FORM 10-QSB. --- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996 TRANSITION
REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-13518
Gaylord Companies, Inc.
- - --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 31-1421571
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4006 Venture Court, Columbus, Ohio 43228
- - --------------------------------------------------------------------------------
(Address of Principal Executive Office)
(614) 771-2777
- - --------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) 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
State the number of shares outstanding of each of the registrant's
classes of common equity, as of the last practicable date: 2,750,000 as of March
31, 1996
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GAYLORD COMPANIES, INC.
INDEX
<TABLE>
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Page
Number
PART I - FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 1996 (unaudited) 1
Consolidated Statements of Operations (unaudited) for the
Three months ended March 31, 1996 and 1995 2
Consolidated Statements of Cash Flows (unaudited) for the
Three months ended March 31, 1996 and 1995 3
Notes to the financial statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-8
PART II - OTHER INFORMATION 9-10
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibit Index 11
Signature 12
</TABLE>
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GAYLORD COMPANIES, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 514,126
Accounts receivable - trade 32,569
Other receivables 215,133
Inventories 1,848,695
Deferred income taxes - current 202,250
Prepaid expenses and other current assets 111,244
----------
TOTAL CURRENT ASSETS 2,924,017
PROPERTY AND EQUIPMENT 663,470
GOODWILL 124,311
DEFERRED INCOME TAXES 357,061
INVESTMENT 125,000
OTHER ASSETS 39,475
----------
$4,233,334
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,371,726
Line of credit 395,000
Bank note - short term 250,000
Sales tax payable 78,818
Current portion of long-term debt 329,989
Current installments of capital lease obligations 11,859
Other current liabilities 72,178
----------
TOTAL CURRENT LIABILITIES 2,509,570
CAPITAL LEASE OBLIGATIONS 5,018
----------
2,514,588
----------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Cumulative preferred stock, par value $.01 per share;
1,500,000 shares authorized, 60,000 shares issued
and outstanding 300,000
Common stock, par value $.01 per share;
10,000,000 shares authorized, 2,750,000
shares issued and outstanding 27,500
Paid-in-capital in excess of par 1,600,817
Retained earnings (deficit) (209,571)
----------
TOTAL STOCKHOLDERS' EQUITY 1,718,746
----------
$4,233,334
==========
See notes to consolidated financial statements.
1
<PAGE>
GAYLORD COMPANIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
---------------------
1996 1995
---------- ----------
NET SALES $2,884,819 $2,919,495
COST OF GOODS SOLD, including store occupancy and
delivery costs 2,206,362 2,217,357
---------- ----------
GROSS PROFIT 678,457 702,138
OPERATING EXPENSES:
Store operating expenses 604,292 575,178
Administrative 310,200 291,861
Depreciation and amortization 48,062 64,373
---------- ----------
962,554 931,412
---------- ----------
OPERATING INCOME (LOSS) (284,097) (229,274)
---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (76,817) (79,536)
Amortization of discount on notes payable - (17,292)
Other income (expense) (14,355) 183
---------- ----------
(91,172) (96,645)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) (375,269) (325,919)
INCOME TAX EXPENSE (BENEFIT) (150,107) (130,368)
---------- ----------
NET INCOME (LOSS) $ (225,162)$ (195,551)
========== ==========
EARNINGS (LOSS) PER COMMON SHARE $ (0.08)$ (0.09)
========== ==========
WEIGHTED AVERAGE COMMON SHARES USED 2,750,000 2,125,000
========== ==========
See notes to consolidated financial statements.
2
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GAYLORD COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
---------------------
1996 1995
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (225,162)$ (195,551)
---------- ----------
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 48,062 62,268
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 9,529 (10,404)
Decrease (increase) in other receivables (21,426) (20,610)
Decrease (increase) in inventory (38,243) (38,705)
Decrease (increase) in prepaid expenses and
other assets 127 (157,472)
Decrease (increase) in deferred income taxes (150,250) -
Increase (decrease) in accounts payable (110,588) (541,758)
Increase (decrease) in sales tax payable (100,485) (95,765)
Increase (decrease) in other current liabilties (138,430) (11,911)
---------- ----------
Total adjustments (501,704) (814,357)
---------- ----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (726,866)(1,009,908)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,501) (10,699)
---------- ----------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (1,501) (10,699)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 395,000 850,000
Repayments of debt (48,775) (50,166)
Principal payments of capital lease obligations (2,751) (3,100)
---------- ----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 343,474 796,734
---------- ----------
NET INCREASE (DECREASE) IN CASH (384,893) (223,873)
CASH AT BEGINNING OF PERIOD 899,019 261,627
---------- ----------
CASH AT END OF PERIOD $ 514,126 $ 37,754
========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the period for:
Interest $ 15,612 $ 30,537
========== ==========
Income taxes $ - $ 100
========== ==========
See notes to consolidated financial statements.
3
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GAYLORD COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements are unaudited, but
reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation of financial position and the results
of operations for the interim periods presented. All such adjustments
are of a normal and recurring nature. The results of operations for any
interim period are not necessarily indicative of the results attainable
for a full fiscal year.
2. LOSS PER SHARE
Per share information is computed based on the weighted
average number of shares outstanding during the period.
4
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended March 31, 1995 and 1996
Consolidated Operations
The Company incurred a net loss of $225,162 in the three months ended
March 31, 1996 as compared to a net loss of $195,551 for the comparable period
in the prior year. The increase in the net loss in the three months ended March
31, 1996 as compared to the same period in 1995 was primarily due to a lower
gross profit margin, higher store operating expenses and higher administrative
costs.
Net sales in the three months ended March 31, 1996 were $2,884,819, a
1.2% decrease over net sales of $2,919,495 for the comparable period in the
prior year. The decrease was due primarily to the fact that the Little Professor
Book Company Superstores in both Boardman and Cincinnati, Ohio posted
significant sales decreases as both stores encountered new competition from
Barnes and Noble Book Superstores in close proximity during the three months
ended March 31, 1996 that they did not encounter in the same period in 1995. All
of the Company's other Book Superstores and Cookstores had sales increases in
the three months ended March 31, 1996 as compared to the same period in the
prior year. Sales in the Bargain Bookstore decreased slightly in the three
months ended March 31, 1996 as compared to the same period in the prior year.
All net sales are comparable in the period.
Cost of goods sold, including store occupancy and delivery costs, was
$2,206,362 for the three months ended March 31, 1996 as compared to $2,217,357
for the three months ended March 31, 1995. Gross profit as a percentage of net
sales was 23.5% for the three months ended March 31, 1996 as compared to 24.0%
during the same period in 1995. Management believes that the primary reason for
the lower gross profit as a percentage of net sales for the three months ended
March 31, 1996, as compared to the same period in 1995, is the lower gross
profit as a percentage of sales in the Company's Book Superstore in Boardman,
Ohio, due to more aggressive discounting in response to the early October 1995
opening of a Barnes and Noble Book Superstore in close proximity. In addition,
while sales decreased in the Company's Book Superstore in Boardman, Ohio, for
the three months ended March 31, 1996, as compared to the same period in 1995,
occupancy costs remained substantially the same.
Store level expenses were $604,292 for the three months ended March 31,
1996 as compared to $575,178 for the three months ended March 31, 1995.
Management believes that the increase in such expenses was due primarily to the
reclassification of certain payroll expenses to store level expenses for the
three months ended March 31, 1996 that were classified as administrative
expenses in the same period in 1995. Store operating expenses were 21.0% of net
5
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sales for the three months ended March 31, 1996 as compared to 19.7% in the same
period in 1995. Management believes that the increase in such expenses as a
percentage of net sales is due primarily to the fact that while store level
expenses increased in the three months ended March 31, 1996 as compared to the
same period in the prior year, net sales decreased.
Administrative expenses for the three months ended March 31, 1996 were
$310,200 compared to $291,861 for the three months ended March 31, 1995.
Management believes that the increase in administrative expenses is due
primarily to the Company's anticipated expansion.
Depreciation and amortization for the three months ended March 31, 1996
were $48,062 compared to $64,373 for the three months ended March 31, 1995.
Management believes that the decrease in depreciation and amortization is due
primarily to the fact that some assets had been completely depreciated or
amortized in the three months ended March 31, 1996 as compared to the same
period in the prior year.
Interest expense for the three months ended March 31, 1996 was $76,817
compared to $79,536 in the same period in the prior year.
Amortization of discount on notes payable for the three months ended
March 31, 1996 was $0 compared to $17,292 for the three months ended March 31,
1995. Management believes that the decrease in amortization of discount on notes
payable is due primarily to the fact that the amortization was accelerated upon
the repayment of the bridge loans in the original principal amount of $500,000
after the completion of the Company's initial public offering in November of
1995 and the amortization was subsequently discontinued.
Cookstore Operations
Net sales in the three months ended March 31, 1996 were $579,541, a
13.9% increase over net sales of $508,734 during the same period in the prior
year. Net sales increased in all of the Company's Cookstores for the period
ended March 31, 1996 as compared to the same period in the prior year. All
Cookstore net sales are comparable in the period.
Cost of goods sold, including store occupancy and delivery costs, was
$420,425 for the three months ended March 31, 1996 as compared to $381,153 for
the three months ended March 31, 1995. Management believes that such increase
was due primarily to the increased level of sales. Gross profit as a percentage
of net sales was 27.5% for the three months ended March 31, 1996 as compared to
25.1% during the same period in 1995. Management believes that the primary
reasons for the higher gross profit as a percentage of net sales for the three
months ended March 31, 1996, as compared to the same period in 1995, are that
while sales increased for the three months ended March 31, 1996, as compared to
the same period in 1995, occupancy costs remained the same.
6
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Bookstore Operations
Net sales in the three months ended March 31, 1996 were $2,305,278, a
4.4% decrease over net sales of $2,410,761 in the prior year. The decrease was
due primarily to the fact that the Little Professor Book Company Superstores in
both Boardman and Cincinnati, Ohio posted significant sales decreases as both
stores encountered new competition from Barnes and Noble Book Superstores in
close proximity during the three months ended March 31, 1996 that they did not
encounter in the same period in 1995. All of the Company's other Book
Superstores had sales increases in the three months ended March 31, 1996 as
compared to the same period in the prior year. Sales in the Bargain Bookstore
decreased slightly in the three months ended March 31, 1996 as compared to the
same period in the prior year. All Bookstore net sales are comparable in the
period.
Cost of goods sold, including store occupancy and delivery costs, was
$1,785,936 for the three months ended March 31, 1996 as compared to $1,836,204
for the three months ended March 31, 1995. Management believes that such
decrease was due primarily to the decreased level of sales. Gross profit as a
percentage of net sales was 22.5% for the three months ended March 31, 1996 as
compared to 23.8% during the same period in 1995. Management believes that the
primary reason for the lower gross profit as a percentage of net sales for the
three months ended March 31, 1996, as compared to the same period in 1995, is
the lower gross profit as a percentage of sales in the Company's Book Superstore
in Boardman, Ohio, due to more aggressive discounting in response to the early
October 1995 opening of a Barnes and Noble Book Superstore in close proximity.
In addition, while sales decreased in the Company's Book Superstore in Boardman,
Ohio, for the three months ended March 31, 1996, as compared to the same period
in 1995, occupancy costs remained substantially the same.
LIQUIDITY AND CAPITAL RESOURCES
Through March 31, 1996, the Company funded its requirements for working
capital and capital expenditures from net proceeds of its initial public
offering, net cash provided by operating activities and through borrowings under
its bank credit facilities. As of March 31, 1996, the Company had a revolving
line of credit of $395,000 and secured term debt in the aggregate amount of
$579,989, all of which was outstanding at March 31, 1996. The bank debt bears
interest at rates of .5% to 1% over the prime rate of interest and has maturity
dates ranging from May 31, 1996 through December 31, 1997.
The bank debt requires the Company to meet covenants pertaining to the
following financial measurements: 1) quarterly net income before taxes; 2)
tangible net worth; 3) cash flow coverage of debt service. At December 31, 1995,
the Company was not in compliance with all three measurements, and therefore was
in technical default of this financing agreement. The bank has granted the
Company waivers through May 31, 1996, but since such waiver period is for less
than one year, all debt under this agreement has been reclassified as current.
In connection with such waivers, the Company agreed to be bound under the
default rate of interest,
7
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which is prime plus 2.5%, and is precluded from obtaining any additional
funds under the revolving credit portion of this loan agreement.
The bank has advised the Company that it does not intend to renew the
Company's credit facilities. The failure of the Company to refinance the
Company's existing credit facilities, of which there can be no assurance, would
have a material adverse effect on the Company.
The Company's capital expenditures totaled $1,501 in the three months
ended March 31, 1996 as compared to $10,699 during the same period in 1995.
Management believes that capital expenditures, including the funds needed for
opening three or possibly four new retail stores, during the next 12 to 18
months will aggregate approximately $750,000.
At March 31, 1996, the Company had recorded deferred tax assets of
approximately $559,000, primarily connected with net operating loss
carryforwards. The Company believes that the benefits of these tax assets will
be realized through future operations. Taxable income would need to average
approximately $100,000 per year over the next 14 years for the Company to
realize the full benefit of these deferred tax assets.
On November 8, 1995, the Company consummated an initial public offering
(the "Offering") of 750,000 shares of common stock and 1,725,000 common purchase
warrants at a price to the public of $3.00 and $0.10, respectively. Each of the
warrants expire on October 30, 2000 and entitle the holder thereof to purchase
one share of common stock for $3.00 per share. In general, the warrants are
redeemable by the Company at a price of $.05 per warrant commencing October 31,
1997 provided that the price of the Company's common stock has been at least
$4.50 for 20 consecutive trading days prior to the redemption of the warrants.
In addition, certain principal stockholders of the Company purchased 60,000
shares of the Company's Series A Preferred Stock at a price of $5.00 per share.
8
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PART II. OTHER INFORMATION
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Please see Exhibit Index on page 9.
(b) Reports on Form 8-K
None
Exhibit Index
<TABLE>
<CAPTION>
Number Description of Exhibit
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<S> <C> <C>
1.1 -- Form of Underwriting Agreement between the Company and the Underwriter.+
3.1 -- Certificate of Incorporation of the Company.+
3.2 -- By-Laws of the Company.+
4.1 -- Form of Warrant Agreement between the Company and Continental Stock Transfer & Trust
Company, as warrant agent.
4.2 -- Specimen Certificate of the Company's Common Stock.+
4.3 -- 1994 Stock Option Plan, as amended.+
4.4 -- Specimen Certificate of the Company's Warrant.+
4.5 -- Form of Underwriter's Warrants.+
5.1 -- Opinion of Gallet Dreyer & Berkey, LLP counsel to the Company.+
10.1 -- Form of Employment Agreement between the Company and John D. Critser.+
10.2 -- Form of Employment Agreement between the Company and John Gaylord.+
10.3 -- Form of Employment Agreement between the Company and George Gaylord.+
10.4 -- Agreements between the Subsidiaries and Bank One, Columbus, N.A.
10.5 -- Exchange Agreement, dated as of August 1, 1994, by and among George Gaylord, John
Gaylord, Janet Gaylord Goodburn, Susan Gaylord Noble, Judy Gaylord, Jennifer Lynn
Gaylord, John D. Critser and Gaylord Companies, Inc.+
10.6 -- Lease, dated September 30, 1987, between UAP-Columbus JV326132, as Landlord, and
Gaylord Book Company, as Tenant, as amended, for premises located at 1655 and 1657 West
Lane Avenue, Lane Avenue Shopping Center, Upper Arlington, Ohio.+
10.7 -- Lease, dated December 15, 1988, between Retail Projects of Cincinnati, Inc., as Landlord,
and Little Professor Enterprises, Inc., as Tenant, as subsequently assigned to Gaylord's Inc.
and amended, for premises located at Space 180, Forest Fair Mall, Forest Park, Ohio.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Description of Exhibit
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<S> <C> <C>
10.8 -- Lease, dated June 13, 1989, between UAP-Columbus JV326132, as Landlord, and The
Cookstore, Inc., as Tenant, as amended, for premises located at 1677 West Lane Avenue,
M-1/4 and M-6, Lane Avenue Shopping Center, Upper Arlington, Ohio.+
10.9 -- Lease, dated September 24, 1990, between Planned Communities Company, as Landlord, and
Little Professor Enterprises, Inc., as Tenant, for premises located at Worthington Square
Shopping Center, Worthington, Ohio.+
10.10 -- Lease, dated July 16, 1992, between Sawmill Place Plaza Associates, as Landlord, and Little
Professor Enterprises, Inc., as Tenant, as amended, for premises known as Space 122, Plaza
at Sawmill Place, 2700 Sawmill Place Blvd., Columbus, Ohio.+
10.11 -- Lease, dated September 10, 1993, between UAP-Columbus,
JV326132, as Landlord, and Gaylord Book Co., Inc., as Tenant,
as amended, for premises located at 1595 West Lane Avenue,
Upper Arlington, Ohio.+
10.12 -- Lease, dated September 13, 1993, between Aetna Life
Insurance Company, as Landlord, and Gaylord Companies, Inc.,
as Tenant, for premises located at Worthington Mall,
Worthington, Ohio.+
10.13 -- Lease, dated October 21, 1993, between Greater Boardman Plaza, Inc., as Landlord, and
Gaylord Enterprises, Inc., as Tenant, for premises located at Room No. 101, Greater
Boardman Plaza Shopping Center, 255 Boardman-Canfield Road, Youngstown, Ohio.+
10.14 -- Lease, dated July 15, 1994, between Glimcher Properties
Limited Partnership, as Landlord, and Gaylord Companies, as
Tenant, for premises located at the Mall at Fairfield Commons,
Store #E181, Beavercreek, Ohio.+
10.15 -- Lease, dated August 19, 1994, between DeBartolo Capital Partnership, as Landlord, and The
Cookstore Inc., as Tenant, for premises located at Room 240, Summit Mall Shopping Center,
3265 West Market Street, Akron, Ohio.+
10.16 -- Sublease, dated August 31, 1994, between J.E. Hanger, Inc., sublessor and The Gaylord
Companies, Inc., sublessee, as a sublease under the master lease dated April 23, 1991
between Teachers Insurance and Annuity Association, as lessor, and J. E. Hanger, Inc., as
lessee, for premises located at 4006 Venture Court, Columbus, Ohio.+
10.17 -- Consignment Agreement, dated February 25, 1989, between
Ingram Industries, Inc., as Consignor, and Gaylord's, Inc., as
Consignee, relating to the store located at 1018 Forest Fair
Drive, Cincinnati, Ohio.+
10.18 -- Consignment Agreement dated May 21, 1991, between Ingram Book Company, as
Consignor, and Little Professor Enterprises, Inc., as
Consignee, relating to the store located at 155 Worthington
Square, Worthington, Ohio.+
10.19 -- Consignment Agreement, dated February 10, 1993, between Ingram Book Company, as
Consignor, and Gaylord Book Company, as Consignee, relating to the store located at 1646
W. Lane Avenue, Columbus, Ohio.+
10.20 -- Consignment Agreement, dated February 10, 1993, between Ingram Book Company, as
Consignor, and Little Professor Enterprises, Inc., as Consignee, relating to the store located
at 6490 Sawmill Road, Columbus, Ohio.+
10.21 -- Consignment Agreement, dated December 1993, between Ingram Book Company, as
Consignor, and Gaylord Enterprises, Inc., as Consignee, relating to the store located at 101
Boardman-Canfield Road, Boardman, Ohio.+
10.22 -- License Agreement, dated as of January 1, 1994, between Sawworth Book Company, as
License Owner, and Little Professor Book Centers, Inc., as Franchisor, relating to 155
Worthington Square, Worthington, Ohio. +
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
10.23 -- License Agreement, dated as of January 1, 1994, between Sawworth Book Company, as
License Owner, and Little Professor Book Centers, Inc., as Franchisor, relating to 6490
Sawmill Road, Columbus, Ohio.+
10.24 -- License Agreement, dated as of January 1, 1994, between Gaylord Enterprises, Inc., as
License Owner, and Little Professor Book Centers, Inc., as Franchisor, relating to 101
Boardman-Canfield Road, Boardman, Ohio.+
10.25 -- License Agreement, dated as of January 1, 1994, between Gaylord's, Inc., as License Owner,
and Little Professor Book Centers, Inc., as Franchisor, relating to 1018 Forest Fair Drive,
Cincinnati, Ohio.+
10.26 -- License Agreement, dated as of January 1, 1994, between Gaylord Book Company, as
License Owner, and Little Professor Book Centers, Inc., as Franchisor, relating to 1657 W.
Lane Avenue, Columbus, Ohio.+
10.27 -- Agreement, dated as of January 1, 1994, between the Company and Little Professor Book
Centers, Inc.+
10.28 -- Letter Agreement, dated September 12, 1994, from Little Professor Book Centers, Inc. to
Gaylord Family Limited.+
10.29 -- Mutual Release Agreement, dated September 12, 1994, among Little Professor Book Centers,
Inc. and the Company Gaylord's, Inc., Gaylord Family Investments, Inc., Gaylord Book
Company, Sawworth Book Company, Gaylord Enterprises, Inc., Gaylord Family Limited,
George Gaylord and John Gaylord.+
10.30 -- Form of Engagement Agreement: Financial Consultant Services between the Underwriter and
the Company.+
10.31 -- Loan Agreement with Bank One*
16.1 -- Letter from KPMG Peat Marwick, LLP on change in certifying accountant.+
21.1 -- List of Subsidiaries.+
</TABLE>
* Previously filed with Form 10-KSB for the year ended December 31st, 1995.
+ Previously Filed with Registration Statement No. 33-90832.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 14, 1996 GAYLORD COMPANIES, INC.
By: /s/ John Gaylord
John Gaylord, Chairman of the Board,
Chief Executive Officer, Treasurer and
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Form 10-QSB for the quarter ended March 31, 1996
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Mar-31-1996
<CASH> 514,126
<SECURITIES> 0
<RECEIVABLES> 32,569
<ALLOWANCES> 0
<INVENTORY> 1,848,695
<CURRENT-ASSETS> 2,924,017
<PP&E> 1,745,737
<DEPRECIATION> 1,082,267
<TOTAL-ASSETS> 4,233,334
<CURRENT-LIABILITIES> 2,509,570
<BONDS> 0
0
300,000
<COMMON> 27,500
<OTHER-SE> 1,391,246
<TOTAL-LIABILITY-AND-EQUITY> 4,233,334
<SALES> 2,884,819
<TOTAL-REVENUES> 2,884,819
<CGS> 2,206,362
<TOTAL-COSTS> 2,206,362
<OTHER-EXPENSES> 604,292
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,817
<INCOME-PRETAX> (375,269)
<INCOME-TAX> (150,107)
<INCOME-CONTINUING> (225,162)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (225,162)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> 0
</TABLE>
