<PAGE>
FORM 10-QSB/A-2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 28, 1996
AMENDED AND RESTATED
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
------------- ----------------
Commission file number 33-42701
PREMIER CONCEPTS, INC.
----------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Colorado 84-1186026
- ------------------------------- ----------------------------
(State or other jurisdiction (IRS Employer Identification)
of incorporation or organization)
3033 South Parker Road, Suite 120, Aurora, Colorado
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 338-1800
-----------------------------------------------
(Issuer's telephone number, including area code)
------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the last 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 / /
As of August 15, 1996, the Registrant had 3,744,695 shares of its $.0004
par value Common Stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes / / No
/ X /
<PAGE>
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheet as of July 28, 1996 and
January 28, 1996 4
Statement of Operations for the Three Months
Ended July 28, 1996 and Three Months Ended
July 30, 1995 5
Statement of Operations for the Six Months
Ended July 28, 1996 and Six Months Ended
July 30, 1995 6
Statement of Changes in Stockholders' Equity for
the Six Months Ended July 28, 1996 7
Statement of Cash Flows for the Six Months Ended
July 28, 1996 and Six Months Ended July 30, 1995 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 10
Liquidity and Capital Resources 10
Results of Operations 10
PART II. OTHER INFORMATION 13
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of
Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Company's method of financial reporting is a fifty-two - fifty-
three (52-53) week fiscal year ending on the last Sunday in January of
each year. The accompanying Balance Sheet at July 28, 1996, Statement of
Operations for the Three and Six Months Ended July 28, 1996 and Six Months
Ended July 30, 1995, Statement of Changes in Stockholders' Equity at July
28, 1996, and Statement of Cash Flows for the Six Months Ended July 28,
1996 and July 30, 1995 are unaudited but reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the
financial position and results of operations for the interim period
presented. The Balance Sheet as of January 28, 1996 is derived from the
audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. As a result, these
financial statements should be read in conjunction with the Company's Form
10-KSB/A for the year ended January 28, 1996.
<PAGE>
<PAGE>
<TABLE>
PREMIER CONCEPTS, INC.
BALANCE SHEET
AS OF JULY 28, 1996 AND JANUARY 28, 1996
<CAPTION>
July 28, 1996 January 28,
1996
------------- -------------
<S> <C> <C>
ASSETS
------
Current Assets:
Cash & Cash Equivalents $ 421,008 $ 327,198
Investments, at market 10,813 45,113
Inventories 1,391,835 1,393,925
Prepaid Expenses & Other Current Assets 125,935 95,503
----------- -----------
Total Current Assets 1,949,591 1,861,739
Property and Equipment, net 1,041,886 977,727
Trademarks, net 94,700 104,900
Deferral Offering Costs 88,239
Other Assets 103,506 92,428
----------- -----------
Total Assets $3,277,922 $3,036,794
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
Current Liabilities:
Notes Payable and Current Portion of
Long Term Debt:
Related Parties $ 64,420 $ 98,879
Other 304,040 378,902
Accounts Payable 743,571 291,905
Other Accrued Liabilities 293,934 408,881
----------- -----------
Total Current Liabilities $1,405,965 $1,178,567
Long-Term Debt, Less Current Portion 713,432 759,864
Other Liabilities 87,385 56,159
----------- -----------
Total Liabilities 2,206,782 1,994,590
----------- -----------
Shareholders' Equity:
Preferred Stock, $.10 par value,
20,000,000 shares authorized;
416,670 issued and outstanding
at July 28, 1996 41,667 --
Common Stock, $.002 par value;
850,000,000 shares authorized;
3,744,695 shares issued and outstanding 1,498 1,498
Additional Paid-in Capital 2,940,070 2,756,737
Accumulated Deficit (1,912,095) (1,716,031)
----------- -----------
Total Stockholders' Equity 1,071,140 1,042,204
----------- -----------
Total Liabilities & Equity $ 3,277,922 $ 3,036,794
============ ============
/TABLE
<PAGE>
<PAGE>
<TABLE>
PREMIER CONCEPTS, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JULY 28, 1996 AND JULY 30, 1995
(UNAUDITED)
<CAPTION>
Three Months Ended Three Months Ended
July 28, 1996 July 30, 1995
------------------ -----------------
<S> <C> <C>
Revenues:
Retail Sales $2,070,988 $2,100,584
Wholesale Sales 12,911 16,677
------------ ------------
Total Revenues 2,083,899 2,117,261
Cost of Goods Sold 609,155 634,847
------------ ------------
Gross Margin 1,474,744 1,482,414
Operating Expenses:
Selling, General & Administrative 1,438,698 1,467,938
Depreciation & Amortization 75,031 75,937
------------ ------------
Total Operating Expenses 1,513,729 1,543,875
------------ ------------
Operating Profit (Loss) (38,985) (61,461)
Other Income (Expenses):
Interest, net (25,261) (34,059)
Increase (Decrease) in Fair Value
-- Tradeable Securities (27,043) (133,197)
Loss Provision on Guarantee -- (31,000)
Provision for store closures -- 92,000
Store Closing Expenses -- (93,419)
Other 10,965 46,859
------------ ------------
Other, net (41,339) (152,816)
Loss Before Income Tax Benefit and
Discontinued Operation (80,324) (214,277)
Income Tax Benefit 5,000 --
------------ ------------
Income (Loss) Before Discontinued Operation(75,324) (214,277)
Income from Discontinued Operation 6,600 --
------------ ------------
Net Income (Loss) $ (68,724) $ (214,277)
============ ============
Net Income (Loss) Available to
Common Shareholders $ (71,724) $ (214,277)
============ ============
Net Income (Loss) Per Share
Before Discontinued Operation $ (0.02) $ (0.10)
Discontinued Operations -- --
Dividends Applicable to
Preferred Stock -- --
------------ ------------
Net Income (Loss) Per Share $ (0.02) $ (0.10)
============ ============
Weighted Average Shares Outstanding 3,744,695 2,175,160
============ ============
/TABLE
<PAGE>
<PAGE>
<TABLE>
PREMIER CONCEPTS, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JULY 28, 1996 AND JULY 30, 1995
<CAPTION>
Six Months Ended Six Months Ended
July 28, 1996 July 30, 1995
------------------ -----------------
<S> <C> <C>
Revenues:
Retail Sales $3,940,997 $4,098,221
Wholesale Sales 16,455 41,108
------------ ------------
Total Revenues 3,957,452 4,139,329
Cost of Goods Sold 1,179,665 1,326,517
------------ ------------
Gross Margin 2,777,787 2,812,812
Operating Expenses:
Selling, General & Administrative 2,850,805 2,971,550
Provision for store closures -- 1,419
Depreciation & Amortization 140,314 170,511
------------ ------------
Total Operating Expenses 2,991,119 3,143,480
------------ ------------
Operating Profit (Loss) (213,332) (330,668)
Other Income (Expenses):
Interest, net (54,422) (65,858)
Increase (Decrease) in Fair Value
-- Tradeable Securities 16,264 (145,876)
Reduction of Accounts Payable
Other 29,249 90,381
------------ ------------
Other, net (8,909) (121,353)
Loss Before Income Tax Benefit and
Discontinued Operation (222,241) (452,021)
Income Tax Benefit 10,000 55,000
------------ ------------
Income (Loss) Before
Discontinued Operation (212,241) (397,021)
Income from Discontinued Operation 16,177 90,390
------------ ------------
Net Income (Loss) $ (196,064) $ (306,631)
============ ============
Net Income (Loss) Available to
Common Shareholders $ (199,064) $ (306,631)
============ ============
Net Profit (Loss) Per Share
Before Discontinued Operation $ (0.06) $ (0.18)
Discontinued Operations .01 .04
Dividends Applicable to
Preferred Stock -- --
------------ ------------
Net Profit (Loss) Per Share $ (0.05) $ (0.14)
============ ============
Weighted Average Shares Outstanding 3,744,745 2,172,949
============ ============
/TABLE
<PAGE>
<PAGE>
<TABLE>
PREMIER CONCEPTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM JANUARY 28, 1996 THROUGH JULY 28, 1996
<CAPTION>
Preferred Stock Common Stock Additional
-------------------- ------------------
Paid-In Accumulated
Shares Amount Shares Amount Capital (Deficit) Total
------ ------ ------ ------ ------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Balances,
January 28, 1996 -- -- 3,744,695 $1,498 $2,756,737 $(1,716,031)$(1,042,204)
Preferred stock issued
for cash 416,670 41,667 -- -- 183,333 -- 225,500
Net Loss
Through July 28,
1996 -- -- -- -- -- (196,064) (196,064)
-------- -------- --------- ------ ----------- --------------------------
Balances, July 28,
1996 416,670 41,667 3,744,695 $1,498 $2,940,070 $(1,912,095)$ (1,071,140)
======== ======== ========== ====== ========== =========================
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PREMIER CONCEPTS, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JULY 28, 1996 AND JULY 30, 1995
<CAPTION>
Six Months Ended Six Months Ended
July 28, 1996 July 30, 1995
------------------ -----------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) $(196,064) $(306,631)
Adjustments to reconcile net income
(loss) to net cash from operating
activities:
Stock for services -- --
Reduction of account payable-
Discontinued Operations (26,177) (145,390)
Provision for store closure -- (1,419)
Depreciation and amortization 140,314 170,511
(Gain) loss on marketable securities (16,264) 145,876
Other, net (11,078) (9,165)
Changes in operating assets and liabilities:
(Increase) decrease in:
Inventories 2,090 20,765
Other assets (30,432) (14,590)
Increase (decrease) in:
Accounts payable and accrued
liabilities 362,896 411,355
Other liabilities 31,226 (97,358)
---------- ----------
Net cash provided by operating
activities 256,511 173,594
Cash Flows From Investing Activities:
Capital expenditures for property
and equipment (194,273) (2,810)
Cash balances of businesses acquired -- --
Proceeds from sale of investments 50,564 96,612
Purchase of investments -- --
---------- ----------
Net cash provided by (used in)
investing activities (143,709) 93,802
Cash Flows From Financing Activities:
Deferred Offering Costs (88,239) --
Proceeds from issuance of Preferred Stock255,000 --
Proceeds from issuance of common stock -- 141,625
Proceeds from issuance of notes payable -- --
Payments on notes payable (155,753) (380,567)
---------- ----------
Net cash used by financing activities (18,992) (238,942)
---------- ----------
Increase (Decrease) in Cash 93,810 28,814
Cash & Cash Equivalents,
beginning of period 327,198 171,164
---------- ----------
Cash & Cash Equivalents,
end of period $ 421,008 $ 199,978
========== ==========
Supplemental Schedule of Cash Flow Information:
Cash paid for interest $ 60,479 $ 66,717
========== ==========
/TABLE
<PAGE>
<PAGE>
PREMIER CONCEPTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 28, 1996
COMMITMENTS AND CONTINGENCIES
------------------------------
Litigation.
----------
The Company is subject to legal proceedings, claims and liabilities, which
arise in the ordinary course of its business. In the opinion of
management, the disposition of these actions will not have a material
adverse effect upon the Company's financial position or results of
operations. (See PART II. OTHER INFORMATION--Item 1. Legal
Proceedings.)
SEASONALITY AND QUARTERLY FLUCTUATIONS
--------------------------------------
The Company's faux jewelry chain, Impostors, historically has
realized lower sales during the first three quarters which has resulted in
the Company incurring losses during those quarters. To this end, the
Company generated a loss during the six months ended July 28, 1996 of
$(196,064).
The Company historically realizes approximately twenty percent (20%)
of its revenues during December as a result of the Christmas season. If
the Company's sales are substantially below seasonal expectations during
December, the Company's annual results will be adversely affected.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in
this report.
RETAIL FISCAL YEAR
The method of financial reporting is a fifty-two to fifty-three (52-
53) week fiscal year ending on the last Sunday in January of each year.
Likewise, reporting quarters end on the Sunday closest to the calendar end
of April, July and October. Each reporting quarter contains 13 weeks of
operations.
LIQUIDITY AND CAPITAL RESOURCES
Approximately 20% of the Company's business is generated during the
Christmas holiday season. The Company's cash position will therefore be
the highest at the end of December as compared to any other month of the
year, and tends to decrease during the first and second quarter. On June
24, 1996, the Company successfully completed a bridge financing in which
it sold an aggregate of 416,670 shares of Series A Convertible Preferred
Stock and 208,335 Class B Warrants, realizing net proceeds of $225,000.
As a result, the Company's cash position increased from $93,810 from
$327,198 at January 28, 1996 to $421,008 at July 28, 1996. These funds
have been largely used to finance the store remodels that were completed
during the first six months of fiscal 1997. The capital raised in the
bridge financing has also been utilized to purchase fixtures and equipment
for several store locations and the corporate offices.
During the first six months of fiscal 1996, the Company continued its
efforts to liquidate its common stock position in Global Casinos, Inc.
Therefore, marketable securities decreased from $45,113 at January 28,
1996 to $10,813 at July 28, 1996. Management intends to liquidate its
remaining securities holdings as allowed by the general market conditions.
Inventories would typically decline moderately during the first six
months of a fiscal year to reflect the lower seasonal sales during this
period. However, for the six months ended July 28, 1996, inventories were
essentially unchanged from $1,393,925 at January 28, 1996 to $1,391,835 at
July 28, 1996. The relatively constant inventory level during the six
month period reflects the Company's inventory buildup during the month of
July, 1996 to prepare for the opening of the Company's new store at the
Park Meadows shopping mall in Denver, Colorado, which opened on August 30,
1996.
During the six months ended July 28, 1996, the Company invested
$194,273 in leasehold improvements, furniture and equipment.
Approximately $166,000 of this investment represents leasehold
improvements, furniture and fixtures in connection with the remodels and
investments in the locations in St. Louis, Missouri, Tucson, Arizona,
Bellevue, Washington, and Denver, Colorado. The balance of $28,000
represents investments in corporate furniture and equipment in connection
with the relocation of the corporate office in January, 1996.
<PAGE>
Therefore, property and equipment, net of $126,454 in depreciation,
increased $64,159 from $977,727 at January 28, 1996, to $1,041,866 at July
28, 1996. At January 28, 1996, the Company's trademark assets were
$104,900, net of accumulated amortization, which represented the goodwill
associated with the Impostors trademark and other intellectual property
acquired as part of the purchase of the Impostors' assets in February,
1994. The Company's trademark asset is being amortized over a 10 year
period, and had an amortized book value was $94,700 at July 28, 1996.
The Company has incurred costs in connection with its proposed public
financing of $88,239 which primarily represent professional services,
printing and other administrative costs. It is estimated that the total
costs to complete the offering will approximate $300,000 which will be
offset against the proceeds from the financing.
As of July 28, 1996, the Company had a total outstanding liabilities
of $2,206,782 compared to $1,994,590 at January 28, 1996, representing an
increase of $212,192 which was due to an increase in current liabilities
of $212,192, from $1,994,590 at January 28, 1996 to $1,405,965 at July 28,
1996. This increase was primarily the result of an addition to accounts
payable of $451,666 from $291,905 at January 28, 1996 to $743,571 at July
28, 1996, which reflects a normal seasonal increase combined with
management's efforts to gain more favorable terms with its vendors. Also,
management continued its efforts to purchase larger quantities of
inventories to maintain favorable inventory costs. Accounts payable also
increased due to the inventory buildup discussed above in anticipation of
the opening of the Company's store in Park Meadows in Denver. As a result
of the foregoing, working capital decreased by $139,546, from $683,172 at
January 28, 1996 to $543,626 at July 28, 1996.
The amount borrowed from related parties was $64,420 at July 28, 1996
which reflects a reduction of $34,459, from the January 28, 1996 figure of
$98,879. During the six month period, the Company also reduced other
short and long term notes by $121,294, which resulted in other notes
payable of $1,017,742 as of July 28, 1996 compared to $1,138,766 at
January 28, 1996. As of July 28, 1996, the Company was in arrears in the
payment of two notes totalling, in the aggregate, approximately $120,000.
Management has been in discussions with the two noteholders and plans to
retire these two notes with the proceeds its proposed public financing.
The largest portion of the Company's long-term debt is comprised of a
$635,000 promissory note, which note carries interest at the rate of 10%
per annum and is payable in monthly interest payments of approximately
$5,300 and is due February 22, 1998. The remainder of the Company's long-
term notes of $713,432 represents liabilities that the Company assumed as
part of the of the Impostors acquisition in February, 1994.
Other accrued liabilities decreased from $408,881 at January 28, 1996
to $293,934 at July 28, 1996, a decrease of $114,947 or nearly 28%. Other
accrued liabilities primarily represent expenses accrued in the ordinary
course of business in connection with the operation of the Company's
Impostors retail chain. As a result of the Company's net loss for the six
months of $196,064, accumulated deficit increased from $1,716,031 at
January 28, 1996 to a deficit of $1,912,095 at July 28, 1996. However,
due to the Company realizing $225,000 from the Bridge Offering,
stockholders' equity increased in the six months from $1,042,204 at
January 28, 1996 to $1,071,140 at July 28, 1996.
<PAGE>
Net cash provided by operating activities for the period ended July
28, 1996 was $256,511, compared to $173,594 for the six months ended July
30, 1995. The improvement was principally due to lower overhead costs and
a resulting reduction in the operating loss for the period.
The positive cash flow generated by operations in the six month
periods ended July 30, 1995 as well as for the period ended July 28, 1996,
reflects the seasonal build-up accounts payable of $411,355 and $362,896
for the two periods receptively.
During the period ended July 28, 1996, the Company invested $194,273
in capital equipment, which reflects the investments in leasehold
improvements, furniture and equipment discussed above. During the period,
management continued its efforts to sell its holdings of Global Casinos
common stock, which resulted in proceeds of $50,564. For the period ended
July 30, 1995, the Company's investments in assets were immaterial, while
the sale of Global Casinos common stock resulted in proceeds of $96,612.
Net cash used in financing activities for the six months ended July
30, 1995 and July 28, 1996 was $238,942 and $18,992 respectively,
reflecting a reduction of $219,950. The majority of the change was the
result of reduced payments on notes in 1996 as compared to 1995 in the
amount of $224,814 as well as proceeds from the Bridge Offering of
$225,000 in June, 1996.
The foregoing resulted in an increase in the Company's cash position
of $64,996, from $28,814 at July 30, 1995 to $93,810 at July 28, 1996.
At January 28, 1996, the Company had a net operating loss
carryforward for federal tax purposes of $680,000 that may be utilized to
offset future profits.
As discussed above, the Company opened its 27th retail location in
Denver, Colorado, on August 30, 1996. In addition, the Company has
executed a lease to open a new location at the Rio Hotel & Casinos' retail
expansion which is scheduled to open in February, 1997. Several other
real estate sites are currently being evaluated, and the Company expects
to execute a minimum of five additional leases to open new retail stores
within its current fiscal quarter. Depending on location and size, the
opening of a new retail location represents an aggregate capital
commitment of approximately $100,000-$200,000 which includes leasehold
improvements, furniture,fixture, equipment and inventory.
The Company intends to use the proceeds from its proposed secondary
financing to fund the growth of its retail chain and take advantage of
other distribution opportunities such as direct mail, home shopping and
internet distribution. However, the majority of the proceeds from the
financing will be utilized to build the retail chain with the goal of
having 50 stores within the next 12 to 18 months. Initial expansion plans
have been concentrated on the states of Florida, New Jersey, Illinois,
Massachusetts, New York and Nevada.
<PAGE>
The Company believes the proceeds from the proposed public offering,
along with cash flow generated by operations will be sufficient to meet
the Company's capital needs over the next two years. However, if the
Company is unsuccessful in securing the contemplated financing, its
ability to pursue additional opportunities for distribution and retail
store expansion will be significantly impaired and the results of
operations for future periods may be adversely affected.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, the percentage
relationship between selected items in the Consolidated Statements of
Operations to net sales:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
July 30, 1995 July 28, 1996
------------- -------------
<S> <C> <C> <C> <C>
Sales $4,139,329 100% $3,957,452 100%
Cost of goods sold 1,326,517 32.0% 1,179,665 29.8%
Gross Margin 2,812,812 68.0% 2,777,787 70.2%
Operating Expenses 3,143,480 75.9% 2,991,119 75.6%
Operating loss (330,668) (8.0%) (213,332) (5.4%)
Other Income (121,353) (2.9%) (8,909) (0.2%)
(expenses), net
Income (loss) before (397,631) (7.4%) (212,241) (5.4%)
discontinued operation
Net Income (loss) (306,631) (7.4%) (196,064) (5.0%)
Net Income (loss) (.71) (.26)
per share
</TABLE>
<PAGE>
RESULTS OF OPERATIONS - THREE MONTHS ENDED JULY 28, 1996 COMPARED TO THREE
MONTHS ENDED JULY 30, 1995
The Company's total revenues for the three months ended July 28, 1996
were $2,083,899 compared to $2,117,261 for the comparable period in 1995.
The decrease of $33,362 is the result of the Company owning and operating
only 26 stores in the three month period ended July 28, 1996 compared to
29 stores for the same period in 1995. Comparable same store sales were
$1,973,217 for the three months ended July 28, 1996 as compared to
$1,933,288 for the three months ended July 30, 1995, an increase of 2.1%.
Management attributes its increase in comparable same store sales to an
continued improvement in merchandise mix which included the introduction
of a genuine sterling silver line of products in May, 1996.
Included in total revenues are sales from wholesale operations,
primarily to former franchisees and jewelry repair income, of $12,911 and
$16,677 for the three months ended July 28, 1996 and July 30, 1995,
respectively.
For the three months ended July 28, 1996, cost of goods sold was
$609,155 resulting in a gross margin of $1,474,744, or 70.8%. This
compares to the three months ended July 30, 1995 in which cost of goods
sold was $634,847 resulting in a gross margin of $1,482,414, or 70.0%.
The improvement in gross margin percentage is the result of less
promotional activity and capitalizing on buying opportunities offering
lower merchandise costs.
Selling, general and administrative expenses were $1,438,698 for the
three months ended July 28, 1996, compared to $1,467,938 for the three
months ended July 30, 1995. The majority of these expenses we comprised
of personnel expenses, which amounted to $680,830 and $698,564 for the
three months ended July 28, 1996, and July 30, 1995 respectively, and
occupancy costs of $487,027 and $489,624 respectively. Depreciation and
amortization expense was $75,031 for the three months ended July 28, 1996,
and $75,937 for the three months ended July 30, 1995, essentially
unchanged. The Company attributes the net decrease in total operating
expenses of approximately $30,000 primarily to a reduction in the
Company's corporate overhead expenses realized from the relocation of the
corporate from California to Colorado.
As a result of the foregoing, the Company's net operating loss for
the three months ended July 28, 1996 was $38,985 as compared to an
operating loss of $61,460 for the comparable three months ended July 30,
1995.
Net interest expense was $25,262 and $34,059 for the three months
ended July 28, 1996 and July 30, 1995 respectively. The decrease of
approximate of approximately $8,800 is attributable to a continued effort
to reduce debt.
During the three months ended July 28, 1996, the Company sold most of
its holdings of Global Casino, Inc. common stock to satisfy a debt
obligation and to provide cash for capital expenditures. Due to market
conditions existing in the quarter, these sales resulted in a loss of
approximately $27,000. For the three months ended July 30, 1995, the
Company recognized a loss on marketable securities approximately $133,000.
The Company intends to liquidate its remaining securities holdings as
market conditions and cash requirements indicate.
<PAGE>
<PAGE>
Other expenses for the three month period ended July 28, 1996 were
$41,339, which represented an decrease of $111,477 from other expenses of
$152,816 from the same period in 1995. The majority of the decrease in
expenses was the result of reduction in the Company's holdings of tradable
securities, from which the Company recorded a loss of $133,197 in the
three month period ended July 30, 1995 compared to a loss of $27,043 for
the same period in 1996.
Other income (expenses) include approximately $6,000 income from
license fees from three former franchisees operating five locations, who
executed license agreements with the Company that entitles them to use the
Impostors trademark for one year. These license agreements, which require
an annual licensee fee of $5,000, will expire in January and February of
1997. The Company may renew these agreements at its discretion.
Based on the foregoing, the Company reported a net loss for the three
months ended July 28, 1996 of $68,724. Taking into effect the preferred
stock cumulative dividends, which is accrued but not paid, the net loss
available to common shareholders was $71,724 which translates to a net
loss of $(.02) per share based on 3,744,695 weighted average shares
outstanding. This compares with a reported net loss for the three months
ended July 30, 1995 of $214,277, or $(.10) per share, based on 2,175,160
weighted average shares outstanding, and represents an improvement of
$145,553, or $.08 per share.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS - SIX MONTHS ENDED JULY 28, 1996 COMPARED TO SIX
MONTHS ENDED JULY 30, 1995
Revenues for the period ended July 30, 1995 were $4,139,329 which
reflects revenues from 29 retail locations. The Company's total revenues
for the six months ended July 28, 1996 were $3,957,452 a decrease of
$181,877 which reflects a reduction in the number of retail locations from
29 in the six month period ended July 30, 1995 to 26 in the period ended
July 28, 1996. Comparable same store sales were $3,731,821 for the six
months ended July 28, 1996 compared to $3,644,764 for the same period in
1995, indicating an increase of 2.4%. Management's attributes this
increase to a continued improvement in the Company's merchandise
assortment and strategy, which included the introduction of a genuine
sterling silver line of products in May, 1996.
Sales from wholesale operations of $16,455 and $41,108 in the six
month periods in 1996 and 1995 are included in total revenues for the six
months ended July 28, 1996 and July 30, 1995, respectively.
For the six months ended July 28, 1996, cost of goods sold was
$1,179,665 and the gross margin was $2,777,787, or approximately 70%. For
the six months ended July 28, 1995, cost of goods sold was $1,326,517 and
the gross margin was $2,812,812 or approximately 68%. The Company
attributes the improvement in gross margin percentage to less promotional
activity and capitalization on buying opportunities to reduce merchandise
costs.
Selling, general and administrative expenses were $2,850,805 for the
six months ended July 28, 1996, compared to $2,971,550 for the period
ended July 30, 1995. The majority of these expenses were comprised of
personnel expenses, which amounted to $1,344,750 and $1,424,165 for the
six months ended July 28, 1996 and July 30, 1995, respectively, and
occupancy costs of $961,987 and $988,792 respectively. Depreciation and
amortization expense was $140,314 for the six months ended July 28, 1996,
and $170,511 for the six months ended July 30, 1995, representing a
reduction of $30,197 due to a reduced depreciable asset base. The Company
credits the majority of the decrease in total operating expenses of
$152,361 to owning and operating three fewer stores in the six months
ended July 28, 1996 compared to the same period in 1995. Also, the
Company's relocation of its corporate offices from California to Colorado
in January, 1996 resulted in lower personnel and occupancy costs of
approximately $75,000 for the six months ended July 28, 1996.
As a result of the foregoing, the Company's net operating loss for
the six months ended July 28, 1996 was $213,332. This compares with a
loss from operations for the six months ended July 30, 1995 of $330, 668.
Net interest expense was $54,422 and $65,858 for the six months ended
July 28, 1996, and July 30, 1995, respectively. The Company's gain on
investments of $16,264 for the period ended July 28, 1996 relates to the
Company's holdings of common stock in Global Casinos, Inc. During the six
months ended July 28, 1996, the Company sold most of its holdings of these
securities and management intends to liquidate its remaining holdings of
Global common stock as allowed by general market conditions. For the
period ended July 30, 1995, the Company reported loss of $145,876 on its
investment in tradable securities.
<PAGE>
<PAGE>
For the period ended July 28, 1996, the Company reported other income
of $29,249, which includes a settlement with a former franchisee for
approximately $10,000 in cash and inventory, and approximately $7,000 in
recognized license fees associated with the renewal of five licensee
agreement which allow these former franchisees the use of the Impostors'
trademark for an additional year. These agreements will expire in the
first quarter of fiscal 1998 at which time the agreements may be renewed
at the discretion of management.
For the period ended July 30, 1995, other income, net of other
expenses, was $90,381, of which approximately $72,000 represented income
from a settlement with a former franchisee, which receivable had been
previously written off in fiscal 1994.
Income from discontinued operations, net of income tax benefit of
$10,000, was $16,177 for the six months ended July 28, 1996, compared a
income tax benefit of $55,000 and other income $90,390 for the six months
ended July 30, 1995. The income from discontinued operations reflects
negotiated settlements with creditors relating to the Company's previous
gaming operations.
Based on the foregoing, the Company reported a net loss for the six
months ended July 28, 1996 of $196,064, which translates to a net loss per
share, after income from discontinued operations, of $0.05 based on
3,744,695 weighted average shares outstanding. This compares with a
reported net loss for the six months ended July 30, 1995 of $306,631 or
$0.14 per share, based on 2,175,160 weighted average shares outstanding as
of that date.
Other than the foregoing, management knows of no trends, or other
demands, commitments, events or uncertainties that will result in, or that
are reasonably likely to result in, a material impact on the income and
expenses of the Company.
IMPAIRMENT OF LONG-LIVED ASSETS
- -------------------------------
In March 1996, the Financial Accounting Standards Board issued a
statement entitled "Accounting for Impairment of Long-Lived Assets." In
the event that facts and circumstances indicate that the cost of assets or
other assets may be impaired, an evaluation of recover ability would be
performed. If an evaluation is required, the estimated future in
discounted cash flows associated with the asset would be compared to
asset's carrying amount to determine if a write-down to market value or
discounted cash flow value is required. Adoption of FAS 121 had no effect
on the unaudited July 28, 1996, financial statements.
STOCK-BASED COMPENSATION
- ------------------------
In October 1995, the Financial Accounting Standards Board issued a
new statement titled "Accounting for Stock-Based Compensation" (FAS 123).
The new statement is effective for fiscal years beginning after December
15, 1995. FAS 123 encourages, but does not require, companies to
recognize compensation expense for grants of stock, stock options, and
other equity instruments to employees based on fair value. Companies that
do not adopt the fair value accounting rules must disclose the impact of
adopting the new method in the notes to the financial statements.
Transactions in equity instruments with non-employees for goods or
services must be accounted for on the fair value method. The Company has
elected not to adopt the fair value accounting prescribed by AS 123 for
employees, and will be subject only to the disclosure requirements
prescribed by AS 123.
<PAGE>
<PAGE>
Other than what has been discussed above, management knows of no
trends, or other demands, commitments, events or uncertainties that will
result in, or that are reasonably likely to result in a material impact on
the income and expenses of the Company.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently involved in the following legal
proceedings:
Premier Concepts, Inc. v. William T. and Martha A. Jackling,
-----------------------------------------------------------
Civil Action No. 7599-94 pending in the State Court of New York,
County of Monroe. This action has also been brought by the Company to
collect approximately $80,000 due and owing on open account from former
franchisees of AFJ. In the case, the Company has also asserted against
the Defendants' claims of trademark infringement, unfair competition and
breach of contract in connection with the Defendants' continued use of the
Company's registered trademark "Impostors" without legal authorization.
Premier Concepts, Inc. v. R & L Imports Corporation.
----------------------------------------------------
The Company has filed a Complaint in the Puerto Rico District
Court for San Juan against R & L Imports Corporation for amounts due for
inventory purchased by R & L Imports Corporation from the Company, and on
amounts due on the notes payable executed as part of the Customer and
Settlement Agreements entered into by the defendant and American Fashion
Jewels, Inc. on January 20, 1994. The Company seeks damages in excess of
$27,000. Both claims are supported by written contracts and written
admissions by the defendant. The Company is represented in Puerto Rico by
the law firm of Cancio, Nadal, Rivera & Diaz.
Premier Concepts, Inc. v. St. Moritz, Inc.
------------------------------------------
The Company has filed a complaint in the County Court for Dallas
County, Texas against St. Moritz, Inc. for amounts due on inventory
purchased by St. Moritz from the Company between October, 1995 and
January, 1996. The Company is seeking full payment for the merchandise
delivered in the amount of $28,644.
SEC Investigation.
------------------
During 1995, the Company received requests for information from
the U.S. Securities and Exchange Commission ("SEC") related to an
investigation begun by the SEC during 1994 into various matters, including
certain transactions in securities by a former officer and director of the
Company. The Company has fully complied with all requests; however, as of
June 12, 1996, neither management of the Company nor the Company's legal
counsel have been informed of the results, if any, of the SEC's
investigation or of any timetable for the SEC to complete its
investigation.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
quarter ended July 28, 1996.<PAGE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits:
--------
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K:
-------------------
None
<PAGE>
SIGNATURE
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.
PREMIER CONCEPTS, INC.
Dated: September 16, 1996 By: /s/ Sissel Greenberg
---------------------- ----------------------------------
Sissel Greenberg, President
Dated: September 16, 1996 By: /s/ Todd Huss
---------------------- ---------------------------------
Todd Huss, Chief Financial
Advisor, Principal Accounting
Officer
