SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED SEPTEMBER 30,1999 COMMISSION FILE NO.0-20406
EZCONY INTERAMERICA INC.
(Exact Name of Registrant as Specified in Its Charter)
BRITISH VIRGIN ISLANDS NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
CRAIGMUIR CHAMBERS, P.O. BOX 71,
ROAD TOWN, TORTOLA BRITISH VIRGIN ISLANDS
(Address of Principal Executive Offices) (Country)
Registrant's telephone number, including area code:
(507) 441-6566 (PANAMA)
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 the filing
requirements for at least the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
At November 1, 1999 there were outstanding:
4,510,000 common shares, no par value
1
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
PAGE
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
September 30, 1999 and December 31, 1998........................ 3
Condensed Consolidated Statements of Operations
and Accumulated Deficit
Three Months Ended September 30, 1999 and 1998.................. 4
Condensed Consolidated Statements of Operations
and Accumulated Deficit
Nine Months Ended September 30, 1999 and 1998.................... 5
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1999 and 1998................... 6
Notes to Condensed Consolidated Financial Statements.............. 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS............................... 8
PART II - OTHER INFORMATION
Item 3. Legal Proceedings................................................ 12
Item 4. Submission of Matters to a Vote of Security Holders.............. 12
Item 5. Other Information................................................ 12
Item 6. Exhibits and Reports on Form 8-K.................................. 13
Signatures ............................................................... 14
2
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 407,575 $ 1,253,073
Trade accounts receivable, net 19,131,005 19,268,099
Due from directors, officers and employees, net 477,014 347,044
Inventories 1,661,345 2,218,369
Prepaid expenses and other current assets 1,255,480 664,429
Restricted cash 4,160,633 4,491,914
------------ ------------
Total current assets 27,093,052 28,242,928
Property and equipment, net 4,196,025 4,295,643
Other assets 77,004 92,281
------------ ------------
Total assets $ 31,366,081 $ 32,630,852
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 331,476 $ 444,701
Notes and acceptances payable 13,636,315 19,079,097
Accounts payable 11,066,978 6,453,328
Accrued expenses and other current liabilities 113,131 657,138
------------ ------------
Total current liabilities 25,147,900 26,634,264
Long-term debt 2,644,942 2,732,386
------------ ------------
Total liabilities 27,792,842 29,366,650
------------ ------------
Shareholders' equity:
Common stock, no par value; 15,000,000 shares
authorized; 4,510,000 shares issued
and outstanding 12,954,723 12,954,723
Accumulated deficit (9,381,484) (9,690,521)
------------ ------------
Total shareholders' equity 3,573,239 3,264,202
------------ ------------
Total liabilities & shareholders'equity $ 31,366,081 $ 32,630,852
============ ============
</TABLE>
3
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net sales $ 15,756,239 $ 24,954,125
Cost of sales 14,584,859 23,355,821
------------ ------------
Gross profit 1,171,380 1,598,304
Selling, general and administrative expenses 871,551 2,934,632
------------ ------------
Operating income (loss) 299,829 (1,336,328)
------------ ------------
Other income (expenses):
Interest income 86,576 93,604
Interest expense (421,726) (767,279)
Other 143,731 5,802
------------ ------------
(191,419) (667,873)
------------ ------------
Income (Loss) from continuing operations 108,410 (2,004,201)
------------ ------------
NET INCOME (loss) 108,410 (2,004,201)
Accumulated deficit, beginning of period (9,489,894) (7,670,385)
------------ ------------
Accumulated deficit, end of period (9,381,484) $ (9,674,586)
============ ============
Income (Loss)per common share - basic and assuming dilution:
Income (Loss) from continuing operations $ 0.02 $ (0.44)
Loss from discontinued operations -- --
------------ ------------
Net Income (loss) $ 0.02 $ (0.44)
============ ============
Weighted average number of common shares
outstanding - basic and assuming dilution 4,510,000 4,510,000
============ ============
</TABLE>
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net sales $ 48,866,954 $ 90,687,109
Cost of sales 44,989,358 85,007,335
------------ ------------
Gross profit 3,877,596 5,679,774
Selling, general & administrative expenses 2,744,537 6,814,545
------------ ------------
Operating income 1,133,059 (1,134,771)
------------ ------------
Other income (expenses):
Interest income 250,840 385,169
Interest expense (1,292,140) (2,312,090)
Other 217,278 133,792
------------ ------------
(824,022) (1,793,129)
------------ ------------
Profit (Loss) from continuing operations 309,037 (2,927,900)
------------ ------------
NET PROFIT (LOSS) 309,037 (2,927,900)
Accumulated deficit, beginning of period (9,690,521) (6,746,686)
------------ ------------
Accumulated deficit, end of period (9,381,484) $ (9,674,586)
============ ============
Income (Loss) per common share - basic and assuming dilution:
Income (Loss) from continuing operations 0.07 (0.65)
------------ ------------
Net Income (loss) $ 0.07 $ (0.65)
============ ============
Weighted average number of common shares
outstanding - basic & assuming dilution 4,510,000 4,510,000
============ ============
</TABLE>
5
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET PROFIT (LOSS ) $ 309,037 $(2,927,900)
Reconciliation of net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 160,892 206,561
Provision for doubtful accounts 489,283 2,204,223
Provision for restructuring charges 0 440,979
(Gain) on sale of equipment (10,750) (1,332)
CHANGES IN OPERATING ASSETS AND LIABILITIES:
(Increase) Decrease in trade
accounts receivable (352,189) 6,239,887
Increase in due from directors,
officers and employees, net (129,970) (101,583)
Decrease in inventories 557,024 3,742,827
(Increase) Decrease in prepaid
expenses and other current assets (591,051) 456,237
Decrease (Increase) in other assets 15,277 (61,966)
Increase (decrease) in accounts payable 4,613,650 (5,991,041)
Decrease in accrued expenses and other
current liabilities (544,007) (758,248)
----------- -----------
Net cash provided from operations $ 4,517,196 3,448,644
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in restricted cash net 331,281 2,826,858
Aquisition of equipment (76,304) (192,910)
Proceeds from sale of equipment 25,780 11,750
----------- -----------
Net cash provided by investing activities 280,757 2,645,698
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) Borrowings of notes and
acceptances payable, net (5,442,782) (6,091,255)
Repayment of long-term debt (200,669) (152,782)
----------- -----------
Net cash used in financing activities (5,643,451) (6,244,037)
----------- -----------
Net(decrease)in cash and cash equivalents (845,498) (149,695)
Cash and cash equivalents at beginning of period 1,253,073 1,280,887
----------- -----------
Cash & cash equivalents at end of period $ 407,575 $ 1,131,192
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 1,292,140 $ 2,051,319
=========== ===========
</TABLE>
The accompanying notes to condensed consolidated financial statements are
an integral part of these statements.
6
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EZCONY INTERAMERICA INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF FINANCIAL STATEMENT PRESENTATION
In management's opinion, the accompanying unaudited condensed consolidated
financial statements of Ezcony Interamerica Inc. and subsidiaries (the
"Company") contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the Company's financial position and
the results of its operations.
The accompanying unaudited interim condensed consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission for the reporting on Form 10-Q. Pursuant to such rules and
regulations, certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The condensed consolidated
financial statements should be read in conjunction with the Consolidated
Financial Statements and the Notes to Consolidated Financial Statements included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1998.
The accounting policies followed for interim financial reporting are the same as
those disclosed in Note 2 of the Notes to Consolidated Financial Statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998.
(2) USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses during the
reporting period. These estimates primarily relate to the determination of the
allowance for doubtful accounts. The Company's accounts receivable are
concentrated in Latin America where political and economic changes affect the
Company's ability and timing of collections. Additionally, the Company collects
certain receivables on a short-term installment basis. Although these estimates
are based on management's knowledge of current events and actions that it may
undertake in the future, actual results may ultimately differ from these
estimates.
(3) DISCONTINUED OPERATIONS
In the third quarter of 1998, the Company decided to restructure its operations
by closing the facility in the United States and transferring the operations to
the Colon Free Zone, Panama, facilities. The Company recorded restructuring
charges totalling $250,759 to recognize severance and benefits to employees to
be terminated ($45,000), lease obligations ranging from a minimum of $20,800 to
a maximum of $137,259, legal fees ($17,500), and a provision for asset
impairment ($51,000).
(4) EARNINGS PER COMMON SHARE
Basic earnings or loss per common share is computed by dividing income or loss
available to common shareholders by the weighted average number of common shares
outstanding. Diluted earnings or loss per common share includes the diluting
effect of stock options and warrants. For the three and nine months ended
September 30, 1998, the effect of stock options and warrants were not included
in the computation because such inclusion would have been antidilutive.
7
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Options and warrants to purchase 725,030 shares of common stock at prices
ranging from $0.22 - $4.13 per share were outstanding during the three and nine
months ended September 30, 1999, but were not included in the computation of
diluted EPS because the exercise price was greater than the average market price
of the common shares.
(5) INCOME TAXES
Effective January 1, 1997, all income derived from export operations of
companies operating in the Colon Free Zone are tax exempt. Therefore, the
Company did not record any provision for income taxes for its operations in
Panama. For the three and nine months ended September 30, 1999, the Company did
not record a provision for income taxes for its operations in the United States
of America due to the taxable loss recognized for the period.
(6) LEGAL MATTERS
A former vendor of New World Interactive has filed a civil lawsuit against the
Company and its now defunct subsidiary, New World Interactive, for breach of
contract on licensing agreements previously entered into between New World
Interactive and the former vendor. The lawsuit seeks damages of $90,750 plus
interest along with costs and attorney's fees. New World Interactive has ceased
all operations and does not intend to defend this action. The Company does not
believe that it has any liability for the claims at issue and intends to
vigorously defend against this lawsuit and believes that there is no merit to
the claim asserted against it.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
The "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included herein should be read in conjunction with the Consolidated
Financial Statements, the related Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
NET SALES
Net sales decreased 36.9% to $15.8 million for the three months ended September
30, 1999 from $24.9 miilion for the same period in 1998. The decrease is
primarily attributable to the decreased sales in the Company's existing markets
and also resulting from the turmoil in the economies of Latin America, first
with Brazil, then Ecuador and the political problems in Venezuela and Colombia.
The Company has also continued to reduce its product lines to eliminate slow
selling brand names and carries on a customer and margin selective sales
program.
GROSS PROFIT
Gross profit decreased 26.7% from $1.6 million for the three months ended
September 30, 1998 to $1.2 million for the same period in 1999.
The Company's gross profit margin increased to 7.4% in the three month period
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ended September 30, 1999 compared to 6.4% in the comparable 1998 period. The
increase in primarily attributable to selective sales of merchandise with better
than historic margins. This has meant that the Company has not accepted orders
with lower margins.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased to $871,551 for the three
months ended September 30, 1999, compared to $2.9 million for the same period in
1998.
The decrease in selling, general and administrative expenses is primarily
attributable to the following: (i) decrease in salaries and commissions, (ii)
closing of sales offices (iii) implementation of a severe austerity program to
reduce operating expenses and (iv) benefits of the implementation of the
restructuring program.
INTEREST
Interest income decreased to $86,576 for the three months ended September 30,
1999 compared to $93,604 for the same period in 1998 due to lower average daily
balances of restricted cash in time deposits.
Interest Expense decreased to $421,726 for the three months ended September
30,1999 compared to $767,279 for the same period in 1998 as a result of the
reduction of some bank's credit lines.
PROFIT FROM CONTINUING OPERATIONS
Profit from continuing operations was $108,410 ($0.02 per share) for the three
months ended September 30, 1999, compared to loss from continuing of
($2,004,201) ($0.44 per share) for the three months ended September 30, 1998.
The change was primarily due to a decrease in selling, general and
administrative expenses and interest expenses, and better sales margins
obtained.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
NET SALES
Total net sales decreased 46.1% to $48.9 million for the nine months ended
September 30, 1999, from $90.7 million for the same period in 1998. The decrease
is primarily attributable to the decreased sales in the Company's existing
markets and also resulting from the turmoils in the economies of Latin America,
first with Brazil, then Ecuador and the political problems in Venezuela and
Colombia. The Company has also reduced its product lines to eliminate slow
selling brand names and carries on a customer and margin selective sales
program.
GROSS PROFIT
Gross profit decreased 31.7% to $3.9 million for the nine months ended September
30, 1999 from $5.7 million for the same period in 1998.
The Company's gross profit margin increased to 7.9% in the nine months period
ended September 30, 1999 compared to 6.3% in the comparable 1998 period.The
increase is primarily attributable to a margin selective sales program in
effect.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased $4.1 million or 59.7% to
$2.7 million for the nine months ended September 30, 1999, compared to $6.8
million for the same period in 1998.
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The decrease in selling, general and administrative expenses is primarily
attributable to the following: (i) decrease in salaries and commissions, (ii)
implementation a severe austerity program to reduce operating expenses, (iii)
closing of sales offices, (iv) benefits of the implementation of the
restructuring program.
Major savings were obtained in the following captions:
Salaries and bonuses $1,023,263 (58.4%), commissions $194,873 (52.3%), utilities
and telephones $113,802 (37.0%), rental $72,990 (80.7%), office expenses
$377,709 (70.9%), travel expenses $104,279 (35.2%),insurance $130,532 (57.4%),
warehousing and container movements $101,101 (286%).
INTEREST
Interest income decreased to $250,840 for the nine months ended September 30,
1999 compared to $385,169 for the same period in 1998 due to lower average daily
balances of restricted cash in time deposits.
Interest expense decreased to $1,292,140 for the nine months ended September 30,
1999 compared to $2.3 million for the same period in 1998 as a result of a
programmed reduction of bank credit facilities to conform to the reduced sales
volume.
PROFIT FROM CONTINUING OPERATIONS
Profit from continuing operations was $309,037 ($0.07 per share) for the nine
months ended September 30, 1999, compared to loss from continuing operations of
$2,927,900 ($0.65 per share) for the nine months ended September 30, 1998. The
change was primarily due to the decrease of operating expenses and selective
sales to obtain better sales margins.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically, and will continue to finance its operations
through short-term bank borrowing, trade credit and, to a lesser extent,
internally generated funds.
The Company generated $4.5 million in cash from operating activities for the
nine months ended September 30, 1999. This was primarily due to an increase of
$0.4 million in accounts receivable, $4.6 million increase in accounts payable
and $0.5 million decrease in inventory.
Cash used by investing activities was $0.3 million for the nine months ended
September 30, 1999, attributable to a decrease in restricted cash balances
resulting from decrease in bank credit lines.
Cash used in financing activities was $5.6 million for the nine months ended
September 30, 1999 principally due to repayments of bank borrowing resulting
from the decrease in bank credit lines.
Management believes that the Company's ability to repay its indebtedness must be
achieved primarily through funds generated from its operations. Sales in
existing markets are primarily made on a credit basis as compared to cash basis
Future political and economic changes in the Latin American countries in which
the Company sells, such as the imposition or lifting of exchange controls, may
affect the Company's ability to collect its accounts receivable. Due to the slow
in the economies in which we operate, we have seen a continued delay in payment
of accounts receivable.
From time to time, the Company experiences temporary liquidity problems that are
typically related to the Company's extension of credit to its customers.
Beginning in 1998, the Company has taken measures to decrease the number of days
to collect on its accounts receivable by not shipping merchandise to certain
customers that have significant past due balances and increasing the
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collection efforts of the Company's credit and collection department and sales
force.
At September 30, 1999 the Company had available with five banks an aggregate of
$22 million in bank credit facilities of which $13.7 million was utilized for
bank notes and acceptances payable, $2.9 million for mortgages and $ 5.2million
for stand-by letters of credit.
All of the Company's lines of credit and credit facilities from its various
lenders are "on demand".
The Company intends to consolidate its borrowings with its existing creditors in
an effort to obtain lower interest rates and reduce inventory carrying costs by
factoring its trade accounts receivables which would also limit the Company's
exposure to credit, political and transfer risk. There can be no assurances that
the Company will be able to finance its trade accounts receivable.
The Company continues to have good relationships with its principal suppliers,
Sony, Pioneer and Samsung.
At September 30, 1999, the Company's credit facility with Sony was $2.4 million,
which was partially collateralized by $1.9 million in stand-by letters of
credit. The Company's credit facility with Pioneer at September 30, 1999 was
$4.0 million which was partially collateralized by $1.7 million in stand-by
letters of credit. Credit facilities with Samsung Electronics was $2.6 million
partially collateralized by $600,000 in stand-by letters of credit. Overall
credit facilities from suppliers was $11.4 million at September 30, 1999, of
which $10.8 million was used as at September 30, 1999.
For a variety of political and economic reasons, the import of nonessential
items such as consumer electronics has been restricted or prohibited from time
to time by many Latin American countries through exchange controls, import
quotas and restrictions, tariffs and other means. Accordingly, changes in the
trade policies of Latin American countries affect both the market for the
Company's products as well as the Company's ability to sell its products. The
ability of the Company to have sales growth is greatly dependent on a favorable
economic and political climate in the Latin American countries that it is
currently operating in, the Company's ability to maintain or increase the profit
margins on its sales within the competitive market that it operates in,
availability of payment methods to its customers, and, to a lesser extent,
product availability.
COUNTRY RISK
The Company does a substantial amount of business in Latin America. There are
significant "country risks" which arise in connection with this business,
including those associated with the receipt of payment for goods sold. Colombia,
which represents a significant market for the Company, is a country for which
the United States Government has taken a particular interest in monitoring the
flow of funds. Although the Company believes that payments received currently
comply with all applicable United States Government regulations and laws, there
can be no assurance that forms of payment will not be challenged by the United
States Government, or that business done in Colombia by the Company will not be
materially affected by this government scrutiny.
SEASONALITY
The Company's operations have historically been seasonal, with generally higher
sales in the third and fourth fiscal quarters. Typically, higher third and
fourth quarter sales result from increased sales in anticipation of the
Christmas holiday season. In addition, sales may also vary by fiscal quarter as
a result of the availability of merchandise for sale. Therefore, the results of
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any interim period are not necessarily indicative of the results that might be
expected during a full fiscal year.
YEAR 2000 COMPLIANCE
Many computer programs were written using two digits rather than four digits to
define the applicable year in the twentieth century. Such software may recognize
a date using "00" as the year 1900 rather than the year 2000. The Company has
converted the programs and hardware systems to make them Year 2000 compatible.
The Company's Year 2000 project is comprised of two components - business
applications and equipment.
The business applications component consists of the Company's business computer
systems, as well as the computer systems of third-party suppliers or customers,
whose year 2000 problems could potentially impact the Company. Equipment
exposures consist of personal computers, system servers and telephone equipment
whose year 2000 problems could also impact the Company. The cost of the Year
2000 initiatives is not expected to be material to the Company's results of
operations, financial position or cash flows. Complete Implementation is
expected before November 30, 1999.
FORWARD LOOKING STATEMENTS
From time to time, the Company publishes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including
certain statements in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations," of this Form 10-Q, which relate to such
matters as anticipated financial performance, business prospects, technological
developments, new products and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. Such factors
include, among others: (i) the general availability of credit from its principal
suppliers and banks to the Company, specifically, the continued cooperation of
its major suppliers and its banks to provide credit and, from time to time their
forbearance with regard to repayment; (ii) expansion of the Company's "core"
business into new geographic markets and within its current markets; (iii) the
Company's ability to increase the profit margins on its sales within the
competitive market it operates in; (iv) improvement in the economies of those
foreign countries in which the Company conducts a material amount of business,
including Colombia, Venezuela, Paraguay and Ecuador; and (v) the Company's
ability to factor its accounts receivable.
PART II - OTHER INFORMATION
Item 3. LEGAL PROCEEDINGS
The Company is currently not a party to any material litigation which is not
incidental to the ordinary course of its business operations.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not have any matters submitted to a vote of security holders
during the quarterly period reported in this Form 10-Q.
Item 5. OTHER INFORMATION
The Company's Common Stock was delisted from The Nasdaq Stock Market effective
at the close of business August 5, 1998 and began trading on the OTC Bulletin
Board. The Company was delisted because it was not in compliance with the market
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value of public float and bid price listing requirements and a request for
continued listing pursuant to an exception to these requirements was denied. The
Company was unable to obtain inclusion into The Nasdaq SmallCap Market since the
Company did not meet its minimum market value of public float listing
requirement.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits:
27. Financial Data Schedule
(b) No reports on Form 8K were filed during the quarter ended September
30, 1999.
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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.
EZCONY INTERAMERICA INC.
Date: November 15, 1999 BY: /S/ EZRA COHEN
-------------------------
Ezra Cohen, President and
Chief Executive Officer
Date: November 15,1999 BY: /S/ CARLOS N.GALVEZ
-------------------------
Carlos N. Galvez
Chief Financial Officer
14
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EXHBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 407,575
<SECURITIES> 0
<RECEIVABLES> 29,970,227
<ALLOWANCES> 6,839,222
<INVENTORY> 1,661,345
<CURRENT-ASSETS> 27,093,052
<PP&E> 5,278,570
<DEPRECIATION> 1,082,545
<TOTAL-ASSETS> 31,366,081
<CURRENT-LIABILITIES> 25,147,000
<BONDS> 0
0
0
<COMMON> 12,954,723
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 27,792,842
<SALES> 48,866,954
<TOTAL-REVENUES> 49,335,072
<CGS> 44,989,358
<TOTAL-COSTS> 44,989,358
<OTHER-EXPENSES> 2,744,537
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,292,740
<INCOME-PRETAX> 309,037
<INCOME-TAX> 0
<INCOME-CONTINUING> 309,037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 309,037
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>
