<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 1996
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number : 0-18947
BRIDAL EXPOS, INC.
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(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2455638
- ---------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
510 Montauk Highway, West Islip, New York 11795
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(Address of principal executive offices)
(516) 669-1200
---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
------ ------
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Outstanding at
Class December 18, 1996
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Common Stock, $.01 par value 5,752,655
Transitional Small Business Disclosure Format (check one):
YES ; NO X
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Page 1 of 12 pages
Index of Exhibits appears on page 12
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BRIDAL EXPOS, INC.
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements:
BALANCE SHEET 3
OCTOBER 31, 1996 (Unaudited)
STATEMENTS OF OPERATIONS -
THREE MONTHS ENDED OCTOBER 31, 1996
AND 1995 (Unaudited) 4
STATEMENTS OF OPERATIONS -
SIX MONTHS ENDED OCTOBER 31, 1996
AND 1995 (Unaudited) 5
CONDENSED STATEMENTS OF CASH FLOWS -
SIX MONTHS ENDED OCTOBER 31, 1996
AND 1995 (Unaudited) 6
NOTES TO FINANCIAL STATEMENTS 7-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION 9-10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURE PAGE 12
PAGE 2
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PART I
ITEM 1. FINANCIAL STATEMENTS
BRIDAL EXPOS, INC.
BALANCE SHEET
(Unaudited)
OCTOBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents......................................... $ 300,324
Accounts receivable (net of allowance for
doubtful accounts of $54,759)................................... 1,517,918
Prepaid expenses.................................................. 207,155
Salesmen advances................................................. 26,875
----------
Total current assets.............................................. 2,052,273
Property and equipment - at cost, less accumulated
depreciation and amortization of $299,932....................... 126,877
Note receivable - officer................................................. 550,482
----------
Total assets......................................................... $2,729,632
----------
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C>
Current liabilities:
Accounts payable and accrued expenses............................. $ 468,531
Income taxes payable...................................................... 21,479
Current portion of note payable (Note 3).................................. 13,271
Deferred revenue.................................................. 1,407,616
----------
Total current liabilities............................................. 1,910,897
Note Payable (Note 3)..................................................... 53,085
Commitments and contingencies (Notes 2 and 3)............................. --
----------
Total liabilities.................................................... 1,963,982
Shareholders' equity:
Common Stock, $.01 par value -
20,000,000 shares authorized;
5,752,655 shares issued and outstanding......................... 57,527
Additional paid-in capital........................................ 924,707
Deficit........................................................... (216,584)
Total shareholders' equity........................................ 765,650
----------
Total liabilities and shareholders' equity....................... $2,729,632
==========
</TABLE>
See accompanying notes to financial statements.
PAGE 3
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BRIDAL EXPOS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
OCTOBER 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
Sales........................................ $ 877,254 $ 846,800
Cost of sales................................ 772,570 613,801
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Gross profit................................. 104,684 232,999
General and administrative expense........... 237,132 269,318
---------- ----------
Operating (loss) income...................... (132,448) (36,319)
Interest and other income (net).............. 14,141 15,031
---------- ----------
(Loss) income before provision for
income taxes............................ (118,307) 21,288)
Provision for income taxes................... 10,010 862_
---------- -----------
Net loss................................... $ (128,317) $ (22,150)
========== ===========
Net loss per common share.................. ($0.02) $0.00
========== ==========
Weighted average number of
shares outstanding...................... 5,752,655 5,752,655
=========== ==========
</TABLE>
See accompanying notes to financial statements.
PAGE 4
<PAGE>
BRIDAL EXPOS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
OCTOBER 31,
-----------------------------
1996 1995
---- ----
<S> <C> <C>
Sales . . . . . . . . . . . . . . . $ 937,961 $ 846,800
Cost of sales . . . . . . . . . . . 856,829 708,685
---------- ----------
Gross profit. . . . . . . . . . . . 81,131 138,115
General and administrative
expense. . . . . . . . . . . . 369,979 464,227
---------- ----------
Operating income (loss) . . . . . . (288,847) (326,112)
Interest income (Note 2). . . . . . 16,607 179,113
---------- ----------
Loss before provision for
income taxes . . . . . . . . . (272,240) (146,999)
Provision for income taxes. . . . . 10,010 862
---------- ----------
Net (loss). . . . . . . . . . . . $ (282,250) $ (147,861)
========== ==========
Net (loss) per common
share. . . . . . . . . . . . . ($0.05) ($0.03)
========== ==========
Weighted average number of
shares outstanding . . . . . . 5,752,655 5,752,655
========== ==========
</TABLE>
See accompanying notes to financial statements.
PAGE 5
<PAGE>
BRIDAL EXPOS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
OCTOBER 31,
------------------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss................................................... $ (282,250) $ (147,861)
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization............................ 23,152 22,124
Provision for loss on accounts receivables............... 20,738 39,893
Accounts receivable...................................... (291,103) (419,776)
Prepaid expenses and also assets......................... 139,725 (169,735)
Deferred revenue......................................... 428,288 815,366
Income tax provision..................................... 1,399 --
Accounts payable & accrued expenses...................... 198,424 116,564
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NET CASH PROVIDED BY
OPERATING ACTIVITIES.................................. 238,373 256,575
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment....................... (6,970) (62,323)
NET CASH USED IN
INVESTING ACTIVITIES.................................. (6,970) (62,323)
CASH FLOWS FROM FINANCING ACTIVITIES:
Note receivable - officer................................ (12,402) (177,102)
Repayment of officer's note receivable................... -- 37,500
Additional borrowings on note (net)...................... 18,411 --
----------- -----------
NET CASH USED IN
FINANCING ACTIVITIES.................................. 6,009 (139,602)
----------- ------------
NET INCREASE IN
CASH AND CASH EQUIVALENTS............................. 237,412 54,650
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD........................................ 62,912 39,812
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD.............................................. $ 300,324 $ 94,462
=========== ===========
SUPPLEMENTAL DISCLOSURES:
Interest paid.............................................. $ 1,126 $ 2,626
=========== ===========
Income taxes paid.......................................... $ 8,601 $ 862
=========== ===========
</TABLE>
See accompanying notes to financial statements.
PAGE 6
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BRIDAL EXPOS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Financial Statements
The accompanying unaudited condensed financial statements of Bridal Expos, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information, the instructions to
Form 10-QSB and Regulation S-B (including Item 310(b) thereof). Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. Management of
the Company believes that the results herein reflect all adjustments which are
in the opinion of management necessary to fairly state the results and
financial condition of the Company for the respective periods. The general
accounting policies followed by the Company are set forth in the audited
financial statements included in such Form 10-KSB.
The results of operations for the six-month period are not necessarily
indicative of the results that may by expected for the full fiscal year ending
April 30, 1997.
NOTE 2 - Summary of Significant Accounting Policies
Business Activity
The Company is engaged in the business of producing and presenting bridal
expositions in major cities throughout the continental United States.
Revenue Recognition
Revenue from shows is recognized upon completion of the expositions in
accordance with the terms of the various contracts.
Property and Equipment
Property and equipment are stated at cost. The costs of additions and
betterments are capitalized and expenditures for repairs and maintenance are
expensed in the period incurred. When items of property and equipment are sold
or retired, the related costs and accumulated depreciation are removed from the
accounts and any gain or loss is included in income.
The Company capitalizes leased equipment where the terms of the lease result in
the transfer to the Company of substantially all the benefits and risks of
ownership of the equipment.
Depreciation and amortization of property and equipment are computed utilizing
accelerated or straight-line methods over the estimated useful lives of the
respective assets.
PAGE 7
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Leasehold improvements are amortized over the shorter of the remaining term of
the lease or the useful lives of the improvements utilizing the straight-line
method.
Legal Proceedings
Under a Consent Judgement entered into between the U.S. Securities and Exchange
Commission and William F. Heaton, III et.al., related to the Registrant's 1990
initial public offering, Mr. Heaton has agreed to pay disgorgement to the
Registrant of $107,000 and prejudgment interest thereon of $43,000 in multiple
payments commencing on July 1, 1995 with a final installment on January 1,
1997.
Note 3 - Notes Payable
During August 1995, the Company entered into an agreement with a bank to borrow
up to $200,000 under a revolving line of credit that is secured with the
personal property of the Company. Borrowings against the line bear interest at
two (2%) percent above the bank's prime rate of interest and are payable in
monthly installments of interest plus one-sixtieth (1/60) of the outstanding
balance. At October 30, 1996, the Registrant had outstanding borrowings against
this line of $66,356.
PAGE 8
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis should be read in conjunction with the
Company's financial statements and the notes thereto appearing elsewhere in
this report.
A. FINANCIAL CONDITION AND LIQUIDITY
As of October 31, 1996, the Company had working capital of $141,376 and cash
and cash equivalents of $300,324. Working capital decreased and cash increased
correspondingly. This is principally attributable to the high level of deferred
revenue during the first half of fiscal 1997 and the corresponding collections
against the deferred revenue. Of the Company's approximately $2.1 million of
current assets at October 31, 1996, approximately $200,000, consisted of
prepaid expenses. The Company also had over $1.5 million in net accounts
receivable at October 31, 1996. During the first two quarters of fiscal 1996,
the Company had a positive cash flow of $237,412. This resulted principally
from cash received in respect of deferred revenue. Net accounts receivable
increased by approximately $270,000 from April 30, 1996 to October 31, 1996
principally due to the high level of deferred revenue during the first two
quarters.
During August 1995, the Company entered into an agreement with a bank to borrow
up to $200,000 under a revolving line of credit secured with the personal
property of the Company. Borrowings against the line bear interest at two (2%)
percent above the bank's prime rate of interest and are payable in monthly
installments of interest plus one-sixtieth (1/60) of the outstanding balance.
At October 31, the Registrant had outstanding borrowings against this line of
$66,356.
The Company believes that its existing capital resources will enable it to
maintain its current and planned operations for the remainder of fiscal 1997.
B. RESULTS OF OPERATIONS
The Company's business is seasonal in nature, in that the Company spends the
summer months each year planning and scheduling expositions to be held in the
fall, winter and spring seasons. As a result, the Company does not generate
significant sales income until the second week of September.
Three months ended October 31, 1996 and 1995
Sales for the three months ended October 31, 1996 increased $30,454 (3.6%) from
$846,800 to $877,254 for the corresponding period of the prior year,
principally due to an increase in local sponsorship of its expositions. The
Company anticipates increased national sponsorship during the third and fourth
quarters of fiscal 1997. Deferred Revenue decreased $612,649 from $2,030,265 to
$1,407,616. The decrease is principally attributable to the Company's ability
to sign two year contracts in fiscal 1996 worth approximately $642,000. No two
year contracts were signed in fiscal 1997. The high level of deferred revenue
at October 31, 1996 will be principally recognized during the remainder of the
1997 fiscal year.
PAGE 9
<PAGE>
Cost of sales during the second quarter of fiscal 1997 increased by $158,769
(25.9%) from the same period of fiscal year 1996 principally due to the
increased advertising to attract more local and national sponsors.
General and administrative expense, which is generally fixed in nature,
decreased by $32,186 (12.0%) from the second quarter of fiscal 1996. The
decrease was principally attributable to a decrease in the Company's bad debt
provision during fiscal 1997.
Interest income in the second quarter of fiscal 1997 ($12,402) and the second
quarter of fiscal 1995 ($15,031) represents interest accrued on a loan payable
from an executive officer of the Company.
As a result of the foregoing, for the quarter ended October 31, 1996, net loss
was $128,317, as compared to net loss of ($22,150) for the corresponding
quarter of fiscal 1996.
The Company's gross profit margin for the second quarter of fiscal 1997
decreased from the gross profit margin for the second quarter of fiscal 1996;
11.9% and 27.5% respectively. The decrease is attributable to increased
advertising in fiscal 1997.
Six months ended October 31, 1996 and 1995
Sales for the six months ended October 31, 1996 were $937,961 an increase of
$91,161 (10.8%) from $846,800 in sales for the corresponding period of fiscal
1996. This increase is principally attributable to an increase in local
sponsorship of its expositions. The Company anticipates increased national
sponsorships during the third and fourth quarters of fiscal 1997.
During the first six months of fiscal 1997, the Company experienced a
significant decrease in its gross profit margin of 7.7% from the corresponding
period of fiscal 1996, from 16.3% to 8.6%. The decrease was principally
attributable to an increase in advertising during the first half of fiscal
1997, to spur sales for the remainder of fiscal 1997.
General and administrative expense decreased over the first six months of
fiscal 1997 by approximately $94,248. This decrease is principally attributable
to a decrease in the Company's bad debt provision during fiscal 1997 and
managements increased efforts to cut costs.
Interest income in fiscal 1997 represents interest accrued on a loan payable
from an officer of the Company.
Other income in fiscal 1996 of $150,000 is disgorgement and prejudgment
interest required to be paid by the Registrant's President to the Registrant as
outlined in the final settlement with the Securities and Exchange Commission
(see note 2).
As a result of the foregoing, for the six months ended October 31, 1996, the
Company's net loss was $282,250 ($.05 per share), as compared to a net loss of
$147,861 ($.03 per share) for the six months ended October 31, 1995.
PAGE 10
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BRIDAL EXPOS, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: None
(b) Reports on Form 8K: None
PAGE 11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the issuer caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: December 18, 1996
BRIDAL EXPOS, INC.
-----------------------------
(Registrant)
By: /s/ William F. Heaton
---------------------------------
William F. Heaton
President/Chief Financial Officer
(Principal Executive, Accounting
and Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 300,324
<SECURITIES> 0
<RECEIVABLES> 1,572,677
<ALLOWANCES> 54,759
<INVENTORY> 0
<CURRENT-ASSETS> 2,052,273
<PP&E> 426,809
<DEPRECIATION> 299,932
<TOTAL-ASSETS> 2,729,632
<CURRENT-LIABILITIES> 1,910,897
<BONDS> 53,085
0
0
<COMMON> 57,527
<OTHER-SE> 708,123
<TOTAL-LIABILITY-AND-EQUITY> 2,729,632
<SALES> 0
<TOTAL-REVENUES> 937,961
<CGS> 0
<TOTAL-COSTS> 856,829
<OTHER-EXPENSES> 349,241
<LOSS-PROVISION> 20,738
<INTEREST-EXPENSE> 1,126
<INCOME-PRETAX> (272,240)
<INCOME-TAX> 10,010
<INCOME-CONTINUING> (282,250)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (282,250)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
