<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 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: 0-19487
--------------------------------------------------------
NSA INTERNATIONAL, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1387102
- --------------------------------------------- ------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
4260 East Raines Road, Memphis, Tennessee 38118
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(901) 541-1223
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- -------------------------------------------------------------------------------
(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, 1996.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NSA International, Inc. and Subsidiaries:
Consolidated Balance Sheets as of October 31, 1996 (unaudited) and April
30, 1996
Consolidated Statements of Operations for the Three Month and Six Month
Periods Ended October 31, 1996 and 1995 (unaudited)
Consolidated Statements of Shareholders' Equity for the Six Month Periods
Ended October 31, 1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows for the Six Month Periods Ended
October 31, 1996 and 1995 (unaudited)
Notes to Consolidated Financial Statements
- 1 -
<PAGE> 3
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCTOBER 31, APRIL 30,
ASSETS 1996 1996
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 5,881,723 $ 8,754,770
Short-term investments 13,354 13,047
Receivables, net 4,635,644 1,839,493
Refundable income taxes 1,131,680 729,545
Inventories 10,376,164 10,233,158
Deferred income taxes 322,000 322,000
Notes receivable - short-term 330,000 125,000
Other current assets 771,767 1,093,442
------------------- --------------------
Total current assets 23,462,332 23,110,455
PROPERTY AND EQUIPMENT, At cost:
Leasehold improvements 309,033 579,618
Manufacturing equipment 455,850 678,800
Office furniture and equipment 1,535,124 2,693,847
Transportation equipment 55,882 124,765
Data processing equipment 1,257,308 2,148,027
------------------- --------------------
Total 3,613,197 6,225,057
Less accumulated depreciation and amortization (1,784,285) (3,347,843)
------------------- --------------------
Property and equipment, net 1,828,912 2,877,214
NOTES RECEIVABLE - LONG-TERM 5,317,795 4,615,495
OTHER ASSETS 619,578 670,827
------------------- --------------------
TOTAL ASSETS $ 31,228,617 $ 31,273,991
=================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Amounts due to NSA, Inc. $ 6,638,578 $ 923,150
Accounts payable, trade 982,242 2,556,531
Accrued sales commissions and allowances 274,183 771,868
Accrued compensation and expenses 6,544,390 4,724,392
Accrued sales returns 1,164,860 1,196,142
Advance payments by dealers/distributors 44,397 105,079
Income taxes payable 1,294,932 1,068,596
Other current liabilities 148,895 441,300
------------------- --------------------
Total current liabilities 17,092,477 11,787,058
AMOUNTS DUE TO NSA, INC. 7,900,000
DEFERRED INCOME TAXES 322,000 322,000
OTHER LIABILITIES 1,058,662 1,058,662
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.05 par value, 100,000,000 shares authorized, 4,858,156
outstanding at October 31, 1996 and April 30, 1996 242,908 242,908
Additional paid-in capital 29,106,950 21,196,430
Deficit (16,594,380) (11,233,067)
------------------- --------------------
Total shareholders' equity 12,755,478 10,206,271
------------------- --------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 31,228,617 $ 31,273,991
=================== ====================
</TABLE>
See notes to consolidated financial statements.
- 2 -
<PAGE> 4
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED OCTOBER 31, ENDED OCTOBER 31,
------------------------------------- ------------------------------------
1996 1995 1996 1995
NET REVENUES:
<S> <C> <C> <C> <C>
Net sales $ 9,269,252 $ 18,021,968 $ 22,604,372 $38,780,085
Dealer and distributor fee income 172,745 380,211 440,582 1,235,584
Revolving credit fee income 19,668 6,769 38,206
------------- -------------- -------------- -----------
Total 9,441,997 18,421,847 23,051,723 40,053,875
COSTS AND EXPENSES:
Dealer/distributor commissions and allowances (1,584,701) (6,965,766) (6,134,402) (15,226,333)
Cost of products sold (5,041,859) (6,755,358) (11,006,087) (14,768,973)
Operating expenses (3,634,989) (7,633,823) (8,197,908) (14,801,582)
Licensing and management fees to NSA, Inc. (142,595) (328,944) (389,044) (725,870)
Interest income 123,947 207,075 246,833 424,030
Interest expense (4) (1,132) (4) (6,511)
Other income (expense), net 174,424 72,738 267,576 (241,205)
Restructuring charge (3,000,000)
------------- -------------- -------------- -----------
Total (10,105,777) (21,405,210) (28,213,036) (45,346,444)
------------- -------------- -------------- -----------
LOSS BEFORE INCOME TAXES (663,780) (2,983,363) (5,161,313) (5,292,569)
INCOME TAX PROVISION (190,532) (36,243) (200,000) (155,270)
------------- -------------- -------------- -----------
NET LOSS $ (854,312) $ (3,019,606) $ (5,361,313) $(5,447,839)
============= ============== ============== ===========
LOSS PER COMMON SHARE $ (0.17) $ (0.62) (1.10) (1.12)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 4,858,156 4,858,156 4,858,156 4,858,156
TRANSACTIONS WITH NSA, INC. INCLUDED IN THE ABOVE:
Net sales to NSA, Inc. $2,504,000 $ 2,988,000 $ 5,025,000 $ 6,088,000
Cost of products sold (purchased from NSA, Inc.) NIL 96,960 293,823 468,655
</TABLE>
See notes to consolidated financial statements.
- 3 -
<PAGE> 5
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SIX MONTH PERIODS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK
-------------------------------- ADDITIONAL
NUMBER PAID-IN
OF SHARES AMOUNT CAPITAL DEFICIT TOTAL
<S> <C> <C> <C> <C> <C>
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 (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
========= ======== =========== ============ ===========
BALANCE AT APRIL 30, 1996 4,858,156 $242,908 $21,196,430 $(11,233,067) $10,206,271
Net loss (5,361,313) (5,361,313)
Forgiveness of debt by NSA, Inc. 7,910,520 7,910,520
--------- -------- ----------- ------------ -----------
BALANCE AT OCTOBER 31, 1996 4,858,156 $242,908 $29,106,950 $(16,594,380) $12,755,478
========= ======== =========== ============ ===========
</TABLE>
See notes to consolidated financial statements.
- 4 -
<PAGE> 6
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTH PERIODS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCTOBER 31, OCTOBER 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (5,361,313) $ (5,447,839)
Adjustments to reconcile net loss to net cash provided (used) by operations:
Gain on sales of property and equipment (32,700)
Depreciation and amortization 383,054 486,081
Restructuring charge 3,000,000
Changes in assets and liabilities:
Receivables, net (2,791,827) 662,881
Inventories (183,812) 1,458,152
Other current assets 231,167 305,044
Accounts payable (1,574,289) (405,987)
Liability for sales returns (31,282) (233,438)
Advance payments by dealers/distributors (60,682) (108,301)
Accrued expenses (1,782,687) (2,899,355)
Income taxes payable and refundable (175,799) (286,436)
Other liabilities (292,405) 795,066
-------------------- --------------------
Net cash used in operating activities (8,639,875) (5,706,832)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (551,790)
Sales of short-term investments 515,200
Purchases of property and equipment (9,120) (283,409)
Proceeds from sales of property and equipment 12,732
Proceeds from receipt of notes receivable 50,000 500,000
-------------------- --------------------
Net cash provided by (used in) investing activities 40,880 192,733
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock and warrants (176)
Advances from (repayments to) NSA, Inc. for equipment purchases and working capital 5,725,948 (1,555,546)
-------------------- --------------------
Net cash provided by (used in) financing activities 5,725,948 (1,555,722)
-------------------- --------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,873,047) (7,069,821)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,754,770 15,603,316
-------------------- --------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,881,723 $ 8,533,495
==================== ====================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ NIL $ 6,511
Income taxes 223,310 355,000
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
See discussion of non-cash investing and financing activities in Note 4.
See notes to consolidated financial statements.
- 5 -
<PAGE> 7
NSA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTH PERIODS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. FINANCIAL STATEMENT PRESENTATION
The consolidated balance sheet as of October 31, 1996, the consolidated
statements of operations for the three month and six month periods ended
October 31, 1996 and 1995, and the consolidated statements of
shareholders' equity and cash flows for the six month periods ended
October 31, 1996 and 1995 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, 1996 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, 1996 APRIL 30, 1996
<S> <C> <C>
Raw materials $ 4,718,468 $ 5,850,158
Finished goods 8,305,489 6,733,874
Accessories 1,751,238 1,933,995
----------- -----------
Total at cost 14,775,195 14,518,027
Reserve for excess and obsolete inventory (4,399,031) (4,284,869)
----------- -----------
Total $10,376,164 $10,233,158
=========== ===========
</TABLE>
- 6 -
<PAGE> 8
4. RESTRUCTURING CHARGE AND SALE OF CERTAIN OPERATIONS
During the second quarter of 1997, the Company sold its operating rights
and certain fixed assets in Germany, Switzerland, Belgium, Holland, and the
United Kingdom. Consideration was received in the form of notes receivable
which provide for annual payments of principal and interest over the next
six to seven years. As the rates on the notes are substantially less than
current market rates, these notes were discounted to a present value of
$1,510,000 using the current U.S. prime rate of 8.25%. The gain on the
sale of $630,000 is being deferred, as the buyers did not make any payments
to the Company as of the closing dates; this deferred gain is offset
against the related notes receivable on the accompanying balance sheet and
will be ratably recognized by the Company as the notes are collected.
Also, these dispositions obligate the buyers to assume responsibilities for
future multi-level direct selling operations in these countries.
During the first quarter of 1997, the Company announced its decision to
close its European headquarters. Accordingly, a restructuring charge
totalling $3,000,000 was reflected during the first quarter of fiscal 1997.
The charge includes estimates of $975,000 to writedown fixed assets to net
realizable value, $500,000 to recognize termination costs of certain
employees, $200,000 to accrue costs related to early termination of leases,
$825,000 to writedown certain inventories which will be obsolete as a
result of the restructuring, and $500,000 for salary and other shutdown
expenses after these operations are sold. Costs totalling $325,000,
principally related to salaries and shutdown expenses, were charged against
the reserve in the second quarter of 1997. Additional employee termination
costs of $500,000 to $1,000,000 are expected during the implementation of
the restructuring plan, which is expected to be completed by the end of
fiscal 1997.
- 7 -
<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, 1996.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Net Revenues Second Quarter Six Months
------------------------- ---------------------------
1997 Change 1996 1997 Change 1996
------ ---------- ------ -------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 9,442 (48.74%) $18,421 $23,052 (42.45%) $40.053
Cost and expenses 10.106 (52.79%) 21,405 28,213 (37.78%) 45,346
Percentage of net revenues 107.02% 116.20% 122.39% 113.21%
Net loss 854 3,020 5,361 5448
Loss per share $ (.17) $ (.62) $ (1.10) $ (1.12)
</TABLE>
The decrease in the second quarter and the first six month's net revenues
resulted from the sale of the Company's direct selling operations in Canada,
Germany, Switzerland, United Kingdom, Belgium, Ireland and Holland. The
Company's Canadian direct selling operations were sold during the 1996 fourth
quarter. The Company's German and Swiss direct selling operations were sold
effective September 2, 1996 and the operations in the United Kingdom, Ireland,
Holland, and Belgium were sold October 2, 1996.
Costs and Expenses
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------- ---------------------------
1997 Change 1996 1997 Change 1996
------ ---------- ------ -------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Dealer/Distributor commissions and
allowances $1,584 (77.26%) $6,966 $ 6,314 (59.71%) $15,226
Percentage of net revenues 16.79% 37.82% 26.61% 38.01%
Cost of products sold 5.042 (25.36%) 6,755 11,006 (25.48%) 14,769
Percentage of net revenues 53.40% 36.67% 47.74% 36.87%
</TABLE>
The 1997 second quarter and first six months decreases in
dealer/distributor commissions and allowances, as a percentage of net revenues,
reflect the change of the sales mix resulting from the sale of certain direct
selling operations which paid dealer/distributor commissions on most of their
prior sales.
The 1997 increases in the cost of products sold resulted from the
Company's increase in the portion of sales to lower margined sales of products
to third party licensees versus the Company's direct selling operations.
<TABLE>
Net Revenues Second Quarter Six Months
------------------------- ---------------------------
1997 Change 1996 1997 Change 1996
------ ---------- ------ -------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating expenses $3,635 (52.38%) $7,634 $8,198 (44.62%) $14,802
Percentage of net revenues 38.49% 41.44% 35.56% 36.96%
</TABLE>
- 8 -
<PAGE> 10
The Company's 1997 second quarter and first six months declines in
operating expenses reflect certain cost and expense controls implemented in
fiscal 1996 and expense reductions resulting from the sale of the Canadian
direct selling operations and the sale of several of the European direct selling
operations in the 1997 second quarter.
<TABLE>
<CAPTION>
Second Quarter Six Months
--------------------- --------------------
1997 Change 1996 1997 Change 1996
------ -------- ----- ---- -------- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest income $123 40.58% $207 $246 (41.98%) $424
Interest expense $-0- 2 $-0- 7
</TABLE>
The decrease in interest income reflects lower average balances of cash
and cash equivalents.
<TABLE>
<CAPTION>
Second Quarter Six Months
--------------------- --------------------
1997 Change 1996 1997 Change 1996
------ -------- ----- ---- -------- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Management fees to NSA, Inc. $ 143 (56.53%) $ 329 $ 389 (46.42)% $ 726
Percentage of net revenues 1.51% 1.79% 1.69% 1.81%
</TABLE>
The decrease in management fees is due to the sale of the Canadian and
selected European direct selling operations.
<TABLE>
<CAPTION>
Second Quarter Six Months
---------------- ---------------
1997 1996 1997 1996
------ ------- ------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Other income (expense) $ 175 $ 73 $ 268 $ (241)
Percentage of net revenues 1.85% .40% 1.16% (0.60)%
</TABLE>
Approximately $75,000 of the 1997 second quarter and $100,000 of the 1997
first six month's increases in other income resulted from foreign currency
transaction and translation gains, net of a small foreign currency hedging
loss. The remaining increases in other income of approximately $100,000 and
$168,000 for the 1997 second quarter and first six months, respectively, were
due to the increases in discounts earned and miscellaneous income. The 1996
six month loss was primarily due to foreign currency hedging which was
partially offset by currency translation and transaction gains.
<TABLE>
<CAPTION>
Second Quarter Six Months
---------------- ---------------
1997 1996 1997 1996
------ ------- ------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Restructuring Costs $-0- $-0- $3,000 $-0-
Percentage of Net Revenues 43.01%
</TABLE>
During the 1997 first quarter, the Company charged $3,000,000 for expenses
to be incurred with the closing of the Company's European Central Office in
Amsterdam and other changes as a result of the sale of selected European direct
selling operations.
<TABLE>
<CAPTION>
Second Quarter Six Months
---------------- ---------------
1997 1996 1997 1996
------ ------- ------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Provision for income taxes $191 $36 $200 $155
</TABLE>
- 9 -
<PAGE> 11
The tax provision for the 1997 second quarter and first six months
resulted from taxable income from the Company's domestic operations which were
unable to be offset by the losses incurred by the Company's European direct
selling subsidiaries.
Net Loss
<TABLE>
<CAPTION>
Second Quarter Six Months
---------------- ---------------
1997 1996 1997 1996
------ ------- ------- ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net Loss $ 854 $3,020 $5,361 $5,448
Loss per share $(.17) $ (.62) $(1.10) $(1.12)
</TABLE>
Future Outlook
In the 1997 second quarter, the Company completed the sale of its European
direct selling operations in the United Kingdom, Ireland, Holland, and Belgium
to third party licensees. The Company is currently negotiating distribution
rights to several other foreign markets. Management anticipates the Company
will continue to incur adverse short-term operating results until it
satisfactorily converts a sufficient portion of its operation to its new method
of doing business.
The Company's U.S affiliate, NSA, Inc., launched Juice Plus Thins(TM) the
Company's dietary food supplement, on October 31, 1996. NSA, Inc. also began
selling the Company's Pet Plus(TM), a food supplement for dogs and cats, during
NSA, Inc.'s fall convention in Nashville. The Company is in the process of
getting foreign product approvals for these products to allow for the sales of
these products by its third party licensees.
Management anticipates that its operational changes and new product
introductions will provide the Company with long-term favorable operating
results, although the ultimate effect of these changes cannot be determined.
Liquidity and Capital Resources
<TABLE>
<CAPTION>
Six Months
-----------------------
1997 1996
---------- ----------
(Dollars in thousands)
<S> <C> <C>
Cash and cash equivalents $ 5,882 $ 8,533
Short-term investments 13 558
Working capital 6,369 8,978
Cash provided (used) by operating activities (8,640) (5,707)
Cash provided (used) by investing activities 41 193
Cash (used) by financing activities 5,726 (1,556)
</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.
- 10 -
<PAGE> 12
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.
(a) On December 3, 1996, the annual meeting of the shareholders of the
Company was held for the purpose of electing directors and approving
the appointment of auditors. Proxies for the meeting were solicited
and there was no solicitation in opposition to management's
solicitations. Holders of 4,858,156 shares were eligible to vote and
4,408,478 shares or 90.7% were represented at the meeting either in
person or by proxy.
(b) All of management's nominees for directors as listed in the proxy
statement were elected with the following vote:
<TABLE>
<CAPTION>
Director For Against Withheld
-------- --- ------- --------
<S> <C> <C> <C>
J. Neil Rood 4,291,574 400 111,504
Charles R. Evans, Jr. 4,291,574 400 111,504
A. Jay Martin 4,291,574 400 111,504
</TABLE>
The following directors continued in office following the meeting:
<TABLE>
<CAPTION>
Name Term Expires
---- ------------
<S> <C>
L.F. Swords 1997
George R. Poteet 1997
William W. Deupree, Jr. 1997
William T. Williams 1997
</TABLE>
The shareholders approved the appointment of as Deloitte & Touche, L.L.P.
as independent auditors for the year ending April 30, 1997 by the
following vote:
<TABLE>
<CAPTION>
For Against Withheld
--- ------- --------
<S> <C> <C>
4,401,878 1,600 0
</TABLE>
- 11 -
<PAGE> 13
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (Section 249.308 OF THIS CHAPTER).
(a) Exhibits.
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
Current Report on Form 8-K filed on September 17, 1996
- 12 -
<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: December 12, 1996 By: /s/ Stan C. Turk
------------------------------------
Stan C. Turk, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q OF NSA INTERNATIONAL, INC. FOR THE PERIOD ENDED OCTOBER 31, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,882
<SECURITIES> 13
<RECEIVABLES> 6,137
<ALLOWANCES> (370)
<INVENTORY> 10,376
<CURRENT-ASSETS> 23,462
<PP&E> 3,613
<DEPRECIATION> (1,784)
<TOTAL-ASSETS> 31,229
<CURRENT-LIABILITIES> 17,092
<BONDS> 0
0
0
<COMMON> 243
<OTHER-SE> 12,512
<TOTAL-LIABILITY-AND-EQUITY> 31,229
<SALES> 9,269
<TOTAL-REVENUES> 9,442
<CGS> 5,042
<TOTAL-COSTS> 6,633
<OTHER-EXPENSES> 3,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (664)
<INCOME-TAX> 191
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (854)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
