SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported): May 14, 1998
ZEGARELLI GROUP INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
CALIFORNIA 0-19227 95-4040591
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification
No.)
150 East Olive Avenue, Burbank, California 91502
(Address of principal executive offices) (Zip Code)
(818) 842-8411
(Registrant's telephone number, including area code)
10318 Norris Street, Pacoima, California 91331
(Former name or former address, if changed since last report)
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Item 5. Other Events.
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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 hereunto duly authorized.
Zegarelli Group International, Inc.
Jennifer J. Eggers
JENNIFER J. EGGERS
Chief Financial Officer
Date: June 16, 1998
<PAGE>4
Burbank, California, May 14, 1998 *** Zegarelli Group International, Inc.
(ZEGG) announced today that the net loss for its fiscal year ended
December 31, 1997 will be $5,080,000, or $(.87) per share. For the year
ended December 31, 1996, the Company had net income of $405,000, or $.08 per
share. The Company has not completed its year-end audit. The amounts for the
Company's 1997 year-end have been supplied by management and are subject to
adjustments which may be required as a result of the annual audit.
The Company is also reporting a net loss of $131,000, or $(.02) per
share, for the first quarter of 1998 on revenues of $190,000, compared to
net income of $80,000, or $.02 per share, on revenues of $2,873,000 for
the first quarter of 1997. Since the Company sold its contract packaging
business in September 1997, those operations are not included in the 1998
numbers.
The Company is continuing its professional hair care line operations,
with sales mainly from the Home Shopping Network and from European
distribution. The Company's President, Alfred E. Booth, Jr., said that
"Although the Company is in an adverse cash flow position, our creditors
are currently working with us to try to reduce the debt and, at the same
time, we are working to increase sales. There is no assurance that the
Company can increase its sales and/or cash flow to satisfy its financial
obligations and continue operations." Mr. Booth further said that during
this restructuring period, "losses can be expected for at least the next
two quarters."
In April 1998, the purchaser of the Company's contract packaging business
in September 1997 filed an action against the Company in the United
States District Court for the District of New Jersey. The lawsuit arises
from the sale of the contract packaging business for which the Company
received a $3.5 million note from the purchaser as part of the
consideration. The Company has filed a motion to transfer venue to the
United States District Court for the Central District of California and
intends to vigorously defend this lawsuit.
The Company manufactures and markets its own line of professional hair
care products under the Zegarelli label. The line is distributed through
regional and European, professional only, distributors and is currently
being sold on Home Shopping Network.
Safe Harbor statement under the Private Securities Litigation Reform Act
of 1995: Statements in this news release looking forward in time involve
risks and uncertainties, including primary customer order rates,
cancellations, late delivery of components which cause production delays,
dependence on certain customers, dependence on key executives,
variability of quarterly results, single operating facility, competition,
product liability risks, control by management, limited trading market,
volatility of stock prices, effect of pending litigation, and other risk
factors detailed in the Company's Securities and Exchange Commission
filings.
