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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(CHECK ONE): /X/Form 10-K / /Form 20-F / /Form 11-K / /Form 10-Q / /Form N-SAR
For Period Ended: December 31, 1998
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/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended:
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READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
EDUCATIONAL INSIGHTS, INC.
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Full Name of Registrant
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Former Name if Applicable
16941 Keegan Avenue
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Address of Principal Executive Office (Street and Number)
Carson, California 90746
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City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
/X/ will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period:
At December 31, 1998, Educational Insights, Inc. (the Company) was in
violation of certain of its loan covenants for which the Company obtained
waivers at year-end. However, due to the nature of said covenants, the
Company anticipates being in default during 1999 which would result in the
long-term debt becoming callable during the year. Because of this, the
Company is currently in negotiation with Union Bank of California (the Bank)
to waive certain loan covenants or amend the agreement betweeen the Bank and
the Company to cure such defaults. The Company hopes to obtain a favorable
resolution within the extension period thereby obviating the necessity of
reclassifying its long-term debt as a current liability in this 10-K filing.
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (6/94)
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PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Rober M. Steinberg (310) 785-5322
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s). /X/ Yes / / No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? /X/ Yes / / No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
See the Company press release dated March 5, 1999 attached as Exhibit 99(a)
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Educational Insights, Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date March 31, 1999 By /s/ Stephen E. Billis
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Stephen E. Billis
Chief Financial Officer
(Principal Financial Officer)
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
____________________________________ATTENTION__________________________________
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
_______________________________________________________________________________
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule O-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
(Section 232.13(b) of this chapter).
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16941 KEEGAN AVENUE
[LOGO] CARSON, CA 90746
PHONE: (310) 884-2000
FAX: (310) 884-2013
FOR IMMEDIATE RELEASE CONTACTS: Stephen E. Billis,
Controller, or
Theodore J. Eischeid,
Chief Executive Officer
(310) 884-2000
EDUCATIONAL INSIGHTS REPORTS
FOURTH QUARTER AND YEAR-END RESULTS
Carson, CA -- March 5, 1999 -- Educational Insights, Inc. (NASDAQ:EDIN)
announced today that consolidated revenue was $12,354,000 for the quarter
ended December 31, 1998, compared to $12,722,000 for the same period one year
ago, a decrease of 2.9%. Consolidated revenue was $39,235,000 for the fiscal
year ended December 31, 1998 an increase of 2.1% or $793,000 compared to
$38,442,000 for the prior fiscal year.
The Company incurred a net loss of $1,679,000 or $0.24 per share -- diluted
for the quarter ended December 31, 1998 compared to net income of $547,000 or
$0.08 per share -- diluted for the same period in 1997. The net loss for the
year ended December 31, 1998 was $2,284,000 or $0.32 per share -- diluted
compared to net income of $65,000 or $0.01 per share -- diluted for 1997.
The Company stated that the decline in income was due primarily to a series
of charges against income in the quarter ended December 31, 1998. The
charges, totaling approximately $2,600,000 (before taxes), principally relate
to excess inventory and recent decisions to discontinue certain low volume
product lines as well as charges relating to certain organizational changes.
Included in the above are approximately $500,000 in charges relating to the
Big Talk project that was recently cancelled due to unresolved technical
problems and is being completely redesigned.
Gross profit as a percentage of sales decreased 7.9 percentage points to
42.3% in 1998 from 50.2% in 1997. This reduction was primarily due to the
write-off of certain inventory considered excess or obsolete and to an
increase in the proportion of lower margin sales in the Company's ExploraToy
division where sales increased by approximately 69%.
Combined operating expenses including sales and marketing, warehousing and
distribution, research and development and general and administrative expense
increased $879,000 to $19,944,000 for the year ended December 31, 1998 from
$19,065,000 for the year ended December 31, 1997. The increase in these
expenses was due primarily to an increase in research and development
expenses resulting from the charges relating to the aforementioned Big Talk
project as well as an increase in general and administrative expenses,
primarily compensation expenses, relating to severance costs associated with
the aforementioned organizational changes
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and costs associated with the recruitment and employment of the Company's new
Chief Executive Officer.
Ted Eischeid, the Company's President and CEO stated "We are obviously in a
period of transition but we have already made a number of changes that I am
confident will enhance the Company's performance."
Educational Insights, Inc. designs, develops and markets a variety of
educational products, including electronic learning aids, electronic games,
activity books, science kits, board games and other materials for use in both
schools and homes. The Company's product line, including its most popular
product, GeoSafari, appeals to children as well as students ranging from
pre-kindergarten to adult and is designed to make learning fun.
Except for the historical information in this press release, the above
statements contain forward-looking statements that involve a number of risks
and uncertainties included, but not limited to, continued successful
development and acceptance of new products, dependence on off-shore contract
manufacturers, competitive factors, dependence on new distribution channels,
dependence on education funding by Federal, State and local governments,
dependence on key development and marketing personnel, general economic
conditions and the risk factors listed from time-to-time in the Company's
filings with the SEC.
