UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: Not applicable
Commission file number 33-8433-D
JANEX INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1034251
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21700 Oxnard Street, Ste. 1610 Woodland Hills, California 91367
(Address of principal executive offices) (Zip Code)
818-593-6777
(Issuer's telephone number)
Check whether the issuer (1) has 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
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
As of October 31, 1995, the issuer had 4,966,721 shares of its
Common Stock, no par value, issued and outstanding.
<PAGE>
JANEX INTERNATIONAL, INC.
INDEX
PART I - FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements
Consolidated Balance Sheet as of
September 30, 1995 . . . . . . . . . . . . . . . .3
Consolidated Statements of Operations
for the three and nine months ended
September 30, 1995 and September 30, 1994. . . . .4
Consolidated Statements of Cash Flows
for the nine months ended
September 30, 1995 and September 30, 1994. . . . .5
Notes to Consolidated Financial Statements . . . .6
Item 2. Management's Discussion and Analysis or
Plan of Operations . . . . . . . . . . . . . . . .8
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . .11
<PAGE>
JANEX INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
SEPTEMBER 30, 1995
ASSETS
CURRENT ASSETS:
Cash $ 573,108
Certificate of deposit and term deposit (Note 2) 600,000
Accounts receivable (net of allowance of $210,527) 1,328,450
Inventories 853,975
Prepaid royalty 236,372
Other current assets 106,669
Total current assets 3,698,574
PROPERTY AND EQUIPMENT - net 333,693
INTANGIBLE ASSETS - net 2,301,309
OTHER ASSETS 329,828
$ 6,663,404
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of stockholder notes payable $ 284,998
Loan payable - bank 725,000
Accounts payable 551,440
Accrued expenses 1,230,367
Income tax payable 29,164
Total current liabilities 2,820,969
LONG-TERM STOCKHOLDER NOTES PAYABLE 173,762
Total liabilities 2,994,731
STOCKHOLDERS' EQUITY:
Class A convertible preferred stock, no par value;
5,000,000 shares authorized; none issued and outstanding -
Common stock, no par value; 20,000,000 shares authorized,
4,966,721 shares issued and outstanding 11,003,616
Accumulated deficit (7,334,943)
Total stockholders' equity 3,668,673
$ 6,663,404
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
JANEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET SALES $ 4,530,727 $ 6,460,560 $ 7,593,812 $11,572,683
COSTS AND EXPENSES:
Cost of sales 2,473,978 3,389,552 4,084,638 6,190,110
Selling, general and administrative 1,218,009 1,177,478 2,787,240 2,798,152
Royalty expense 553,435 714,042 963,981 1 217,177
Total costs and expenses 4,245,422 5,281,072 7,835,859 10,205,439
OPERATING INCOME (LOSS) 285,305 1,179,488 (242,047) 1,367,244
OTHER INCOME (EXPENSE):
Interest income 10,143 2,544 42,996 15,007
Interest expense (25,665) (65,938) (57,758) (188,081)
Foreign exchange loss on
license fee obligation - (1,157) - (60,813)
Gain on disposal of fixed assets - - - 2,023
Total other income (expense) (15,522) (64,551) (14,762) (231,864)
INCOME (LOSS) BEFORE INCOME TAX 269,783 1,114,937 (256,809) 1,135,380
INCOME TAX 30,634 51,827 33,787 51,840
NET INCOME (LOSS) $ 239,149 $ 1,063,110 $ (290,596) $ 1,083,540
INCOME (LOSS) PER COMMON SHARE:
Primary $ 0.04 $ 0.22 $ ( 0.06) $ 0.23
Weighted average number of primary
shares outstanding 5,352,629 4,809,959 4,810,860 4,717,943
Fully diluted $ 0.04 $ 0.22 $ ( 0.06) $ 0.23
Weighted average number of
fully diluted shares outstanding 5,425,552 4,809,959 4,810,860 4,807,551
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JANEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<CAPTION>
1995 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net (loss) income $ (290,596) $ 1,083,540
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities:
Depreciation 206,884 110,929
Amortization of licensing relationships,
trademarks and goodwill 137,412 127,855
Provision for returns & losses on accounts receivable 179,555 108,551
Imputed interest on license fee obligation - 66,030
Amortization of product development costs 187,590 87,924
Foreign exchange loss on license fee obligation - 60,488
Gain on sale of property and equipment - (2,023)
Changes in operating assets and liabilities, net of effect
from purchase of Malibu Fun Stuffed and
Malibu Fun Stuffed International Limited (Note 4):
Increase in accounts receivable (545,444) (1,915,782)
Increase in inventories (449,486) (588,612)
Increase in prepaid royalty (87,467) (96,380)
Increase in other current assets (10,536) (59,827)
Increase in other assets (1,779) (51,116)
Decrease in checks issued in excess of fund on deposit - (63,485)
(Decrease) increase in accounts payable (129,826) 739,464
Increase in accrued expenses 415,514 1,165,448
Decrease in accrued restructuring and other charges (7,816) (18,919)
Increase (decrease) in income tax payable 21 (16,373)
Net cash (used in) provided by operating activities (395,974) 737,712
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property and equipment (363,075) (205,156)
Proceeds from the sale of property and equipment - 14,330
Additions to intangible assets - (23,021)
Term Deposit (Note 2) (100,000)
Payment for purchase of Malibu Fun Stuffed and Malibu
Fun Stuffed International Limited, net of cash
acquired (Note 4) (54,897) -
Additions to product development costs (266,809) (152,205)
Net cash used in investing activities (784,781) (366,052)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from bank loan 725,000 (350,000)
Proceeds from note payable - other - 160,171
Payment of stockholder note payable (139,158) (243,407)
Proceeds from issuance of common stock and warrants 96,000 704,550
Net cash provided by financing activities 681,842 271,314
(DECREASE) INCREASE IN CASH (498,913) 642,974
CASH AT BEGINNING OF PERIOD 1,072,021 643,378
CASH AT THE END OF PERIOD $ 573,108 $ 1,286,352
(Continued)
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JANEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Continued)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<CAPTION>
1995 1994
<S> <C> <C>
Cash paid during period for:
Interest $ 51,641 $ 95,636
Income tax $ 33,787 $ 68,200
NONCASH INVESTING AND FINANCING ACTIVITIES:
In August 1995, the Company issued 125,000 shares of its restricted common stock to
acquire all of the outstanding stock of Malibu Fun Stuffed and its related Hong Kong
company Malibu Fun Stuffed International Limited. The stock was valued at $325,000 on
the date of the transaction. The total purchase price exceeded the value of the net
assets of the Company by $422,220, which the Company has allocated to goodwill.
</TABLE>
JANEX INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated balance sheet as of September
30, 1995, and the consolidated statements of operations and
cash flows for the nine months ended September 30, 1995 and
September 30, 1994, have not been audited by independent
auditors, but include all adjustments (consisting of normal,
recurring accruals) which are, in the opinion of management,
necessary to a fair statement of the results for such
periods.
Certain information and footnote disclosure normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to
the requirements of the Securities and Exchange Commission,
although the Company believes that the disclosures included
in these financial statements are adequate to make the
information not misleading.
The consolidated financial statements should be read in
conjunction with the consolidated financial statements and
notes thereto included in the Company's December 31, 1994,
Form 10-KSB.
JANEX INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)
2. BANK LOAN AGREEMENTS
The Company has a $1,000,000 line of credit with a bank,
pursuant to a loan agreement that expires on May 12, 1996.
The maximum amount available under the line of credit is
reduced by advances against the line. Loans from the credit
line bear interest at 9.75% as of September 30, 1995. The
line of credit is secured by a $500,000 certificate of
deposit purchased from the bank and a first priority security
interest in all of the assets of the Company, including
accounts receivable and inventory. The certificate of deposit
has a 6.25% yield. There was $725,000 outstanding under the
line of credit at September 30, 1995.
The Company, through a Hong Kong bank, has a line of credit
for the Company's subsidiary, Pro Gains Company Limited ("Pro
Gains"), which allows Pro Gains to discount with the bank
letters of credit issued to Pro Gains by its customers. The
credit line is tailored to match the Company's selling
season. From May to November the credit line is HK$10,000,000
(US$1,300,000) and from December to April the line is
HK$2,000,000 (US$260,000). The credit line is secured by a
$100,000 term deposit with the bank. Janex International,
Inc. has issued a guarantee to the Hong Kong bank in the full
amount of the line. At September 30, 1995, the Company had
advances under this line for discounted letters of credit of
$253,471. The bank advances funds under the line when the
Company submits to the bank ("discounts") letters of credit
the Company has received from its customer. These advances
are treated as a reduction in accounts receivable. When the
bank collects on the letters of credit, the bank applies the
amounts collected as payments against the line. The Company
remains liable to the bank for any letters of credit which
ultimately are not honored by the issuing bank.
3. EARNINGS PER SHARE
Earnings per share are based upon the weighted average number
of shares of common stock outstanding and common stock
equivalents (common stock options and warrants), when dilutive.
4. OTHER EVENTS
On August 4, 1995, the Company acquired all of the outstanding
stock of Malibu Fun Stuffed, a California corporation, and its
affiliated Hong Kong company, Malibu Fun Stuffed International
Limited. Under the terms of the purchase agreement, the sellers
received $50,000 cash at the closing, and 125,000 shares of the
Company's restricted common stock. The purchase agreement also
provides for additional contingent payments based on future
performance of the acquired companies. The two acquired
companies, operating in tandem, develop, manufacture and
market toys and novelty gift items, selling primarily to
specialty retailers in the United States.
Item 2.
Management's Discussion and Analysis or Plan of Operations
Material Changes in Results of Operations
Three Months Ended September 30, 1995 and September 30, 1994
Sales for the three months ended September 30, 1995, were
$4,530,727, a decrease of $1,929,833, or 29.9%, from the three
months ended September 30, 1994. The net income for the three
months ended September 30, 1995, was $239,149 or $0.04 per share,
as compared to a net income for the three months ended September
30, 1994, of $1,063,110 or $0.22 per share.
Sales for the quarter ended September 30, 1995, resulted
primarily from shipment of products incorporating characters
licensed from The Walt Disney Company, which generated gross
sales of $1,832,000, or 40% of total sales, and the shipment of
products incorporating characters licensed from Warner Bros.,
which generated gross sales of $1,664,000, or 36% of total sales.
This compares to sales during the quarter ended September 30,
1994, when licenses from The Walt Disney Company generated gross
sales of $2,163,000, or 33% of total sales, and licenses from
Warner Bros. generated $272,000, or 4% of total sales.
The primary reason for the decrease in sales during the 1995
quarter is the significantly reduced demand for products
incorporating the Mighty Morphin Power RangersTM license ("Power
Rangers"). Power Rangers product, which accounted for 52% of
total sales, or $3,339,000, in the third quarter of 1994, only
generated 9% of total sales, or $404,000 in the third quarter of
1995. None of the Company's new licenses for 1995 generated
enough revenue to replace the decrease in the sale of Power
Rangers products.
Gross profit was 45.4% for the quarter ended September 30, 1995,
as compared to 47.5% for the quarter ended September 30, 1994.
The 1995 gross profit was in line with expectations, as
management sets prices on most products to achieve a gross profit
of between 45% and 50%. Overall gross profit will vary depending
upon the sales mix during the period.
Royalty expense was $553,435 for the quarter ended September
30,1995, or approximately 12.2% of sales, as compared to royalty
expense of $714,042 for the quarter ended September 30, 1994,
which was 11.1% of sales. The royalty expense for the 1995
quarter is greater as a percentage of sales than in 1994 as a
result of two factors. Firstly, as royalty rates vary from
license to license from 8% to 17%, royalties will vary between
periods based upon the product mix included in sales during the
period. Secondly, the increase in royalties as a percentage of
sales is consistent with a general upward trend in the royalty
rates on license agreements.
Selling, general and administrative ("SG&A") expenses were
$1,218,009 for the quarter ended September 30, 1995, as compared
to $1,177,478 for the quarter ended September 30, 1994, a
decrease of $40,531, or 3%. SG&A expenses are comprised of fixed
overhead costs and variable selling expenses. The fixed overhead
portion of SG&A for the 1995 quarter was $719,671, approximately
$76,000 more than management s forecast, and approximately
$177,000, or 32.6%, greater than the comparable quarter in 1994.
SG&A increased during the quarter ended September 30, 1995,
primarily as a result of increases in payroll costs of 47.5%, or
$86,393, increases in travel and accommodation costs of $671.2%,
or $28,693, increases in sales and marketing costs of 37.0%, or
$8,942, increases in depreciation of $84.5%, or $69,581,
increases in product development costs of 214.5%, or $56,451 and
increases in communication costs of 46.1%, or $9,420. These
increases were offset by decreases in occupancy costs of 59.4%,
or $7,050, decreases in professional fees & investor relations of
80.1%, or $25,336, and decreases in financial costs of 18.4%, or
$14,758.
The variable selling cost component of SG&A was $498,338 for the
quarter ended September 30, 1995, or 11.0% of sales, compared to
$634.733 for the quarter ended September 30, 1994, which was 9.8%
of sales. Variable selling costs include sales representative s
commission, agent s commission, freight, product liability
insurance, testing fees and other charges that vary directly with
sales volume. Management expects variable selling costs to be
between 10% and 12% of sales. Included in variable selling
expenses for the three months ended September 30, 1995, is a
reserve of $30,000 against royalty advances, product development
costs and minimum guarantees associated with potentially
unproductive licenses. Variable selling costs, as a percentage of
sales, are greater in the 1995 quarter than the 1994 quarter
primarily as a result of the reserve against unproductive
licenses taken in the 1995 quarter, and an increase in the
percentage rate charged by the Company's agent in Hong Kong.
Material Changes in Results of Operations
Nine Months Ended September 30, 1995 and September 30, 1994
Sales for the nine months ended September 30, 1995, were
$7,593,812, a decrease of $3,978,871, or 34.4%, from the nine
months ended September 30, 1994. The net loss for the nine months
ended September 30, 1995, was $290,596 or $0.06 per share, as
compared to a net income for the nine months ended September 30,
1994, of $1,083,540, or $0.23 per share.
Sales for the nine months ended September 30, 1995, resulted
primarily from shipment of products incorporating characters
licensed from The Walt Disney Company, which generated sales of
$3,135,000, or 41% of total sales, and the shipment of products
incorporating characters licensed from Warner Bros., which
generated sales of $2,459,000, or 32% of total sales. This
compares to sales during the nine months ended September 30,
1994, when licenses from The Walt Disney Company generated sales
of $3,832,000, or 33% of total sales, and licenses from Warner
Bros. generated $475,000, or 4% of total sales.
The major cause for the decrease in sales during the nine months
ended September 30, 1995, was the decrease in sales of products
based on the Power Rangers license. Power Rangers product, which
accounted for 54% of total sales, or $6,197,000, in the first
nine months of 1994, only generated 13% of total sales, or
$1,030,000 in the first nine months of 1995, reflecting a
dramatic decrease in the demand for Power Rangers merchandise.
None of the Company s new licenses for 1995 generated enough
revenue to replace the decrease in the sale of Power Rangers
products.
Gross profit was 46.2% for the nine months ended September 30,
1995, as compared to 46.5% for the nine months ended September
30, 1994. The 1995 gross profit was in line with expectations, as
management sets prices on most products to achieve a gross profit
of between 45% and 50%. Overall gross profit will vary depending
upon the sales mix during the period. Cost of goods for the nine
month period in 1995 included $40,000 in reserves against
inventory which the Company expects to sell below cost.
Royalty expense was $963,981 for the nine months ended September
30,1995, or approximately 12.7% of sales, as compared to royalty
expense of $1,217,177 for the nine months ended September 30,
1994, which was 10.5% of sales. As in the quarter, the royalty
expense for the first nine months of 1995 is greater as a
percentage of sales than in the first nine months of 1994 as a
result of two factors. Firstly, as royalty rates vary from
license to license from 8% to 17%, royalties will vary between
periods based upon the product mix included in sales during the
period. Secondly, the increase in royalties as a percentage of
sales is consistent with a general upward trend in the royalty
rates on license agreements.
Selling, general and administrative ("SG&A") expenses were
$2,787,240 for the nine months ended September 30, 1995, as
compared to $2,798,152 for the nine months ended September 30,
1994. SG&A expenses are comprised of fixed overhead costs and
variable selling expenses. The fixed overhead portion of SG&A for
the nine month period in 1995 was $1,896,758, approximately
$28,000 less than management s forecast, and approximately
$248,000, or 15%, greater than the comparable nine month period
in 1994. SG&A increased during the first nine months of 1995
primarily as a result of increases in payroll costs of 22%, or
$129,582, increases in travel and accommodation costs of $73.1%,
or $50,901, increases in sales and marketing costs of 28.6%, or
$27,075, increases in depreciation of $44.2%, or $105,571,
increases in product development costs of 62.3%, or $76,349 and
increases in communication costs of 39.6%, or $24,334. These
increases were offset by decreases in occupancy costs of 56.9%,
or $59,471, decreases in professional fees & investor relations
of 23.9%, or $43,063, and decreases in financial costs of 34.8%,
or $42,539.
The variable selling cost component of SG&A was $890,482 for the
nine months ended September 30, 1995, or 11.7% of sales, compared
to $1,149,224 for the nine months ended September 30, 1994, which
was 9.9% of sales. Variable selling costs include sales
representative's commission, agent's commission, freight, product
liability insurance, testing fees and other charges that vary
directly with sales volume. Management expects variable selling
costs to be between 10% and 12% of sales. Also included in
variable selling expenses for the nine months ended September
30, 1995, is a reserve of $90,000 against royalty advances,
product development costs and minimum guarantees associated with
potentially unproductive licenses. Variable selling costs, as a
percentage of sales, are greater in the first nine months of 1995
than in the first nine months of 1994 primarily as a result of
the reserve against unproductive licenses taken in 1995 and an
increase in the percentage rate charged by the Company's agent in
Hong Kong.
As of September 30, 1995, the Company had a backlog of unfilled
orders of approximately $2 million, as compared to a backlog of
unfilled orders at September 30, 1994, of approximately $1.8
million.
Liquidity and Capital Resources
The Company believes its existing cash balance together with its
lines of credit and net income from operations are sufficient to
meet its financing requirements through to the end of 1995. Given
the loss through to the end of the third quarter, and given that
the orders on hand at September 30, 1995, are insufficient to
generate a profit in the fourth quarter, the possibility exists
that the Company may be in a loss position for the year. If a
loss for the year occurs, the Company's cash position going into
1996 will be less than its cash balance going into 1995.
Historically, the Company generates negative cash flow during the
first four months of the year, as these months are generally not
profitable, and at the same time the Company is also investing in
tooling and in building inventories. If the Company determines at
any time that its cash balance together with its lines of credit
and profits from operations, net of any operating losses, are
insufficient to provide for the working capital needs of the
Company during the first half of 1996, the Company intends to
pursue a variety of financing sources to cover any such projected
working capital deficiency. These financing sources include banks
and other lenders. Additionally, the Company could consider a
private placement of the Company's stock. There can be no
assurance that such financing will be available should it be
necessary.
As part of the Company's ongoing program of capital investment in
new products and licenses, during the nine months ended September
30, 1995, the Company invested $173,000 in royalty advances
against new licenses, $339,000 in tooling for new products and
$267,000 in product development costs.
The Company has a $1,000,000 line of credit with a bank, pursuant
to a loan agreement which expires on May 12, 1996. The maximum
amount available under the line of credit is reduced by advances
against the line. Loans from the credit line bear interest at
9.75% as of September 30, 1995. The line of credit is secured by
a $500,000 certificate of deposit purchased from the bank and a
first priority security interest in all of the assets of the
Company, including accounts receivable and inventory. The
certificate of deposit has a 6.25% yield. There was $725,000
outstanding under the line of credit at September 30, 1995.
In January 1995, a Hong Kong bank approved a line of credit for
the Company s subsidiary, Pro Gains Company Limited ("Pro
Gains"), which allows Pro Gains to discount with the bank letters
of credit issued to Pro Gains by its customers. The credit line
is tailored to match the Company's selling season. From May to
November the credit line is HK$10,000,000 (US$1,300,000) and from
December to April the line is HK$2,000,000 (US$260,000). The
credit line is secured by a $100,000 term deposit with the bank.
Janex International, Inc. has issued a guarantee to the Hong Kong
bank in the full amount of the line. At September 30, 1995, the
Company had advances under this line for discounted letters of
credit of $253,471. The bank advances funds under the line when
the Company submits to the bank ("discounts") letters of credit
the Company has received from its customer. These advances are
treated as a reduction in accounts receivable. When the bank
collects on the letters of credit, the bank applies the amounts
collected as payments against the line. The Company remains
liable to the bank for any letters of credit which ultimately
are not honored by the issuing bank.
As of September 30, 1995, the Company had cash and certificates
of deposit of $1,173,108, working capital of $877,605 and a
current ratio of 1.3-to-1. This compares to cash of $1,786,352
and working capital of $1,424,632 as of September 30, 1994.
During the nine months ended September 30, 1995, the Company
received $96,000 from a warrant holder pursuant to the warrant
holder exercising warrants to purchase 150,000 shares of the
Company s common stock.
On August 4, 1995, the Company acquired all of the outstanding
stock of Malibu Fun Stuffed, a California corporation, and its
affiliated Hong Kong company, Malibu Fun Stuffed International
Limited. Under the terms of the purchase agreement, the Company
issued 125,000 shares of the Company's restricted common stock to
the former owners of the acquired companies.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. Financial Data Schedule - EX-27
(b) Reports on Form 8-K. On October 5, 1995, under Item 4 Changes
in Registrant's Certifying Accountant, the Company reported that
effective October 5, 1995, the Company terminated the services of
Kellogg and Andelson Accountancy Corporation, and effective
October 6, 1995, engaged the services of BDO Siedman, LLP, as the
Company's independent accountants.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Issuer has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: November 14, 1995
JANEX INTERNATIONAL, INC.
(Registrant)
By: /s/ Michael S. Manahan
Michael S. Manahan, Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,173,108
<SECURITIES> 0
<RECEIVABLES> 1,328,450
<ALLOWANCES> 0
<INVENTORY> 853,975
<CURRENT-ASSETS> 3,698,574
<PP&E> 333,693
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,663,404
<CURRENT-LIABILITIES> 2,820,969
<BONDS> 0
<COMMON> 11,003,616
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,663,404
<SALES> 7,593,812
<TOTAL-REVENUES> 7,593,812
<CGS> 4,084,638
<TOTAL-COSTS> 7,835,859
<OTHER-EXPENSES> 14,762
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,758
<INCOME-PRETAX> (256,809)
<INCOME-TAX> 33,787
<INCOME-CONTINUING> (290,596)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (290,596)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
