<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the quarterly period ended August 1, 1997.
--------------
[ ] 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 0-21862
OROAMERICA, INC.
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(Exact name of registrant as specified in its charter)
Delaware 94-2385342
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
443 North Varney Street, Burbank, California 91502
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(Address of principal executive offices) (Zip Code)
(818) 848-5555
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(Registrants telephone number, including area code)
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:
SHARES OUTSTANDING AS OF
CLASS September 10, 1997
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Common Stock 6,254,378
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OROAMERICA, INC.
REPORT ON FORM 10-Q FOR THE
QUARTER ENDED AUGUST 1, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets ................................... 1
Consolidated Statements of Income ............................. 2
Consolidated Statements of Cash Flows.......................... 3
Notes to Condensed Consolidated Financial Statements......... 4 - 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 7
PART II - OTHER INFORMATION
Items 1 through 3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders........... 12
Item 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.............................. 12
SIGNATURES ................................................................ 13
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OROAMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JANUARY 31, AUGUST 1,
1997 1997
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(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $22,381 $21,085
Accounts receivable less allowance for returns
and doubtful accounts of $10,222 and $4,899 17,837 13,765
Other accounts and notes receivable 521 267
Inventories (Note 2) 9,411 10,567
Deferred income taxes 2,712 2,712
Prepaid income taxes -- 53
Prepaid items and other current assets 582 1,247
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Total current assets 53,444 49,696
Property and equipment, net 10,219 10,504
Excess of purchase price over net assets acquired, net 4,395 4,249
Patents, net 5,666 5,421
Investments in and advances to affiliates 642 642
Non-current notes receivable 768 1,047
Other assets 127 141
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$75,261 $71,700
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 514 $ 414
Notes payable (Note 3) -- --
Accounts payable 6,094 4,637
Income taxes payable 443 --
Accrued expenses 5,730 4,660
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Total current liabilities 12,781 9,711
Deferred income taxes payable 285 285
Long-term debt, less current portion 2,685 2,508
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Total liabilities 15,751 12,504
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Stockholders' equity:
Preferred stock, 500,000 shares authorized, $.001 par value;
none issued and outstanding -- --
Common stock, 10,000,000 shares authorized, $.001 par value; 6,252,378 and
6,254,378 shares issued and outstanding
at January 31, 1997 and August 1, 1997, respectively 6 6
Paid-in capital 42,970 42,979
Retained earnings 16,534 16,211
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Total stockholders' equity 59,510 59,196
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$75,261 $71,700
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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OROAMERICA, INC.
CONSOLIDATED STATEMENTS OF INCOME
PERIODS ENDED AUGUST 2, 1996 AND AUGUST 1, 1997
(Unaudited)
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
FOR THE FOR THE
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
----------------------------- -----------------------------
AUGUST 2, AUGUST 1, AUGUST 2, AUGUST 1,
1996 1997 1996 1997
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<S> <C> <C> <C> <C>
Net sales $ 29,747 $ 27,585 $ 74,662 $ 60,235
Cost of goods sold, exclusive of
depreciation 24,691 21,944 61,360 48,383
----------- ----------- ----------- -----------
Gross profit 5,056 5,641 13,302 11,852
Selling, general and administrative
expenses 5,354 6,117 12,272 11,641
----------- ----------- ----------- -----------
Operating (loss) income (298) (476) 1,030 211
Interest expense 645 373 1,433 799
----------- ----------- ----------- -----------
Loss before income taxes (943) (849) (403) (588)
Benefit for income taxes (298) (383) (45) (265)
----------- ----------- ----------- -----------
Net loss $ (645) $ (466) $ (358) $ (323)
=========== =========== =========== ===========
Net loss per share (Note 1) $ (.10) $ (.07) $ (.05) $ (.05)
=========== =========== =========== ===========
Weighted average shares outstanding 6,250,749 6,254,378 6,249,045 6,254,045
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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OROAMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
FOR THE
TWENTY-SIX WEEKS ENDED
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AUGUST 2, AUGUST 1,
1996 1997
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (358) $ (323)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,306 1,161
Provision for losses on accounts receivable 188 356
Provision for estimated returns (5,000) (5,490)
Gain on sale of fixed assets (21) --
Change in assets and liabilities:
Accounts receivable 11,229 9,056
Other accounts and notes receivable (185) 254
Inventories (5,276) (1,156)
Non-current accounts receivable -- (279)
Prepaid income taxes and income taxes payable (81) (496)
Prepaid items and other current assets (53) (695)
Accounts payable, accrued expenses and deferred liabilities 258 (2,378)
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Net cash provided by operating activities 2,007 10
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Cash flows from investing activities:
Capital expenditures (657) (1,038)
Proceeds from sale of fixed assets 27 --
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Net cash used in investing activities (630) (1,038)
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Cash flows from financing activities:
Gross borrowings under line-of-credit agreement -- 300
Repayment of borrowings under line-of-credit -- (300)
Principal repayments of long-term debt (460) (277)
Issuance of common stock 19 9
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Net cash used in financing activities (441) (268)
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Increase in cash and cash equivalents 936 (1,296)
Cash and cash equivalents at beginning of period 12,310 22,381
-------- --------
Cash and cash equivalents at end of period $ 13,246 $ 21,085
======== ========
Supplemental disclosure of cash flow information:
Interest paid $ 1,579 $ 398
Income taxes paid $ 35 $ 231
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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OROAMERICA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The condensed consolidated financial statements included herein include
all adjustments, all of which are of a normal recurring nature, that, in the
opinion of management, are necessary for a fair presentation of financial
information for the thirteen and twenty-six week periods ended August 2, 1996
and August 1, 1997. Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's January 31, 1997 audited consolidated financial statements. The
results of operations for the thirteen and twenty-six week periods ended August
1, 1997 are not necessarily indicative of the results for a full year.
Net income per share
Net income per share is computed by dividing net income for all periods
presented by the weighted average number of shares outstanding during each
period, including dilutive shares issuable upon the exercise of stock options
granted, calculated using the treasury stock method.
NOTE 2 - INVENTORIES
Inventories consist of the following (in thousands, except per ounce
data):
January 31, August 1,
1997 1997
-------- --------
(Unaudited)
Gold and other raw materials $ 2,880 $ 2,345
Manufacturing costs and other 9,041 8,706
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Jewelry inventories 11,921 11,051
Tobacco inventories -- 1,633
Perfume inventories -- 267
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Subtotal 11,921 12,951
LIFO cost less than FIFO cost (1,880) (1,754)
Allowance for vendor advances (630) (630)
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$ 9,411 $ 10,567
======== ========
Gold price per ounce $ 345.50 $ 324.10
======== ========
The Company values its jewelry inventories using the last-in, first-out
(LIFO) method. The
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Company values its tobacco and perfume inventories using the first-in, first-out
(FIFO) method.
The Company has several consignment agreements with gold consignors
providing for a maximum aggregate consignment of 270,000 fine troy ounces. In
accordance with the consignment agreements, title remains with the gold
consignors until purchased by the Company.
At January 31, 1997 and August 1, 1997, the Company held approximately
147,500 and 156,000 fine troy ounces of gold under consignment agreements,
respectively. Consigned gold is not included in inventory and there is no
related liability recorded at quarter end. The purchase price per ounce is based
on the daily Second London Gold Fixing. Manufacturing costs included in
inventory represent costs incurred to process consigned and Company owned gold
into finished jewelry products.
The gold consignors and the Company's revolving credit lender (Note 3)
have a security interest in substantially all the assets of the Company. The
Company pays to the gold consignors a consignment fee based on the dollar
equivalent of ounces outstanding, computed based on the Second London Gold
Fixing, as defined in the agreements. Each consignment agreement is terminable
on 30 days notice by the Company or the consignor.
The gold consignment agreements require the Company to comply with
certain covenants with respect to its working capital, current ratio and
tangible net worth and to maintain the aggregate of its accounts receivable and
inventory of gold at specified minimums. Additional provisions of the agreements
(a) prohibit the payment of dividends, (b) limit capital expenditures, (c) limit
the amount of debt the Company may incur, (d) prohibit the Company from engaging
in mergers and acquisitions, (e) require the Company to maintain and assign as
additional collateral key man life insurance on its chief executive officer in
the amount of $5.0 million, (f) prohibit termination of the chief executive
officer's employment for any reason other than death or disability and prohibit
any material amendment to his employment contract and (g) require notice if the
Company's principal stockholder (who is also its chief executive officer) ceases
to own at least 40% of the Company's outstanding common stock. At August 1,
1997, the Company was in compliance with all of the requirements of its
consignment agreements.
NOTE 3 - NOTES PAYABLE
The Company has a revolving credit facility with Bank of America, NT &
SA which varies seasonally from $20.0 million to $35.0 million and may not
exceed the lesser of the credit line, as seasonally adjusted, or 80% of eligible
accounts receivable minus a reserve amount, as provided for under the credit
facility. Advances under the credit facility bear interest at the lender's prime
rate minus 0.25%, or, at the Company's option, at short-term fixed rates or
rates determined by reference to offshore interbank market rates plus 1.75%. The
revolving credit facility also provides for the issuance of banker's
acceptances, and for the issuance of letters of credit in an aggregate amount
not to exceed $2.5 million at any one time. Banker's acceptances bear an
interest rate based on the bank's prevailing discount rate at the time of
issuance plus 1.75%. No banker's acceptances were outstanding as of January 31,
1997 and August 1, 1997. No short-term advances
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<PAGE> 8
were outstanding at January 31, 1997 and August 1, 1997. A stand-by letter of
credit outstanding at January 31, 1997 and August 1, 1997 totaled $1,583,000 and
$1,000,000, respectively. The revolving credit facility also provides for a
separate $1 million reducing-revolving line of credit, whereby the amount of
credit available decreases $200,000 annually every June 30th until June 30,
1999, when the then outstanding principal balance becomes payable in full.
Advances under the reducing-revolving credit facility bear interest at the
bank's prime rate plus .75%. No advances under the reducing-revolving credit
facility were outstanding at January 31, 1997 or August 1, 1997. The revolving
credit agreement expires August 1, 1998.
Amounts outstanding under the Bank of America credit agreement are
secured by substantially all of the Company's assets; the Company's gold
consignors also have security interests in these assets, and all of the
consignors and Bank of America are parties to a collateral sharing agreement.
The revolving credit agreement contains substantially the same covenants and
other requirements as are contained in the Company's gold consignment agreements
(Note 2). At August 1, 1997, the Company was in compliance with all of the
requirements of the revolving credit agreement.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read together with the
financial statements and notes thereto.
GENERAL
The Company's business, and the jewelry business in general, is highly
seasonal. The third and fourth quarters of the Company's fiscal year, which
include the Christmas shopping season, historically have accounted for
approximately 60% of the Company's annual net sales and a somewhat higher
percentage of the Company's income before taxes. While the fourth quarter
generally produces the strongest results, the relative strengths of the third
and fourth quarters are subject to variation from year to year based on a number
of factors, including the purchasing patterns of the Company's customers. The
seasonality of the Company's business places a significant demand on working
capital resources to provide for a buildup of inventory in the third quarter
(which is primarily satisfied by an increase in the amount of gold held under
consignment) and in turn has led to a seasonal buildup in customer receivables
in the fourth quarter that must be funded by increased borrowings. Consequently,
the results of second quarter operations are not necessarily indicative of the
Company's performance for an entire year.
Prices for the Company's products generally are determined by reference
to the current market price of gold. Consequently, the Company's sales could be
affected by significant increases, decreases or volatility in the price of gold.
The Company accounts for its jewelry inventories at the lower of cost or
market, using the last-in, first-out (LIFO) method to determine cost, less the
allowance for vendor advances. As a result, the Company's gross profit margin
can be affected by changes in LIFO reserves and the allowance for vendor
advances, as well as by changes in the amount of gold owned at each period end
and fluctuations in the price of gold.
On February 27, 1997, the Company announced its entry into the premium
cigar business. In its Form 10-K for fiscal year ended January 31, 1997, the
Company disclosed its intent to market perfume under an exclusive license
agreement with a French manufacturer. As of August 1, 1997, no cigar or perfume
revenues have been recognized.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items included in the
consolidated statements of income.
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<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET SALES
----------------------------
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
AUGUST 2, AUGUST 1, AUGUST 2, AUGUST 1,
1996 1997 1996 1997
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<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 83.0 79.6 82.2 80.3
----- ----- ----- -----
Gross profit 17.0 20.4 17.8 19.7
Selling, general and
administrative expenses 18.0 22.2 16.4 19.3
----- ----- ----- -----
Operating (loss) income (1.0) (1.8) 1.4 0.4
Interest expense 2.2 1.3 1.9 1.3
----- ----- ----- -----
Loss before income taxes (3.2) (3.1) (0.5) (0.9)
Benefit for income taxes (1.0) (1.4) (0.0) (0.4)
----- ----- ----- -----
Net loss (2.2)% (1.7)% (0.5)% (0.5)%
===== ===== ===== =====
</TABLE>
THIRTEEN WEEKS ENDED AUGUST 1, 1997 COMPARED TO THIRTEEN WEEKS ENDED AUGUST 2,
1996
Net sales for the thirteen weeks ended August 1, 1997 decreased by $2.2
million, or 7.3%, from the comparable period of the prior year. This decrease
was primarily attributable to a decrease in sales prices due to a reduction in
the average market price of gold and to a decrease in the amount of gold jewelry
(by weight) sold.
Gross profit for the thirteen week period ended August 1, 1997 increased
by $585,000 or 11.6%, from the comparable period of the prior year. As a
percentage of net sales, gross profit increased from 17.0% for the thirteen week
period ended August 2, 1996 to 20.4% for the current period. In the thirteen
weeks ended August 1, 1997, there was a decrease in cost of sales of $22,000
which was primarily attributable to a LIFO reserve adjustment of $88,000 offset
by a $66,000 decrease in the carrying value of inventory due to gold price
fluctuations. In the thirteen weeks ended August 2, 1996, there was a decrease
in cost of sales of $226,000 which was primarily attributable to a LIFO reserve
adjustment. Absent these factors, the gross profit margin in the thirteen week
periods ended August 1, 1997 and August 2, 1996 would have been 20.4% and 16.2%
of sales, respectively. The increase on a comparable basis, was due to changes
in sales product mix. The gold prices used to cost inventory at August 1, 1997,
May 2, 1997, August 2, 1996, and May 3, 1996, were $324.10, $339.65, $386.35 and
$394.00 per ounce, respectively.
Selling, general and administrative expenses for the thirteen weeks
ended August 1, 1997 increased by $763,000, or 14.3%, from the comparable period
of the prior year. As a percentage of net sales, these expenses increased from
18.0% in the thirteen weeks ended August 2, 1996 to 22.2% in the thirteen weeks
ended August 1, 1997. The increase in the amount of selling, general and
administrative expense is primarily attributable to increased personnel costs of
$107,000, increased selling and product expenses of $385,000, and increased
provision for bad
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<PAGE> 11
debts of $292,000. These increases to expense were offset by an increase in
other income of $81,000. Personnel costs have increased primarily due to
increased personnel for cigar and perfume operations and administrative
functions. Selling and product expenses have risen due to increases in
cooperative advertising and royalty fee expense. The provision for bad debts has
increased primarily due to additional amounts reserved for accounts receivable
due from Montgomery Ward as a result of its bankruptcy filing during the current
quarter.
Interest expense for the thirteen weeks ended August 1, 1997 decreased
by approximately $272,000 or 42.2%, from the comparable period of the prior
year. Interest expense declined due to reduced borrowings under the gold
consignment agreements.
The effective tax benefit rate in the thirteen weeks ended August 1,
1997 was 45.1% as compared to 31.6% in the comparable period of the prior year.
TWENTY-SIX WEEKS ENDED AUGUST 1, 1997 COMPARED TO TWENTY-SIX WEEKS ENDED AUGUST
2, 1996
Net sales for the twenty-six weeks ended August 1, 1997 decreased by
$14.4 million, or 19.3%, from the comparable period of the prior year. This
decrease was primarily attributable to a decrease in sales prices due to a
reduction in the average market price of gold and to a decrease in the amount of
gold jewelry (by weight) sold by the Company.
Gross profit for the twenty-six week period ended August 1, 1997
decreased by $1.5 million, or 10.9% from the comparable period of the prior
year. As a percentage of net sales, gross profit increased from 17.8% for the
twenty-six weeks ended August 2, 1996 to 19.7% for the current period. In the
twenty-six week period ended August 1, 1997, there was a decrease in cost of
sales of $35,000, which was attributable to a LIFO reserve adjustment of
$126,000 offset by a $91,000 decrease in the carrying value of inventory due to
gold price fluctuations. In the twenty-six week period ended August 2, 1996,
there was a decrease in cost of sales of $163,000, which was attributable to a
LIFO reserve adjustment of $212,000 offset by an inventory adjustment of $49,000
from gold price fluctuations. Absent these factors, the gross profit margin in
the twenty-six weeks ended August 1, 1997 and August 2, 1996 would have been
19.6% and 17.6%, respectively. The increase on a comparable basis is due to
changes in sales product mix. The gold prices used to cost inventory at August
1, 1997, January 31, 1997, August 2, 1996 and February 2, 1996 were $324.10,
$345.50, $386.34, $414.50 per ounce, respectively.
Selling, general and administrative expenses for the twenty-six weeks
ended August 1, 1997 decreased by $631,000 or 5.1%, from the comparable period
of the prior year. As a percentage of net sales, these expenses increased from
16.4% in the twenty-six weeks ended August 2, 1996 to 19.3% in the current
period. The decrease in the dollar amount of selling, general administrative
expenses is primarily attributable to decreased consulting, professional and
outside services of $970,000, offset by increased selling and product expenses
of $182,000 and increased provision for bad debts of $168,000. Professional
and consulting services decreased approximately $1.3 million due
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<PAGE> 12
to a reduction in legal fees caused by the settlement of certain litigation in
fiscal 1997. This decrease was offset by a $320,000 increase in temporary
personnel expense due to a higher utilization of temporary personnel in the
Company's operations. Selling and product expenses have increased primarily due
to increases in cooperative advertising and royalty fee expense. The provision
for bad debts has increased primarily due to additional amounts reserved for
accounts receivable due from Montgomery Ward as a result of its bankruptcy
filing in the current period.
Interest expense for the twenty-six weeks ended August 1, 1997 decreased
by $634,000, or 44.2%, from the comparable period of the prior year. This
decrease is primarily attributable to reduced borrowings under the gold
consignment agreements.
The effective tax benefit rate in the twenty-six weeks ended August 1,
1997 was 45.1% as compared to 11.2% in the comparable period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company has satisfied its working capital requirements through
internally generated funds, a gold consignment program and borrowings under its
revolving credit facilities.
A substantial portion of the Company's gold supply needs have been
satisfied through gold consignment arrangements with various banks and bullion
dealers. Under the consignment arrangements, the Company may defer the purchase
of gold used in the manufacturing process and held in inventory until the time
of sale of finished goods to customers. Financing costs under the consignment
arrangements currently are approximately 3% per annum of the market value of the
gold held under consignment, computed daily. The gold consignment agreements
contain covenants restricting the amount of consigned gold the Company may
reconsign or otherwise have outside its possession at any one time. The
aggregate amount of gold that the Company may acquire under its consignment
arrangements was approximately 270,000 ounces at August 1, 1997 and is subject
to fluctuations based on changes in the market value of gold. At August 1, 1997,
the Company held approximately 156,000 ounces of gold on consignment.
The Company's revolving credit facility with Bank of America NT & SA
expires August 1, 1998. The credit facility provides for borrowings which vary
seasonally from $20.0 million to $35.0 million and are subject to the lesser of
the credit line, as seasonally adjusted, or 80% of eligible accounts receivable
minus a reserve amount as provided for under the credit facility.
For further information regarding the Company's gold consignment
agreements and revolving credit facilities, see Notes to Condensed Consolidated
Financial Statements.
Net accounts receivable decreased from $17.8 million at January 31, 1997
to $13.8 million at August 1, 1997. The decrease in net accounts receivable
results primarily from seasonal fluctuations in sales. The allowance for returns
and doubtful accounts decreased from $10.2 million at January 31, 1997 to $4.9
million at August 1, 1997. The decrease in the amount of the allowance at August
1, 1997 is primarily attributable to seasonal adjustments in the reserve for
returns.
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<PAGE> 13
Inventories increased from $9.4 million at January 31, 1997 to $10.6
million at August 1, 1997. This increase is primarily attributable to the build
up of tobacco and perfume inventories of approximately $1.9 million. At August
1, 1997, a substantial portion of the gold included in the Company's finished
goods and work in process consisted of gold acquired pursuant to the Company's
consignment program. Consigned gold is not included in inventory.
Accounts payable decreased from $6.1 million at January 31, 1997 to $4.6
million at August 1, 1997. This decrease is primarily attributable to seasonal
gold purchases and the timing of payments. Accrued expenses decreased from $5.7
million at January 31, 1997 to $4.7 million at August 1, 1997. This decrease
results primarily from reduced amounts accrued for cooperative advertising
due to the timing of payments thereon.
During the twenty-six weeks ended August 1, 1997, the Company has
expended approximately $2.3 million for its cigar and perfume operations,
principally for the purchase of tobacco and perfume inventories. The Company
also estimates that its working capital and capital expenditure requirements for
its cigar operations for the balance fiscal 1998 will approximate $2.0 million.
The Company expects to incur capital expenditures related to its jewelry
business of approximately $600,000 during the balance of fiscal 1998,
principally for improvement of manufacturing facilities and the purchase of
manufacturing and computer equipment. The Company believes that funds generated
from operations, the gold consignment program and the borrowing capacity under
its revolving credit facility will be sufficient to finance its working capital
and capital expenditure requirements for at least the next 12 months.
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<PAGE> 14
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on July 1,
1997. At the Annual Meeting, Guy Benhamou, David Rousso, Bertram K. Massing,
Ronald A. Katz and Shiu Shao were elected as directors of the Company. Of the
5,548,095 shares of common stock represented in person or by proxy at the Annual
Meeting, Messrs. Benhamou, Rousso, Massing, Katz, and Shao received 5,534,545,
5,534,045, 5,534,545, 5,534,545 and 5,534,045 votes in favor of the election,
respectively.
At the Annual Meeting, the stockholders also approved the proposal to
ratify the selection of Price Waterhouse LLP as independent accountants for
fiscal 1998, such proposal receiving 5,532,395 votes for approval and 4,800
votes against approval, with 10,900 votes abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedule.
(b) There were no reports on Form 8-K filed during the thirteen weeks ended
August 1, 1997.
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<PAGE> 15
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.
OROAMERICA, INC.
Date: September 10, 1997 By: SHIU SHAO
------------------ -----------------------------
SHIU SHAO, Vice President and
Chief Financial Officer
Date: September 10, 1997 By: BETTY SOU
------------------ -----------------------------
BETTY SOU, Controller
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OROAMERICA,
INC.'S CONSOLIDATED BALANCE SHEET AT AUGUST 1, 1997 (UNAUDITED) AND CONSOLIDATED
STATEMENT OF INCOME FOR THE TWENTY-SIX WEEKS ENDED AUGUST 1, 1997 (UNAUDITED)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1998
<PERIOD-END> AUG-01-1997
<CASH> 21,085
<SECURITIES> 0
<RECEIVABLES> 18,664
<ALLOWANCES> (4,899)
<INVENTORY> 10,567
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0
0
<COMMON> 6
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (323)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
