SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
For the transition period from _______ to _______
Commission file number: 33-83894-NY
LOIS/USA INC.
(Exact name of the Registrant as specified in its charter)
Delaware 13-3441962
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 West 57th Street, New York, New York 10019
(Address of principal executive offices) (Zip Code)
N/A (Former name, former address and former fiscal year, if changed from
last report)
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___ No___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distributions of securities under a plan
confirmed by a court. Yes___ No___.
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date: 2,521,123
Transitional Small Business Disclosure Format (check one): Yes____ No____.
<PAGE>
PART I-FINANCIAL INFORMATION PAGE
NUMBER
Item 1. Financial Statements
Consolidated Balance Sheets as of
December 31, 1995 and
June 30, 1996..................................F-1
Consolidated Statements of Operations for the
Three Months Ended June 30, 1995
and 1996.......................................F-2
Consolidated Statements of Operations for the
Six Months ended June 30, 1995 and 1996........F-3
Consolidated Statements of Changes In
Stockholder's (Deficit) For the Periods
Ended December 31, 1995 and
June 30, 1996..................................F-4
Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1995
And 1996.................................... ..F-5
Notes to Consolidated Financial Statements.......F-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations......................................9
PART II-OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..........................11
SIGNATURE..........................................................12
<PAGE>
<TABLE>
<CAPTION>
LOIS/USA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND JUNE 30, 1996
(UNAUDITED)
(000's omitted)
1995 1996
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,729 $ 1,447
Accounts receivable, net 19,527 30,761
Investments 150 150
Expenditures billable to clients 1,388 832
Deferred tax asset 76 0
Prepaid taxes 270 377
Other current assets 130 400
Total current assets 23,270 33,967
------- -------
PROPERTY AND EQUIPMENT, at cost 2,079 3,065
Less-Accumulated depreciation and (1,747) (1,927)
amortization ------- -------
Net property and equipment 332 1,138
------- -------
OTHER ASSETS:
Deferred financing and
offering costs 212 409
Good will 325 12,438
Other assets 51 521
--- ---
Total other assets 588 13,368
--- ------
Total assets $24,190 $48,473
======= =======
LIABILITIES AND STOCKHOLDERS' 1995 1996
EQUITY (DEFICIT) ---- ----
CURRENT LIABILITIES:
Accounts payable $24,613 $32,716
Accrued expenses and other current
liabilities 221 805
Deferred purchase price - 1,520
Total current liabilities 24,834 35,041
------ ------
OTHER LIABILITIES:
Deferred rent - 1,590
Deferred payouts 46 -
--
Bank loans - 5,202
Deferred purchase price - 5,000
Total other liabilities 46 11,792
--
Total liabilities 24,880 46,833
------ ------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, par value $.01
per share:
1,000,000 shares authorized;
no shares
issued and outstanding
Common stock, par value $.01
per share:
20,000,000 shares authorized;
2,175,000 and 2,521,123 issued
and outstanding 22 25
Additional paid-in capital 3,746 5,820
Accumulated deficit (4,458) (4,205)
------ -------
Total stockholder's equity (deficit) (690) (1,640)
------ -------
Total liabilities and stockholders'
equity (deficit) $24,190 $48,473
======= =======
</TABLE>
The accompaning notes are an integrated part of the consolidated statements.
<PAGE>
<TABLE>
<CAPTION>
LOIS/USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
(000's omitted except for share data)
INCOME: 1995 1996
---- ----
<S> <C> <C>
Commissions and fees $4,321 $7,546
OPERATING EXPENSES:
Salaries and related costs, net 2,439 4,570
Client services 368 401
Rent and related charges 349 518
Amortization of acquisition costs 22 162
Other operating expenses 546 1,474
----- ------
Total operating expenses 3,763 7,125
----- ------
Operating income 558 421
NONOPERATING EXPENSES:
Interest, net 34 (3)
Amortization of deferred financing costs 14 14
-- --
Total nonoperating expenses 48 11
-- --
Net income before provision 510 410
for income taxes
PROVISION FOR INCOME TAXES 196 154
--- ---
Net income (loss) $314 246
==== ===
NET INCOME PER COMMON $.14 $.09
SHARE ==== ====
WEIGHTED AVERAGE NUMBER OF 2,175,000 2,521,123
COMMON EQUIVALENT OF SHARES ========= =========
OUTSTANDING
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
<PAGE>
<TABLE>
<CAPTION>
LOIS/USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE six MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
(000's omitted except for share data)
INCOME: 1995 1996
---- ----
<S> <C> <C>
Commissions and fees $8,052 $13,688
OPERATING EXPENSES:
Salaries and related costs, net 4,925 9,122
Client services 647 753
Rent and related charges 709 962
Amortization of acquisition costs 78 324
Other operating expenses 821 2,083
--- -----
Total operating expenses 7,224 13,244
----- ------
Operating income 828 444
NONOPERATING EXPENSES:
Interest, net 44 (6)
Amortization of deferred financing costs 28 28
-- --
Total nonoperating expenses 72 22
-- --
Net income before provision 756 422
for income taxes
PROVISION FOR INCOME TAXES 302 169
--- ---
Net income $454 253
==== ===
NET INCOME PER COMMON $.21 $.10
SHARE ==== ====
WEIGHTED AVERAGE NUMBER OF 2,175,000 2,521,123
COMMON EQUIVALENT OF SHARES ========= =========
OUTSTANDING
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
<PAGE>
<TABLE>
<CAPTION>
LOIS/USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S (DEFICIT)
FOR THE PERIODS ENDED DECEMBER 31, 1995 AND JUNE 30, 1996
(000'S omitted)
Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
----- ------- ----------- -----
<S> <C> <C> <C> <C>
BALANCE, January 1, 1995 $18 1,029 (5,176) (4,129)
Net Income - - 718 718
Contribution of 1 1,357 - 1,358
Redeemable Warrants
Issuance of Common 3 1,360 - 1,363
Shares to Public - ----- -----
BALANCE, January 1, 1996 22 3,746 4,458 690
Net Income 253 253
Issuance of Common
Shares to EJL
shareholders 3 2,074 - 2,077
- ----- ----- -----
BALANCE, June 30, 1996 $25 $5,820 $(4,205) $1,640
=== ====== ======== ======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE>
<TABLE>
<CAPTION>
LOIS/USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(000's omitted)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1996
Net income (loss) $454 $253
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities-
Amortization and depreciation 122 324
Amortization of deferred financing costs 28 28
Decrease in deferred tax asset 302 117
Changes in assets and liabilities, net of
effect from acquisitions
(Increase) decrease in accounts receivable 1,287 (3,091)
(Increase) decrease in expenditures billable
to clients (116) 1,067
(Increase) decrease in prepaid income taxes (250) (76)
(Increase) decrease in other assets (214) 530
Increase (decrease) in accounts payable
and accrued expenses (1,847) (1,422)
NET CASH PROVIDED BY (USED ------ -------
IN) OPERATING ACTIVITIES 334 (2,270)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition, net of cash acquired - (1,314)
Cash paid for costs of acquisition - (1,594)
Purchase of fixed assets - (81)
NET CASH USED IN INVESTING ------ -------
ACTIVITIES - (2,989)
CASH FLOWS FROM FINANCING ACTIVITIES:
Drawdown of credit facility 3,100 5,202
Repayment of credit facility (2,000) -
Repayment of subordinated stockholders (3,200) -
Issuance of new shares 1,363 -
Increase in deferred financing costs - (225)
Reclass of deferred financing costs 90 -
NET CASH USED IN FINANCING ----- -------
ACTIVITIES (647) 4,977
NET CASH (DECREASE) IN CASH AND ----- -------
CASH EQUIVALENTS (981) (282)
CASH AN CASH EQUIVALENTS, beginning
of period 1,457 1,729
CASH AND CASH EQUIVALENTS, end ----- -----
of period $476 $1,447
===== ======
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during the period of-
Interest $44 $92
=== ====
Income taxes $250 $91
==== ====
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
LOIS/USA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from this report, as is
permitted by such rules and regulations; however, the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
annual report on Form 10-KSB, as amended by Amendment No.1 to Form 10-KSB.
In the opinion of management, the information furnished reflects all
adjustments, all of which are of normal recurring nature, necessary for a fair
presentation of the results for the reported interim periods. Results of
operations for interim periods are not necessarily indicative of results for the
full year.
2. ACQUISITION OF EISAMAN, JOHNS & LAWS ADVERTISING, INC.
On February 12, 1996 the Company acquired all the outstanding shares of Eisaman,
Johns & Laws Advertising, Inc., a California corporation ("EJL"), a national
advertising agency, established in 1959, with its principal advertising offices
in Los Angeles, Chicago, Houston and Detroit. For its fiscal years ended
February 28, 1993, 1994 and 1995, EJL had commission and fee revenues of
$19,087,000, $18,151,000 and $17,011,000, respectively, and net income (loss) of
$18,000, ($5,000) and ($788,000). At February 28, 1995, EJL had net working
capital of $1,238,000, total assets of $19,256,000 and stockholders' equity of
$2,263,000.
Pursuant to the Stock Purchase Agreement (the "Agreement"), between the Company
and the shareholders of EJL, ("the Sellers"), the Company made an initial cash
payment of $4,000,000 and issued 333,333 shares of the Company's stock par value
$.01 per share, (the "Common Stock") at an issue price of $6.00 per share to the
Sellers.
The Sellers will receive as additional purchase price, an amount equal to 5% of
the combined revenue of Lois/USA and EJL, as defined in the Agreement, for an
additional $12,000,000 of purchase price (the "Additional Purchase Price") over
a period of five years from the date of the acquisition. Payments will be made
in the ratio of 75% cash and 25% in Common Stock, valued at $6.00 per share for
the first four quarters and thereafter valued at the fair market value of the
Common Stock as defined in the Agreement. At least $1,750,000 of Additional
Purchase Price must be paid for the year ending December 31, 1996, and the
Sellers have been guaranteed a minimum Additional Purchase Price of $6,000,000
in cash. To the extent that this minimum cash amount is not paid by December 31,
1999, all further Purchase Price will be paid in cash until the payment ratio
has been restored and then all remaining payments will be made in the payment
ratio. The Agreement provides the Sellers with the ability to put shares of
Additional Purchase Price back to the Company in the event that the minimum cash
amounts have not been paid to the Sellers. Such shares can be put back to the
Company based at the value on the date such shares were initially issued, on a
last-in first-out basis. However, the Sellers cannot put the initial 333,333
shares back to the Company.
Interest will be payable on any missed payment of Additional Purchase Price at
the prime rate plus 2% for the first missed payment and an additional 5% shall
be paid beginning with the second consecutive missed and incurred payment.
The Sellers will receive a final purchase price payment of $750,000 in
additional shares in 2001.
At the closing of the transaction on February 12, 1996, the Sellers were
required to deliver $2,200,000 of net worth, as defined in the Agreement, based
upon EJL's historical cost as required under generally accepted accounting
principles. The parties have not yet finalized the amount of net worth delivered
by the sellers. To the extent an amount in excess of $2,000,000 is delivered,
the Company will issue the Sellers a three year subordinated installment note,
payable quarterly, and bearing interest at Chemical Bank's prime rate plus 1.5%.
This note will be subordinated to the Company's existing bank indebtedness. If
less than $2,200,000 is delivered, the cash portion of the additional purchase
price will be reduced.
To the extent the Company consummates a public offering within 12 months of the
acquisition date at a price per share less than $6.00, the Company will increase
the number of initial shares to the Sellers based upon the offering price. The
Company has granted the Sellers certain rights with respect to registration of
the Common Stock under the Securities Act of 1933. The Company's two majority
shareholders also entered into a shareholders' agreement with EJL's four
majority shareholders which, among other things, entitles the former EJL
shareholders to elect one director to the Company's Board of Directors.
Concurrent with the acquisition of EJL, the Company entered into five year
employment agreements with four of the senior EJL executives which will provide
for aggregate compensation of $1,165,000 per year, renewable upon the mutual
agreement of the parties. Bonuses are discretionary. Upon termination of three
of the employment agreements with three of the executives, those executives will
enter into consulting agreements each for a five year term, with compensation to
each executive of $100,000 per year. Each employment agreement provides for a
two year non-competition clause and provisions for health and life insurance and
the payment of costs of medical coverage.
The Company accounted for the transaction using the purchase method of
accounting. Since February 12, 1996, the Company's consolidated financial
statements include EJL's activity. At the date of acquisition, the excess of the
minimum guaranteed purchase price of $12,750,000 over the fair market value of
the net assets acquired was reflected in the Company's consolidated financial
statements as goodwill. Presently, such amount is estimated to be approximately
$12,500,000. As payments of Additional Purchase Price are made, such payments
will be accounted for as increases to goodwill. None of the recorded goodwill
will be deductible for income tax purposes. This goodwill will be amortized over
a 20 year life. As a result of the non-deductibility of goodwill, the Company's
effective tax rate will be adversely impacted.
Additional minimum guaranteed purchase price payments of $6,750,000 have been
reflected as a liability on the Company's balance sheet at the acquisition date
and will be reduced as additional cash payments are made. The accounting for
additional share issuances through the date that the put feature continues to be
available to the Sellers will be similar to redeemable stock which is classified
outside of shareholders' equity. At the time that the minimum cash purchase
price payments have been made, and the ability of the Sellers to put shares back
to the Company ceases, the value of additional shares, if any, issued to the
Sellers will be reclassified as stockholder's equity.
Currently, the Company is studying the fair value of the assets and liabilities
acquired. Upon the completion of this study, amounts recorded might differ from
those given in this interim report. The unaudited consolidated results of
operations on a pro forma basis as adjusted to reflect the acquisition of EJL as
if such acquisition had been effective as of January 1 of each year indicated
are as follows:
Six Months Ended June 30,
(Amounts in thousands except per share data)
1995 1996
Commissions and fees $15,578 $14,017
Operating (loss) $ (3) $ (347)
Net (loss) $ (1) $ (139)
Net (loss) per weighted
average common share $ (.01) $ (.06)
3. REDUCING REVOLVING CREDIT FACILITY
Concurrent with the Company's registered direct placement of 300,000 shares of
Common Stock in January 1995 (the "Offering"), the Company entered into a $2
million reducing revolving credit facility (the "Reducing Revolving Credit
Agreement") with Chemical Bank. Upon consummation of the Company's Offering, the
Company borrowed $2 million under the Reducing Revolving Credit Agreement which,
when added to the net proceeds of the Company's Offering, enabled the Company to
repay the Subordinated Note. Amounts outstanding under the Reducing Revolving
Credit Agreement bear interest at the highest rate determined with reference to
one of several fluctuating rate bases. The current interest rate under the
credit facility is 10%.
Borrowings under the Reducing Revolving Credit Agreement are secured by (a) all
of the assets of the Company's operating subsidiaries, (b) a pledge of all
shares of capital stock of the Company's operating subsidiaries held by the
Company, (C) a pledge of all shares of the Company's capital stock held by
Messrs. Lois and Veru, and (d) an assignment in favor of Chemical Bank of the
key man life insurance policies on Mr. Lois (in an amount not less than $2
million) and Mr. Veru (in an amount not less than $1 million).
As of December 31, 1995, the loans under the Reducing Revolving Credit Agreement
were scheduled to mature on December 31, 1997, subject to required amortization
payments which were to reduce the principal balance and the amount available to
be borrowed by approximately $166,000 each quarter commencing in the second
quarter of 1995. Concurrent with the acquisition of EJL in February 1996 as
discussed in Note 2, Chemical Bank entered into an amended and restated credit
agreement (the "Amended and Restated Credit Agreement") whereby Chemical Bank
agrees to increase the amount available under the Reducing Revolving Credit
Agreement by an additional $2,500,000 and extended the maturity date of the
facility through March 31, 1999, required amortization will be $250,000 per
quarter commencing with the quarter ending March 31, 1996. The Company will be
required to prepay amounts outstanding under the Amended and Restated Credit
Agreement equal to 100% of Excess Cash Flow (as defined in the Reducing
Revolving Credit Agreement) up to $300,000 for any year and 50% of Excess Cash
Flow above $300,000 for any year. For the year ended December 31, 1995, this
requirement was waived. Excess Cash Flow is defined as actual cash flow of the
Company less 110% of debt amortization.
The Company expects to be able to satisfy its future debt service obligations
with cash flows from operations. However, there can be no assurance that future
cash flows of the Company will be sufficient to meet such obligations. The
Amended and Restated Credit Agreement also contains certain affirmative and
negative covenants customary in an agreement of this nature. The terms of the
Amended and Restated Credit Agreement prohibit the Company from paying dividends
on its Common Stock.
In December 1994, the Company also increased its existing credit facility from
$1 million to $2 million under substantially identical terms. Of this facility,
$150,000 has been set aside for a contingent letter of credit in favor of the
landlord of the office space leased in New York which would be payable in an
event of default.
Amounts borrowed will bear interest at a rate to be negotiated upon borrowing.
There were approximately $268,000 in fees and expenses incurred in connection
with the facility. These amounts are being amortized over the initial three-year
period of the loan. Costs to extend the facility of approximately $175,000 will
be amortized over the period from 1996 through 1999.
LOIS/USA INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operation
Six Months Ended June 30, 1996 Compared
to Six Months Ended June 30, 1995
As a result of the acquisition of Eisaman, Johns and Laws, Advertising Inc.
("EJL") on February 12, 1996, the amounts reported for the six months ended June
30, 1996 include consolidated amounts of the two entities. Cost savings from the
combination of the two agencies are being implemented, especially in the areas
of real estate leasing and agency administrative costs. Since the acquisition
took place in the middle of the first quarter, these cost reductions began in
the second quarter of 1996 and will continue throughout the remainder of the
year.
The combination of the two entities resulted in a net loss of ($441,000) versus
net income of $140,000 during the same three month period in 1995. While
commissions and fees rose from $8,052,000 to $13,688,000 or 70.0%, operating
expenses rose $6,020,000 to $13,244,000 an increase of 83.3%. This disparity in
revenue growth versus operating increases is related to the seasonal nature of
EJL's business. Non- operating expenses fell from $72,000 to $22,000 as a result
of lower interest expenses.
The provision for taxes fell from $302,000 in 1995 to $169,000 in 1996 in 1996
due to lower operating revenues in 1996
Earnings per share fell to a loss of .10 per share on weighted average shares of
2,521,123. For the six months in 1995, earnings per share were $.21 on 2,175,000
shares.
Three Months Ended June 30, 1996 Compared
to Three Months Ended June 30, 1996
Consolidated revenues from commission and fee income was $7,546,000 in the
second quarter of 1996 as compared to $4,321,000 during the comparable three
month period in 1995. Net income was $246,000 for the three months ended June
30, 1996 as compared to $314,000 for 1995. While commissions and fees rose
74.6%, expenses rose 89.3% from $3,763,000 to $7,125,000.
Non-operating expenses fell from 48,000 in 1995 to $11,000 in 1996 as a result
of lower net interest expense.
The provision for taxes was $164,000, down $32,000. The lower provision is
based on lower taxable income.
Liquidity and Capital Resources
On February 12, 1996, the Company acquired all of the outstanding shares of
capital stock of Eisaman, Johns & Laws Advertising, Inc. ("EJL"), a California
corporation, pursuant to a Stock Purchase Agreement between the Company and the
shareholders of EJL. In exchange for 49,512 shares of the common stock of EJL,
the Company issued 333,333 shares of its common stock, $.01 par value per share,
and made an initial cash payment of approximately $4 million. The shares of (the
"Common Stock") were issued from the Company's existing authorized capital
stock, and the cash was paid out of working capital and additional bank debt. In
addition, the Company has agreed to pay EJL shareholders 5% of the combined
revenue of the combined entity over the next five years, subject to certain
adjustments. The purchase price paid to EJL stockholders will range from a
minimum of $12 million to a maximum of $18 million.
Cash and cash equivalents increased from $1,729,000 at December 31, 1995
to $5,495,000 at June 30, 1996. The decrease was the result of cash used in
financing the EJL acquisition and the cash flows from operations.
The Company's working capital deficit decreased from ($1,564,000) at December
31, 1995 to ($1,251,000) at June 30, 1996. This decrease was the result of funds
generated from the new bank debt offset by the $4,000,000 payment to the former
shareholders of EJL.
Management believes that cash flows from operations, together with funds
available under the Company's credit facilities with Chase Bank, will be
sufficient to meet the Company's cash needs for its existing business and any
potential acquisitions over the next twelve months.
The Company is regularly presented with opportunities to acquire advertising
agencies and intends to consider potential acquisitions which would be
complementary to the Company's current business activities and fit the Company's
acquisition strategy. Although no specific plans or commitments currently exist,
any future acquisitions may require material capital expenditures or commitments
that could place significant constraints on future working capital. In addition,
the Amended and Restated Credit Agreement contains covenants restricting the
Company from making capital expenditures in excess of $250,000 in any fiscal
year and contains certain financial condition ratios that could place
significant constraints on the Company's ability to make acquisitions. The
Company believes that the restrictions will not impair its ability to make
acquisitions for stock or deferred contingent payments in accordance with its
acquisition financing strategy.
The Company's business operations are not seasonal; however, based upon
individual client expenditures and the history of EJL, significant quarter to
quarter fluctuations in billings and net income may occur.
PART II OTHER INFORMATION
Item 3. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) On Form 8-K: The Company filed a Form 8-K dated as of February
12, 1996, regarding the acquisition of Eisaman, Johns & Laws
Advertising, Inc., which did not include the pro forma
financial data pertaining to the acquisition. The Company is
currently delinquent in the filing of the pro forma financial
data due to unforseen difficulties in obtaining necessary
information from Eisaman, Johns & Laws Advertising, Inc.
<PAGE>
SIGNATURE
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.
LOIS/USA INC.
Date: August 15,1996 By /s/ ROBERT K. STEWART
ROBERT K. STEWART
Executive Vice President
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
JUNE 30, 1996, CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF
INCOME FOR THE THREE-MONTH PERIOD ENDED JUNE, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE FOOTNOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,447
<SECURITIES> 150
<RECEIVABLES> 30,065
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,967
<PP&E> 30,761
<DEPRECIATION> 1,927
<TOTAL-ASSETS> 48,473
<CURRENT-LIABILITIES> 35,041
<BONDS> 0
0
0
<COMMON> 25
<OTHER-SE> 1,615
<TOTAL-LIABILITY-AND-EQUITY> 48,473
<SALES> 0
<TOTAL-REVENUES> 13,688
<CGS> 0
<TOTAL-COSTS> 13,244
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6)
<INCOME-PRETAX> 422
<INCOME-TAX> 169
<INCOME-CONTINUING> 253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 253
<EPS-PRIMARY> .10
<EPS-DILUTED> 0
</TABLE>
