<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
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: 0-23606
EDUCATIONAL INSIGHTS, INC.
(Exact name of registrant as specified in its charter)
California 95-2392545
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
16941 Keegan Avenue
Carson, CA 90746
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 884-2000
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
As of November 3, 2000 there were 7,040,000 shares of common stock outstanding.
Total number of sequential pages: 13 Exhibit Index is on page 13.
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PART I - ITEM 1. FINANCIAL STATEMENTS
EDUCATIONAL INSIGHTS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited, except for December 31, 1999 balance sheet information)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash $ 480 $ 698
Accounts receivable, less allowance for doubtful accounts and sales returns
of $558 in 2000 and $433 in 1999 9,260 8,880
Inventory 12,797 10,492
Income taxes receivable 311
Other receivables 32 30
Prepaid expenses and other current assets 850 663
Deferred income taxes, net 696 904
--------- ---------
Total current assets 24,115 21,978
--------- ---------
PROPERTY AND EQUIPMENT, NET 4,392 4,372
--------- ---------
DEFERRED INCOME TAXES, NET 1,975 732
--------- ---------
OPTION ON INTELLECTUAL PROPERTY 1,000
---------
OTHER ASSETS 647 732
--------- ---------
TOTAL $32,129 $ 27,814
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (including $126 due to shareholder) $ 333 $ 149
Line of credit 8,077 2,761
Accounts payable 3,090 1,595
Accrued expenses 1,584 1,305
--------- ---------
Total current liabilities 13,084 5,810
--------- ---------
LONG TERM DEBT 860 781
--------- ---------
SUBORDINATED NOTE PAYABLE DUE TO SHAREHOLDER 874
---------
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized;
no shares issued
Common stock, no par value; 30,000,000 shares authorized;
7,040,000 shares issued in 2000 and 1999 18,644 18,644
Accumulated other comprehensive income - foreign currency
translation adjustments 113 126
Accumulated deficit/Retained earnings (1,446) 2,453
--------- ---------
Total shareholders' equity 17,311 21,223
--------- ---------
TOTAL $32,129 $ 27,814
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
Page 2 of 13 sequentially numbered pages.
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EDUCATIONAL INSIGHTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
SALES $ 9,898 $13,435 $21,933 $30,109
COST OF SALES 5,807 7,229 12,243 16,085
------------- -------------- ------------- -------------
GROSS PROFIT 4,091 6,206 9,690 14,024
------------- -------------- ------------- -------------
OPERATING EXPENSES:
Sales and marketing 2,124 2,349 5,594 5,724
Warehousing and distribution 582 698 2,134 2,107
Research and development 894 808 3,061 2,632
General and administrative 894 1,061 3,086 2,970
------------- -------------- ------------- -------------
Total operating expenses 4,494 4,916 13,875 13,433
------------- -------------- ------------- -------------
OPERATING INCOME (LOSS) (403) 1,290 (4,185) 591
------------- -------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (216) (174) (426) (363)
Interest income 6 4 32 16
Other income (expense), net (169) 123 (354) (7)
------------- -------------- ------------- -------------
Total other income (expense) (379) (47) (748) (354)
------------- -------------- ------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES (782) 1,243 (4,933) 237
PROVISION (BENEFIT) FOR INCOME TAXES 509 443 (1,034) 95
------------- -------------- ------------- -------------
NET INCOME (LOSS) (1,291) 800 (3,899) 142
------------- -------------- ------------- -------------
OTHER COMPREHENSIVE INCOME (LOSS) -
Foreign currency translation adjustments
(Net of tax of $(3) and $5, $(9) and $(3) for the three-
and nine-month periods ended September 30, 2000 and 1999,
respectively.) (4) 9 (13) (5)
------------- -------------- ------------- -------------
COMPREHENSIVE INCOME (LOSS) $(1,295) $ 809 $(3,912) $ 137
============= ============== ============= =============
Net Income (Loss) Per Share - Basic and Diluted $ (0.18) $ 0.11 $ (0.56) $ 0.02
============= ============== ============= =============
Weighted Average Number of
Common Shares Outstanding - Basic 7,040 7,040 7,040 7,040
============= ============== ============= =============
Weighted Average Number of
Common Shares Outstanding - Diluted 7,040 7,137 7,040 7,141
============= ============== ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
Page 3 of 13 sequentially numbered pages.
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EDUCATIONAL INSIGHTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE-MONTHS ENDED
SEPTEMBER 30,
---------------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(3,899) $ 142
Adjustments to reconcile net loss to net cash
used in operating activities:
Provision for doubtful accounts and sales returns 431 272
Provision for inventory obsolescence 316 373
Depreciation 824 954
Deferred income taxes (1,027) (24)
Changes in operating assets and liabilities:
Accounts receivable (932) (1,767)
Inventory (2,749) (1,028)
Income taxes receivable 311 16
Other receivables (2) 28
Prepaid expenses and other current assets (201) (179)
Other assets 54 (310)
Accounts payable 1,788 948
Accrued expenses 281 434
----------- -----------
Net cash used in operating activities (4,805) (141)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (576) (556)
Purchase option on intellectual property (1,000)
----------- -----------
Net cash used in investing activities (1,576) (556)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in line of credit 5,315 563
Proceeds from issuance of note payable to shareholder 1,000
Repayments of long-term debt (128) (100)
----------- -----------
Net cash provided by financing activities 6,187 463
----------- -----------
Effect of exchange rate changes on cash (24)
----------- -----------
NET INCREASE (DECREASE) IN CASH (218) (234)
CASH, BEGINNING OF PERIOD 698 748
----------- -----------
CASH, END OF PERIOD $ 480 $ 514
=========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 389 $ 373
Income taxes paid $ 111
Cash received from taxes $ (311)
</TABLE>
Page 4 of 13 sequentially numbered pages.
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EDUCATIONAL INSIGHTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The consolidated financial statements of Educational Insights, Inc. (the
"Company") include all of the accounts of the Company and its wholly owned
subsidiary. All significant inter-company balances and transactions have been
eliminated in consolidation.
The interim consolidated financial statements are not audited, but include
all adjustments (including normal recurring adjustments) which are, in the
opinion of management, necessary for a fair representation of the financial
position, results of operations and cash flows for the period.
The consolidated financial statements as presented herein should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto as filed with the Securities and Exchange Commission and included
in the Company's Form 10-K for the year ended December 31, 1999. The Company's
fiscal year ends December 31. The results of operations for the period ended
September 30, 2000, are not indicative of the results that might be expected for
the full fiscal year.
Certain reclassifications have been made to the 1999 amounts to conform
with the current year's presentation.
2. INVENTORY
Inventory consists principally of finished goods held for sale and is
stated at the lower of cost or market. Cost is determined using the first-in,
first-out method.
3. NEW ACCOUNTING STANDARD
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements",
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. Subsequent amendments to SAB 101 deferred its
implementation until the Company's fourth fiscal quarter of 2000. The Company
will adopt SAB 101 and is currently in the process of evaluating the impact, if
any, SAB 101 will have on its financial position or results of operations.
Page 5 of 13 sequentially numbered pages.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited
consolidated financial statements and accompanying notes included in Part I -
Item 1 of this Quarterly Report, and the audited consolidated financial
statements and accompanying notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999.
The Company's business is highly seasonal. Typically, sales and operating income
are highest during the third and fourth quarters and lowest during the first and
second quarters. This seasonal pattern is primarily due to the increased demand
for the Company's products during the "back-to-school" and year-end holiday
selling seasons.
SALES
Sales decreased $3,537,000 to $9,898,000 in the quarter ended September 30,
2000, from $13,435,000 in the quarter ended September 30, 1999. Sales decreases
occurred in each of the Company's primary markets. The decrease in sales is
principally due to delays in the introduction of most of its new product
offerings.
Sales decreased by 27.2% or $8,176,000 to $21,933,000 for the nine-month
period ended September 30, 2000 from $30,109,000 for the nine-month period ended
September 30, 1999. Sales decreases occurred in each of the Company's primary
markets. The decrease in the Company's core school market was a reflection of
the weakness of product reorders that the Company experienced in the fourth
quarter of 1999 and the first half of 2000. Additionally, sales in all the
Company's markets were adversely affected by delays in the introduction of the
Company's new product offerings.
Due to the lateness in the introduction of most of its new products, the
Company expects sales volume in the year 2000 to be $11 to $12 million lower
than the $41.1 million experienced in the prior year.
GROSS PROFIT
Gross profit margin as a percentage of sales decreased 4.9 percentage
points to 41.3% for the quarter ended September 30, 2000 as compared to 46.2%
for the quarter ended September 30, 1999.
Gross profit margin as a percentage of sales decreased 2.4 percentage
points to 44.2% for the nine-month period ended September 30, 2000, as compared
to 46.6% for the nine-month period ended September 30, 1999.
The decrease in the gross profit margin percentages on both a quarterly and
year-to-date basis is principally due to lower gross profit in the specialty
retail market. This resulted primarily from sales to certain customers at lower
than standard margins as well as charges to rework certain inventory items to
resolve certain technical and packaging problems.
SALES AND MARKETING EXPENSE
Sales and marketing expense decreased $225,000 to $2,124,000 for the
quarter ended September 30, 2000 from $2,349,000 for the same period in 1999.
However, when expressed as a percentage of sales, said expense increased to
21.5% for the quarter ended September 30, 2000, as compared to 17.5% for the
same period in 1999.
Sales and marketing expense decreased $130,000 to $5,594,000 for the
nine-month period ended September 30, 2000 from $5,724,000 for the same period
in 1999. When expressed as a percentage of sales, sales and marketing expense
increased to 25.5% for the nine-month period ended September 30, 2000 from 19.0%
for the same period in 1999.
Page 6 of 13 sequentially numbered pages.
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The reason for the variances on both a quarterly and year-to-date basis is
primarily as result of the lower sales volume experienced in the quarter. The
lower volume sales decreased the absolute dollar amount of variable sales and
marketing expense incurred, but the combination of variable and fixed marketing
expenses was proportionally higher as a percentage of sales in 2000 than in 1999
due to the lower sales volume in 2000.
WAREHOUSING AND DISTRIBUTION EXPENSE
Warehousing and distribution expense decreased $116,000 to $582,000 for the
quarter ended September 30, 2000 compared to $698,000 for the same period in
1999. However, when expressed as a percentage of sales, said expense increased
to 5.9% for the quarter ended September 30, 2000 from 5.2% for the same period
in 1999 due to the lower sales volume in 2000 as compared to 1999. The decrease
in absolute dollars was primarily due to headcount reductions made in response
to the lower sales volume.
Warehousing and distribution expense increased $27,000 to $2,134,000 or
9.7% of sales for the nine-month period ended September 30, 2000 compared to
$2,107,000 or 7.0% of sales for the same period in 1999. The increase in
warehousing and distribution expense in absolute dollars on a year-to-date basis
was primarily due higher compensation expense relating to personnel increases in
the Company's purchasing and quality assurance functions in the year 2000 which
was partially offset by headcount reductions made during the quarter in response
to lower sales volume.
RESEARCH AND DEVELOPMENT EXPENSE
Research and development expense increased $86,000 to $894,000 or 9.0% of
sales for the quarter ended September 30, 2000 compared to $808,000 or 6.0% of
sales for the same quarter in 1999.
Research and development expense increased $429,000 to $3,061,000 or 14.0%
of sales for the nine-month period ended September 30, 2000 compared to
$2,632,000 or 8.7% of sales for the same period in 1999.
The increase in research and development expense on both a quarterly and
year-to-date basis was due primarily to increased development activity for both
new and repackaged products, as well as increased use of outside resources to
attempt to reduce the design time of new products, thereby mitigating any
further delays in the introduction of new products to market.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expense decreased $167,000 to $894,000 for the
quarter ended September 30, 2000 compared to $1,061,000 for the same quarter in
1999. However, when expressed as a percentage of sales, said expense increased
to 9.0% for the quarter ended September 30, 2000 from 7.9% for the same period
in 1999 due to the lower sales volume in 2000 as compared to 1999.
General and administrative expense increased $116,000 to $3,086,000 or
14.1% of sales for the nine-month period ended September 30, 2000 compared to
$2,970,000 or 9.9% of sales for the same period in 1999 despite the decrease in
said expense for the quarter. This was primarily due to compensation expense
relating to the separation agreement with the Company's ex-President and CEO.
INTEREST EXPENSE
Interest expense increased $42,000 to $216,000 for the quarter ended
September 30, 2000 compared to $174,000 for the same quarter of 1999.
For the nine-month period ended September 30, 2000, interest expense
increased $63,000 to $426,000 compared to $363,000 for same period of 1999.
The increase in interest expense on both a quarterly and year-to-date basis
was a result of increased borrowings under the Company's line of credit and the
higher prime rate (which is the reference rate on the Company's line of credit)
in 2000 than in 1999.
Page 7 of 13 sequentially numbered pages.
<PAGE>
OTHER INCOME AND EXPENSE
Other expense, net of other income, increased $292,000 to $169,000 for the
quarter ended September 30, 2000 compared to other income of $123,000 for the
same quarter in 1999.
For the nine-month period ended September 30, 2000, other expense increased
$347,000 to $354,000 compared to $7,000 for the same period in 1999.
The increase in other expense, net of other income, on both a quarterly and
year-to-date basis resulted principally from foreign exchange losses recorded at
the Company's UK subsidiary during the periods as compared to foreign exchange
gains recorded in the same periods in 1999. In addition, foreign exchange losses
were incurred on sales to Canada during 2000 due to the weakening Canadian
dollar during the year as compared to foreign exchange gains recorded in 1999.
PROVISION (BENEFIT) FOR INCOME TAXES
As of September 30, 2000, the Company has current and non-current net
deferred tax assets totaling $3,471,000, which primarily represent the tax
benefit the Company expects to earn from the utilization of net operating loss
carryforwards (NOLs) that were created from losses in 1998 and 2000. These NOLs
expire in 2018 and 2020. However, due to the inherent uncertainty in forecasting
future taxable income, management has recorded a valuation allowance of $800,000
to reduce said deferred tax assets to their estimated realizable value of
$2,671,000. Realization of the net deferred tax asset (net of recorded valuation
allowance) is dependent upon future profitable operations. Although realization
is not assured, the management believes it is more likely than not that the net
recorded benefits will be realized primarily through future profitable
operations. In order to achieve this level of profitability, the Company will
need to materially improve its performance when compared to the past five years.
This improvement will be enabled as a result of the changes currently being
implemented by the Company's new President and CEO. The primary change is to
refocus the Company more on its sales to schools and other more educational
products, which was its core business for the first twenty-five years of its
existence. This change is expected to significantly improve the Company's future
profitability primarily in two ways. First, the educational products have
historically earned a higher profit margin than consumer products. Secondly, it
will enable the Company to lower operating expenses as a percentage of sales as
it will reduce the amount of money it has spent in recent years developing and
marketing a myriad of consumer products, many of which were only marginally
successful.
In order to realize the recorded deferred tax asset of $2,671,000, the
Company will need to generate future taxable income of approximately $7,000,000.
If the Company is unable to generate sufficient taxable income prior to
expiration of these NOLs, increases in the valuation allowance will be required
through a charge to income. However, if the Company achieves sufficient
profitability to utilize a greater portion of the deferred tax asset, the
valuation allowance will be reduced through a credit to income.
LIQUIDITY & CAPITAL RESOURCES
In recent years, the Company's working capital needs have been met through
funds generated from operations and from the Company's revolving line of credit.
The Company's principal need for working capital has been to meet peak inventory
and accounts receivable requirements associated with its seasonal sales
patterns. The Company increases inventory levels during the spring and summer
months in anticipation of increasing shipments in the summer and fall. Accounts
receivable have historically increased during the summer and fall because of the
Company's use of extended payment programs wherein sales are made to the
Company's customers for which payment is deferred for one to three months based
on the size of the sales orders. The number of days sales outstanding in
accounts receivable increased to 119 days as compared to 84 days for the
nine-month periods ended September 30, 2000 and 1999, respectively. This
increase is primarily due to special dating programs that allowed for longer
terms than the Company's typical extended payment program. These special dating
programs were offered this year to incentivize customers to purchase additional
products. The Company does not anticipate repeating said special dating programs
in the future. Due to these sales
Page 8 of 13 sequentially numbered pages.
<PAGE>
patterns, the largest customer orders are shipped during the summer and fall,
hence increasing accounts receivable balances during the third and fourth
quarters.
During the period ended September 30, 2000, the Company's sources of
funds were primarily the net increase in borrowings under the Company's line
of credit of $5,315,000 and an increase in accounts payable of $1,788,000. In
addition, $1,000,000 was obtained from a shareholder in the form of long-term
debt (bearing interest at 9.5% with a maturity date of September 2005)
specifically for the purpose of purchasing an option to purchase The Amazing
Live Sea-Monkeys-Registered Trademark- intellectual property. Said option is
reported as a non-current asset in the accompanying consolidated balance
sheets in the amount of $1,000,000. The option agreement provides the Company
with the right, but not the obligation, to purchase the Amazing Live
Sea-Monkeys-Registered Trademark- intellectual property, product line and
related patents. The option expires on October 31, 2006.
The principal uses of cash during the period ended September 30, 2000 were
to fund the year-to-date net loss of $3,899,000 and an increase in inventory of
$2,749,000. Capital spending of $576,000 during the period was primarily for
tooling relating to new products.
The Company currently has a revolving line of credit with a bank, which
is collateralized by substantially all of the Company's assets. Under the
revolving line of credit agreement, which expires June 30, 2001, the Company
may borrow up to $8 million from January through June and up to $10 million
from July through December. Advances, which are formula driven based on
eligible accounts receivable and inventory levels, bear interest at one
half-percentage point above the bank's reference rate (9.5% at September 30,
2000). The agreement requires the maintenance of minimum net income amounts
and net worth amounts, and provides for various restrictions including
limitations on capital expenditures and additional indebtedness. Although the
Company was in violation of the net income and net worth covenants at
September 30, 2000, the Company has received an oral waiver. At September 30,
2000, the Company had $8,077,000 of outstanding borrowings against this line
of credit.
The Company's borrowings available under the revolving line of credit and
anticipated funds from operations that are used to satisfy the Company's working
capital and capital expenditure requirements may not be adequate if (as
management currently estimates) the downtrend in sales continues at its current
pace for the remainder of the year. As such, the Company is currently
investigating other means of raising capital (e.g., refinancing the mortgage on
its corporate headquarters facility and/or sale of the facility and/or amending
the borrowing base formula of its revolving line of credit agreement) and has
implemented expense reduction activities in order to mitigate the potential cash
flow impact of further potential sales declines. In the event that the Company's
sales do not improve and the Company is unable to raise additional capital
and/or sufficiently reduce operating expenses, the Company's financial position
could be materially adversely affected.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for the historical information contained herein, this Report
contains forward-looking statements which involve a number of risks and
uncertainties, including but not limited to continued successful development and
acceptance of new products, 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 Securities and Exchange Commission.
ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to certain market risks, which arise during the normal
course of business from changes in foreign exchange rates and interest rates. A
discussion of the Company's market risk associated with it's foreign currency
transactions is presented below. The market risk associated with long-term debt
is not material.
Page 9 of 13 sequentially numbered pages.
<PAGE>
FOREIGN EXCHANGE RISK
The Company sells its products in numerous countries around the world,
however, except in Canada, such sales are denominated in U.S. Dollars.
Additionally, the Company's UK subsidiary conducts its business in British pound
sterling which is its functional currency, although its inter-company payable is
denominated in U.S. dollars. These factors create an exposure to the future
earnings of the Company when foreign exchange rates change and certain of its
receivables as well as its foreign subsidiary's financial statements are
denominated in foreign currencies.
As such, the Company is primarily exposed to the following foreign
currencies: the Canadian dollar and the British pound sterling. Based upon a
hypothetical five-percent strengthening of the U.S. dollar across these
currencies, the potential foreign exchange losses due to said foreign currency
exposures would have been approximately $150,000 at September 30, 2000. The
Company does not currently hedge this risk.
Page 10 of 13 sequentially numbered pages.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
(1) Subordinated Secured Promissory Note by and between
Educational Insights, Inc. and Burton Cutler and Diana P.
Cutler, Co-Trustees, Cutler Family Trust UTD May 4, 1989,
dated September 19, 2000.
(2) Subordinated Security Agreement by and between Educational
Insights, Inc. and Burton Cutler and Diana P. Cutler,
Co-Trustees, Cutler Family Trust UTD May 4, 1989, dated
September 19, 2000.
(b) REPORTS ON FORM 8-K The following report on Form 8-K was filed
during the period in question:
(1) On September 19, 2000, a report was filed reporting a change
in the registrant's certifying accountant.
Page 11 of 13 sequentially numbered pages.
<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.
EDUCATIONAL INSIGHTS, INC.
(Registrant)
Date: November 10, 2000 By: /s/ G. REID CALCOTT
----------------------------------------
G. Reid Calcott
President and Chief Executive Officer
Date: November 10, 2000 By: /s/ STEPHEN E. BILLIS
----------------------------------------
Stephen E. Billis
Vice President and Chief Financial Officer
Page 12 of 13 sequentially numbered pages.
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
------- ----------- --------------
<S> <C> <C>
10.23 Subordinated Secured Promissory Note by and between Educational
Insights, Inc. and Burton Cutler and Diana P. Cutler, Co-Trustees,
Cutler Family Trust UTD May 4, 1989, dated September 19, 2000.
10.24 Subordinated Security Agreement by and between Educational Insights,
Inc. and Burton Cutler and Diana P. Cutler, Co-Trustees, Cutler Family
Trust UTD May 4, 1989, dated September 19, 2000.
</TABLE>
Page 13 of 13 sequentially numbered pages.
