SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: Commission File No.:
August 31, 1999 0-16442
FIRST TEAM SPORTS, INC.
(Exact name of Registrant as specified in its charter)
Minnesota 41-1545748
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1201 Lund Boulevard
Anoka, Minnesota 55303
(Address of principal executive offices)
Registrant's telephone number, including area code:
(612) 576-3500
--------------------------------------
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 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 latest practicable date: 5,852,188 shares of Common
Stock, $.01 par value per share, outstanding as of October 12, 1999.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST TEAM SPORTS, INC.
CONSOLIDATED BALANCE SHEETS
August 31, 1999 and February 28, 1999
<TABLE>
<CAPTION>
August 31, February 28,
ASSETS 1999 1999
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 2,379,827 $ 723,574
Receivables:
Trade, less allowance for
doubtful accounts of $705,000 at
August 31, 1999 and $642,000 at
February 28, 1999 11,092,444 12,284,005
Refundable income taxes 1,291,071 1,136,858
Inventories 10,931,056 10,047,020
Prepaid expenses 793,080 839,777
Deferred income taxes 842,000 1,175,000
----------- -----------
Total current assets 27,329,478 26,206,234
PROPERTY AND EQUIPMENT,
Land 600,000 600,000
Building 4,988,680 4,988,680
Production equipment 2,331,612 2,278,231
Office furniture and equipment 1,892,805 1,825,257
Warehouse equipment 939,212 937,677
Vehicles 101,276 104,380
----------- -----------
10,853,585 10,734,225
Less accumulated depreciation 3,931,137 3,316,390
----------- -----------
6,922,448 7,417,835
DEFERRED INCOME TAXES 2,251,000 1,988,000
OTHER ASSETS
License agreements, less accumulated
amortization of $3,862,000 at August
31, 1999 and $3,687,000 at February
28, 1999 1,505,365 1,680,024
Goodwill, less accummulated amortization
of $382,000 at August 31, 1999 and
$329,000 at February 28, 1999 1,066,251 1,119,197
Other 677,428 723,104
----------- -----------
3,249,044 3,522,325
----------- -----------
$39,751,970 $39,134,394
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>
FIRST TEAM SPORTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
August 31, 1999 and February 28, 1999
<TABLE>
<CAPTION>
August 31, February 28,
1999 1999
------------ ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Notes payable to bank $ 6,500,000 $ 2,525,000
Current maturities of
long-term debt 1,234,461 1,305,763
Accounts payable, trade 1,940,252 3,692,759
Accrued expenses 839,218 1,311,043
------------ ------------
Total current liabilities 10,513,931 8,834,565
LONG-TERM DEBT,
less current maturities 4,989,916 5,576,967
DEFERRED INCOME TAXES 195,000 195,000
DEFERRED REVENUE 600,000 600,000
SHAREHOLDERS' EQUITY
Common Stock, par value $.01 per share;
authorized 10,000,000 shares; issued
and outstanding 5,852,188 shares at
August 31, 1999, and 5,803,848 at
February 28, 1999 58,522 58,039
Additional paid-in capital 9,910,091 9,825,240
Retained earnings 14,304,110 14,647,756
Accumulated other comprehensive loss (819,600) (603,173)
------------ ------------
23,453,123 23,927,862
------------ ------------
$ 39,751,970 $ 39,134,394
============ ============
</TABLE>
See accompanying notes.
<PAGE>
FIRST TEAM SPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
August 31, August 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 7,264,628 $ 9,239,152 $ 21,325,080 $ 24,354,248
Cost of goods sold 5,567,840 14,126,388 15,051,607 24,906,992
------------ ------------ ------------ ------------
Gross profit 1,696,788 (4,887,236) 6,273,473 (552,744)
------------ ------------ ------------ ------------
Operating expenses:
Selling 923,848 1,379,795 2,249,307 2,780,156
General and
administrative 2,000,503 2,223,080 3,994,021 3,972,650
------------ ------------ ------------ ------------
2,924,351 3,602,875 6,243,328 6,752,806
------------ ------------ ------------ ------------
Operating income/(loss) (1,227,563) (8,490,111) 30,145 (7,305,550)
Interest expense (259,974) (321,769) (438,743) (680,950)
------------ ------------ ------------ ------------
Loss before
income taxes (1,487,537) (8,811,880) (408,598) (7,986,500)
Income taxes 447,163 2,966,856 64,952 2,684,303
------------ ------------ ------------ ------------
Net loss for
the period ($ 1,040,374) ($ 5,845,024) ($ 343,646) ($ 5,302,197)
============ ============ ============ ============
Net loss per share:
Basic ($ 0.18) ($ 1.01) ($ 0.06) ($ 0.92)
Diluted ($ 0.18) ($ 1.01) ($ 0.06) ($ 0.92)
Shares used in computation of
net loss per share:
Basic 5,840,342 5,792,253 5,822,102 5,792,253
Diluted 5,840,342 5,792,253 5,822,102 5,792,253
</TABLE>
See accompanying notes.
<PAGE>
FIRST TEAM SPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Six Months Ended August 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
August 31, August 31,
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (343,646) $ (5,302,197)
Adjustments required to reconcile net
loss to net cash provided by (used in)
operating activities:
Depreciation 614,747 627,722
Amortization 287,763 580,844
Deferred income taxes 70,000 --
Change in assets and liabilities:
Receivables 976,251 (304,290)
Inventories (892,571) 11,839,982
Prepaid expenses 46,509 128,997
Accounts payable (1,747,853) (774,523)
Accrued expenses (468,382) (118,734)
Income taxes (148,421) (2,152,891)
------------ ------------
Net cash provided by
(used in) operating activities (1,605,603) 4,524,910
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (124,091) (141,739)
Other -- (261,673)
------------ ------------
Net cash used in investing activities (124,091) (403,412)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (payments) on short-term
borrowings 3,975,000 (3,630,000)
Proceeds on long-term borrowings -- 262,760
Principal payments on long-term
borrowings (657,780) (540,276)
Net proceeds from exercise of stock options 85,332 --
------------ ------------
Net cash provided by (used in)
financing activities 3,402,552 (3,907,516)
Increase in cash and
cash equvalents 1,672,858 213,982
Effect of foreign currency translation (16,605) (7,200)
Cash and cash equivalents:
Beginning 723,574 1,869,545
------------ ------------
Ending $ 2,379,827 $ 2,076,327
============ ============
</TABLE>
See accompanying notes.
<PAGE>
FIRST TEAM SPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation have been
included. The operating results for the period ended August 31, 1999 are not
necessarily indicative of the operating results to be expected for the full
fiscal year.
For further information, refer to the financial statements and footnotes thereto
included in the Company's annual report or Form 10-K for the year ended February
28, 1999.
NOTE 2.
As of March 1, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130 Report Comprehensive Income ("Statement 130"). Statement
130 establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this statement had no impact on the
Company's net income or shareholders' equity. Statement 130 requires the
Company's foreign currency translation, which prior to adoption was reported
separately in shareholders' equity, to be included in other comprehensive
income.
During the quarters ended August 31, 1999 and 1998, total comprehensive
loss amounted to $($1,257,635) and ($6,239,933) respectively. During the
six-month period ended August 31, 1999 and 1998, total comprehensive loss
amounted to ($560,073) and ($5,903,447) respectively.
<PAGE>
NOTE 3.
<TABLE>
<CAPTION>
Basic EPS Diluted EPS
1999 1998 1999 1998
------- ------- ------- -------
(in thousands, except per share data)
Three Months Ended August 31
<S> <C> <C> <C> <C>
Net Loss ($1,040) ($5,845) ($1,040) ($5,845)
======= ======= ======= =======
Weighted average common
Shares outstanding 5,840 5,792 5,840 5,792
Stock options -- -- -- --
------- ------- ------- -------
Total common equivalent
Shares outstanding 5,840 5,792 5,840 5,792
======= ======= ======= =======
Net Loss per share ($ .18) ($ 1.01) ($ .18) ($ 1.01)
Six Months Ended August 31
Net Loss ($ 344) ($5,302) ($ 344) ($5,302)
======= ======= ======= =======
Weighted average common
Shares outstanding 5,822 5,792 5,822 5,792
Stock options -- -- -- --
------- ------- ------- -------
Total common equivalent
Shares outstanding 5,822 5,792 5,822 5,792
======= ======= ======= =======
Net Loss per share ($ .06) ($ .92) ($ .06) ($ .92)
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Net Sales. Net sales were $7.3 million in the second quarter of fiscal 2000, a
decrease of 21% over the comparable quarter of fiscal 1999 when sales were $9.2
million. Net sales for the first six months of fiscal 2000 were $21.3 million,
compared to $24.4 million for the first six months of fiscal 1999, a decrease of
13%. In-line skate sales volume decreases, combined with a decrease in the
average selling price of the Company's Skate Attack brand, were the principal
factors in the Company's net sales decline in both the second quarter and
six-month period of fiscal 2000.
The Company's product groups consist of in-line skates, in-line accessories and
parts (primarily protective wear and replacement wheels and bearings), roller
hockey products, ice hockey sticks and ice hockey protective wear and
accessories. Within the product groups, the Company maintains Ultra Wheels,
Skate Attack, Heavy and Third World in-line product lines and a Hespeler ice
hockey line. The Ultra Wheels, Heavy and Third World lines consist of higher
quality and higher priced products that are targeted for the specialty and
sporting goods chain store customers. The Skate Attack line consists of lower
priced products for the mass merchant customers. The Hespeler ice hockey line
consists of high quality products that are targeted primarily at the specialty
and sporting goods chain stores.
A breakdown and analysis for the Company's main product lines is as follows:
<TABLE>
<CAPTION>
Second Quarter
-----------------------------------------------------------
(amount in millions) Fiscal 2000 Fiscal 1999
----------- -----------
Amount % Amount % Change
------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
In-line Skates $3.2 43.8% $5.7 62.0% (43.9%)
In-line Accessories and Parts 1.1 15.1 1.4 15.2 (21.4)
Ice Hockey Sticks 1.1 15.1 .8 8.7 37.5
Ice Hockey Protective and Access. 1.9 26.0 1.3 14.1 46.2
------------ ----------- ----------- ------------ -----------
Total Net Sales $7.3 100.0% $9.2 100.0% (20.7%)
============ =========== =========== ============ ===========
First Six Months
-----------------------------------------------------------
(amount in millions) Fiscal 2000 Fiscal 1999
----------- -----------
Amount % Amount % Change
------------ ----------- ----------- ------------ -----------
In-line Skates $14.3 67.1% $18.0 73.8% (20.6%)
In-line Accessories and Parts 2.6 12.2 3.3 13.5 (21.2)
Ice Hockey Sticks 1.6 7.5 1.4 5.7 14.3
Ice Hockey Protective and Access. 2.8 13.2 1.7 7.0 64.7
------------ ----------- ----------- ------------ -----------
Total Net Sales $21.3 100.0% $24.4 100.0% (12.7%)
============ =========== =========== ============ ===========
</TABLE>
The Company distributes products to numerous countries worldwide. A geographic
breakdown is as follows:
<TABLE>
<CAPTION>
Second Quarter
-----------------------------------------------------------
(amount in millions) Fiscal 2000 Fiscal 1999
----------- -----------
Amount % Amount % Change
------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Domestic $4.0 54.8% $4.8 52.2% (16.7%)
Canada 2.7 37.0 3.4 37.0 (20.6)
Europe 0.1 1.4 0.5 5.4 (80.0)
Other International 0.5 6.8 0.5 5.4 --
------------ ----------- ----------- ------------ -----------
Total Net Sales $7.3 100.0% $9.2 100.0% (20.7%)
============ =========== =========== ============ ===========
First Six Months
-----------------------------------------------------------
(amount in millions) Fiscal 2000 Fiscal 1999
----------- -----------
Amount % Amount % Change
------------ ----------- ----------- ------------ -----------
Domestic $11.5 54.0% $13.7 56.1% (16.1%)
Canada 7.5 35.2 7.6 31.1 (1.3)
Europe 1.6 7.5 2.6 10.7 (38.5)
Other International 0.7 3.3 0.5 2.1 40.0
------------ ----------- ----------- ------------ -----------
Total Net Sales $21.3 100.0% $24.4 100.0% (12.7%)
============ =========== =========== ============ ===========
</TABLE>
Several factors contributed to the Company's sales performance in the second
quarter of fiscal 2000. The decrease in domestic and Canadian sales was the
result of a loss in product placements with the mass merchant distribution
channels. This was a continued result of the mass merchants' reduction in
branded selections as well as a continued decline in the average price of
in-line skates at the mass merchant level. Sales of the Company's Skate Attack
brand (sold primarily to the mass merchants) decreased approximately 70% both in
the second quarter and for the six-month period. In addition, there was a
decrease in the number of close out product sales in the second quarter of
fiscal 2000 due to improved Company inventory levels and a decrease in excess
inventory levels in the market place. The decrease in European sales was
primarily the result of continued competitive pressures in the European in-line
skate market and the continued number of in-line skate customers buying direct
from Pacific Rim manufacturers. The increase in Other International sales was
primarily the result of the Company's continued efforts to open new accounts in
the international arena.
While the Company believes there are some positive signs that the market
conditions in the in-line industry are improving, the national and international
markets continue to be very competitive and under extreme price competition.
Gross Margin As a percentage of net sales, the gross margin was 23.4% in the
second quarter of fiscal 2000 compared to (52.9%) in the second quarter of
fiscal 1999. The gross margin as a percentage of net sales for the six-month
period of fiscal 2000 was 29.4% compared to (2.3 %) for fiscal 1999.
<PAGE>
The improvement in the gross margin in the second quarter and for the six month
period is primarily due to an increase in the percentage of Ultra Wheels skate
sales, which normally carry higher margins, versus Skate Attack skates sales and
an increase in the percentage of total sales related to Hespeler products. In
addition the Company's decision to restructure its production philosophy, which
was implemented in the latter half of fiscal 1999, has resulted in better
inventory control and improved margins. During the second quarter of fiscal
1999, the Company conducted a thorough review of its in-line business and as a
result the Company wrote down certain inventories. The total amount of the
writedown was approximately $6 million, which was recorded in the cost of goods
sold section of the fiscal 1999 second quarter Statement of Operations. The
major inventory reduction was in the Company's unfinished/component parts
inventory. As a result of the Company's restructured production philosophy, the
Company shifted the majority of its in-line skate production to offshore sources
in an effort to reduce product costs.
The Company's UltraWheels brand of in-line skates accounted for approximately
77% and 86%, respectively, of total in-line skate sales in the second quarter
and for the six month period of fiscal 2000 compared to 57% and 62%,
respectively in fiscal 1999, while the Company's Skate Attack brand accounted
for 23% and 14%, respectively, of total in-line skate sales in the second
quarter and for the six month period of fiscal 2000 compared to 43% and 38%,
respectively in fiscal 1999. The Hespeler brand accounted for approximately 41%
and 21% of total net sales in the second quarter and for the six-month period of
fiscal 2000 compared to 23% and 13%, respectively in fiscal 1999.
Operating Expenses. Selling expenses were $900,000 or 12.7% of total net sales
in the second quarter and $2.2 million or 10.5% of total net sales for the six
month period of fiscal 2000 compared to $1.4 million or 14.9% in the second
quarter and $2.8 million or 11.4% for the six month period of fiscal 1999. The
decrease in selling expenses in fiscal 2000 is primarily the result of a
reduction in royalties and co-op advertising costs associated with the decreased
sales volume, reduced convention and show expenses and management's efforts to
closely monitor and control its expenditures.
General and administrative expenses were $2.0 million or 27.5% of total net
sales in the second quarter and $4.0 million or 18.7% of total net sales for the
six month period of fiscal 2000 compared to $2.2 million or 24.1 % in the second
quarter and $4.0 million or 16.3% for the six month period of fiscal 1999. The
decrease in the absolute dollar amount of the general and administrative
expenses in the second quarter and in the six month period of fiscal 2000 was
primarily due to the elimination of the administrative costs associated with the
Company's Mothership subsidiary which was closed in the early part of fiscal
2000.
In fiscal 1997, the Company purchased a new software system and appropriate
computer hardware. As part of the Company's selection process, the ability to
recognize the year 2000 was a major requirement and thus the Company is prepared
for the change. The Company is currently working to resolve the potential impact
of the year 2000 on the processing of date sensitive information by the
Company's computerized information systems, which might occur due to vendors
and/or customers not being ready. Based on preliminary information, costs of
addressing potential problems are currently not expected to have a material
adverse impact on the Company's financial position, results of operations or
cash flows in future periods.
<PAGE>
Other Income and Expense. Interest expense was $260,000 in the second quarter
and $439,000 for the six-month period of fiscal 2000 compared to $322,000 in the
second quarter and $681,000 for the six-month period of fiscal 1999. The
decrease in interest expense for the both the second quarter and the six month
period was primarily due to a decrease in the interest expense related to the
Company's line of credit facility. The Company has continued to strongly manage
its cash flows, which has resulted in a decrease in the average outstanding
balance on the Company's line of credit facility during the second quarter and
for the six-month period of fiscal 2000 as compared to the same periods of
fiscal 1999.
Provision for Income Taxes. The Company's effective tax rate was 30.1% and
15.9%, respectively, in the second quarter and the six month period of fiscal
2000 compared to 33.7% and 33.6%, respectively, in the second quarter and six
month period of fiscal 1999. The decrease in fiscal 2000 is primarily due to the
effect of state and foreign tax rates, the percentage of state and foreign
revenues, deferred tax items and the level of pre-tax losses.
Net Loss. The Company had a net loss of ($1.0) million or ($.18) per share in
the second quarter of fiscal 2000 compared to a net loss of ($5.8) million or
($1.01) per share in fiscal 1999. The Company had a net loss of ($344,000) or
($.06) per share for the six month period of fiscal 2000 compared to a net loss
of ($5.3) million or ($.92) per share in fiscal 1999. The decrease in the net
loss for both the second quarter and the six month period can be attributed to
the improved gross margins, strong inventory controls by management which
reduced the number of close out sales and eliminated the need for any large
inventory write downs as was the case in fiscal 1999 and the reduction of
operating expenses as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
In the six-month period of fiscal 2000, the Company's operations used $1.6
million of cash compared to providing $4.5 million of cash in the six-month
period of fiscal 1999. The decrease in the net cash provided by operations is
primarily the result of the Company reducing its vendor payable balances. The
large amount of cash provided by operations in the prior year was the result of
the Company making a significant reduction of its old inventory. Management
believes that its inventories need to be aggressively managed and controlled and
has programs for effectively reducing unneeded inventory.
Net cash used in investing activities was $124,000 in the six-month period of
fiscal 2000 compared to $403,000 in the six-month period of fiscal 1999. In
fiscal 2000, this cash was used to fund equipment purchases.
Net cash provided by financing activities was $3.4 million in the six-month
period of fiscal 1999 compared to cash used in financing activities of $3.9
million in the six-month period of fiscal 1999. The cash provided by this
activity in fiscal 2000 was primarily due to the change in the Company's credit
facility.
<PAGE>
The Company's debt to worth ratio was .7 to 1 as of August 31, 1999, compared to
.6 to 1 as of February 28, 1999 and .7 to 1 as of August 31, 1998. The Company's
long-term debt, which consists primarily of a mortgage note on the Company's
facility and obligations under endorsement license agreements, less current
maturities, was $5.0 million as of August 31, 1999.
The Company, effective September 8, 1999, entered into a new financing package
with Norwest Bank Minnesota N.A. This package included a new operating credit
line and a refinancing of the Company's mortgage note. The primary financing
facility is a $10 million revolving credit line, which is subject to a borrowing
base calculated monthly and updated periodically during each month. The
borrowing base is based on a percentage of eligible receivables and inventories.
As of August 31, 1999, the borrowing base limitation was $9.1 million, of which
$6.5 million was outstanding. In connection with this credit facility, the
Company agreed, among other things, to maintain certain minimum financial ratio
and income levels.
The Company's cash and cash equivalents were $2.4 million as of August 31, 1999,
compared to $700,000 as of February 28, 1999 and $2.1 million as of August 31,
1998.
The Company believes its current cash position, funds available under existing
bank arrangements and cash generated from operations will be sufficient to
finance the Company's operating requirements through fiscal 2000.
Certain statements contained in this Management's Discussion and Analysis of
Financial Condition and Results of Operations are forward looking, based on
current expectations, and actual results may differ materially. These forward
looking statements, in particular the statements regarding market conditions in
the in-line skate industry and the sufficiency of the Company's capital
resources, involve a number of risks and uncertainties which are described in
the Company's Annual Report on Form 10-K for the fiscal year ended February 28,
1999, including (1) the size and strength of competing manufacturers of in-line
skates, (2) the level of excess inventories and degree of price competition in
the in-line skate market, (3) the Company's dependence on certain key customers,
and (4) the effect of adverse weather conditions and overall economic conditions
on the in-line skate market.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk. The Company's sales and results of operations are subject to
foreign currency fluctuations. The Company's foreign operations are in countries
with fairly stable currencies, therefore, the effect of foreign currencies has
not been significant. The Company hedges its exposure to translation gains and
losses by maintaining and controlling its foreign cash flows when possible, thus
reducing such exposure.
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of Security Holders.
(a) The Company held its Annual Meeting on June 8, 1999.
(b) Proxies for the Annual Meeting were solicited pursuant to
Regulation 14 under the Securities Exchange Act of 1934. There
was no solicitation in opposition to management's nominees as
listed in the proxy statement, and all of such nominees were
elected.
The shareholders set the number of directors at six (6) by a
vote of 5,034,027 shares in favor, 61,238 shares against and
41,173 shares abstaining. The following persons were elected
to serve as directors of the Company until the next annual
meeting of shareholders with the following votes:
Number of Number of
Nominee Votes For Votes Withheld
------- --------- --------------
John J. Egart 5,058,465 77,973
David G. Soderquist 5,061,815 74,623
Joe Mendelsohn 5,061,565 74,873
Timothy G. Rath 5,061,515 74,923
Stanley E. Hubbard 5,061,812 74,626
William J. McMahon 5,057,915 78,523
The shareholders approved an increase in the number of shares
reserved under the Company's 1994 stock option and incentive
compensation from 1,325,000 to 1,725,000 by a vote of
1,822,845 shares in favor, 317,424 shares against and 43,633
shares abstaining, which votes excluded 2,952,486 shares
("broker non-votes").
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Exhibit Index immediately following the
signature page of this Form 10-Q.
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the
Registrant during the quarter to which this Form 10-Q relates.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST TEAM SPORTS, INC.
By: /s/ John J. Egart
John J. Egart
President and CEO
By: /s/ Kent A. Brunner
Kent A. Brunner
Vice President and CFO
Dated: October 12, 1999
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBIT INDEX TO FORM 10-Q
For Quarter Ended: Commission File No.: 0-16422
August 31, 1999
- --------------------------------------------------------------------------------
FIRST TEAM SPORTS, INC.
- --------------------------------------------------------------------------------
Exhibit
Number Description
3.1 Restated Articles of Incorporation -- incorporated by reference to
Exhibit 3.1 to the Company's Form 10-K for the year ended February 28,
1997
3.2 Bylaws -- incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-18 Reg. No. 33-16345C
4.1 Specimen of Common Stock Certificate--incorporated by reference to 4.1
to the Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1991
4.2 Certificate of Designations of Series A Preferred Stock (included in
Restated Articles of Incorporation -- see Exhibit 3.1)
4.3 Rights Agreement dated as of March 15, 1996 between the Company and
Norwest Bank Minnesota, N.A. as Rights Agent -- incorporated by
reference to Exhibit 2.1 to the Company's Registration Statement on
Form 8-A, Reg. No. 0-16422
4.4 Form of Right Certificate -- incorporated by reference to Exhibit 2.2
to the Company's Registration Statement on Form 8-A, Reg. No. 0-16422
4.5 Summary of Rights to Purchase Share of Series A Preferred Stock-
incorporated by reference to Exhibit 2.3 to the Company's Registration
Statement of Form 8-A, Reg. No. 0-16422
27* Financial Data Schedule (included in electronic version only)
- -------------
*Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-29-2000
<PERIOD-START> MAR-01-1999
<PERIOD-END> AUG-31-1999
<EXCHANGE-RATE> 1
<CASH> 2,379,827
<SECURITIES> 0
<RECEIVABLES> 11,797,444
<ALLOWANCES> 705,000
<INVENTORY> 10,931,080
<CURRENT-ASSETS> 27,329,478
<PP&E> 10,853,585
<DEPRECIATION> 3,931,137
<TOTAL-ASSETS> 39,751,970
<CURRENT-LIABILITIES> 10,513,931
<BONDS> 4,989,916
58,522
0
<COMMON> 0
<OTHER-SE> 23,394,601
<TOTAL-LIABILITY-AND-EQUITY> 39,751,970
<SALES> 21,325,080
<TOTAL-REVENUES> 21,325,080
<CGS> 15,051,607
<TOTAL-COSTS> 15,051,607
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 438,743
<INCOME-PRETAX> (408,598)
<INCOME-TAX> (64,952)
<INCOME-CONTINUING> (343,646)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (343,646)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
