<PAGE>
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 April 30, 2000
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
of incorporation or organization) Identification Number)
3033 South Parker Road, Suite 120, Aurora, Colorado 80014
-----------------------------------------------------------
(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 June 12, 2000, the Registrant had 1,660,010 shares of its $.002 par
value Common Stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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INDEX
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements 3
Balance Sheet as of April 30, 2000 and January 30, 2000 4
Statement of Operations for the Three Months Ended April 30,
2000 and May 2, 1999 6
Statement of Cash Flows for the Three Months Ended April 30,
2000 and May 2, 1999 7
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 14
PART II. OTHER INFORMATION 18
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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. The
accompanying balance sheet at April 30, 2000, statements of operations and for
the three months ended April 30, 2000, and May 2, 1999, and statements of cash
flows for the three months ended April 30, 2000, and May 2, 1999 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 30, 2000 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
Premier Concepts Form 10-KSB for the year ended January 30, 2000.
Forward-Looking Statements
--------------------------
In addition to historical information, this Quarterly Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and are thus prospective. The forward-looking
statements contained herein are subject to certain risks and uncertainties
that could cause actual results to differ materially from those reflected in
the forward-looking statements. Factors that might cause such a difference
include, but are not limited to, competitive pressures, changing economic
conditions, those discussed in the Section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and other
factors, some of which will be outside the control of Premier Concepts.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date hereof.
Premier Concepts undertakes no obligation to publicly revise these forward-
looking statements to reflect events or circumstances that arise after the
date hereof. Readers should refer to and carefully review the information in
future documents Premier Concepts files with the Securities and Exchange
Commission.
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<TABLE>
<CAPTION>
PREMIER CONCEPTS, INC.
BALANCE SHEET
AS OF APRIL 30, 2000 AND JANUARY 30, 2000
(UNAUDITED)
April 30, January 30,
2000 2000
--------- ------------
ASSETS
------
<S> <C> <C>
Current Assets:
Cash & Cash Equivalents $ 248,966 $ 357,653
Restricted Cash 818,492 102,903
Merchandise Inventories 1,823,127 1,786,255
Prepaid Expenses & Other Current Assets 162,785 260,229
------------- ------------
Total Current Assets 3,053,370 2,507,040
Property and Equipment, net 2,096,919 2,190,331
Other Assets:
Restricted Cash 200,000 200,000
Trademarks, net 47,533 50,633
Website Development Costs 140,666 131,058
Other 71,163 71,007
------------- ------------
Total Assets $ 5,609,651 $ 5,150,069
============= ============
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current Liabilities:
Notes Payable $ 459,207 $ 466,903
Accounts Payable 1,208,269 1,062,071
Accrued Liabilities 544,907 644,676
------------- ------------
Total Current Liabilities 2,212,383 2,173,650
Deferred Rent 231,981 229,234
------------- -------------
Total Liabilities 2,444,364 2,402,884
------------- -------------
Redeemable Common Stock and Warrants,
$.002 par value, 228,571 shares issued
and outstanding and 32,000 warrants 200,000 200,000
Shareholders' Equity:
Preferred Stock, $.10 par value, 20,000,000
shares authorized; none issued and
outstanding at April 30, 2000 and
January 30, 2000 - -
Series B Convertible Preferred Stock,
3% cumulative, redeemable, convertible
to 369,231 shares of common stock, 120
shares authorized; none issued and
outstanding at April 30, 2000 and
January 30, 2000 - -
Common Stock, $.002 par value; 850,000,000
shares authorized; 1,431,439 shares
issued and outstanding at April 30, 2000,
and 1,328,207 shares issued and
outstanding at January 30, 2000 2,863 2,656
Additional Paid-in Capital 7,012,894 6,298,084
Accumulated Deficit (4,050,470) (3,753,555)
------------- ------------
Total Stockholders' Equity 2,965,287 2,547,185
------------- ------------
Total Liabilities & Equity $ 5,609,651 $ 5,150,069
============= ============
</TABLE>
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<TABLE>
<CAPTION>
PREMIER CONCEPTS, INC.
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED APRIL 30, 2000 AND MAY 2, 1999
(UNAUDITED)
Three Months Ended Three Months Ended
April 30, 2000 May 2, 1999
------------------ ------------------
<S> <C> <C>
Total Revenues 2,647,577 2,815,098
Cost of Goods Sold 816,670 865,035
------------- --------------
Gross Margin 1,830,907 1,950,063
Operating Expenses:
Personnel 934,439 931,500
Occupancy 682,807 716,324
Other Selling, General and Admini-
strative 394,171 411,282
Depreciation and Amortization 113,879 124,138
------------- --------------
Total Operating Expenses 2,125,296 2,183,244
Operating Loss (294,389) (233,181)
Other Income (Expenses):
Interest, net (7,526) (10,716)
Other 5,000 4,709
-------------- --------------
Other, net (2,526) (6,007)
-------------- --------------
Net Loss $ (296,915) $ (239,188)
================ ===============
Net Loss Per Common Share (Basic and
Diluted): $ (0.21) $ (0.24)
================ ===============
Weighted Average Shares Outstanding 1,389,632 990,377
================ ===============
</TABLE>
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<TABLE>
<CAPTION>
PREMIER CONCEPTS, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED APRIL 30, 2000 AND MAY 2, 1999
(UNAUDITED)
Three Months EndedThree Months Ended
April 30, 2000 May 2, 1999
------------------ -------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Profit (Loss) $ (296,915) $ (239,188)
Adjustments to reconcile net profit
(loss) to net cash from operating
activities:
Amortization of warrants issued for
services 2,225 -
Depreciation and amortization 113,879 124,138
Changes in operating assets and
liabilities:
(Increase) decrease in:
Merchandise inventories (36,872) 143,522
Other assets 112,086 (23,102)
Increase (decrease) in:
Accounts payable and accrued
liabilities 46,429 (42,256)
Other liabilities 2,747 18,779
------------- -------------
Net cash used by operating activities (56,421) (18,107)
Cash Flows From Investing Activities:
Capital expenditures for property and
equipment (17,367) (9,991)
Capital expenditures for development of
website (9,608) -
------------- -------------
Net cash used by investing
activities (26,975) (9,991)
Cash Flows From Financing Activities:
Proceeds from exercise of options and
warrants 703,170 -
Proceeds from sales of warrants 11,847 -
Increase in restricted cash from exercise
of options and warrants, and sale of
warrants (715,589) -
Deferred Offering Costs - (9,225)
Proceeds from issuance of common stock - 220,769
Payments on notes payable (24,719) (130,999)
----------- -------------
Net cash provided (used) by
financing activities (25,291) 80,545
------------ -------------
Increase (Decrease) in Cash and Cash
Equivalents (108,687) 52,447
Cash & Cash Equivalents, beginning of
period 357,653 221,273
Cash & Cash Equivalents, end of
period $ 248,966 $ 273,720
================ ===============
Supplemental Schedule of Cash Flow
Information:
Cash paid for interest $ 11,890 $ 14,081
=============== ===============
Non-cash transaction - Note payable
issued for services $ 17,023 $ -
================ ===============
</TABLE>
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<PAGE>
PREMIER CONCEPTS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
Commitments and Contingencies
-----------------------------
LITIGATION. Premier Concepts 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 Premier's financial position or results of
operations. (See PART II. OTHER INFORMATION--Item 1. Legal Proceedings.)
Seasonality and Quarterly Fluctuations
--------------------------------------
Our faux jewelry chain, operating under the trade names Impostors and
Elegant Pretenders, historically has realized lower sales during the first
three quarters which has resulted in incurring operating losses during those
quarters. To this end, we have generated an operating loss during the three
months ended April 30, 2000 of $294,389, as compared to an operating loss of
$233,181 for the three months ended May 2, 1999.
Premier Concepts' business is highly seasonal with its mall locations
generating approximately 20% of revenues during the December holiday season.
Our 10 tourist locations experience fluctuations, based upon such factors as
seasonality, economic conditions and other factors affecting tourism in their
particular locations.
Proposed Merger:
----------------
Premier Concepts has executed an Agreement and Plan of Merger with
AmazeScape. Com, Inc. The pending merger is subject to stockholder approval.
At the consummation of this transaction, stockholders of AmazeScape will be
issued 12,462,851 shares of common stock and 120 shares of Series B
convertible stock, representing approximately 87% of the combined entity.
Directors and officers of Premier Concepts and AmazeScape will receive options
for the purchase of 280,000 shares of common stock upon consummation of the
merger. Additionally, at closing of the merger, Premier Concepts will issue
250,000 shares of common stock for services provided in arranging the merger.
It is anticipated that this transaction will be accounted for as a purchase
business combination. The transaction will be treated as a reverse merger,
with AmazeScape being the surviving company for financial reporting purposes.
<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 - APRIL 30, 2000 COMPARED TO JANUARY 30, 2000
At April 30, 2000 our operating cash balance of $248,966 was
approximately 30% less than the cash balance of $357,653 at January 30, 2000.
During the quarter ended April 30, 2000, merchandise inventories
increased $36,872, or approximately 2%. The increase is partially due to new
merchandise received for spring promotions including a special promotion for
Mother's Day during the first two weeks of May. In addition, approximately
$12,500 of additional merchandise had been purchased to stock our online
store, premierjewelry.com, which was launched the last week of May.
Other assets, which primarily includes prepaid expenses and accounts
receivable, decreased by approximately $97,000, and is attributed to the
reduction of a receivable from AmazeScape for costs incurred in connection
with the proposed merger. Under the terms of the agreement, these costs are
to be paid by AmazeScape as they come due. At April 30, 2000 the balance of
the receivable had been reduced by approximately $137,000 from $155,000 at
January 30, 2000 to $18,000 at April 30, 2000. These costs primarily include
legal and accounting fees in connection with the proposed merger.
Also included in prepaid expenses and other current assets is
approximately $14,800 representing the remaining imputed value of a warrant to
purchase 25,000 shares of common stock at $.875 per share associated with a
two year extension of a Management Services Agreement. The agreement provides
for certain consulting services including arrangement of possible debt and
equity financing, as well as strategic, operational and investment banking
advice. On November 1, 1999 the Management Services Agreement was extended an
additional two years through December 2002. These costs are being amortized
as professional services over the life of the extended agreement.
As a result of the foregoing, current assets, net of restricted cash as
discussed below, decreased by $169,259 from $2,404,137 at January 30, 2000 to
$2,234,878 at April 30, 2000.
For the quarter ended April 30, 2000, accounts payable and accrued
expenses increased marginally by $46,429, or approximately 3%, which increase
is attributed to the related increase in merchandise inventory. Accounts
payable and accrued expenses primarily include amounts payable to merchandise
vendors and other suppliers of products and services used in the ordinary
course of business.
Notes payable, all maturing within one year, decreased slightly by
approximately $7,700. This decrease is the result of regularly scheduled
payments made of $24,719, offset by the issuance of a short-term note in the
amount of $17,023 issued to finance a portion of our commercial liability
insurance package. The note bears interest at 11%, requires monthly principal
and interest payments of $1,979, and matures on November 28, 2000.
Included in notes payable is a bank note with a principal balance of
$401,000 at April 30, 2000. This note requires monthly principal payments of
$1,000 plus accrued interest at the Bank's prime lending rate plus 1.5%. A
one time principal payment of $37,000 was made in December 1999. The note
matures on June 20, 2000, and is expected to be renewed with the Bank under
essentially the same terms.
Also included in notes payable is approximately $32,400 representing the
balance of a note payable to a contractor relating to the construction of a
store in Palisades Center in West Nyack, New York in 1998. This store was
closed in January 2000 due to poor performance. The note requires monthly
installments of $5,000 including principal and interest at 10%. The note
matures in November 2000.
As a result of the foregoing, current liabilities increased $38,733 from
$2,173,650 at January 30, 2000, to $2,212,383 at April 30, 2000. Working
capital, net of restricted cash as discussed below, decreased $207,992 from
$230,487 at January 30, 2000 to $22,495 at April 30, 2000.
During the quarter ended April 30, 2000 we invested $17,367 in property
and equipment. Approximately $5,000 was invested in development and design
for our new store at the Aladdin Hotel and Casino in Las Vegas, Nevada.
During the second and third quarters, we expect to invest an additional
$150,000 to complete the new store, which is expected to open in August 2000.
During the quarter ended April 30, 2000 we also invested approximately $7,500
to upgrade our accounting software and systems at our corporate offices in
Aurora, Colorado. This compares with approximately $10,000 invested in
property and equipment for the quarter ended May 2, 1999, which consisted
primarily of minor furniture and equipment improvements at our corporate
offices.
Based on the foregoing, property and equipment, net of accumulated
depreciation, decreased $93,412, from $2,190,331 at January 30, 2000, to
$2,096,919 at April 30, 2000.
In October 1996, we developed and launched our first e-commerce web site
"impostors.com" which provided our initial Internet presence. While the web
site had the capability to generate sales of our product, we realized only
modest revenue generated directly from the web site. In July 1999, we started
the process of developing a new e-commerce platform "premierjewelry.com" from
which we intend to showcase existing and new product concepts. As of April
30, 2000, we had invested $140,666 in the development of the new
"premierjewelry.com" web site, of which approximately $9,600 was invested
during the quarter ended April 30, 2000. The new site was launched on May 30,
2000.
Our trademark assets, representing the goodwill of the Impostors
trademark and other intellectual property, was acquired as part of the
acquisition of Impostors in 1994. This asset is being amortized over a 10-
year period, and had an amortized book value of $47,533 at April 30, 2000.
Other non-current assets primarily include security deposits made to
landlords and utility service providers. The balance of $71,163 at April 30,
2000 is relatively unchanged from the January 30, 2000 balance of $71,007.
Deferred rent increased $2,747 from $229,234 at January 30, 2000, to
$231,981 at April 30, 2000, resulting from the recognition of rental expense
on a straight line basis on leases that contain predetermined fixed
escalations of the minimum rents during the initial term of the lease.
On November 12, 1999, 228,571 shares of common stock were sold to an
investor in a private placement for $200,000. The proceeds from the sale, and
the shares of common stock, are being held in escrow. The escrowed funds are
to be used as partial collateral to facilitate a debt financing. The funds
and the shares of common stock will be released from the escrow account upon
certain terms and conditions, including the approval of the Board of Directors
and consent of the lender in the proposed debt financing. In the event the
merger transaction described above is not consummated prior to June 30, 2000,
at the investor's option the $200,000 will be released from escrow and
disbursed to the investor, and the 228,571 shares of common stock will be
returned and cancelled. These escrowed funds are classified as restricted
cash at January 30, 2000, and the escrowed shares of common stock are
classified as redeemable common stock.
During the quarter ended April 30, 2000 certain employees purchased
30,000 shares of common stock through the exercise of stock options awarded
from our Incentive Stock Option Plan. The total proceeds from the exercise of
these options were $69,375.
Also during the quarter ended April 30, 2000, 33,282 shares of common
stock were issued from exercises of the public "A" warrants that were issued
as part of the public offering completed in April 1997. Two "A" warrants are
exercisable to purchase one share of common stock at an exercise price of
$10.00 per share. In April 2000, the expiration date for these warrants was
extended to June 21, 2000. The total proceeds received from the exercise of
these warrants were $332,820.
Also during the quarter ended April 30, 2000, 39,950 shares of common
stock were issued from the exercise of other options and warrants. Of this,
29,450 share of common stock were issued from the exercise of options held by
the representatives of the underwriter of our public offering completed in
April 1997. These options are exercisable to purchase one share of common
stock at an exercise price of $9.00 per share, and expire in April 2002. The
total proceeds from exercise of these options were $265,050. At April 30,
2000, there remained outstanding 25,550 representative options. In addition,
8,000 shares were issued to an investor from the exercise of warrants acquired
from the June 1999 private placement of convertible preferred stock. These
warrants are exercisable to purchase one share of common stock at an exercise
price of $4.10, and expire in June 2002. The total proceeds received from
exercise of these 8,000 warrants were $32,800. At April 30, 2000, 72,000 of
the warrants issued in connection with the June 1999 private placement
remained outstanding. Additionally, 2,500 shares were issued to an investor
from the exercise of warrants acquired in March 1999 as compensation for
providing services under a Management Services Agreement. These warrants are
exercisable to purchase one share of common stock at an exercise price of
$1.25 per share, and expire in June 2002. The total proceeds received from
exercise of these warrants were $3,125. At April 30, 2000, 22,500 of these
warrants were outstanding.
During the quarter ended April 30, 2000, the representatives of the
underwriter of our public offering completed in April 1997, exercised options
to purchase 32,908 "A" warrants, the terms of which are described above. The
options are exercisable to purchase one "A" warrant at an exercise price of
$.36 per warrant. The total proceeds received from the exercise of these
options to purchase warrants were $11,487. At April 30, 2000, 22,092 options
to purchase "A" warrants were outstanding.
The total proceeds received from the exercise of options and warrants was
$715,017 for the quarter ended April 30, 2000. Under the terms of the
Agreement and Plan of Merger with AmazeScape, we have placed into escrow all
of the cash proceeds from the exercise of options or warrants received after
November 17, 1999, through April 30, 2000. In the event the merger
transaction is consummated, the funds will be released to AmazeScape. In the
event the merger transaction is not consummated, the funds will be released to
Premier Concepts, Inc. These escrowed funds with a balance of $818,492 at
April 30, 2000, net of fees and interest earned, are classified as restricted
cash.
As a result of the foregoing, common stock increased $207, from $2,656
(1,328,207 shares outstanding) at January 30, 2000, to $2,863 (1,431,439
shares outstanding) at April 30, 2000. Additional paid in capital increased
$714,810 from $6,298,084 at January 30, 2000 to $7,012,894 at April 30, 2000.
As a result of the net loss for the quarter ended April 30, 2000 of
$296,915, the accumulated deficit increased from $3,753,555 at January 30,
2000 to $4,050,470 at April 30, 2000. Considering the net loss and the equity
transactions as discussed above, total stockholders' equity increased $418,102
from $2,547,185 at January 30, 2000 to $2,965,287 at April 30, 2000.
Net cash used by operating activities was $56,421 for the quarter ended
April 30, 2000 compared with $18,107 for the quarter ended May 2, 1999. The
change of approximately $38,000 primarily represents the increases in
merchandise inventories as discussed above, and the reduction of the
receivable from AmazeScape for costs incurred associated with the proposed
merger, also as discussed above.
Net cash used by investing activities was $26,975 for the quarter ended
April 30, 2000 compared with $9,991 for the quarter ended May 2, 2000. The
change of approximately $17,000 is attributable to additional capital
investments in our accounting system, our new website, and investments in the
new store being built at the Aladdin Hotel and Casino in Las Vegas, Nevada,
all as discussed above.
Net cash used by financing activities for the quarter ended April 30,
2000 was $25,291, and primarily represents regularly scheduled payments on
notes payable. In addition, as discussed above, we received approximately
$715,600 from the exercises of options and warrants, and from the sales of
warrants. All of such funds are held in a restricted escrow account per the
merger agreement with AmazeScape. This compares to net cash provided by
financing activities of $80,545 for the quarter ended May 2, 1999, which
represented $211,544 in proceeds (net of $9,225 of costs of the offering),
from a private placement of common stock in March 1999, and a $112,000
principal reduction of our bank note, as well as regularly scheduled payments
on notes payable.
The foregoing resulted in a decrease of $108,687 in our operating cash
position from $357,653 at January 30, 2000 to $248,966 at April 30, 2000.
This compares with an increase in cash of $52,447 from $221,473 at January 31,
1999 to $273,720 at May 2, 1999.
As discussed above, on August 20, 1999 a lease was executed to open a
retail store in the new Aladdin Hotel and Casino in Las Vegas, Nevada. This
store is expected to open in August of 2000. No additional leases to open
retail locations have been executed. However, possible new locations are
currently being evaluated. Depending on location and size, the opening of a
new retail location represents an aggregate capital requirement of
approximately $75,000-$200,000, including the lease build-outs, fixtures,
equipment and inventory. As discussed above, the funds received from the
exercises of options and warrants is restricted under the terms of the merger
agreement. Upon completion of the merger, the current operations of Premier
Concepts will be entitled to a portion of these funds sufficient to meet our
short-term capital requirements. As discussed above, if the merger is not
consummated, Premier Concepts will be entitled to all such funds.
Also, as discussed above, in November 1999, 228,571 shares of common
stock were sold to an investor for $200,000. The proceeds from the equity
sale are being held in escrow and will be used as partial collateral to obtain
additional debt financing of up to $500,000 to provide capital for retail
expansion, and general working capital. Additional sources of capital are
currently being evaluated to meet plans for future capital investment and
working capital needs. However, there can be no assurance that such financing
will be secured.
RESULTS OF OPERATIONS - THREE MONTHS ENDED APRIL 30, 2000 COMPARED TO THREE
MONTHS ENDED MAY 2, 2000
Set forth below is selected summary financial data derived from the
financial statements and financial records.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
April 30, 2000 May 2, 1999
------------------- -----------------
<S> <C> <C>
Statements of Operations Data:
Total Revenues $2,647,577 $ 2,815,098
Operating loss (294,389) (233,181)
Net income loss (296,915) (239,188)
Net loss per common share (.21) (.24)
Weighted average shares outstanding 1,389,632 990,377
Statistical Data:
Store revenues $2,645,000 $ 2,803,997
Store gross margin 1,831,943 1,948,354
Store operating expenses 1,716,018 1,761,262
Store operating profit 115,925 187,092
Corporate overhead operating expenses 409,055 421,444
Gross margin percentage 69.2% 69.3%
Comparable same store sales (33 stores) 2,645,000 2,579,940
Comparable same store sales growth 2.5% -3.8%
</TABLE>
Total revenues for the three months ended April 30, 2000 were $2,647,577
as compared to $2,815,098 for the comparable period ended May 2, 1999, a
decrease of $167,521, or 6%. However, comparable same store sales were
$2,645,000 for the three months ended April 30, 2000 as compared to $2,579,940
for the comparable period ended May 2, 1999, an increase of approximately
$65,000, or 2.5%. Approximately $224,000 of revenues for the quarter ended
May 2, 1999 is attributable to three stores closed during the year ended
January 30, 2000:
Paradise Valley, Phoenix, AZ -- closed December 26, 1999 upon expiration
of lease;
Pentagon City, Arlington, VA -- closed January 25, 2000 upon expiration
of lease; and,
Palisades Center, West Nyack, NY -- closed January 25, 2000 due to poor
performance.
Also included in total revenues are approximately $2,600 and $11,100 for
the quarters ended April 30, 2000 and May 2, 1999, respectively. These
revenues represent minor sales to wholesale customers and sales generated from
our catalog.
For the three months ended April 30, 2000, cost of goods sold was
$816,670 and the gross margin was $1,830,907, or 69.2%. For the three months
ended May 2, 1999, cost of goods sold was $865,035 and the gross margin was
$1,950,063, or 69.3%. Included in cost of goods sold are freight charges
incurred in the acquisition of our merchandise from vendors. Total freight
charges included in cost of goods sold was $26,388, or 1.0% of total revenue
for the quarter ended April 30, 2000. This compares with freight charges of
$20,975, or 0.8% of total revenue for the quarter ended May 2, 1999.
Total operating expenses were $2,125,296 for the quarter ended April 30,
2000, compared to $2,183,244 for the quarter ended May 2, 1999, or 80.3% and
77.6% of revenues, respectively. The majority of these expenses were
comprised of store and corporate office personnel expenses, which amounted to
$934,439 and $931,500 for the quarters ended April 30, 2000, and May 2, 1999,
respectively, an increase of approximately $3,000. While we operated three
fewer stores during the quarter ended April 30, 2000, than during the quarter
ended May 2, 1999, our total store personnel costs remained unchanged. This
is the result of a store staffing increase initiated in the second quarter of
fiscal year ended January 30, 2000, that was implemented to provide greater
store security as well as increased floor coverage during store operating
hours to enhance customer service. We expect that store personnel expenses
will decrease as a percentage of revenue as our operational and sales training
programs are fully implemented during the second and third quarters.
Personnel costs for our corporate personnel remained relatively unchanged from
$220,245 to $216,891 for the quarters ended April 30, 2000 and May 2, 1999,
respectively.
Occupancy costs of $682,807, and $716,324, are included in total
operating expenses for the three months ended April 30, 2000 and May 2, 1999,
respectively. The decrease of approximately $33,500 represents operating
three fewer stores during the quarter ended April 30, 2000 compared to the
quarter ended May 2, 1999.
Other selling, general and administrative expenses of $394,171 and
$411,282 are included in total operating expenses for the quarters ended April
30, 2000 and May 2, 1999, respectively, representing a decrease of
approximately $17,100. Following is a comparative summary of costs included
in other selling, general and administrative expenses, and their relationship
to total revenues for the periods:
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
April 30, 2000 May 2, 1999
------------------ ------------------
<S> <C> <C>
Advertising and promotion $49,997 1.9% $46,649 1.7%
Banking fees 60,862 2.3% 60,184 2.1%
Merchandise distribution 41,767 1.6% 29,487 1.0%
Repairs and rentals 17,836 0.7% 19,332 0.7%
Property insurance, fees, and
taxes 31,706 1.2% 12,991 0.5%
Professional and service fees 38,703 1.5% 61,515 2.2%
Supplies and product packaging 58,422 2.2% 57,085 2.0%
Telephone and utilities 50,396 1.9% 55,163 2.0%
Travel 34,853 1.3% 52,051 1.8%
Other 9,629 0.4% 16,825 0.6%
------- --------
$394,171 14.9% $411,282 14.6%
======== ========
</TABLE>
Included in total operating expenses are corporate overhead expenses of
$409,055, or 15.5% of total revenues, for the three months ended April 30,
2000, as compared to $421,444, or 15.0% of total revenues, for the three
months ended May 2, 1999, representing a slight decrease of approximately
$12,400 for the comparable period. It is expected that corporate overhead
will decrease as a percentage of sales as new retail stores and additional
distribution is added. Efforts to continue to improve and utilize
technological resources and control administrative costs are ongoing.
Also included in total operating expenses are depreciation and
amortization expenses that were $113,879 and $124,138 for the quarters ended
April 30, 2000 and May 2, 1999, respectively. The decrease is attributed to
three fewer stores operating during the quarter ended April 30, 2000 as
compared to the quarter ended May 2, 1999.
As a result of the foregoing, the loss from operations for the quarter
ended April 30, 2000 was $294,389, as compared with a loss from operations for
the quarter ended May 2, 1999 of $233,181, an increase of $61,208.
Interest expense was $11,905 and $14,081 for the quarters ended April 30,
2000, and May 2, 1999, respectively, and is comprised primarily of interest
charged on the Bank Note and the construction contractor note, both as
discussed above. Interest income was $4,379 and $3,365 for the quarters ended
April 30, and May 2, 1999, respectively, and results from the daily investing
of available cash balances.
Other income was $5,000 and $4,709 for the quarters ended April 30, 1999,
May 2, 1999, respectively, and consists almost entirely of license fees
associated with extension agreements that will allow certain former
franchisees to use the Impostors trademark. The license agreements have a one-
year term expiring in January 2001, and are renewable at our option.
Based on the foregoing, the net loss for the three months ended April 30,
2000 was $296,915, which translates to a net loss per share of $(0.21) based
on 1,389,632 weighted average shares outstanding. This compares with a net
loss for the three months ended May 2, 1999 of $239,188, or $(0.24) per share,
based on 990,377 weighted average shares outstanding as of that date.
Other than the foregoing, no trends, or other demands, commitments,
events or uncertainties are known that will result in, or that are reasonably
likely to result in, a material impact on the income and expenses of the
Company.
YEAR 2000
The Year 2000 problem exists because many computer programs, embedded
systems and components were designed to refer to a year by the last two digits
of the year, such as "99" for "1999." We believe that our activities to
mitigate potential Year 2000 problems have been successful. However, there
are no assurances that the Year 2000 problems incurred by our vendors will not
have a material adverse effect on our business, financial condition or results
of operations.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time we are involved in commercial disputes in the ordinary
course of business with vendors, landlords and other parties, which on
occasion become the subject matter of litigation. At the present time, except
as set forth below, we are not a party to any legal proceedings outside of the
ordinary course of business or which would have a material adverse impact upon
our operations or properties.
We have been named as a defendant in a civil action filed in the Supreme
Court of the State of New York, County of Onondaga on May 21, 1999. The
lawsuit was brought by EkleCo as plaintiff, and asserts claims against us for
rent and other sums due under the commercial lease for its retail store
located in the Palisades Center in West Nyack, New York in an aggregate amount
of approximately $140,000. We have denied liability, and on July 27, 1999 we
filed a counter claim against the landlord asserting breach of contract, false
representation and fraud in inducing us to enter into the lease. We are
seeking damages in excess of $300,000. We intend to vigorously defend the
action and prosecute our counterclaims. Based upon our assessment of the facts
and consultations with legal counsel, we believe that the likelihood of a
material adverse outcome in the matter is remote.
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 April 30, 2000.
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>
<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: June 14, 2000 By: /s/ Sissel Eckenhausen
-------------- -------------------------------
Sissel Eckenhausen, President
Dated: June 14, 2000 By: /s/ Todd Huss
-------------- --------------------------------
Todd Huss, Chief Financial Advisor,
Principal Accounting Officer
