FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1996
OR
[ ]] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------ to -------.
Commission file number 0-19000
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JIM HJELM'S PRIVATE COLLECTION, LTD.
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3337553
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(State or other jurisdiction of (IRS Employer)
incorporation or organization) Identification No.)
225 West 37th Street, New York, New York 10018
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(212) 921-7058
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Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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 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 latest practicable date: 1,422,803 shares of
common stock, par value $.0002 per share.
JIM HJELM'S PRIVATE COLLECTION, LTD.
INDEX
Part 1. Financial Information
Item 1. Financial Statements
Balance Sheets at January 31, 1996 and
October 31, 1995.......................................3-4
Statements of Income for the three
months ended January 31, 1996 and 1995...................5
Statements of Cash Flows for the
nine months ended January 31, 1996 and 1995..............6
Notes to Financial Statements..............................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K...................8
Signature..................................................9
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<TABLE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
BALANCE SHEETS
(Unaudited)
ASSETS
January 31, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 22,474 $ 36,645
Accounts receivable, net of allowance
for doubtful accounts and trade dis-
counts - $157,000 at January 31, 1996
and $121,670 at October 31, 1995 2,099,683 1,869,711
Inventories 1,631,816 1,795,840
Note receivable 8,505 8,505
Deferred income taxes 874 18,556
Prepaid expenses and other current assets 425,333 471,630
--------- ---------
Total current assets 4,188,685 4,200,887
Property and equipment - at cost net of ac-
cumulated depreciation and amortization
of $313,791 at January 31, 1996 and $304,606
at October 31, 1995 187,564 196,749
Other assets
Deferred income taxes - 27,000
Security deposits and other 102,357 101,711
---------- ----------
$4,478,606 $4,526,347
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
January 31, October 31,
1996 1995
----------- -----------
Current liabilities
Notes payable $1,280,000 $1,300,000
Accounts payable 1,236,865 1,227,939
Payroll taxes payable 263,245 384,365
Other current liabilities 43,725 84,941
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Total current liabilities 2,823,835 2,997,245
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Other long term liabilities 72,441 74,056
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Shareholders' equity
Preferred stock - $.0001 par value,
authorized 1,000,000 shares; issued
and outstanding- none - -
Common stock - $.0002 par value,
authorized 3,333,333 shares;
issued and outstanding 1,422,803
at January 31, 1996 and 1,372,803
at October 31, 1995 285 275
Additional paid-in capital 1,702,077 1,652,087
Accumulated deficit (61,542) (139,701)
---------- ---------
1,640,820 1,512,661
Less: Note receivable and accrued
interest (53,500) (52,625)
5,000 shares held in treasury (4,990) (4,990)
---------- ----------
Total shareholders' equity 1,582,330 1,455,046
---------- ----------
$4,478,606 $4,526,347
========= ==========
See accompanying notes to financial statements
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<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JANUARY 31, 1996 AND 1995
(Unaudited)
1996 1995
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<S> <C> <C>
Net sales $2,313,124 $1,740,306
Cost of goods sold 1,513,885 1,149,585
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Gross profit 799,239 590,721
Selling, general and
administrative ex-
penses 676,080 506,131
---------- ----------
Income from continu-
ing operations before
provision for income
taxes 123,159 84,590
Provision for income
taxes 45,000 25,377
------ ---------
Net income $ 78,159 $59,213
============ ============
Net income per com-
mon and common equi-
valent share
Net income $ 0.06 $0.05
============ ============
See accompanying notes to financial statements
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<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 and 1995
1996 1995
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<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ 78,159 $ 59,213
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 9,185 16,275
Accrued interest on note receivable (875) (875)
Provision for doubtful accounts and trade discounts 35,330 10,000
Deferred income taxes 44,682 -
Changes in operating assets and liabilities
Increase in accounts receivable (265,302) (269,717)
Decrease in inventories 164,024 35,368
Decrease in note receivable - 19,976
(Increase) decrease in prepaid expenses and
other current assets 46,297 (56,327)
Increase in security deposits
and other assets (646) (1,580)
Increase in accounts payable 8,926 22,257
Decrease in payroll taxes payable and
other current liabilities (162,336) (59,944)
Decrease in long term liabilities (1,615) (842)
------------- --------
Net Cash (used in) Operating Activities (44,171) (226,196)
------------- ---------
Cash Flows From Investing Activities
Purchase of property and equipment - (2,429)
------------ ----------
Net Cash used in Investing Activities - (2,429)
------------ -----------
Cash Flows from Financing Activities
Net proceeds (payment of) from (20,000) 199,717
short term borrowing
Proceeds from sale of common stock 50,000 -
------------ ----------
Net Cash provided by Financing Activities 30,000 199,717
------------ ----------
Net (decrease) in cash (14,171) (28,908)
Cash, beginning of year 36,645 39,086
------------ --------
Cash, end of period $22,474 $10,178
======= =========
See accompanying notes to financial statements
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<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1.
The balance sheet as of January 31, 1996, the statements of income for the
three month periods ended January 31, 1996 and 1995 and the statements of cash
flows for the three month periods ended January 31, 1996 and 1995 have been
prepared by the company, without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position, results of
operations and cash flows, as of January 31, 1996 and for all periods
presented have been made. The results of operations are not necessarily
indicative of the results to be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's Form 10-KSB for its fiscal year
ended October 31, 1995 which was filed with the Securities and Exchange
Commission.
Note 2. Composition of Inventory
Fiscal Quarter Ended Fiscal Year Ended
January, 31, 1996 October 31, 1995
------------------- ------------------
Raw materials $540,717 $580,948
Work-in-process 206,508 161,484
Finished Goods 884,591 1,053,408
----------- -----------
$1,631,816 $1,795,840
----------- -----------
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Note 3. Notes Payable
The company had a $1,000,000 revolving line of credit with a bank, with
interest payable at 2% above the bank's prime rate of interest. As of
October 31, 1995 and January 31, 1996 there was an outstanding balance of
$1,000,000. On February 20, 1996, this line of credit was replaced with
a $1,500,000 line of credit with another financial institution.
In September 1995 the Company borrowed $100,000 from a shareholder.
The rate of interest is 12%. The loan is repayable in monthly
installments of $20,000, commencing January 15, 1996. The balance
outstanding as of January 31, 1996 and October 31, 1995 was $80,000
and $100,000, respectively.
In December 1994, with the consent of the Company's bank, the Company
obtained a short term line of credit of up to $200,000 from a shareholder.
Interest under this line accrues at a rate of 6% above the bank's prime
rate. Payment of the principal of this line is subordinate to payment of
the Company's revolving line of credit. As of January 31, 1996 and October
31, 1995, there was $200,000 outstanding.
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[CAPTION]
JIM HJELM'S PRIVATE COLLECTION, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three months ended January 31, 1996 as compared to three months ended January
31, 1995
For the first three months of the Company's fiscal year ending October 31,
1996 ("Fiscal 1996"), revenues increased to $2,313,124 from $1,740,306, an
increase of 33% over the same period a year ago. Net income was $78,159 or
$.06 per share for this period as compared to net income of $59,213 or $.05
per share in the first three months of Fiscal 1995. Gross profit as a
percentage of sales increased to 34.6% from 33.9% in the first three months
of the prior year largely due to the product mix. Selling, general and
administrative expenses as a percentage of net sales was 29.2% in the current
period as compared to 29.1% in the prior period.
Liquidity and Capital Resources
The Company's working capital increased to $1,364,850 at January 31,
1996 from $1,203,642 at October 31, 1995. The Company's current ratio
increased to 1.48 to 1 at January 31, 1996 from 1.40 to 1 at October 31, 1995.
During the first quarter of Fiscal 1996, the Company obtained $50,000 in
capital through a private placement offering.
The Company continues to experience a tight liquidity position, resulting in
the need for increased borrowing and sizable short term debt. In the event
the Company was unable to maintain its current borrowing facilities this
could result in a severe cash shortage which could materially negatively
impact the company's operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K.
None.
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SIGNATURE
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.
JIM HJELM'S PRIVATE COLLECTION, LTD.,
Registrant
s/Joseph L. Murphy
Dated: March 18, 1996 By: --------------------------------
Joseph L. Murphy
President
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hjelm\10q.196
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 22,474
<SECURITIES> 0
<RECEIVABLES> 2,099,683
<ALLOWANCES> 157,000
<INVENTORY> 1,631,816
<CURRENT-ASSETS> 4,188,685
<PP&E> 187,564
<DEPRECIATION> 313,791
<TOTAL-ASSETS> 4,478,606
<CURRENT-LIABILITIES> 2,823,835
<BONDS> 0
0
0
<COMMON> 285
<OTHER-SE> 1,640,535
<TOTAL-LIABILITY-AND-EQUITY> 4,478,606
<SALES> 2,313,124
<TOTAL-REVENUES> 2,313,124
<CGS> 1,513,885
<TOTAL-COSTS> 676,080
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 123,159
<INCOME-TAX> 45,000
<INCOME-CONTINUING> 78,159
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78,159
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
