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 June 30, 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: 3,195,000 as of August 14,
1996.
<PAGE>
GAYLORD COMPANIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1996 (unaudited) 1
Consolidated Statements of Operations (unaudited) for the
Three and six months ended June 30, 1996 and 1995 2
Consolidated Statements of Cash Flows (unaudited) for the
Three months ended June 30, 1996 and 1995 3
Notes to the financial statements 4-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-11
PART II - OTHER INFORMATION 12
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature 13
Exhibit Index 14
</TABLE>
<PAGE>
GAYLORD COMPANIES, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 2,094
Accounts receivable - trade 29,143
Other receivables 231,768
Inventories 1,795,057
Deferred income taxes - current 252,000
Prepaid expenses and other current assets 530,354
----------------
TOTAL CURRENT ASSETS 2,840,416
PROPERTY AND EQUIPMENT 619,169
GOODWILL 122,971
DEFERRED INCOME TAXES 458,875
INVESTMENT 125,000
OTHER ASSETS 38,516
----------------
$ 4,204,947
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,194,440
Line of credit 395,000
Convertible notes 622,500
Sales tax payable 99,948
Current portion of long-term debt 280,490
Current installments of capital lease obligations 11,859
Other current liabilities 125,564
----------------
TOTAL CURRENT LIABILITIES 2,729,801
CAPITAL LEASE OBLIGATIONS 2,953
----------------
2,732,754
----------------
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) (456,124)
----------------
TOTAL STOCKHOLDERS' EQUITY 1,472,193
----------------
$ 4,204,947
================
See notes to consolidated financial statements.
1
<PAGE>
GAYLORD COMPANIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------------------------------------
1996 1995 1996 1995
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
NET SALES $ 2,656,311 $ 2,820,156 $ 5,541,130 $ 5,739,651
COST OF GOODS SOLD, including store occupancy and
delivery costs 2,044,066 2,155,005 4,250,428 4,372,362
---------------- ---------------- ---------------- ----------------
GROSS PROFIT 612,245 665,151 1,290,702 1,367,289
OPERATING EXPENSES:
Store operating expenses 580,949 548,945 1,185,241 1,124,123
Administrative 314,482 286,270 624,682 578,131
Depreciation and amortization 48,062 68,167 96,124 132,540
---------------- ---------------- ---------------- ----------------
943,493 903,382 1,906,047 1,834,794
---------------- ---------------- ---------------- ----------------
OPERATING INCOME (LOSS) (331,248) (238,231) (615,345) (467,505)
---------------- ---------------- ---------------- ----------------
OTHER INCOME (EXPENSE):
Interest expense - net (72,489) (90,782) (149,306) (170,318)
Amortization of discount on notes payable - (17,291) - (34,583)
Other income (expense) 4,481 (32) (9,874) 151
---------------- ---------------- ---------------- ----------------
(68,008) (108,105) (159,180) (204,750)
---------------- ---------------- ---------------- ----------------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) (399,256) (346,336) (774,525) (672,255)
INCOME TAX EXPENSE (BENEFIT) (161,703) (138,534) (311,810) (268,902)
---------------- ---------------- ---------------- ----------------
NET INCOME (LOSS) $ (237,553) $ (207,802) $ (462,715) $ (403,353)
================ ================ ================ ================
EARNINGS (LOSS) PER COMMON SHARE $ (0.09) $ (0.10) $ (0.17) $ (0.20)
================ ================ ================ ================
WEIGHTED AVERAGE COMMON SHARES USED 2,750,000 2,000,000 2,750,000 2,000,000
================ ================ ================ ================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
GAYLORD COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------------------
1996 1995
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (462,715) $ (403,353)
--------------- ----------------
Adjustments to reconcile net income (loss) to net cash provided
used by operating activities:
Depreciation and amortization 96,124 128,528
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 12,955 (4,475)
Decrease (increase) in other receivables (38,061) (26,542)
Decrease (increase) in inventory 15,395 (65,470)
Decrease (increase) in prepaid expenses and other assets (418,983) (79,532)
Decrease (increase) in deferred income taxes (301,814) (243,671)
Increase (decrease) in accounts payable (287,874) (251,718)
Increase (decrease) in sales tax payable (79,354) 19,793
Increase (decrease) in other current liabilties (88,559) (10,893)
--------------- ----------------
Total adjustments (1,090,171) (533,980)
--------------- ----------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (1,552,886) (937,333)
--------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (7,004) (12,399)
--------------- ----------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (7,004) (12,399)
--------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,017,500 850,000
Repayments of debt (349,719) (119,554)
Principal payments of capital lease obligations (4,816) (4,825)
--------------- ----------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 662,965 725,621
--------------- ----------------
NET INCREASE (DECREASE) IN CASH (896,925) (224,111)
CASH AT BEGINNING OF PERIOD 899,019 261,627
--------------- ----------------
CASH AT END OF PERIOD $ 2,094 $ 37,516
=============== ================
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the period for:
Interest $ 37,919 $ 66,609
=============== ================
Income taxes $ - $ 100
=============== ================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
GAYLORD COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 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 with net income
(loss) reduced by preferred stock dividends.
3. PRIVATE PLACEMENT
In June 1996 the Company consummated a private placement to 12
investors of an aggregate of $622,500 of its Convertible Notes (the
"1996 Financing"). The Convertible Notes are due and payable on
December 11, 1996. Interest is payable at the rate of 5% per annum. The
principal amount of each Convertible Note is convertible into shares of
Common Stock at the rate of $1.50 per share.
4. CONSULTING AGREEMENT
As of April 23, 1996, the Company entered into a twenty-four
month financial consulting and investor relations agreement with Solay,
Inc. Pursuant to the financial consulting and investor relations
agreement, Solay, Inc. is entitled to receive $135,000, which amount
has been prepaid by the Company. In addition, Solay, Inc. received
$65,000 in connection with financial advisory services rendered to the
Company in connection with the 1996 Financing. Pursuant to the
financial consulting and investor relations agreement, Solay, Inc. has
the right to purchase 300,000 shares of Common Stock and 600,000
Warrants identical to the warrants offered in the Initial Public
Offering through October 23, 1996, for an aggregate purchase price of
$300,000. In addition,
4
<PAGE>
Rodika Salter, an affiliate of Solay, Inc., has an option to purchase
up to 200,000 shares of Common Stock until October 23, 1996 for $1.50
per share. In connection with the 1996 Financing, Worthington Capital
Corp. received an aggregate of $35,175 of commissions and
non-accountable expenses. In connection with the 1996 Financing,
Worthington Capital Corp. was granted the right to acquire 100,000
shares of Common Stock and 200,000 Warrants identical to the Warrants
offered in the Initial Public Offering until October 23, 1996, for an
aggregate purchase price of $100,000.
5. BANK DEBT
In May 1996, the Company entered into a revised financing
agreement with Bank One. As of June 30, 1996, the Company had a
revolving line of credit of $395,000 and secured term debt in the
aggregate amount of $280,491. The bank debt bears interest at rates of
2.5% over the prime rate of interest. The line of credit and the
secured term debt mature on January 10, 1997. Under the bank loan
agreements, no additional advances will be made under the line of
credit through the maturity date of January 10, 1997.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1995 and 1996
Consolidated Operations
The Company incurred a net loss of $237,553 in the three months ended
June 30, 1996 as compared to a net loss of $207,802 for the comparable period in
the prior year. The increase in the net loss in the three months ended June 30,
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 June 30, 1996 were $2,656,311, a
5.8% decrease over net sales of $2,820,156 for the comparable period in the
prior year. The decrease was due primarily to the fact that the Superstores in
both Boardman and Cincinnati, Ohio posted significant sales decreases as a
result of new competition from stores operated by Barnes and Noble, Inc. in
close proximity during the three months ended June 30, 1996. Such stores did not
encounter such competition in the same period in 1995.
Cost of goods sold, including store occupancy and delivery costs, was
$2,044,066 for the three months ended June 30, 1996 as compared to $2,155,005
for the three months ended June 30, 1995. Gross profit as a percentage of net
sales was 23.0% for the three months ended June 30, 1996 as compared to 23.6%
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
June 30, 1996, as compared to the same period in 1995, is the lower gross profit
as a percentage of sales in the Company's Superstore in Boardman, Ohio, due to
more aggressive discounting in response to the early October 1995 opening of a
superstore by Barnes and Noble, Inc. in close proximity. In addition, while
sales decreased in the Superstore in Boardman, Ohio, for the three months ended
June 30, 1996, as compared to the same period in 1995, occupancy costs remained
substantially the same.
Store level operating expenses were $580,949 for the three months ended
June 30, 1996 as compared to $548,945 for the three months ended June 30, 1995.
Management believes that the increase in such expenses was due primarily to the
reclassification of certain payroll expenses to store level operating expenses
for the three months ended June 30, 1996. Such expenses were classified as
administrative expenses in the same period in 1995. Store operating expenses
were 21.9% of net sales for the three months ended June 30, 1996 as compared to
19.5% 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 operating expenses increased in the three months ended June 30, 1996
as compared to the same period in the prior year, net sales decreased.
6
<PAGE>
Administrative expenses for the three months ended June 30, 1996 were
$314,482 compared to $286,270 for the three months ended June 30, 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 June 30, 1996
were $48,062 compared to $68,167 for the three months ended June 30, 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 June 30, 1996 as compared to the same period
in the prior year.
Interest expense for the three months ended June 30, 1996 was $85,251
compared to $90,782 in the same period in the prior year. Amortization of
discount on notes payable for the three months ended June 30, 1996 was $0
compared to $17,291 for the three months ended June 30, 1995. 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 (the "Bridge Loans") upon the completion
of the Company's initial public offering in November of 1995 (the "Initial
Public Offering") and the amortization was subsequently discontinued.
Cookstore Operations
Net sales in the three months ended June 30, 1996 were $563,846, a 5.0%
increase over net sales of $537,084 during 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
$418,473 for the three months ended June 30, 1996 as compared to $397,175 for
the three months ended June 30, 1995. Management believes that such increase was
due primarily to the increased level of sales. Gross profit as a percentage of
net sales was 25.8% for the three months ended June 30, 1996 as compared to
26.1% during the same period in 1995.
Bookstore Operations
Net sales in the three months ended June 30, 1996 were $2,092,466, an
8.4% decrease over net sales of $2,283,072 in the prior year. The decrease was
due primarily to significant sales decreases in Superstores in both Boardman and
Cincinnati, Ohio, as discussed above.
Cost of goods sold, including store occupancy and delivery costs, was
$1,625,593 for the three months ended June 30, 1996 as compared to $1,757,830
for the three months ended June 30, 1995. Management believes that such decrease
was due primarily to the decreased level of sales. Gross profit as a percentage
of net sales was 22.3% for the three months ended June 30, 1996 as compared to
23.0% during the same period in 1995. Management believes that the
7
<PAGE>
primary reason for the lower gross profit as a percentage of net sales for the
three months ended June 30, 1996, as compared to the same period in 1995, is the
lower gross profit as a percentage of sales in the Superstore in Boardman, Ohio,
due to more aggressive discounting in response to the early October 1995 opening
of a store by Barnes and Noble, Inc. in close proximity. In addition, while
sales decreased in the Company's Book Superstore in Boardman, Ohio, for the
three months ended June 30, 1996, as compared to the same period in 1995,
occupancy costs remained substantially the same.
Six Months Ended June 30, 1995 and 1996
Consolidated Operations
The Company incurred a net loss of $462,715 in the six months ended
June 30, 1996 as compared to a net loss of $403,353 for the comparable period in
the prior year. Management believes that the increase in the net loss in the six
months ended June 30, 1996 as compared to the same period in 1995 was primarily
due to lower gross profit margins, higher store operating expenses and higher
administrative costs.
Net sales in the six months ended June 30, 1996 were $5,541,130, a 3.5%
decrease over net sales of $5,739,651 for the comparable period in the prior
year. The decrease was due primarily to the fact that the Superstores in both
Boardman and Cincinnati, Ohio posted significant sales decreases as a result of
new competition from stores operated by Barnes and Noble, Inc. in close
proximity during the six months ended June 30, 1996. Such stores did not
encounter such competition in the same period in 1995.
Cost of goods sold, including store occupancy and delivery costs, was
$4,250,428 for the six months ended June 30, 1996 as compared to $4,372,362 for
the six months ended June 30, 1995. Gross profit as a percentage of net sales
was 23.3% for the six months ended June 30, 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 six months ended June 30,
1996, as compared to the same period in 1995, is the lower gross profit as a
percentage of sales in the Company's Superstore in Boardman, Ohio, due to more
aggressive discounting in response to the early October 1995 opening of a
superstore by Barnes and Noble, Inc. in close proximity. In addition, while
sales decreased in the Superstore in Boardman, Ohio, for the six months ended
June 30, 1996, as compared to the same period in 1995, occupancy costs remained
substantially the same.
Store level operating expenses were $1,185,241 for the six months ended
June 30, 1996 as compared to $1,124,123 for the six months ended June 30, 1995.
Management believes that the increase in such expenses was due primarily to the
reclassification of certain payroll expenses to store level operating expenses
for the six months ended June 30, 1996. Such expenses were classified as
administrative expenses in the same period in 1995. Store level operating
expenses were 21.4% of net sales for the six months ended June 30, 1996 as
compared to 19.5% in the same period in 1995. Management believes that the
increase in such expenses as a percentage of
8
<PAGE>
net sales is due primarily to the fact that while store level operating expenses
increased in the six months ended June 30, 1996 as compared to the same period
in the prior year, net sales decreased.
Administrative expenses for the six months ended June 30, 1996 were
$624,682 compared to $578,131 for the six months ended June 30, 1995. Management
believes that the increase in administrative expenses is due primarily to the
Company's anticipated expansion.
Depreciation and amortization for the six months ended June 30, 1996
were $96,124 compared to $132,540 for the six months ended June 30, 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 six months ended June 30, 1996 as compared to the same period
in the prior year.
Interest expense for the six months ended June 30, 1996 was $162,067
compared to $170,318 in the same period in the prior year. Amortization of
discount on notes payable for the six months ended June 30, 1996 was $0 compared
to $34,583 for the six months ended June 30, 1995. 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 upon the completion of the Initial Public Offering in
November of 1995 and the amortization was subsequently discontinued.
Cookstore Operations
Net sales in the six months ended June 30, 1996 were $1,143,387, a 9.3%
increase over net sales of $1,045,819 during 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
$838,899 for the six months ended June 30, 1996 as compared to $778,327 for the
six months ended June 30, 1995. Management believes that such increase was due
primarily to the increased level of sales. Gross profit as a percentage of net
sales was 26.6% for the six months ended June 30, 1996 as compared to 25.6%
during the same period in 1995. Management believes that the primary reason for
the higher gross profit as a percentage of net sales for the six months ended
June 30, 1996, as compared to the same period in 1995, are that while sales
increased for the six months ended June 30, 1996, as compared to the same period
in 1995, occupancy costs remained the same.
Bookstore Operations
Net sales in the six months ended June 30, 1996 were $4,397,744, a 6.3%
decrease over net sales of $4,693,832 in the prior year. Management believes
that the decrease was due primarily to significant sales decreases in
Superstores in both Boardman and Cincinnati, Ohio, as discussed above.
9
<PAGE>
Cost of goods sold, including store occupancy and delivery costs, was
$3,411,529 for the six months ended June 30, 1996 as compared to $3,594,034 for
the six months ended June 30, 1995. Management believes that such decrease was
due primarily to the decreased level of sales. Gross profit as a percentage of
net sales was 22.4% for the six months ended June 30, 1996 as compared to 23.4%
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 six months ended
June 30, 1996, as compared to the same period in 1995, is the lower gross profit
as a percentage of sales in the Superstore in Boardman, Ohio, due to more
aggressive discounting in response to the early October 1995 opening of a store
by Barnes and Noble, Inc. in close proximity. In addition, while sales decreased
in the Company's Book Superstore in Boardman, Ohio, for the six months ended
June 30, 1996, as compared to the same period in 1995, occupancy costs remained
substantially the same.
LIQUIDITY AND CAPITAL RESOURCES
Through June 30, 1996, the Company funded its requirements for working
capital and capital expenditures from net proceeds of its Initial Public
Offering and through borrowings under its bank credit facilities and
subordinated notes. As of June 30, 1996, the Company had a revolving line of
credit of $395,000 and secured term debt in the aggregate amount of $280,491 and
subordinated notes in the aggregate amount of $622,500. The bank debt bears
interest at rates of 2.5% over the prime rate of interest and the subordinated
notes bear an interest rate of 5.0%. The line of credit and the secured term
debt mature on January 10, 1997. The subordinated notes mature on December 10,
1996. Under the bank loan agreements, no additional advances will be made under
the line of credit through the maturity date of January 10, 1997. 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 affects on the Company.
The Company's capital expenditures totaled $307,100 in fiscal 1994 and
$26,775 in fiscal 1995 and $7,004 in the six months ended June 30, 1996 and
$12,399 in the six months ended June 30, 1995. Capital expenditures were higher
in 1994 because the Company opened two new Cookstores. 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 June 30, 1996, the Company had recorded deferred tax assets of
approximately $711,000, primarily connected with net operating loss carry
forwards. The Company believes, although there can be no assurance, that the
benefits of these tax assets will be realized through future operations. Taxable
income would need to average approximately $127,000 per year over the next 14
years for the Company to realize the full benefit of these deferred tax assets.
10
<PAGE>
On November 7, 1995, the Company consummated an Initial Public Offering
of 750,000 shares of common stock and 1,725,000 warrants at a price to the
public of $3.00 and $0.10, respectively. 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.
In June 1996 the Company consummated a private placement to 12
investors of an aggregate of $622,500 of its convertible notes. The convertible
notes are due and payable on December 11, 1996. Interest is payable at the rate
of 5% per annum. The principal amount of each Convertible Note is convertible
into shares of Common Stock at the rate of $1.50 per share. The shares of Common
Stock issuable upon the conversion of the Convertible Notes were registered
under the Securities Act of 1933, as amended.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - None
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS - None
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit Index
b) Reports on Form 8-K - None
12
<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.
GAYLORD COMPANIES, INC.
------------------------------------
By: John Gaylord
Chairman and Chief Executive Officer
Date: August 19, 1996
13
<PAGE>
GAYLORD INDEX OF EXHIBITS.
<TABLE>
<CAPTION>
Number Description of Exhibit
<S> <C>
1.1 - Form of Underwriting Agreement between the Company and the Underwriters.+
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.+
4.6 - Option Agreement between the Company and Lido Equities Corp.**
4.7 - Option Agreement between the Company and Solay, Inc.**
4.8 - Stock Option Agreement between the Company and Rodika Salter.**
4.9 - Form of Convertible Note.**
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.+
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.+
<PAGE>
Number Description of Exhibit
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. +
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
<PAGE>
Number Description of Exhibit
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- Consulting Agreement dated as of April 23, 1996 by and between Solay,Inc.
and the Company.**
10.32- Consulting Agreement between the Company and Lido Equities Corp.**
10.33- Amendments to Agreements between the Company and Bank One Columbus,N.A.**
10.34- Amendment No. 1 to Employment Agreement between the Company and John Critser.**
10.35- Amendment No. 1 to Employment Agreement between the Company and John Gaylord.**
10.36- Amendment No. 1 to Employment Agreement between the Company and George Gaylord.**
16.1 - Letter from KPMG Peat Marwick, LLP on change in certifying accountant.+
21.1 - List of Subsidiaries.+
27.1 - Financial Data Schedule.
<FN>
+ Previously filed with the Registration Statement on Form SB-2, Registration No. 33-90832.
** Previously filed with the Registration Statement on Form B-2, Registration No. 33-07324.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000930114
<NAME> GAYLORD COMPANIES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 2094
<SECURITIES> 0
<RECEIVABLES> 29143
<ALLOWANCES> 0
<INVENTORY> 1,795,057
<CURRENT-ASSETS> 2,942,230
<PP&E> 1,751,240
<DEPRECIATION> 1,132,071
<TOTAL-ASSETS> 4,204,947
<CURRENT-LIABILITIES> 2,647,303
<BONDS> 1,312,802
0
300,000
<COMMON> 27,500
<OTHER-SE> 1,144,693
<TOTAL-LIABILITY-AND-EQUITY> 4,204,947
<SALES> 5,541,130
<TOTAL-REVENUES> 5,541,130
<CGS> 4,250,428
<TOTAL-COSTS> 4,250,428
<OTHER-EXPENSES> 1,185,241
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 149,306
<INCOME-PRETAX> (774,525)
<INCOME-TAX> (311,810)
<INCOME-CONTINUING> (462,715)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (462,715)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> 0
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