11,847,853 11,847,853
Accumulated deficit (5,588,176) (5,635,154)
Accumulated other comprehensive
income (loss) (21,022) (20,246)
------------ ------------
Total stockholders' equity 6,254,935 6,208,733
------------ ------------
$ 7,609,922 $ 7,525,816
============ ============
The accompanying notes are an integral part of these statements.
<PAGE>
Acorn Holding Corp. and Subsidiaries
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
Three months ended March 31,
2000 1999
(unaudited) (unaudited)
----------- -----------
Net sales $ 1,639,551 $ 877,455
----------- -----------
Costs and expenses
Cost of sales 1,187,451 805,118
Selling, general and administrative 372,667 410,078
----------- -----------
1,560,118 1,215,196
Operating profit (loss) 79,433 (337,741)
----------- -----------
Other income (expense)
Loss on investment -- (754)
Interest income, net 10,238 12,762
----------- -----------
10,238 12,008
----------- -----------
Income (loss) before income
taxes (benefit) expense 89,671 (325,733)
Income tax (benefit) expense
Current 12,243 36,141
Deferred 30,450 (102,947)
----------- -----------
42,693 (66,806)
----------- -----------
Net income (loss) $ 46,978 $ (258,927)
=========== ===========
Earnings (loss) per share
(basic and diluted) $ 0.03 $ (0.16)
=========== ===========
Weighted average shares outstanding 1,628,002 1,628,002
=========== ===========
The accompanying notes are an integral part of these statements.
<PAGE>
Acorn Holding Corp. and Subsidiaries
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From January 1, 2000 to March 31, 2000 (unaudited)
<TABLE>
<CAPTION>
Accumulated
Additional other
Common paid-in Accumulated comprehensive
stock capital deficit income (loss) Total
----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 2000 $ 16,280 $11,847,853 $(5,635,154) $ (20,246) $ 6,208,733
=========== =========== =========== =========== ===========
Comprehensive income (loss) (unaudited)
Net income -- -- 46,978 -- 46,978
Other comprehensive income (loss),
net of reclassification adjustments
and taxes -- -- -- (21,022) (21,022)
-----------
Total comprehensive income 46,202
----------- ----------- ----------- ----------- -----------
Balance at March 31, 2000 $ 16,280 $11,847,853 $(5,588,176) $ (21,022) $ 6,254,935
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
Acorn Holding Corp. and Subsidiaries
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
Three months ended March 31,
2000 1999
(unaudited) (unaudited)
----------- -----------
Cash flows from operating activities
Net income (loss) $ 46,978 $ (258,927)
Adjustments to reconcile net income
(loss) to net cash (used in)
provided by operating activities
Depreciation and amortization 72,546 95,675
Deferred income taxes 33,577 (66,806)
(Increase) decrease in assets
Accounts receivable (49,396) (156,369)
Inventories (206,917) 75,467
Prepaid expenses (43,347) (46,183)
Other assets (35,000) --
Increase (decrease) in liabilities
Accounts payable 83,082 103,352
Accrued expenses 57,356 (25,396)
Deferred income (75,000) (75,000)
----------- -----------
Net cash used in operating activities (116,121) (354,187)
----------- -----------
Cash flows from investing activities
Purchase of machinery and equipment -- (42,170)
Proceeds from redemption of investments 3,869 51,212
Note receivable proceeds 40,000 40,000
----------- -----------
Net cash provided by investing activities 43,869 49,042
----------- -----------
Cash flows from financing activities
Payment of long-term debt and capital lease (30,264) (30,265)
----------- -----------
Net cash used in financing activities (30,264) (30,265)
----------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (102,516) (335,410)
Cash and cash equivalents at beginning of period 956,357 1,126,838
----------- -----------
Cash and cash equivalents at end of period $ 853,841 $ 791,428
=========== ===========
The accompanying notes are an integral part of these statements.
<PAGE>
Acorn Holding Corp. and Subsidiaries
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE A - ORGANIZATION AND PURPOSE
Acorn Holding Corp. (Acorn) was incorporated under the laws of the State of
Delaware on September 8, 1983.
Acorn is a holding company for its wholly-owned subsidiaries, Automotive
Industries, Inc. (Automotive) and Recticon Enterprises, Inc. (Recticon).
Automotive is an inactive subsidiary.
Recticon is organized to engage in the business of manufacturing and
processing of silicon wafers for the semi-conductor industry.
NOTE B - BASIS OF PRESENTATION
Interim financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for the
periods. The 1999 balance sheet has been derived from the audited financial
statements contained in the 1999 Annual Report to Stockholders. These
interim financial statements conform with the requirements for interim
financial statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles. The results
for the three months ended March 31, 2000 are not necessarily indicative of
the results to be expected for the full year. Reporting developments have
been updated where appropriate. In this connection, there are no significant
changes in disclosures, except for the following:
1. Reclassifications
Certain prior period financial information has been reclassified to conform
to current period presentation.
2. Common Stock
On April 19, 1999, the Company approved a resolution to amend the Company's
certificate of incorporation to decrease the issued and outstanding common
shares and to effect a 5-for-2 reverse stock split. Earnings per share and
weighted average earnings per shares outstanding for all periods have been
changed to reflect the 5-for-2 reverse stock split.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Sales for the three-month period ended March 31, 2000 increased
$762,096 from the three-month period ended March 31, 1999. The Company realized
an operating profit of $79,433 as compared to an operating loss of ($337,741)
over the comparable prior year period. The principal reason for the increase in
profitability was due to a higher demand for the Company's products. The Company
believes, based on its present orders, that the present trend will continue in
the second quarter.
Although the business in which the Company is engaged is highly
competitive and cyclical in nature, the Company believes that it has sufficient
short-term and long-term liquidity either from cash on hand, credit arrangements
or cash flow from operations.
From time to time in both written reports and oral statements by the
Company's senior management, we may express our expectations regarding future
performance by the Company. These "forward-looking statements" are inherently
uncertain, and investors must recognize that event could turn out to be other
than what senior management expected.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. 27 - Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed by the Company filed during the
quarter ended March 31, 2000.
<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.
ACORN HOLDING CORP.
Date: May 15, 2000 By: Larry V. Unterbrink
-------------------------------
Larry V. Unterbrink, Treasurer
(Principal Financial and
Accounting Officer)
Stephen A. Ollendorff
By:-----------------------------
Stephen A. Ollendorff,
Chairman, Chief Executive
Officer and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ACORN HOLDING CORP. AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000737243
<NAME> ACORN HOLDING CORP.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 853,841
<SECURITIES> 203,956
<RECEIVABLES> 554,891
<ALLOWANCES> 0
<INVENTORY> 2,280,225
<CURRENT-ASSETS> 4,078,512
<PP&E> 1,781,163
<DEPRECIATION> 1,090,453
<TOTAL-ASSETS> 7,609,922
<CURRENT-LIABILITIES> 995,457
<BONDS> 0
0
0
<COMMON> 16,280
<OTHER-SE> 6,238,655
<TOTAL-LIABILITY-AND-EQUITY> 7,609,922
<SALES> 1,639,551
<TOTAL-REVENUES> 1,639,551
<CGS> 1,187,451
<TOTAL-COSTS> 1,560,118
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,671
<INCOME-TAX> 42,693
<INCOME-CONTINUING> 46,978
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,978
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
