<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1995
------------------------------------------------
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: 0-19487
-------------------------------------------------------
NSA INTERNATIONAL, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 62-1387102
- ---------------------------------------- -----------------------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
4260 East Raines Road, Memphis, Tennessee 38118
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(Address of principal executive offices) (Zip Code)
(901) 541-1223
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(Registrant's telephone number, including area code)
Not Applicable
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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 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.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
4,858,156 shares of $.05 par value common stock were outstanding at
October 31, 1995.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NSA International, Inc. and Subsidiaries:
Consolidated Balance Sheets as of October 31, 1995 (unaudited)
(restated) and April 30, 1995
Consolidated Statements of Operations for the Three Month and Six Month
Periods Ended October 31, 1995 and 1994 (unaudited) (restated)
Consolidated Statements of Shareholders' Equity for the Six Month
Periods Ended October 31, 1995 and 1994 (unaudited) (restated)
Consolidated Statements of Cash Flows for the Six Month Periods Ended
October 31, 1995 and 1994 (unaudited) (restated)
Notes to Consolidated Financial Statements
<PAGE> 3
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(RESTATED)
OCTOBER 31, APRIL 30,
ASSETS 1995 1995
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,533,495 $15,603,316
Short-term investments 557,935 521,345
Receivables, net 1,362,075 2,024,956
Refundable income taxes 3,058,959 3,054,484
Inventories 11,372,476 12,830,628
Deferred income taxes 148,000 148,000
Note receivable - short-term 500,000
Other current assets 1,468,405 1,766,798
----------- -----------
Total current assets 26,501,345 36,449,527
PROPERTY AND EQUIPMENT, At cost:
Leasehold improvements 603,554 372,662
Manufacturing equipment 716,721 714,755
Office furniture and equipment 3,142,981 3,131,918
Transportation equipment 181,390 215,761
Data processing equipment 2,064,653 2,244,194
----------- -----------
Total 6,709,299 6,679,290
Less accumulated depreciation and amortization (3,412,690) (3,089,044)
----------- -----------
Property and equipment, net 3,296,609 3,590,246
NOTE RECEIVABLE - LONG-TERM 4,000,000 4,000,000
OTHER ASSETS 597,348 603,999
----------- -----------
TOTAL ASSETS $34,395,302 $44,643,772
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Amounts due to NSA, Inc. $ 7,643,988 $ 9,310,467
Accounts payable, trade 1,959,029 2,365,016
Accrued sales commissions and allowances 789,913 1,448,432
Accrued compensation and expenses 4,175,405 6,416,241
Accrued sales returns 1,552,170 1,785,608
Advance payments by dealers/distributors 271,095 379,396
Income taxes payable 974,174 1,256,135
Other current liabilities 156,939 361,873
----------- -----------
Total current liabilities 17,522,713 23,323,168
DEFERRED INCOME TAXES 345,000 345,000
OTHER LIABILITIES 1,058,662 58,662
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.05 par value, 100,000,000 shares authorized, 4,858,156
outstanding at October 31, 1995 and April 30, 1995 242,908 242,908
Additional paid-in capital 21,197,440 21,197,616
Retained earnings (5,971,421) (523,582)
----------- -----------
Total shareholders' equity 15,468,927 20,916,942
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $34,395,302 $44,643,772
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(RESTATED) (RESTATED)
THREE MONTHS SIX MONTHS
ENDED OCTOBER 31, ENDED OCTOBER 31,
----------------------------- ------------------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET REVENUES:
Net sales $ 18,021,968 $ 22,341,711 $ 38,780,085 $ 50,263,830
Dealer fee income 380,211 423,837 1,235,584 1,261,568
Revolving credit fee income 19,668 25,270 38,206 37,957
------------ ------------ ------------ ------------
Total 18,421,847 22,790,818 40,053,875 51,563,355
COSTS AND EXPENSES:
Dealer/distributor commissions and allowances (6,965,766) (9,651,001) (15,226,333) (22,403,642)
Cost of products sold (6,755,358) (8,138,273) (14,768,973) (15,935,193)
Operating expenses (7,633,823) (6,833,948) (14,801,582) (14,097,166)
Licensing and management fees to NSA, Inc. (328,944) (554,753) (725,870) (1,217,973)
Interest income 207,075 102,301 424,030 192,331
Interest expense (1,132) (17,518) (6,511) (47,372)
Other income (expense), net 72,738 988,254 (241,205) 1,085,233
------------ ------------ ------------ ------------
Total (21,405,210) (24,104,938) (45,346,444) (52,423,782)
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (2,983,363) (1,314,120) (5,292,569) (860,427)
INCOME TAX BENEFIT (PROVISION) (36,243) 443,631 (155,270) 207,229
------------ ------------ ------------ ------------
NET LOSS $ (3,019,606) $ (870,489) $ (5,447,839) $ (653,198)
============ ============ ============ ============
LOSS PER COMMON SHARE $ (0.62) $ (0.18) $ (1.12) $ (0.13)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 4,858,156 4,857,795 4,858,156 4,857,795
TRANSACTIONS WITH NSA, INC. INCLUDED IN THE ABOVE:
Net sales to NSA, Inc. $ 2,988,000 $ 1,792,456 $ 6,088,000 $ 3,691,000
Cost of products sold (purchased from NSA, Inc.) 96,960 729,031 468,655 1,597,251
</TABLE>
See notes to consolidated financial statements.
<PAGE> 5
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SIX MONTH PERIODS ENDED OCTOBER 31, 1995 AND 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK
------------------------ ADDITIONAL
NUMBER PAID-IN RETAINED
OF SHARES AMOUNT CAPITAL EARNINGS TOTAL
<S> <C> <C> <C> <C> <C>
BALANCE AT APRIL 30, 1994 4,858,456 $242,923 $21,199,751 $ 4,217,883 $25,660,557
Repurchase of common stock and warrants (800) (40) (1,235) (1,275)
Net loss (653,198) (653,198)
--------- -------- ----------- ----------- -----------
BALANCE AT OCTOBER 31, 1994 4,857,656 $242,883 $21,198,516 $ 3,564,685 $25,006,084
========= ======== =========== =========== ===========
BALANCE AT APRIL 30, 1995 4,858,156 $242,908 $21,197,616 $ (523,582) $20,916,942
Repurchase of common stock and warrants (176) (176)
Net loss (restated) (5,447,839) (5,447,839)
--------- -------- ----------- ----------- -----------
BALANCE AT OCTOBER 31, 1995 4,858,156 $242,908 $21,197,440 $(5,971,421) $15,468,927
========= ======== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTH PERIODS ENDED OCTOBER 31, 1995 AND 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(RESTATED)
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,447,839) $ (653,198)
Adjustments to reconcile net loss to net cash provided (used) by operations:
Gain on sales of property and equipment (32,700) (99,577)
Depreciation and amortization 486,081 764,054
Change in deferred income taxes (1,787)
Changes in assets and liabilities, net of effect of sale of educational products:
Receivables, net 662,881 (1,046,109)
Inventories 1,458,152 2,460,562
Other current assets 305,044 (797,896)
Accounts payable (405,987) 1,435,738
Liability for sales returns (233,438) 163,429
Advance payments by dealers/distributors (108,301)
Accrued expenses (2,899,355) (243,526)
Income taxes payable and refundable (286,436) (167,006)
Other liabilities 795,066 (214,601)
----------- -----------
Net cash provided by (used in) operating activities (5,706,832) 1,600,083
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (551,790)
Sales of short-term investments 515,200 (2,948,710)
Purchases of property and equipment (283,409) (616,378)
Proceeds from sales of property and equipment 12,732 392,757
Proceeds from receipt of notes receivable 500,000
----------- -----------
Net cash provided by (used in) investing activities 192,733 (3,172,331)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock and warrants (176) (1,275)
Payments on long-term debt (247,864)
Advances from (repayments to) NSA, Inc. for equipment purchases and working capital (1,555,546) (2,835,821)
----------- -----------
Net cash used in financing activities (1,555,722) (3,084,960)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,069,821) (4,657,208)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 15,603,316 20,081,363
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,533,495 $15,424,155
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 6,511 $ 47,372
Income taxes 355,000 4,285
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
See discussion of non-cash investing and financing activities in Note 4.
</TABLE>
See notes to consolidated financial statements.
<PAGE> 7
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTH PERIODS ENDED OCTOBER 31, 1995 AND 1994 (UNAUDITED) (RESTATED)
- --------------------------------------------------------------------------------
1. FINANCIAL STATEMENT PRESENTATION
The consolidated balance sheet as of October 31, 1995, the consolidated
statements of operations for the three month and six month periods ended
October 31, 1995 and 1994, and the consolidated statements of shareholders'
equity and cash flows for the six month periods ended October 31, 1995 and
1994 have been prepared by the Company, without audit. It is management's
opinion that these statements include all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial
position, results of operations, and cash flows as of October 31, 1995 and
for all periods presented. The results for the periods presented are not
necessarily indicative of the results that may 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 condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K, previously filed with the Securities
and Exchange Commission.
2. LOSS PER SHARE
Amounts shown as loss per share have been computed by dividing net loss
applicable to common shareholders by the weighted average number of common
shares outstanding.
3. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Raw materials $ 5,418,626 $ 6,122,208
Finished goods 7,743,847 8,218,954
Accessories 2,422,991 2,814,019
----------- -----------
Total at cost 15,585,464 17,155,181
Reserve for excess and obsolete inventory (4,212,988) (4,324,553)
----------- -----------
Total $11,372,476 $12,830,628
=========== ===========
</TABLE>
4. SALE OF EDUCATIONAL PRODUCTS TO NSA, INC.
On July 21, 1994, the Company completed the sale of its exclusive rights
and inventory in Wings, an educational product, and The Knowledge Network,
an educational catalog product, to NSA, Inc. The total purchase price of
$5,500,000 was determined based upon an independent valuation. NSA, Inc.
assumed a $1.1 million note payable and the remainder of the purchase price
was settled as a reduction of the amounts due to NSA, Inc. The transaction
resulted in a gain, after income tax, of $62,000.
<PAGE> 8
5. ABANDONMENT OF U.K. LEASE
The company leases office space in the U.K. under a non-cancelable
operating lease expiring in 2016. In October 1995 the Company abandoned
the location and signed a sublease agreement with an unrelated party. A
loss of $1,000,000 has been recognized in the second quarter which
represents the excess of future rent expense over sublease income
discounted at 8%.
These financial statements have been restated to reflect the $1,000,000
loss in the second quarter described above. The effect of the restatement
is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
OCTOBER 31, 1996 OCTOBER 31, 1996
<S> <C> <C>
Net loss as previously reported $2,019,606 $4,447,839
Net loss as restated 3,019,606 5,447,839
</TABLE>
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Management's discussion should be read in conjunction with the
Consolidated Financial Statements and the discussion of NSA International,
Inc.'s (the "Company") business and other detailed information appearing
elsewhere herein. All information is based on the Company's fiscal quarter and
six months ended October 31.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Net Revenues Second Quarter Six Months
------------------------------------- --------------------------------------
1996 Change 1995 1996 Change 1995
-------- ----------- -------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues $18,422 (19.17)% $22,791 $40,054 (22.32)% $51,563
Cost and expenses 21,405 (11.20)% 24,105 45,346 (13.50)% 52,424
Percentage of net revenues 116.19% 105.76% 113.21% 101.67%
Net income (loss) (3,020) (870) (5,448) (653)
Earnings (loss) per share $ (.62) $ (.18) $ (1.12) $ (.13)
</TABLE>
The decline in net revenues for the second quarter and first six months
of fiscal 1996 reflects decreased sales by the Company's direct selling
subsidiaries. Decreased sales by the Company's German and French direct selling
subsidiaries accounted for a majority of both the quarterly and six months'
revenue decline.
As disclosed previously, the first quarter decline in German sales was
attributed to changes to the Company's marketing plan which were not well
received by the German dealers and distributors. Certain of these changes to
the German marketing plan were reversed in the 1996 second quarter. Although
the Company anticipates that the present German marketing plan should result in
improved sales trends, the revised plan has not been in effect for a sufficient
period to enable the Company to determine whether the revisions will result in
increased sales.
Historically, the bulk of sales within France have occurred in the
Paris region of the country. The Company implemented plans and procedures
during the second quarter of 1996 intended to improve geographic expansion
within its French market. The Company anticipates that these plans and
procedures will increase sales by the French direct selling subsidiary.
In an effort to improve revenues in Europe, the Company has and
continues to make adjustments in its marketing plans, product mix and management
structure. The success of these changes is dependent on dealer and distributor
acceptance and their ability to successfully market the Company's products.
Thus, management cannot predict whether and when these strategies will result in
improved revenues.
In North America, the Company's 1996 first six months and second
quarter increase in Juice Plus sales did offset the revenue decrease resulting
from the sale of the Company's manufacturing subsidiary and the closure of the
Company's Mexican direct selling subsidiary.
Costs and Expenses
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------------------ -------------------------------------
1996 Change 1995 1996 Change 1995
-------- ----------- -------- ----------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Dealer/Distributor commissions
and allowances $6,966 (27.82)% $9,651 $15,226 (32.04)% $22,404
Percentage of net revenues 37.82% 42.35% 38.01% 43.45%
Cost of products sold 6,755 (16.99)% 8,138 14,769 (7.32)% 15,935
Percentage of net revenues 36.67% 35.71% 36.87% 30.90%
</TABLE>
<PAGE> 10
The decrease in dealer/distributor commissions and allowances, as a
percentage of net revenues, reflects the above described decrease in the direct
selling subsidiaries' revenues, which result in lower commissions being paid to
distributors. Additionally, the Company has experienced increased sales of
Juice Plus to NSA, Inc. which do not result in commission expenses to the
Company.
The change in the sales mix also resulted in an increase in cost of
sales as a percentage of net revenues.
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------------------ -------------------------------------
1996 Change 1995 1996 Change 1995
------ ------ -------- --------- ------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating expenses $7,634 11.71% $6,834 $14,802 5.00% $14,097
Percentage of net revenues 41.44% 29.99% 36.96% 27.34%
</TABLE>
The increase in the 1996 first six months and second quarter operating
expenses reflects the abandonment by the Company of its lease of office space in
the U.K. under a non-cancelable operating lease expiring in 2016. In October
1995 the Company signed a sublease agreement with an unrelated party. A loss of
$1,000,000 has been recognized which represents the excess of future rent
expense over sublease income discounted at 8%. The increase also includes
certain operational costs incurred by the Company as a result of its expansion
into Italy and the cost of new product development and marketing literature.
The increase was partly offset by the Company's sale of its manufacturing
subsidiary and the closing of the Company's Mexican direct selling subsidiary.
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------------------ ----------------------------------
1996 Change 1995 1996 Change 1995
-------- -------- ------- ------- --------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest income $207 102.94% $102 $424 120.83% $192
Interest expense 1 (94.12)% 18 7 (85.11)% 47
</TABLE>
The increase in interest income in the 1996 first six months and second
quarter reflects interest earned on notes receivable obtained by the Company as
a result of its sale of the manufacturing operations. The decrease in interest
expense resulted from debt reduction by the Company.
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------------------------------- -----------------------------------
1996 Change 1995 1996 Change 1995
------- --------- ------- --------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Licensing and management fees to
NSA, Inc. $329 (40.72)% $555 $726 (40.39)% $1,218
Percentage of net revenues 1.79% 2.44% 1.81% 2.36%
</TABLE>
Licensing fees paid to NSA, Inc. have decreased in the 1996 second
quarter and the first six months as a result of the product sales mix changes.
The change in the Company's sales mix reflected increased sales of the Company's
Juice Plus products for which NSA does not receive a licensing fee, as opposed
to sales of the air and water products from which NSA does receive a licensing
fee.
Management fees paid to NSA, Inc. for the 1996 first six months and
second quarter reflect a reduction of administrative expenses incurred by NSA,
Inc. on the Company's behalf due to the Company's sale of its manufacturing
subsidiary and the closing of the Company's Mexican direct selling subsidiary.
<TABLE>
<CAPTION>
Second Quarter Six Months
----------------------- -------------------------
1996 1995 1996 1995
------ ------ ----------- ----------
<S> <C> <C> <C> <C>
(Dollars in thousands)
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C>
Other income (expense) $ 73 $ 989 $(241) $1,085
Percentage of net revenues 0.40% 4.34% (0.60)% 2.11%
</TABLE>
The 1996 first six months and second quarter change in other income
(expense) is primarily attributed to approximately $300,000 of foreign currency
hedging losses incurred during the first six months of 1996 compared to no
foreign currency hedging gains or losses for the same period of 1995. The
foreign currency transaction and translation gains totaled approximately $83,000
during the second quarter of fiscal 1996 and $138,402 during the first six
months of fiscal 1996, compared to $720,743 during the second quarter of fiscal
1995 and $653,743 during the first six months of fiscal 1995.
Benefit (Provision) for Income Taxes
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------------------------- ---------------------------
1996 1995 1996 1995
--------- ---------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Benefit (Provision) for Income taxes $ (36) $ 444 $ (155) $ 207
Effective tax rate (1.81)% 33.74% (3.61)% 24.07%
</TABLE>
The low effective tax rate for the 1996 first six months and second
quarter reflects losses incurred by European direct selling subsidiaries for
which the Company was not able to recognize a tax benefit.
Net Income (Loss)
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------------------------- -----------------------
1996 1995 1996 1995
--------- --------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net income (loss) $(3,020) $(870) $(5,448) $(653)
Earnings (loss) per share $ (.62) $(.18) $ (1.12) $(.13)
</TABLE>
Future Outlook
Management continues to implement strategies intended to increase
revenue and improve long-term operating performance. Additional steps to
increase revenue include the planned expansion of direct marketing sales into
other countries, the development of improved core products, and the modification
of the marketing plan to encourage the concentration on core products by the
dealer/distributors and to accelerate the initial promotion of new dealers
within the commission structure.
The Company is aggressively implementing cost containment measures in
an effort to improve net operating performance. These measures, along with the
revenue enhancement strategies, are intended to have long term favorable effects
on results of operations. However, the Company's multi-level distribution
networks are highly competitive and are subject to a number of uncertainties
which may affect revenues and results from operations. The success of these
strategies and changes will be dependent on dealer/distributor acceptance and
their ability to market the Company's products. Management believes that these
changes coupled with changing economic conditions, both domestically and
internationally, may continue to adversely affect short-term operating results.
<PAGE> 12
Liquidity and Capital Resources
<TABLE>
<CAPTION>
Six Months
---------------------------------
1996 1995
------------ ------------
(Dollars in thousands)
<S> <C> <C>
Cash and cash equivalents $8,533 $15,424
Short-term investments 558 3,424
Working capital 8,978 18,011
Cash provided (used) by operating activities (5,707) 1,600
Cash provided (used) by investing activities 193 (3,172)
Cash provided (used) by financing activities (1,556) (3,085)
</TABLE>
The Company has sufficient cash on hand to finance its current
operations, and does not anticipate requiring additional funding in excess of
the current cash balances or cash flow generated by operations. If required,
management believes additional funding will be available from financial
institutions or NSA, Inc. at satisfactory terms.
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On October 31, 1995, the annual meeting of the shareholders of the
Company was held, at which meeting the shareholders ratified the selection of
Deloitte & Touche, L.L.P. as independent accountants and auditors for the
Company and elected George R. Poteet, William T. Williams, William W. Deupree,
Jr. and J. Neil Rood to serve as directors for two-year terms or until their
successors have been duly elected and qualified.
ITEM 5. OTHER INFORMATION.
Peter Kiepe has resigned as vice president in charge of the Company's
operations in Europe. John Greenham, who has been serving as director of
European operations for the last three years, has assumed Mr. Kiepe's duties on
an interim basis.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (Section 249.308 OF THIS CHAPTER).
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
<PAGE> 14
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.
NSA INTERNATIONAL, INC.
Date: July 24, 1996 By: /s/ Stan C. Turk
---------------------------------------
Stan C. Turk, Chief Financial Officer
