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 April 30, 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.
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(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.
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
INDEX
Part 1. Financial Information
Item 1. Financial Statements
Balance Sheets at April 30, 1996 and
October 31, 1995...................................... 3-4
Statements of Income for the three and six
months ended April 30, 1996 and 1995.................. 5
Statements of Cash Flows for the
six months ended April 30, 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................. 9
Signature................................................ 10
<PAGE>
<TABLE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
BALANCE SHEETS
(Unaudited)
ASSETS
April 30, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 34,706 $ 36,645
Accounts receivable, net of allowance
for doubtful accounts and trade dis-
counts - $196,000 at April 30, 1996
and $121,670 at October 31, 1995 2,274,754 1,869,711
Inventories 1,585,231 1,795,840
Note receivable - 8,505
Deferred income taxes - 18,556
Prepaid expenses and other current assets 475,480 471,630
--------- ---------
Total current assets 4,370,171 4,200,887
Property and equipment - at cost net of ac-
cumulated depreciation and amortization
of $323,206 at April 30, 1996 and $304,606
at October 31, 1995 180,097 196,749
Other assets
Deferred income taxes 27,000
Security deposits and other 120,857 101,711
---------- ----------
$4,671,125 $4,526,347
========== ==========
See accompanying notes to financial statements
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
BALANCE SHEETS
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Current liabilities
Notes payable $1,503,479 $1,300,000
Accounts payable 1,182,453 1,227,939
Payroll taxes payable 105,245 384,365
Other current liabilities 94,114 84,941
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Total current liabilities 2,885,291 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 April 30, 1996 and 1,372,803
at October 31, 1995 285 275
Additional paid-in capital 1,702,077 1,652,087
Retained earnings (Accumulated
deficit) 70,396 (139,701)
---------- ---------
1,772,758 1,512,661
Less: Note receivable and accrued
interest 54,375 52,625
5,000 shares held in treasury 4,990 4,990
---------- ----------
Total shareholders' equity 1,713,393 1,455,046
---------- ----------
$4,671,125 $4,526,347
========= ==========
See accompanying notes to financial statements
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 1996 AND 1995
(Unaudited)
Three Months Ended Six Months Ended
1996 1995 1996 1995
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net sales $2,966,627 $1,816,718 $5,279,751 $3,557,024
Cost of goods sold 1,879,755 1,204,722 3,393,640 2,354,307
---------- ---------- --------- ----------
Gross profit 1,086,872 611,996 1,886,111 1,202,717
Selling, general and
administrative ex-
penses 879,934 558,225 1,556,014 1,064,356
---------- ---------- --------- ----------
Income from continu-
ing operations before
provision for income
taxes 206,938 53,771 330,097 138,361
Provision for income
taxes 75,000 16,131 120,000 41,508
------ --------- --------- ----------
Net income $ 131,938 $37,640 $210,097 $ 96,853
============ ========= ========= ==========
Net income per com-
mon and common equi-
valent share
Primary $ 0.09 $ 0.03 $ 0.15 $ 0.08
============ ======== ========== ==========
Fully Diluted $ 0.08 $ 0.03 $ 0.14 $ 0.08
============ ======= ========= ==========
See accompanying notes to financial statements
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
APRIL 30, 1996 and 1995
1996 1995
------------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $210,097 $ 96,853
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Depreciation and amortization 18,600 32,550
Accrued interest on note receivable (1,750) (1,750)
Provision for doubtful accounts and trade discounts 74,330 10,000
Deferred income taxes 45,556 -
Changes in operating assets and liabilities
Increase in accounts receivable (479,373) (353,824)
(Increase) decrease in inventories 210,609 (61,393)
Decrease in note receivable 8,505 44,286
Increase in prepaid expenses and
other current assets (3,850) (55,421)
Increase in security deposits
and other assets (19,146) (10,000)
(Decrease) increase in accounts payable (45,486) 93,581
Increase (decrease) in payroll taxes payable
and other current liabilities (269,947) (23,840)
Decrease in long term liabilities (1,615) (2,421)
------------- --------
Net Cash (used in) Operating Activities (253,470) (231,379)
------------- ---------
Cash Flows From Investing Activities
Purchase of property and equipment (1,948) (11,284)
------------- ----------
Net Cash used in Investing Activities (1,948) (11,284)
------------------------
Cash Flows from Financing Activities
Net proceeds from
short term borrowing 203,479 229,717
Proceeds from sale of common stock 50,000 -
------------ ---------
Net Cash provided by Financing Activities 253,479 229,717
------------ ---------
Net (decrease) increase in cash (1,939) (12,946)
Cash, beginning of year 36,645 39,086
------------- --------
Cash, end of period $34,706 $26,140
======= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1.
The balance sheet as of April 30, 1996, the statements of income
for the six month periods ended April 30, 1996 and 1995 and the
statements of cash flows for the six month periods ended April 30,
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 April 30, 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
April 30, 1996 October 31, 1995
------------------- ------------------
Raw materials $ 580,185 $ 580,948
Work-in-process 212,602 161,484
Finished Goods 792,444 1,053,408
----------- ----------
$1,585,231 $1,795,840
------------ ----------
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, 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 bearing an interest rate of 4% above prime. As of
April 30, 1996, there was an outstanding balance of $1,283,479.
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 April 30, 1996 and October 31, 1995 was $20,000
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.
JIM HJELM'S PRIVATE COLLECTION, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three months ended April 30, 1996 as compared to three months ended
April 30, 1995 and six months ended April 30, 1996 as compared to
six months ended April 30, 1995
For the first six months of the Company's fiscal year ending
October 31, 1996 ("Fiscal 1996"), revenues increased to $5,279,751
from $3,557,024, an increase of 48% over the same period a year
ago. Net income was $210,097 or $.15 per share for this period as
compared to net income of $96,853 or $.08 per share in the first
six months of Fiscal 1995. Gross profit as a percentage of sales
increased to 35.7% from 33.8% in the first six months of the prior
year largely due to volume efficiencies. Selling, general and
administrative expenses as a percentage of net sales decreased to
29.5% in the current period as compared to 29.9% in the prior
period.
For the quarter ended April 30, 1996 revenues increased to
$2,966,627 from $1,816,718 an increase of 63% over the comparable
period a year ago. Net income increased to $131,938 for the
quarter ended April 30, 1996 as compared to $37,640 for the period
ended April 30, 1995. Gross profits as a percentage of sales
increased to 36.6% in the quarter ended April 30, 1996 from 34% in
the year ago. Selling, general and administrative expenses as a
percentage of sales decreased to 29.7% in the current quarter from
30.7% in the comparable period a year ago.
Liquidity and Capital Resources
The Company's working capital increased to $1,484,800 at April
30, 1996 from $1,203,642 at October 31, 1995. The Company's
current ratio increased to 1.51 to 1 at April 30, 1996 from 1.40 to
1 at October 31, 1995.
During the six months ended April 30, 1996 the Company used
cash in operating activities of $253,470 as compared to $231,379
during the earlier period. Usage during the current period was due
to a significant increase in accounts receivable and decrease in
payroll tax liability, offset partially by increased net income and
decreased inventory. The Company used cash in investing activities
(purchase of equipment) during the six months ended April 30, 1996
of $1,948 as compared to $11,284 in the year earlier period. The
Company generated cash from financing activities during the six
months ended April 30, 1996 of $253,479 as compared to $229,717 in
the year earlier period. During the current period, this was due to
increased short term borrowings and from proceeds from the sale of
Common Stock.
During the first quarter of Fiscal 1996, with the consent of
the 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% over the Bank's prime rate. Payment of the principal
of this line is subordinate to the payment of the Company's
revolving line of credit.
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K.
None.
<PAGE>
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: June 14, 1996 By: --------------------------------
Joseph L. Murphy
President and Principle
Financial Officer
hjelm\10q.696
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 34,706
<SECURITIES> 0
<RECEIVABLES> 2,274,754
<ALLOWANCES> 196,000
<INVENTORY> 1,585,231
<CURRENT-ASSETS> 4,370,171
<PP&E> 180,097
<DEPRECIATION> 323,206
<TOTAL-ASSETS> 4,671,125
<CURRENT-LIABILITIES> 2,885,291
<BONDS> 0
0
0
<COMMON> 285
<OTHER-SE> 1,713,108
<TOTAL-LIABILITY-AND-EQUITY> 4,671,125
<SALES> 2,966,627
<TOTAL-REVENUES> 2,966,627
<CGS> 1,879,755
<TOTAL-COSTS> 879,934
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 206,938
<INCOME-TAX> 75,000
<INCOME-CONTINUING> 131,938
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 131,938
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
