- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 December 31, 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 February 10, 1999, 4,513,481 shares of the Registrant's Common Stock, par
value $.001 a share, were outstanding.
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<PAGE>
INDEX
INMARK ENTERPRISES, INC. AND SUBSIDIARIES
<TABLE>
<S> <C>
Page
----
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Consolidated Financial Statements of Inmark Enterprises, Inc. (Unaudited)
Consolidated Balance Sheets - December 31, 1998 and March 31, 1998 3
Consolidated Statements of Operations - Three month and nine month periods
ended December 31, 1998 and December 31, 1997 4
Consolidated Statement of Stockholders' Equity - Nine month period ended
December 31, 1998 5
Consolidated Statements of Cash Flows - Nine month periods ended
December 31, 1998 and December 31, 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, 4 and 5. Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
27 Financial Data Schedule
(b) Reports on Form 8-K. None.
SIGNATURES 13
- ----------
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
INMARK ENTERPRISES, INC.
Consolidated Balance Sheets
December 31, 1998 and March 31, 1998
<TABLE>
<S> <C> <C>
December 31, 1998 March 31, 1998*
----------------------- --------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 993,043 1,459,909
Contract receivables 21,902,380 10,933,241
Deferred tax asset 83,442 83,442
Prepaid taxes 452,291 452,291
Prepaid expenses and other current assets 564,056 163,042
----------------- -----------------
Total current assets 23,995,212 13,091,925
----------------- -----------------
Furniture, fixtures and equipment, net 1,323,141 815,257
Goodwill, net 19,226,055 16,534,950
Deferred financing costs 105,825 124,500
Note receivable from officer 225,000 225,000
Other assets 64,744 26,757
----------------- -----------------
Total assets 44,939,977 30,818,389
================= =================
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable 2,546,389 1,601,751
Accrued job costs 14,313,908 8,335,745
Accrued compensation 131,814 314,876
Other accrued liabilities 961,100 298,791
Due to affiliate 287,734 -
Accrued taxes payable 800,685 94,260
----------------- -----------------
Total current liabilities 19,041,630 10,645,423
Notes payable bank - long term 10,000,000 7,000,000
Subordinated notes payable - long term 2,500,000 2,500,000
----------------- -----------------
Total liabilities 31,541,630 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 4,513,481 shares at
December 31, 1998 and 4,475,326 shares at March 31, 1998 4,513 4,475
Additional paid-in capital 5,387,458 5,131,896
Retained earnings 8,006,376 5,536,595
----------------- -----------------
Total stockholders' equity 13,398,347 10,672,966
----------------- -----------------
Total liabilities and stockholders' equity 44,939,977 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>
INMARK ENTERPRISES, INC.
Consolidated Statements of Operations
Three Month and Nine Month Periods Ended December 31, 1998 and December 31, 1997
(Unaudited)
<TABLE>
Three Months Ended Nine Months Ended
December 31, December 31,
<S> <C> <C> <C> <C>
1998 1997 1998 1997
------------------- ------------------- ------------------ ---------------
Sales $ 11,334,802 7,210,047 $ 33,737,804 18,054,383
Direct expenses 7,686,441 4,967,101 22,682,144 12,260,535
--------------- --------------- --------------- -----------
Gross profit 3.648,361 2,242,946 11,055,660 5,793,848
--------------- --------------- --------------- -----------
Salaries 1,002,072 800,472 3,173,394 2,182,369
Selling, general and administrative expense 1,082,854 487,297 3,301,448 1,404,149
--------------- --------------- --------------- -----------
Total operating expenses 2,084,926 1,287,769 6,474,842 3,586,518
--------------- --------------- --------------- -----------
Operating income 1,563,435 955,177 4,580,818 2,207,330
Interest income (expense), net (165,979) 44,480 (464,523) 109,007
--------------- --------------- --------------- -----------
Income before income taxes 1,397,456 999,657 4,116,295 2,316,337
Provision for income taxes 558,514 468,744 1,646,514 800,000
--------------- --------------- --------------- -----------
Net income $ 838,942 530,913 $ 2,469,781 1,516,337
=============== =============== =============== ===========
Net income per common and common equivalent share:
Basic $ .19 $ .15 $ .55 $ .43
=============== =============== =============== ===========
Diluted $ .15 $ .11 $ .44 $ .34
=============== =============== =============== ===========
Weighted average number of common and common equivalent shares outstanding:
Basic 4,481,835 3,549,064 4,479,067 3,546,148
=============== =============== =============== ===========
Diluted 5,597,219 4,673,335 5,652,781 4,491,468
=============== =============== =============== ===========
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 $ 838,942 530,913 $ 2,469,781 1,516,337
Reconciliation of weighted average shares used for basic and diluted computation
is as follows:
Weighted average shares - Basic 4,481,835 3,549,064 4,479,067 3,546,148
Dilutive effect of options and warrants 1,115,384 1,124,271 1,173,714 945,320
--------------- --------------- --------------- -----------
Weighted average shares - Diluted 5,597,219 4,673,335 5,652,781 4,491,468
=============== =============== =============== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
INMARK ENTERPRISES, INC.
Consolidated Statement of Stockholders' Equity
Nine months ended December 31, 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Total
Common Stock Additional Retained Stockholders'
par value $.001 Paid-in 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 8,155 $ 8 5,592 - 5,600
Acquisition of U.S. Concepts, Inc. 30,000 $ 30 249,970 - 250,000
Net income - - - 2,469,781 2,469,781
----------- --------- ---------------- ------------ ------------------
Balance, December 31, 1998 4,513,481 $ 4,513 $ 5,387,458 $ 8,006,376 $ 13,398,347
=========== ========= ================ ============ ==================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
INMARK ENTERPRISES, INC.
Consolidated Statements of Cash Flows
Nine Months Ended December 31, 1998 and 1997
(Unaudited)
<TABLE>
<S> <C> <C>
1998 1997
--------------------- ---------------------
Cash flows from operating activities:
Net income $ 2,469,781 1,516,337
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 815,271 270,608
Deferred income taxes - 504,000
Changes in operating assets and liabilities:
Increase in contract receivables (10,251,061) (2,653,631)
Increase in prepaid expenses and other assets (314,141) (39,151)
Decrease in accounts payable (143,581) (246,719)
Increase in accrued job costs 5,978,163 2,559,939
Increase in other accrued liabilities 536,692 63,983
Decrease in accrued compensation (183,062) (126,653)
Increase in accrued taxes payable 706,425 -
------------------ -----------------
Net cash (used in) provided by operating activities (385,513) 1,848,713
------------------ -----------------
Cash flows from investing activities:
Purchases of fixed assets (462,505) (34,504)
Costs related to purchase of Optimum Group, Inc. and U.S.
Concepts, Inc., net of cash acquired (2,624,448) -
------------------ -----------------
Net cash used in investing activities (3,086,953) (34,504)
------------------ -----------------
Cash flows from financing activities:
Proceeds from exercise of stock options 5,600 6,037
Proceeds from bank borrowings 3,000,000 -
------------------ -----------------
Net cash provided by financing activities 3,005,600 6,037
------------------ -----------------
Net (decrease) increase in cash (466,866) 1,820,246
Cash and cash equivalents at beginning of period 1,459,909 1,712,751
------------------ -----------------
Cash and cash equivalents at end of period $ 993,043 3,532,997
================== =================
Supplemental disclosure:
Interest paid during the period $ 443,970 -
================== =================
Income tax paid during the period $ 964,933 163,451
================== =================
Noncash investing and financing activity:
Value of 30,000 shares of common stock issued related to
purchase of U.S. Concepts, Inc. $ 250,000 -
================== =================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE>
Inmark Enterprises, Inc. and Subsidiaries
Notes to the Unaudited Consolidated Financial Statements
December 31, 1998 and 1997
(1) Basis of Presentation
---------------------
The interim financial statements of Inmark Enterprises, Inc. (the
"Company") for the three and nine month periods ended December 31, 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 nine month periods ended December 31, 1998
are not necessarily indicative of the results for a full year.
On December 29, 1998, a wholly-owned subsidiary of the Company,
acquired the business conducted by U.S. Concepts, Inc. for a purchase
price consisting of $1,410,000 in cash, 30,000 shares of newly issued
common stock of the Company valued at $250,000 and the assumption of
approximately $1,700,000 of liabilities and debt. In addition, during
the four year period subsequent to December 29, 1998, to the extent
U.S. Concepts achieves specified pre-tax earnings, an additional amount
up to $2,500,000 could be payable. Up to 50% of any such additional
amount payable, at the option of the recipient, may be paid in shares
of the Company's common stock. The acquisition has been accounted for
as a purchase by the Company whereby the excess of the purchase price
over the fair value of the net assets acquired of $3,329,000 has been
classified as goodwill. The cash portion of the purchase price was
borrowed from amounts available under the Company's revolving line of
credit. Subsequent to December 31, 1998, the Company executed an
amendment to its existing loan facility with its bank pursuant to which
the principal amount available under the revolving loan portion of the
credit facility was increased from $5,000,000 to $7,000,000 for the
period from January 14, 1999 to and including December 31, 1999. After
December 31, 1999, the principal amount available under the revolving
loan portion of the credit facility will be reduced to $5,000,000 for
the balance of such credit facility.
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
------------------
Earnings per share of common stock for the three and nine month periods
ended December 31, 1998 has been calculated according to the guidelines
of Statement No. 128 "Earnings per Share" and earnings per share of
common stock for the three and nine month periods ended December 31,
1997 have been restated to conform with Statement No. 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 on May 14, 1998.
Basic earnings per share for the three and nine month periods 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 nine
month periods have been computed
7
<PAGE>
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 nine month periods
ended December 31, 1998 and 1997 is based upon the Company's estimated
effective tax rate for that year. The provision for income taxes in
1997 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.
-------------------------
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 for the three and nine
month periods ended December 31, 1998 reflect the consolidated operations of the
Company and Optimum and exclude the operations of U.S. Concepts, whereas the
operations for the three and nine month periods ended December 31, 1997 are that
of the Company excluding U.S. Concepts and Optimum.
Results of Operations
Sales. The Company's sales for the quarter ended December 31,
1998 were $11,335,000, inclusive of $3,053,000 of sales of Optimum, compared to
the Company's sales of $7,210,000 for the prior year quarter ended December 31,
1997, an increase of $4,125,000 or 57.2%. Sales for the nine months ended
December 31, 1998 were $33,738,000, inclusive of $9,226,000 of sales of Optimum,
compared to sales of $18,054,000 for the nine months ended December 31, 1997, an
increase of $15,684,000 or 86.9%. Other than the increase in sales attributable
to Optimum, the additional increase in sales for both the quarter and nine month
period ended December 31, 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 nine month period.
8
<PAGE>
Direct Expenses. Direct expenses for the quarter ended
December 31, 1998 were $7,686,000, or 67.8% of sales, inclusive of $2,086,000 of
direct expenses of Optimum, compared to $4,967,000, or 68.9% of sales, for the
comparable prior year quarter, an increase of $2,719,000 or 54.7%. Direct
expenses for the nine months ended December 31, 1998 were $22,682,000, inclusive
of $5,787,000 of direct expenses of Optimum, or 67.2% of sales, compared to
$12,261,000, or 67.9% of sales, for the comparable prior year period, an
increase of $10,421,000 or 85%. Other than the increase in direct expenses
attributable to Optimum, the additional increase in the amount of direct
expenses for both the quarter and nine month period December 31, 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 nine month period ended December 31, 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 nine month periods.
As a result of these changes in sales and direct expenses,
gross profit for both the quarter and nine month periods ended December 31, 1998
increased by $1,406,000 and $5,262,000 compared to the prior year respective
periods, thereby amounting to $3,649,000 and $11,056,000 for the quarter and
nine month periods ended December 31, 1998.
Operating Expenses. Operating expenses for the quarter ended
December 31, 1998 increased by $797,000 to $2,085,000 compared to $1,288,000 for
the quarter ended December 31, 1997. Operating expenses for the nine months
ended December 31, 1998 increased by $2,888,000 to $6,475,000 compared to
$3,587,000 for the comparable prior year nine month period. Operating expenses
as a percentage of sales were 18.4% and 17.9%, respectively, for the quarters
ended December 31, 1998 and December 31, 1997 and 19.2% and 19.9%, respectively,
for the nine month periods ended December 31, 1998 and 1997.
The increase in operating expenses for the quarter ended
December 31, 1998 was primarily the result of (A) the inclusion of $681,000 of
operating expenses of Optimum consisting of approximately (i) $212,000 in
salaries, bonuses and related employee payroll expenses and (ii) $469,000 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 $116,000 related primarily to the overall increase in the level of
operations in the quarter ended December 31, 1998. The increase in operating
expenses for the nine months ended December 31, 1998 was primarily the result of
(A) the inclusion of $2,211,000 of operating expenses of Optimum consisting of
approximately (i) $822,000 in salaries, bonuses and related employee payroll
expenses and (ii) $1,389,000 of selling, general and administrative expenses
which included approximately $450,000 of amortization of goodwill and deferred
financing costs associated with the Optimum Acquisition and (B) with respect to
the Company, an increase of approximately $677,000 related primarily to the
overall increase in the level of operations in the nine months ended December
31, 1998.
Interest Expense/Income. For the quarter and nine month
periods ended December 31, 1998, the Company incurred net interest expense of
approximately $166,000 and $465,000 respectively, on its bank borrowings and
notes issued in conjunction with the Optimum Acquisition. For the comparable
quarter and nine month period of the prior fiscal year, the Company had earned
interest income of approximately $44,000 and $109,000 respectively, from short
term cash equivalent investments.
Provision For Income Taxes. Provisions for federal, state and
local income taxes for the quarter and nine month period ended December 31, 1998
were based upon the Company's estimated effective tax rate for the fiscal year.
In comparison, for the prior year quarter and nine month period ended December
31, 1997, provisions for federal, state and local income taxes were based upon
the Company's effective tax rate for the fiscal
9
<PAGE>
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 December 31, 1998 was $839,000 compared to net
income of $531,000 for the comparable prior year quarter and net income for the
nine months ended December 31, 1998 was $2,470,000 compared to $1,516,000 for
the nine months ended December 31, 1997.
Liquidity and Capital Resources.
For the nine months ended December 31, 1998, the Company's
activities were funded with existing working capital and proceeds from
borrowings under the Company's revolving credit bank line. At December 31, 1998,
the Company had cash and cash equivalents totaling $993,000 and working capital
of $4,954,000 compared to cash and cash equivalents of $1,460,000 and working
capital of $2,447,000 at March 31, 1998. Stockholders' equity increased by
$2,725,000 to $13,398,000 primarily as a result of the Company's $2,470,000 net
income for the nine months ended December 31, 1998 and the issuance of 30,000
shares of the Company's common stock, valued at $250,000 for the purchase of
U.S. Concepts, Inc.
For the nine months ended December 31, 1998, (i) primarily as
a result of the combined increase in both billed and unbilled contract
receivables, cash used in operating activities amounted to $386,000; (ii) cash
used in investing activities amounted to $3,086,000 and consisted of $2,624,000
related primarily to the purchase of U.S. Concepts, Inc. and $463,000 related to
the purchase of equipment and leasehold improvements with respect to the
relocation of the Company's office; and (iii) cash provided by financing
activities amounted to $3,006,000 and consisted of $3,000,000 of Company
borrowings under its revolving credit bank line and $6,000 from the exercise of
stock options. As a result of the net effect of the aforementioned, the
Company's cash and cash equivalents decreased $467,000 for the nine months ended
December 31, 1998.
To satisfy the cash requirements of the December 29, 1998
purchase of U.S. Concepts, the Company utilized the balance of bank borrowings
then available under its revolving credit bank line which resulted in the
Company's notes payable to its bank to increase to $10 million at December 31,
1998. To provide for short term financing needs, on January 14, 1999, the
Company executed an amendment to its existing loan facility with its bank
pursuant to which the principal amount available under the revolving loan
portion of the credit facility was increased from $5,000,000 to $7,000,000 for
the period from January 14, 1999 to and including December 31, 1999. After
December 31, 1999, the principal amount available under the revolving loan
portion of the credit facility will be reduced to $5,000,000 for the balance of
such credit facility.
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. 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.
10
<PAGE>
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 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, 4 and 5. Not Applicable.
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: February 10, 1999 By: /s/ John P. Benfield
------------------------------------------------
John P. Benfield, President
(Principal Executive Officer)
and Director
Dated: February 10, 1999 By: /s/ Donald A. Bernard
------------------------------------------------
Donald A. Bernard, Executive Vice
President and Chief Financial Officer
(Principal Accounting and Financial
Officer) and Director
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000886475
<NAME> INMARK ENTERPRISES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1998
<PERIOD-END> Dec-31-1998
<CASH> 993,043
<SECURITIES> 0
<RECEIVABLES> 21,902,380
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,995,212
<PP&E> 1,904,782
<DEPRECIATION> 581,641
<TOTAL-ASSETS> 44,939,977
<CURRENT-LIABILITIES> 19,041,630
<BONDS> 0
0
0
<COMMON> 4,513
<OTHER-SE> 13,393,834
<TOTAL-LIABILITY-AND-EQUITY> 44,939,977
<SALES> 33,737,804
<TOTAL-REVENUES> 33,737,804
<CGS> 22,682,144
<TOTAL-COSTS> 22,682,144
<OTHER-EXPENSES> 6,474,842
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 464,523
<INCOME-PRETAX> 4,116,295
<INCOME-TAX> 1,646,514
<INCOME-CONTINUING> 2,469,781
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,469,781
<EPS-PRIMARY> .55
<EPS-DILUTED> .44
</TABLE>
