U. S. Securities and Exchange Commission
Washington D.C. 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 June 30, 1996
Commission File No. 0-19015
ICIS Management Group, Inc.
(Formerly: Alter Sales Co., Inc.)
FLORIDA 59-0791065
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
5050 N. Federal Hwy, Lighthouse Point, Florida 33064
(address of principal executive office) (zip code)
Issuer's telephone number: (954) 426-3400
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock
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 registration was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No .
--- --
As of August 12, 1996, 6,035,127 shares of the Registrant's Common Stock
were outstanding.
<PAGE>
Form 10-QSB: June 30, 1996
ICIS Management Group, Inc.
Page 2
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited financial statements for the quarter ended June 30, 1996 are
attached hereto and incorporated herein.
ICIS MANAGEMENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
ASSETS 1996 1995
------------ ------------
CURRENT ASSETS:
Cash and equivalents $ 77,901 $ 689,633
Accounts receivable:
Trade 550,854 656,953
Affiliates 321,763 275,177
Note receivable, affiliate 562,813 500,000
Inventories 2,288,768 2,361,236
Prepaid expenses and other current assets 161,662 125,271
------------ ------------
Total Current Assets 3,963,761 4,608,270
------------ ------------
PROPERTY AND EQUIPMENT, NET 2,846,091 2,326,332
------------ ------------
INVESTMENT IN JOINT VENTURE 533,996 --
------------ ------------
$ 7,343,848 $ 6,934,602
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 1,150,430 $ 100,000
Accounts payable 433,785 672,706
Accrued expenses 367,218 343,163
------------ ------------
Total Current Liabilities 1,951,433 1,115,869
------------ ------------
LONG-TERM DEBT, LESS CURRENT MATURITIES 439,570 1,000,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock $.004 par value; 10,000,000
shares authorized; 6,035,127 shares
issued and outstanding 24,141 19,941
Capital in excess of par value 12,351,384 11,595,384
Stock subscriptions receivable (160,000) (160,000)
Accumulated deficit (7,262,680) (6,636,592)
------------ ------------
Total Stockholders' Equity 4,952,845 4,818,733
------------ ------------
$ 7,343,848 $ 6,934,602
============ ============
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
ICIS MANAGEMENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------------ ------------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET REVENUES $ 2,058,285 $ 2,386,379 $ 1,001,932 $ 1,110,996
COST OF SALES 1,394,636 1,652,282 716,517 787,066
----------- ----------- ----------- -----------
GROSS PROFIT 663,649 734,097 285,415 323,930
OPERATING EXPENSES:
Selling expenses 194,444 195,258 116,229 98,640
Warehouse expenses 202,231 205,104 95,855 108,427
General and administrative 800,758 1,122,788 419,601 635,886
Loss on investment in joint venture 51,004 -- 51,004 --
Depreciation and amortization 42,982 72,471 24,721 52,319
----------- ----------- ----------- -----------
1,291,419 1,595,621 707,410 895,272
----------- ----------- ----------- -----------
OPERATING LOSS (627,770) (861,524) (421,995) (571,342)
OTHER INCOME (EXPENSE):
Other income 60,318 88,460 27,439 29,317
Interest income -- 6,040 -- 3,660
Interest expense (62,000) (49,800) (31,000) (21,000)
----------- ----------- ----------- -----------
(1,682) 44,700 (3,561) 11,977
----------- ----------- ----------- -----------
NET LOSS $ (626,088) $ (816,824) $ (422,192) $ (559,365)
=========== =========== =========== ===========
NET LOSS PER SHARE $ (.11) $ (.34) $ (.07) $ (.21)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 5,492,627 2,380,181 6,011,794 2,685,184
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
ICIS MANAGEMENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Capital in Stock Total
------------------------- Excess of Subscription Accumulated Stockholders'
Shares Par Value Par Value Receivable Deficit Equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, JANUARY 1, 1996 4,985,127 $ 19,941 $11,595,384 (160,000) (6,636,592) $ 4,818,733
QUARTER ENDED MARCH 31, 1996:
Proceeds from capital contribution -- -- 450,000 -- -- 450,000
Net loss -- -- -- -- (203,896) (203,896)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES, MARCH 31, 1996 4,985,127 $ 19,941 $12,045,384 (160,000) (6,840,488) 5,064,837
QUARTER ENDED JUNE 30, 1996:
Proceeds from sale of common stock,
net of expenses 1,050,000 4,200 306,000 -- -- 310,200
Net loss -- -- -- -- (422,192) (422,192)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES, JUNE 30, 1996 6,035,127 $ 24,141 $12,351,384 (160,000) (7,262,680) 4,952,845
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
ICIS MANAGEMENT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (626,088) (816,824)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Depreciation and amortization 42,982 72,471
Loss on investment in joint venture 51,004 --
Changes in operating assets and liabilities:
Accounts receivable 59,513 90,200
Inventories 72,468 (69,819)
Prepaid expenses and other current assets (36,391) (8,958)
Other assets -- (15,222)
Accounts payable and accrued expenses (214,866) 177,233
---------- ----------
Net cash flows from operating activities (651,378) (570,919)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash from business acquired for stock -- 277,104
Acquisition of property and equipment (72,741) (99,579)
Receipts from notes receivable -- 210,000
Issuance of notes receivable (62,813) (183,000)
Investments in joint venture (585,000) --
---------- ----------
Net cash flows from investing activities (720,554) 204,525
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts from sale of common stock and contributed capital 760,200 125,000
Proceeds from long-term debt -- 728,000
---------- ----------
Net cash flows from financing activities 760,200 853,000
---------- ----------
NET CHANGE IN CASH AND EQUIVALENTS (611,732) 486,606
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 689,633 70,961
---------- ----------
CASH AND EQUIVALENTS, END OF PERIOD 77,901 557,567
========== ==========
SUPPLEMENTAL INFORMATION:
Interest paid 62,000 21,000
========== ==========
Noncash financing activity:
Note payable in exchange for acquisition of building 490,000 --
========== ==========
Issuance of stock for payment of long-term debt -- 728,000
========== ==========
Issuance of stock in exchange for consulting services -- 52,000
========== ==========
Net assets from businesses acquired for common stock:
Global Talent Guild, Inc.:
Assets -- 512,366
Liabilities -- (100,845)
---------- ----------
-- 411,521
========== ==========
Millennium Environmental Corp.:
Assets -- 2,350,000
Liabilities -- (1,000,000)
---------- ----------
-- 1,350,000
========== ==========
Advertising Television, Inc.:
Assets -- 49,250
Liabilities -- --
---------- ----------
-- 49,250
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
ICIS MANAGEMENT GROUP, INC. AND SUBSIDIARIES
Notes to consolidated financial statements
(Unaudited)
(1) The consolidated balance sheet at the end of the preceeding fiscal year has
been derived from the audited consolidated balance sheet contained in the
Company's Form 10-KSB and is presented for comparitive purposes. All other
financial statements are unaudited. All adjustments which are of a normal
and recurring nature and in the opinion of management necessary for a fair
presentation, have been included. The results of operations for interim
periods are not necessarily indicative of the operating results for the
full year. Footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted in accordance with the published rules and regulations of the
Securities and Exchange Commission. These consolidated financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's Form 10-KSB for the most recent fiscal
year.
-6-
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
ICIS Management Group, Inc. (the "Company") operates three wholly-owned
subsidiaries, Sunshine Automotive Parts Distributors, Inc. ("Sunshine"),
Sunshine Auto Replicas, Inc. d/b/a Champion Auto Works ("Champion") and Sunshine
Real Estate Holding Co. ("Sunshine Real Estate"). At June 30, 1996, the Company
had assets of $7,343,848 and shareholder's equity of $4,952,848.
For second quarter of 1996, the Company had losses totaling $422,192. Of
this amount $164,504 or 39% represents losses incurred in the start up of
Champion inclusive of $51,004 of losses incurred in the joint venture investment
with Auto Resolution, Ltd. For the same quarter last year, the Company reported
losses totaling $559,365 or $.21 per share. By comparison, the loss for the
second quarter of 1996 is $.07 per share.
Sunshine had revenues during the quarter of $1,001,932 and an operating
loss of $102,996. During the same quarter last year, Sunshine had revenues of
$1,107,327 and an operating loss of $254,813.
Sunshine Real Estate had revenues of $12,000 and a loss of $48,639. No
comparative data for 1995 exists.
The parent company itself has no independent revenue producing operations
and made up the balance of the quarterly losses. The Company's loss from the
expense of operation was $106,053.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
-7-
<PAGE>
None
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
On May 30, 1996, Sunshine Real Estate closed on its purchase of a 48,000
square feet building at 240 & 300 NE 72nd Street, Miami, Florida. The building
is utilized as a plant facility by Auto Resolution, Ltd. to build replica
assembly products for Champion Auto Works. Sunshine Real Estate purchased the
building for $550,000 and signed a seven year purchase money mortgage note in
the principal amount of $490,000. The note, which is payable in equal monthly
installments, bears interest at eight and one-half percent per annum.
Item 6. Exhibits and Reports on Form 8-K
A Form 8-K was published on January 12, 1996 to report the acquisition of
Champion. This report is incorporated herein by reference. No exhibits were
attached to the report.
The unaudited financial statements for the quarter ended June 30, 1996 are
attached hereto and incorporated herein.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, there unto
duly authorized.
ICIS Management Group, Inc.
Dated: August 12, 1996 /s/ James W. Nearen
----------------------------
James W. Nearen, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 77,901
<SECURITIES> 0
<RECEIVABLES> 872,617
<ALLOWANCES> 0
<INVENTORY> 2,288,768
<CURRENT-ASSETS> 3,963,761
<PP&E> 3,213,302
<DEPRECIATION> 367,211
<TOTAL-ASSETS> 7,343,848
<CURRENT-LIABILITIES> 1,951,433
<BONDS> 0
0
0
<COMMON> 24,141
<OTHER-SE> 4,928,704
<TOTAL-LIABILITY-AND-EQUITY> 7,343,848
<SALES> 2,058,285
<TOTAL-REVENUES> 2,058,285
<CGS> 1,394,636
<TOTAL-COSTS> 2,686,055
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62,000
<INCOME-PRETAX> (626,088)
<INCOME-TAX> 0
<INCOME-CONTINUING> (626,088)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (626,088)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
