================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
__x_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-20394
INMARK ENTERPRISES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1340408
------------------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
415 Northern Boulevard
Great Neck, New York 11021
-------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 622-2800
--------------
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 ___
On November 12, 1998, 4,480,326 shares of the Registrant's Common Stock, par
value $.001 a share, were outstanding.
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<PAGE>
<TABLE>
INDEX
INMARK ENTERPRISES, INC. AND SUBSIDIARIES
Page
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
Item 1. Consolidated Financial Statements of Inmark Enterprises, Inc. (Unaudited)
Consolidated Balance Sheets - September 30, 1998 and March 31, 1998 3
Consolidated Statements of Operations - Three month and six month periods
ended September 30, 1998 and September 30, 1997 4
Consolidated Statement of Stockholders' Equity - Six month period ended
September 30, 1998 5
Consolidated Statements of Cash Flows - Six month periods ended
September 30, 1998 and September 30, 1997 6
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
PART II - OTHER INFORMATION 12
- ---------------------------
Items 1, 2, 3 and 5. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
27 Financial Data Schedule
SIGNATURES 13
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>
INMARK ENTERPRISES, INC.
Consolidated Balance Sheets
September 30, 1998 and March 31, 1998
<S> <C> <C>
September 30, 1998 March 31, 1998*
----------------------- --------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 1,289,051 1,459,909
Contract receivables 16,539,906 10,933,241
Deferred tax asset 83,442 83,442
Prepaid taxes 247,269 452,291
Prepaid expenses and other current assets 521,513 163,042
----------------- -----------------
Total current assets 18,681,181 13,091,925
----------------- -----------------
Furniture, fixtures and equipment, net 922,291 815,257
Goodwill, net 16,116,076 16,534,950
Deferred financing costs 112,050 124,500
Note receivable from officer 225,000 225,000
Other assets 80,370 26,757
----------------- -----------------
Total assets 36,136,968 30,818,389
================= =================
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable 755,822 1,601,751
Accrued job costs 13,162,467 8,335,745
Accrued compensation 248,468 314,876
Other accrued liabilities 160,815 298,791
Accrued taxes payable - 94,260
----------------- -----------------
Total current liabilities 14,327,572 10,645,423
Notes payable bank - long term 7,000,000 7,000,000
Subordinated notes payable - long term 2,500,000 2,500,000
----------------- -----------------
Total liabilities 23,827,572 20,145,423
----------------- -----------------
Stockholders' equity:
Class A convertible preferred stock, par value
$.001; authorized 650,000 shares; none issued and outstanding - -
Class B convertible preferred stock, par value
$.001; authorized 700,000 shares; none issued and outstanding - -
Preferred stock, undesignated; authorized
3,650,000 shares; none issued and outstanding - -
Common stock, par value $.001; authorized
25,000,000 shares; issued and outstanding 4,480,326 shares at
September 30, 1998 and 4,475,326 shares at March 31, 1998 4,480 4,475
Additional paid-in capital 5,137,491 5,131,896
Retained earnings 7,167,425 5,536,595
----------------- -----------------
Total stockholders' equity 12,309,396 10,672,966
----------------- -----------------
Total liabilities and stockholders' equity 36,136,968 30,818,389
================= =================
* The consolidated balance sheet as of March 31, 1998 has been summarized from
the Company's audited balance sheet as of that date.
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
INMARK ENTERPRISES, INC.
Consolidated Statements of Operations
Three Month and Six Month Periods Ended September 30, 1998 and September 30, 1997
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1998 1997 1998 1997
-------------------- ------------------- ------------------ ----------------
Sales $ 10,151,232 4,925,449 $ 22,403,002 10,844,336
Direct expenses 6,702,499 3,258,798 14,995,703 7,293,434
--------------- --------------- --------------- ---------------
Gross Profit 3,448,733 1,666,651 7,407,299 3,550,902
--------------- --------------- --------------- ---------------
Salaries 1,097,901 695,190 2,171,322 1,381,897
Selling, general and administrative expense 1,112,631 441,840 2,218,594 916,852
--------------- --------------- --------------- ---------------
Total operating expenses 2,210,532 1,137,030 4,389,916 2,298,749
--------------- --------------- --------------- ---------------
Operating income 1,238,202 529,621 3,017,383 1,252,153
Interest income (expense), net (127,917) 24,731 (298,553) 64,527
--------------- --------------- --------------- ---------------
Income before income taxes 1,110,285 554,352 2,718,830 1,316,680
Provision for income taxes 445,000 131,000 1,088,000 331,256
--------------- --------------- --------------- ---------------
Net income $ 665,285 423,352 $ 1,630,830 985,424
=============== =============== =============== ===============
Net income per common and common equivalent share:
Basic $ .15 $ .12 $ .36 $ .28
=============== =============== =============== ===============
Diluted $ .12 $ .09 $ .29 $ .22
=============== =============== =============== ===============
Weighted average number of common and common equivalent shares outstanding:
Basic 4,479,891 3,544,689 4,477,621 3,544,689
=============== =============== =============== ===============
Diluted 5,593,517 4,509,015 5,675,847 4,473,973
=============== =============== =============== ===============
Reconciliation of the net income available to common shareholders for the
computation of diluted per share is as follows:
Net income available to common
shareholders on both a basic and diluted
basis $ 665,285 423,352 $ 1,630,830 985,424
Reconciliation of weighted average shares used for basic and diluted computation
is as follows:
Weighted average shares - Basic 4,479,891 3,544,689 4,477,621 3,544,689
Dilutive effect of options and warrants 1,113,626 964,326 1,198,226 929,284
--------------- --------------- --------------- ---------------
Weighted average shares - Diluted 5,593,517 4,509,015 5,675,847 4,473,973
=============== =============== =============== ===============
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
INMARK ENTERPRISES, INC.
Consolidated Statement of Stockholders' Equity
Six months ended September 30, 1998
(Unaudited)
<S> <C> <C> <C> <C> <C>
Additional Total
Common Stock Paid-in Retained Stockholders'
par value $.001 Capital Earnings Equity
---------------------------------- ----------- ------------- --------------
Shares Amount
------------- -------------
Balance, March 31, 1998 4,475,326 $ 4,475 $ 5,131,896 $ 5,536,595 $ 10,672,966
Exercise of stock options 5,000 $ 5 5,595 - 5,600
Net income - - - 1,630,830 1,630,830
------------- ------------- ----------- ------------- --------------
Balance, September 30, 1998 4,480,326 $ 4,480 $ 5,137,491 $ 7,167,425 $ 12,309,396
============= ============= =========== ============= ==============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
<TABLE>
INMARK ENTERPRISES, INC.
Consolidated Statements of Cash Flows
Six Months Ended September 30, 1998 and 1997
(Unaudited)
<S> <C> <C>
1998 1997
--------------------- ---------------------
Cash flows from operating activities:
Net income $ 1,630,830 985,424
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 531,428 180,653
Deferred income taxes - 116,256
Changes in operating assets and liabilities:
Increase in contracts receivable (5,606,665) (1,137,484)
Decrease in prepaid taxes 205,022 -
(Increase) decrease in prepaid expenses and other
assets (412,084) 59,510
Decrease in accounts payable (845,929) (286,679)
Increase in accrued job costs 4,826,722 1,177,260
Decrease in other accrued liabilities (137,976) (2,294)
Decrease in accrued compensation (66,408) (150,653)
Decrease in accrued taxes payable (94,260) -
------------------ -----------------
Net cash provided by operating activities 30,680 941,993
------------------ -----------------
Cash flows from investing activities:
Purchases of fixed assets (189,012) (25,231)
Costs related to purchase of Optimum Group, Inc. (18,126) -
------------------ -----------------
Net cash used in investing activities (207,138) (25,231)
------------------ -----------------
Cash flows from financing activities:
Proceeds from exercise of stock options 5,600 -
------------------ -----------------
Net cash provided by financing activities 5,600 -
------------------ -----------------
Net (decrease) increase in cash (170,858) 916,762
Cash and cash equivalents at beginning of period 1,459,909 1,712,751
------------------ -----------------
Cash and cash equivalents at end of period $ 1,289,051 2,629,513
================== =================
Supplemental disclosure:
Interest paid during the period $ 335,864 -
================== =================
Income tax paid during the period $ 952,536 74,500
================== =================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE>
Inmark Enterprises, Inc. and Subsidiaries
Notes to the Unaudited Consolidated Financial Statements
September 30, 1998 and 1997
(1) Basis of Presentation
---------------------
The interim financial statements of Inmark Enterprises, Inc. (the
"Company") for the three and six month periods ended September 30, 1998
and 1997 have been prepared without audit. In the opinion of
management, such financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present fairly
the Company's results for the interim periods presented. The results of
operations for the three and six month periods ended September 30, 1998
are not necessarily indicative of the results for a full year.
On March 31, 1998, Optimum Group, Inc. ("Optimum"), an indirect
wholly-owned subsidiary of the Company, acquired all of the assets and
the business and assumed certain of the liabilities of OG Holding
Corporation, formerly known as Optimum Group, Inc. (the "Optimum
Acquisition"). The Optimum Acquisition has been accounted for as a
purchase by the Company as at March 31, 1998. Accordingly, the results
of operations discussed below for the three and six month periods ended
September 30, 1998 reflect the consolidated operations of the Company
including Optimum whereas the operations for the three and six month
periods ended September 30, 1997 are that of the Company excluding
Optimum.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These
consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended March 31, 1998.
(2) Earnings Per Share
------------------
In February 1997, the FASB issued Statement 128, "Earnings Per Share".
Statement 128 supersedes APB Opinion No 15, "Earnings Per Share" and
specifies the computation, presentation and disclosure requirements for
earnings per share ("EPS") for entities with publicly held common stock
or potential common stock. It replaces the presentation of primary EPS
with the presentation of basic EPS and replaces fully diluted EPS with
diluted EPS. It also requires dual presentation of basic and diluted
EPS on the face of the income statement for all entities with complex
capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. Statement 128 is effective
for financial statements for both interim and annual periods ending
after December 15, 1997.
Earnings per share of common stock for the three and six month periods
ended September 30, 1998 has been calculated according to the
guidelines of Statement 128 and earnings per share of common stock for
7
<PAGE>
the three and six month periods ended September 30, 1997 have been
restated to conform with Statement 128. All earnings per share
calculations have been adjusted for the five-for-four stock split paid
in the form of a stock dividend payable on June 15, 1998 to
shareholders of record May 14, 1998.
Basic earnings per share for the three and six month periods ended
September 30, 1998 have been computed by dividing net income for each
of the respective periods by the weighted average number of shares of
common stock outstanding for each such period. Diluted earnings per
share for the three and six month periods ended September 30, 1998 have
been computed by dividing net income for each of the periods by the
weighted average number of shares of common stock and common stock
equivalents outstanding for each such period, plus the assumed exercise
of stock options and warrants, less the number of treasury shares
assumed to be purchased from the proceeds of such exercises using the
average market price of the Company's common stock during the
respective period. Stock options and warrants have been excluded from
the calculation of diluted earnings per share in any period in which
they would be antidilutive.
(3) Unbilled Contracts in Progress
------------------------------
Unbilled contracts in progress represents revenue recognized in advance
of billings rendered based on work performed to date on certain
contracts. Accrued job costs are also recorded for such contracts to
properly match costs and revenue.
(4) Income Taxes
------------
The provision for income taxes for the three and six month periods
ended September 30, 1998 is based upon the Company's estimated
effective tax rate for the year, whereas for the three and six month
periods ended September 30, 1997, the provision for income taxes
includes approximately $110,000 of deferred tax benefits arising from
the reduction of the valuation allowance for deferred tax assets.
Item 2. Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations.
-------------------------
The following discussion compares the Company's consolidated
(including Optimum) results of operations for the three and six month periods
ended September 30, 1998 to the Company's then consolidated (excluding Optimum)
results of operations for the three and six month periods ended September 30,
1997. The information herein should be read together with the consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended March 31, 1998.
Results of Operations
Sales. The Company's sales for the quarter ended September 30,
1998 were $10,151,000, inclusive of $2,927,000 of sales of Optimum, compared to
the Company's sales of $4,925,000 for the prior year quarter ended September 30,
1997, an increase of $5,226,000 or 106.1%. Sales for the six months ended
September 30, 1998 were $22,403,000, inclusive of $6,173,000 of sales of
Optimum, compared to sales of $10,844,000 for the six months ended September 30,
1997, an increase of $11,599,000 or 106.6%. Other than the increase in sales
attributable to Optimum, the additional increase in sales for both the quarter
and six month
8
<PAGE>
period ended September 30, 1998 resulted from the overall increase in contract
projects in progress in each of the respective periods compared to the contract
projects in progress in the like prior year quarter and six month period.
Direct Expenses. Direct expenses for the quarter ended
September 30, 1998 were $6,702,000, or 66% of sales, inclusive of $1,715,000 of
direct expenses of Optimum, compared to $3,259,000, or 66.2% of sales, for the
comparable prior year quarter, an increase of $3,444,000 or 105.7%. Direct
expenses for the six months ended September 30, 1998 were $14,996,000, or 66.9%
of sales, compared to $7,293,000, or 67.3% of sales, for the comparable prior
year period. Other than the increase in direct expenses attributable to Optimum,
the additional increase in the amount of direct expenses for both the quarter
and six month period September 30, 1998 principally relates to the comparative
increase in sales for the period, whereas the decrease in direct expenses as a
percentage of sales for both the quarter and six month period ended September
30, 1998 were primarily the result of current Optimum client projects in the
aggregate contributing a greater gross profit margin than the mix of the
Company's projects in both the respective comparable prior year quarter and six
month periods.
As a result of these changes in sales and direct expenses,
gross profit for both the quarter and six month periods ended September 30, 1998
increased by $1,782,000 and $3,856,000 compared to the prior year respective
periods, thereby amounting to $3,449,000 and $7,407,000 for the quarter and six
month periods ended September 30, 1997.
Operating Expenses. Operating expenses for the quarter ended
September 30, 1998 increased by $1,074,000 to $2,211,000 compared to $1,137,000
for the quarter ended September 30, 1997. Operating expenses for the six months
ended September 30, 1998 increased by $2,091,000 to $4,390,000 compared to
$2,299,000 for the comparable prior year six month period. Operating expenses as
a percentage of sales were 21.8% and 23.1%, respectively, for the quarters ended
September 30, 1998 and September 30, 1997 and 19.6% and 21.2%, respectively, for
the six month periods ended September 30, 1998 and 1997.
The increase in operating expenses for the quarter ended
September 30, 1998 was primarily the result of (A) the inclusion of $788,000 of
operating expenses of Optimum consisting of approximately (i) $272,000 in
salaries, bonuses and related employee payroll expenses and (ii) $516,000 of
selling, general and administrative expenses which included approximately
$150,000 of amortization of goodwill and deferred financing costs associated
with the Optimum Acquisition and (B) with respect to the Company, an increase of
approximately $286,000 related primarily to the overall increase in the level of
operations in the quarter ended September 30, 1998. With the inclusion of the
operating expenses of Optimum and the related amortization of the costs related
to the Optimum Acquisition, operating expenses as a percentage of sales
decreased to 21.8% compared to 23.1% for the prior year quarter ended September
30, 1997. The increase in operating expenses for the six months ended September
30, 1998 was primarily the result of (A) the inclusion of $1,529,000 of
operating expenses of Optimum consisting of approximately (i) $610,000 in
salaries, bonuses and related employee payroll expenses and (ii) $919,000 of
selling, general and administrative expenses which included approximately
$300,000 of amortization of goodwill and deferred financing costs associated
with the Optimum Acquisition and (B) with respect to the Company, an increase of
approximately $562,000 related primarily to the overall increase in the level of
operations in the six months ended September 30, 1998. With the inclusion of the
operating expenses of Optimum and the related amortization of the costs related
to the Optimum Acquisition, operating expenses as a percentage of sales
decreased to 19.6% compared to 21.2% for the prior year six month period ended
September 30, 1997.
Interest Expense/Income. For the quarter and six month periods
ended September 30, 1998, the Company incurred net interest expense of
approximately $128,000 and $299,000 respectively, on its bank borrowings and
notes issued in conjunction with the Optimum Acquisition. For the comparable
quarter and six
9
<PAGE>
month period of the prior fiscal year, the Company had earned interest income of
approximately $25,000 and $65,000 respectively, from short term cash equivalent
investments.
Provision For Income Taxes. Provisions for federal, state and
local income taxes for the quarter and six month period ended September 30, 1998
were based upon the Company's estimated effective tax rate for the fiscal year.
In comparison, for the prior year quarter and six month period ended September
30, 1997, provisions for federal, state and local income taxes were based upon
the Company's effective tax rate for the fiscal year and included $110,000 of
deferred tax benefits expected to be realized arising from the reduction of the
valuation allowance for deferred tax assets.
Net Income. As a result of the items discussed above, net
income for the quarter ended September 30, 1998 was $665,000 compared to net
income of $423,000 for the comparable prior year quarter and net income for the
six months ended September 30, 1998 was $1,631,000 compared to $985,000 for the
six months ended September 30, 1997.
Liquidity and Capital Resources.
For the six months ended September 30, 1998, all of the
Company's activities were funded with existing working capital without the need
to further utilize amounts available under its revolving credit bank line. At
September 30, 1998, the Company had cash and cash equivalents totaling
$1,289,000 and working capital of $4,354,000 compared to cash and cash
equivalents of $1,460,000 and working capital of $2,447,000 at March 31, 1998.
Stockholders' equity increased to $12,309,000 primarily as a result of the
Company's net income for the six months ended September 30, 1998.
For the six months ended September 30, 1998, cash provided by
operating activities amounted to $31,000 and cash in the amount of $6,000 was
received from exercise of stock options, cash used to purchase fixed assets
totaled $189,000 and additional cash used related to the Optimum Acquisition
amounted to $18,000, thereby resulting in a decrease in cash of $171,000.
The Company believes that its current working capital
position, together with the current unused amount available under its revolving
credit bank line, is sufficient to support its existing and anticipated levels
of operation and that its working capital will continue to increase as the
Company continues to maintain profitable operations, thereby negating the need
for additional external financing. To the extent that the Company should be
required to seek external equity or additional debt financing, there can be no
assurance that the Company will be able to obtain any such additional funding.
Other Matters.
The Company has evaluated its computer systems and has
determined that its existing computer systems will require an insignificant
amount of effort and cost to make them Year 2000 compliant. Accordingly, the
Company plans to modify or replace portions of its software prior to March 31,
1999, so that its computer systems will function properly with respect to dates
in the year 2000 and thereafter. As the Company's computer systems are PC based,
the modifications or replacements necessary to overcome the year 2000 issue are
not anticipated to result in any material incremental costs. The Company
anticipates that any additional expenditures to complete the implementation will
be funded
10
<PAGE>
from cash flow generated by operations. With conversions to new software and
modifications to existing software, the year 2000 issue should not pose
significant operational problems for the Company. The Company does not have any
computer systems which are interdependent with the computer systems of its
vendors and others with which the Company transacts business. The Company cannot
predict the effect of the Year 2000 problem on the vendors and others with which
the Company transacts business and there can be no assurance that the effect of
the Year 2000 problem on such entities will not have a material adverse effect
on the Company's business, operating results and financial position.
Forward-Looking Statements.
This report contains or incorporates by reference
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, that are based on beliefs of the Company's management as well as
assumptions made by and information currently available to the Company's
management. When used in this report, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should,"
"will," the negative thereof or other variations thereon or comparable
terminology are intended to identify forward-looking statements. Such statements
reflect the current views of the Company with respect to future events based on
currently available information and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in those
forward-looking statements. Factors that could cause actual results to differ
materially from the Company's expectations are set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1998 under "Risk
Factors", including but not limited to "Dependence on Key Personnel,"
"Customers," "Competition," "Risk Associated with Acquisitions," "Expansion
Risk," "Control by Executive Officers and Directors," "Outstanding Indebtedness;
Security Interest," "Shares Eligible for Future Sale," and "Lack of Dividend
History." Other factors may be described from time to time in the Company's
public filings with the Securities and Exchange Commission, news releases and
other communications. The forward-looking statements contained in this report
speak only as of the date hereof. The Company does not undertake any obligation
to release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
11
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Items 1, 2, 3 and 5. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
The Annual Meeting of Stockholders of the Company was held on
September 15, 1998 at the Marriott Hotel, 101 James Doolittle Boulevard,
Uniondale, New York 11553 at 10:00 a.m. A majority of the Company's voting
shares were present at the meeting, either in person or by proxy.
At such meeting, the stockholders elected Paul A. Amershadian,
John P. Benfield, Donald A. Bernard, Herbert M. Gardner, Joseph S. Hellman and
Thomas E. Lachenman to the Board of Directors. All of these individuals will
serve on the Board of Directors until the next annual meeting of stockholders
and until their successors are duly elected and qualified.
Directors Votes For Votes Abstained
--------- --------- ---------------
Paul A. Amershadian 3,821,952 13,750
John P. Benfield 3,821,952 13,750
Donald A. Bernard 3,821,952 13,750
Herbert M. Gardner 3,821,952 13,750
Joseph S. Hellman 3,821,952 13,750
Thomas E. Lachenman 3,821,952 13,750
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits.
Exhibit No. Description of Exhibits
----------- -----------------------
27 Financial Data Schedule
(b) Reports on Form 8-K. None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INMARK ENTERPRISES, INC.
Dated: November 12, 1998 By: /s/ John P. Benfield
----------------------------------
John P. Benfield, President
(Principal Executive Officer)
and Director
Dated: November 12, 1998 By: /s/ Donald A. Bernard
-----------------------------------
Donald A. Bernard, Executive Vice
President and Chief Financial Officer
(Principal Accounting and Financial
Officer) and Director
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000886475
<NAME> INMARK ENTERPRISES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1998
<PERIOD-END> Sep-30-1998
<CASH> 1,289,051
<SECURITIES> 0
<RECEIVABLES> 16,539,906
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,681,181
<PP&E> 1,195,791
<DEPRECIATION> 273,500
<TOTAL-ASSETS> 36,136,968
<CURRENT-LIABILITIES> 14,327,572
<BONDS> 9,500,000
0
0
<COMMON> 4,480
<OTHER-SE> 12,304,916
<TOTAL-LIABILITY-AND-EQUITY> 36,136,968
<SALES> 22,403,002
<TOTAL-REVENUES> 22,403,002
<CGS> 14,995,703
<TOTAL-COSTS> 14,995,703
<OTHER-EXPENSES> 4,389,916
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 298,553
<INCOME-PRETAX> 2,718,830
<INCOME-TAX> 1,088,000
<INCOME-CONTINUING> 1,630,830
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,630,830
<EPS-PRIMARY> .36
<EPS-DILUTED> .29
</TABLE>
