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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) JULY 14, 1998
INTERVISUAL BOOKS, INC.
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-10916 95-2929217
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2716 OCEAN PARK BLVD., SUITE 2020, SANTA MONICA, CA 90405
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 396-8708
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On July 14, 1998, the Company issued a press release reporting the
Company's second quarter 1998 sales and the loss for the second quarter. As
reported in the press release, due to a variety of factors the Company expects
third quarter 1998 sales and income to be below those of third quarter 1997. A
copy of the press release is filed as Exhibit 99.1 hereto and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press Release issued by Intervisual Books, Inc. on July 14, 1998
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.
Dated: July 17, 1998 INTERVISUAL BOOKS, INC.
By: /s/ WALDO H. HUNT
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Name: Waldo H. Hunt
Title: Chairman and Chief Executive Officer
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EXHIBIT LIST
Exhibit 99.1 Press Release issued by Intervisual Books, Inc. on July 14, 1998
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NEWS RELEASE
For: INTERVISUAL BOOKS, INC.
2716 Ocean Park Blvd., #2020
Santa Monica, CA 90405
Contact: Dan P. Reavis
Chief Financial Officer
Intervisual Books, Inc.
(310) 396-8708
FOR IMMEDIATE RELEASE
INTERVISUAL BOOKS REPORTS SECOND QUARTER RESULTS
Santa Monica, California -- July 14, 1998 -- Intervisual Books, Inc. (IBI)
(NASDAQ: IVBK) today reported second quarter 1998 sales were up 10% on sales of
$3,629,640, as compared to $3,301,644 for the same period of 1997. The loss for
the second quarter of 1998 was $346,392 or $.07 per share. This compares with a
net loss of $415,231 or $.08 per share for the same period of 1997.
For the six months ended June 30, 1998, the Company reported a loss of
$809,718 or $.16 per share, compared with a net loss of $828,315 or $.16 per
share for the corresponding period last year. Sales for the first six months of
1998 were $4,939,709, as compared to $5,397,929 in 1997.
Norm Sheinman, IBI's president and chief operating officer stated, "Our
sales continue to be adversely affected by the strength of the US dollar
compared with the currencies of major international countries where we
historically have sold 30% to 40% of our books. The Japanese Yen and the German
Mark, for example, are down 31% and 22% since April 1996, making our books that
much more expensive."
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Sheinman went on to explain that the continuing Asian economic crisis was
another factor significantly affecting sales, particularly in Japan.
Traditionally Japan is IBI's third best market, after the US and England. Sales
to Japan are materially below last year and are expected to remain that way for
all of 1998.
In addition, Sheinman stated, "Business with our US publishers continues
to be affected by consolidations in the industry. Long-term IBI customer Random
House was recently acquired by Bertelsmann and is the eighth of IBI's US
publishers to have been absorbed by US or international conglomerates during the
last six years. This clearly explains why IBI has placed a high priority on its
move into self-publishing.
Though the introduction of 51 new self-published titles during 1998 will
more than double sales of self-published titles achieved in 1997, it now appears
that the transition from being mainly a packager to both a packager and
publisher will not compensate for the anticipated loss of sales due to the
factors explained above; and, therefore, we expect third quarter 1998 sales and
income to be below those of 1997."
Sheinman added, "We wish to emphasize that our marketing plan is to
continue selling our books to all international publishers and selected US
publishers as a packager, but we will continue to market our own titles under
the Piggy Toes Press and Pop-Up Press imprints through our distributor, Andrews
McMeel of Kansas City. Fall 1998 books enjoying advance sales beyond
expectations include an adult dimensional spectacular titled Harley-Davidson, a
Three-Dimensional Tribute to an American Icon and The Alphabet Chest by Rebecca
Wildsmith, an outstanding juvenile illustrator."
To strengthen its sales efforts in the US and Europe, IBI has acquired the
services of Ed Martin and Jeffrey Nobbs, both of whom have over twenty years of
publishing
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experience. Mr. Martin, who has been appointed vice president of North American
sales, worked with Random House for 19 years achieving the position of Senior VP
of Sales and Marketing of the Juvenile and Merchandise group. Also, he was the
sales director of the Disney Mouseworks division from 1994 to 1996.
Jeffrey Nobbs, who worked with IBI in England from 1992 to 1994 as vice
president of European sales and in Los Angeles from 1994 to 1996 as IBI's
publisher, will act as IBI's European marketing and book development consultant
from his office in Manchester, England.
Sheinman also explained that IBI's commercial sales division, which
creates and markets interactive paper premiums and books for the advertising
industry, is fully activated and is expected to contribute revenues in 1999.
Intervisual is the world's leading creator and producer of interactive
pop-up and novelty books for children and adults.
* * *
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements are subject to
risks and uncertainties that could cause actual results to vary materially from
those projected in the forward-looking statements. The Company may experience
significant fluctuations in future operating results due to a number of
economic, competitive and other factors, including, among other things, the size
and timing of customer orders, changes in laws, new or increased competition,
delays in new products, production problems, changes in market demand, market
acceptance of new products, seasonality in product purchases, changes in foreign
exchange rates and others. These factors and others could cause operating
results to vary significantly from those in prior periods, and those projected
in forward-looking statements. Additional information with respect to these and
other factors which could materially affect the Company and its operations are
included in the Company's filings with the Securities and Exchange Commission
and are incorporated herein.
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INTERVISUAL BOOKS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 3,578,824 $ 3,292,770 $ 4,736,607 $ 5,381,563
Rights income 50,816 8,874 203,102 16,366
----------- ----------- ----------- -----------
Total revenues 3,629,640 3,301,644 4,939,709 5,397,929
Cost of sales 2,861,262 2,582,454 3,752,090 4,247,064
----------- ----------- ----------- -----------
Gross profit 768,378 719,190 1,187,619 1,150,865
Selling, general and
administrative expenses 1,238,338 1,360,212 2,315,580 2,436,512
Interest income (net) 2,306 11,713 15,480 30,190
----------- ----------- ----------- -----------
Loss before income taxes (467,654) (629,309) (1,112,481) (1,255,457)
Income tax benefit (121,262) (214,078) (302,763) (427,142)
----------- ----------- ----------- -----------
Net loss $ (346,392) $ (415,231) $ (809,718) $ (828,315)
=========== =========== =========== ===========
Loss per share:
Basic $ (0.07) $ (0.08) $ (0.16) $ (0.16)
=========== =========== =========== ===========
Diluted (0.07) (0.08) (0.16) (0.16)
=========== =========== =========== ===========
Weighted average number
of shares and equivalents
outstanding:
Basic 5,079,053 5,032,798 5,064,730 5,032,798
=========== =========== =========== ===========
Diluted 5,079,053 5,032,798 5,064,730 5,032,798
=========== =========== =========== ===========
</TABLE>
BALANCE SHEET HIGHLIGHTS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------- ------------
<S> <C> <C>
Cash and short term investments $ 459,059 $ 2,382,714
Total current assets 7,034,130 9,799,169
Total assets 11,287,664 13,725,574
Total current liabilities 4,756,816 6,451,463
Total liabilities 4,917,772 6,612,419
Stockholders' equity 6,369,892 7,113,155
</TABLE>
