UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended March 29, 1997.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the transition period from to
Commission file number 0 - 26618
MAKO MARINE INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0501535
(State of other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
4355 NW 128TH STREET MIAMI, FLORIDA 33054
(Address of principal executive offices)
(305) 685 - 6591
(Issuers telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
As of May 12, 1997, there were 9,055,000 shares of common stock, $0.01 par
value per share, outstanding.
<PAGE>
MAKO MARINE INTERNATIONAL, INC.
TABLE OF CONTENTS
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheet.........................................................3
Statements of Operations..............................................4
Statements of Cash Flows..............................................5
Notes to Financial Statements.........................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................8
Part II. Other Information
Item 5. Other Information...........................................13
Item 6. Exhibits and Reports on Form 8-K............................13
Signatures...........................................................15
2
<PAGE>
Mako Marine International, Inc.
Balance Sheet
(unaudited)
==========================================================================
March 29, 1997
- --------------------------------------------------------------------------
Assets
Current assets
Cash $ 80,835
Marketable securities 2,512,863
Accounts receivable, less allowance for 433,918
doubtful accounts of $99,171
Inventories 3,540,960
Prepaid and other assets 557,419
- --------------------------------------------------------------------------
Total current assets 7,125,995
Property and equipment, net 4,946,263
Goodwill 4,748,524
Other assets 38,165
- --------------------------------------------------------------------------
$ 16,858,947
- --------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable $ 1,310,678
Accrued expenses 1,681,378
Accrued interest payable 276,951
Due to Tracker Marine, an affiliate 543,904
Advance - Credit America, Inc., an affiliate 300,906
Current portion of note payable, CreditAmerica 187,500
Venture Capital, Inc., an affiliate
Current portion of indemnities 86,895
Current portion of long-term debt 578,215
- --------------------------------------------------------------------------
Total current liabilities 4,966,427
Note payable, CreditAmerica Venture
Capital, Inc., an affiliate, less current portion 712,500
Indemnities, less current portion 161,861
Long-term debt, less current portion 1,242,195
- --------------------------------------------------------------------------
Total liabilities 7,082,983
- --------------------------------------------------------------------------
Stockholders' equity
Preferred stock; 2,000,000 shares -
authorized; none issued
Common stock, $.01 par value, 15,000,000 90,550
shares authorized; 9,055,000
shares issued and outstanding
Additional paid-in capital 10,570,175
Accumulated deficit (884,761)
- --------------------------------------------------------------------------
Total stockholders' equity 9,775,964
- --------------------------------------------------------------------------
$ 16,858,947
- --------------------------------------------------------------------------
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
Mako Marine International, Inc.
Statements of Operations
(unaudited)
============================================================================================================
<CAPTION>
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
March March March March
29, 1997 30, 1996 29, 1997 30, 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 4,566,363 $ 4,380,766 $ 13,853,439 $13,797,185
Cost of products sold 4,219,949 3,880,187 12,689,623 12,192,817
- -----------------------------------------------------------------------------------------------------------------
Gross profit 346,414 500,579 1,163,816 1,604,368
- -----------------------------------------------------------------------------------------------------------------
Operating and other expenses:
Selling, general and administrative 1,648,538 1,389,219 4,193,433 3,473,727
Interest 77,221 73,534 262,882 244,881
Other 11,870 16,202 60,028 217,039
- -----------------------------------------------------------------------------------------------------------------
Total expenses 1,737,629 1,478,955 4,516,343 3,935,647
- -----------------------------------------------------------------------------------------------------------------
Loss before other income (1,391,215) (978,376) (3,352,527) (2,331,279)
Other income (expense) 25,803 21,235 (64,663) 80,974
- -----------------------------------------------------------------------------------------------------------------
Net loss $ (1,365,412) $ (957,141) $(3,417,190) $(2,250,305)
- -----------------------------------------------------------------------------------------------------------------
Net loss per common share $ (.17) $ (.35) $ (.77) $ (.94)
- ------------------------------------------------------------------------------------------------------------------
Average number of common shares 7,850,066 2,735,345 4,427,355 2,395,286
- -----------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
4
<PAGE>
<TABLE>
Mako Marine International, Inc.
Statements of Cash Flows
(unaudited)
<CAPTION>
=================================================================================================================
Nine months ended March 29, 1997 March 30, 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net loss $ (3,417,190) $ (2,250,305)
Adjustment to reconcile net loss to net cash
(used in) provided by operating activities:
Provision for depreciation 572,052 415,811
Provision for amortization 30,637 -
Provision for doubtful accounts 57,000 165,054
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 908,239 (366,296)
Increase in inventories (394,661) (1,639,165)
Decrease (increase) in prepaids and assets (276,536) 158,622
Increase in accounts payable, accrued
expenses and accrued interest payable 406,913 405,092
- -----------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (2,113,546) (3,111,187)
- -----------------------------------------------------------------------------------------------------------------
Investing activities:
Purchase of property and equipment (161,891) (328,454)
Purchase of marketable securities (2,512,863)
- -----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (2,674,754) (328,454)
- -----------------------------------------------------------------------------------------------------------------
Financing activities:
Decrease in restricted cash - 200,000
Increase in due to affiliate 543,904 -
Principal payments on debt and indemnities (344,892) (2,072,635)
Issuance of common stock, net 4,140,000 5,307,423
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 4,339,012 3,434,788
- -----------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (449,288) (4,853)
Cash and cash equivalents, beginning of
period 530,123 91,961
- -----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 80,835 $ 87,108
- -----------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
Mako Marine International, Inc.
Notes to Financial Statements
Summary of Significant Accounting Policies
Business
Mako Marine International, Inc. (the "Company") is engaged in the manufacture
and sale of offshore fishing and pleasure boats.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with instructions to Form 10- QSB and Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which include only the normal recurring
adjustments) considered necessary for a fair presentation have been included.
For further information, refer to the audited financial statements as of June
29, 1996 and footnotes thereto filed on form 10-KSB (SEC File No. 0-26618) filed
with the Securities and Exchange Commission. The results of operations for the
nine months ended March 29, 1997 are not necessarily indicative of the results
of operations for the full year.
Net Loss Per Common Share
Pursuant to Securities and Exchange Commission Staff Accounting Bulletin Topic
4-D, stock issued and stock options granted have been included in the
calculation of weighted average shares of common stock outstanding for the nine
months ended March 29, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
6
<PAGE>
Reclassifications
Certain prior period amounts have been reclassified to conform to the current
financial statement presentation.
Stock Purchase
On January 16, 1997, the Company sold to Tracker Marine, L.P., a Missouri
limited partnership ("Tracker") 6,400,000 newly issued shares (the "Mako
Shares") of the Company's common stock, having a par value of $.01 per share
(the "Mako Common Stock"), for a purchase price consisting of cash in the amount
of $4,140,000 and assets relating to Tracker's saltwater boat business. The Mako
Shares, together with Tracker's contemporaneous purchase of 930,000 shares of
Mako Common Stock from CreditAmerica Venture Capital, Inc. resulted in Tracker's
acquisition of a total of 7,330,000 shares of Mako Common Stock, representing
approximately 80.9% of the then outstanding shares of Mako Common Stock. Under
the terms of the Agreement pursuant to which Mako sold the Mako Shares to
Tracker (the "Stock Purchase Agreement"), the Company is required to issue to
Tracker additional shares of Mako Common Stock if, at any time prior to the
expiration of the ninetieth day following August 23, 2000, the market price of
the Mako Common Stock reaches certain levels during a period of ten consecutive
trading days. See, "Management's Discussion and Analysis of Financial Condition
and Results of Operations-Overview," below. Also, the Stock Purchase Agreement
provides for an option on the part of Tracker to acquire additional shares of
Mako Common Stock at $1.50 per share, if and to the extent that, options and
warrants to acquire shares of Mako Common Stock which were outstanding on the
closing date of the sale of the Mako Shares to Tracker are exercised in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Overview," below.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This report contains certain forward-looking statements within the meaning of
Federal securities laws which, while reflective of management's beliefs or
expectations, involve certain risks and uncertainties, many of which are beyond
the control of the Company. Accordingly, the Company's actual results and the
timing of certain events could differ materially from those discussed herein.
Factors that could cause or contribute to such differences include, but are not
limited to, the significant losses incurred by the Company during the first nine
months of fiscal 1997, those factors discussed in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" below and the "Risk Factors" contained in the Company's prospectus
dated August 23, 1995.
Results of Operations for Three Months and Nine Months Ended March 29, 1997
Versus Three Months and Nine Months Ended March 30, 1996
Overview
On January 16, 1997, the Company sold to Tracker 6,400,000 newly issued Mako
Shares for a purchase price consisting of cash in the amount of $4,140,000 and
assets relating to Tracker's saltwater boat business, including Tracker's
manufacturing facility located in Punta Gorda, Florida, its "Seacraft" and
"Silver King" brands of off-shore fishing boats and the exclusive right over a
five-year period to advertise at preferred rates the Company's saltwater boat
products in a catalog published by an affiliate of Tracker that distributes
annually more than 40 million catalogs worldwide. The Mako Shares, together with
Tracker's contemporaneous purchase of the 930,000 CAVC Shares from CAVC,
resulted in Tracker's acquisition of a total of 7,330,000 shares of Mako Common
Stock, representing approximately 80.9% of the then outstanding shares of Mako
Common Stock.
The Stock Purchase Agreement provides, among other things, that in addition to
the Mako Shares, during the period beginning on the Closing Date (January 16,
1997) and ending 90 business days following the exercise, redemption or
expiration of the Company's publicly-traded Redeemable Common Stock Purchase
Warrants, the Company will issue to Tracker (i) 1,800,000 shares, if the market
price of the Mako Common Stock is $5.00 or more during a period of ten
consecutive trading days, (ii) an additional 1,800,000 shares, if the price of
the Mako Common Stock is $6.00 or more during a period of ten consecutive
trading days, and (iii) an additional 3,629,000 shares, if the market price of
the Mako Common Stock is $7.00 or more during a period of ten consecutive
trading days. The expiration date of the aforementioned public warrants is
August 23, 2000.
The Stock Purchase Agreement also provides Tracker with an option to acquire
additional shares of Mako Common Stock at $1.50 per share. The option is
designed to permit Tracker to maintain an 80% interest in the Company to the
8
<PAGE>
extent that options and warrants to acquire shares of Mako Common Stock which
were outstanding on the Closing Date are exercised in the future. There are
currently outstanding options and warrants to purchase 3,622,900 shares of Mako
Common Stock, which expire at varying dates through 2001.
As indicated below, the currently low sales level of the Company's product is
not sufficient to support the Company's current fixed cost levels. Additionally,
certain variable costs incurred by the Company in connection with the
manufacture of its products are high. Management believes that the additional
boat brands and the Company's exclusive catalog rights discussed above should
result in increased sales. Management further believes that through its
affiliation with Tracker, certain efficiencies can be achieved and that the
Company could be able to obtain certain materials and components used in the
manufacture of its products from outside sources at lower prices.
Net Sales
The Company's net sales for the quarter ended March 29, 1997 (the third quarter
of the fiscal year ending June 28, 1997) increased by $185,597 (or 4.2%) to
$4,566,363 from $4,380,766 for the corresponding quarter of the prior fiscal
year. This increase was attributable to the addition of SeaCraft and SilverKing
sales amounting to approximately $235,000.
The Company's net sales for the nine months ended March 29, 1997, increased by
$56,254 or (0.4%) to $13,853,439 from $13,797,185 for the corresponding period
of the prior year. This increase was attributable to the addition of SeaCraft
and SilverKing sales, as discussed above, offset by (i) industry wide slower
retail sales; and (ii) manufacturing delays in producing two new Mako models
during the first quarter (a 25 foot center console which replaced an older model
and a 33 foot center console).
Cost of Products Sold and Gross Profit
Gross profit for the quarter ended March 29, 1997 decreased by $154,165 to
$346,414 (7.6% of sales) from $500,579 (11.4% of sales) for the corresponding
quarter of the prior fiscal year. This decrease was due primarily to certain
inefficiencies, discussed below.
Gross profit for the nine months ended March 29, 1997, decreased by $440,552 to
$1,163,816 (8.4% of sales) from $1,604,368 (11.6% of sales) for the
corresponding period of the prior year. This decrease is a result of: (i) the
spreading of fixed overhead costs over decreased production volumes; (ii) labor
inefficiencies due in part to the unavailability of certain components and parts
during the winter months; and (iii) inefficiencies from the start-up of the
SeaCraft and SilverKing lines.
The Company has reached an agreement in principle with its supplier of outboard
motors with respect to certain modifications to the current agreement with such
supplier, including a revised pricing formula, which agreement in principle is
9
<PAGE>
subject to the execution by both parties of a definitive amendment. The revised
pricing will likely result in a lower cost to the Company for its acquisition of
outboard motors, which is a major component of the Company's products. Thus, it
is expected that the new pricing will have a substantial positive impact on the
cost of products sold and resulting gross profit margins. The effectiveness of
the amendment, including the new pricing formula, is expected to be retroactive
to January 16, 1997.
Operating Expenses
Selling, general and administrative expenses for the quarter ended March 29,
1997 increased by $259,319 (or 18.7%) to $1,648,538 from $1,389,219 for the
corresponding quarter of the prior fiscal year. This increase is due primarily
to the expenses resulting from the Tracker transaction (See "Overview") and
advertising costs for the SeaCraft and Silver King lines.
Selling, general and administrative expenses for the nine months ended March 29,
1997, increased $719,706 (or 20.7%) to $4,193,433 from $3,473,727 for the
corresponding period of the prior year. The increase is a result of: (i)
increased sales incentive programs of $260,000 in the nine months ended March
29, 1997 compared to the nine months ended March 30, 1996; (ii) higher selling
and administrative salaries of approximately $65,000; (iii) approximately
$250,000 in increased warranty costs and reserve; (iv) increased professional
fees amounting to approximately $80,000; (v) general and advertising costs
associated with the Seacraft and SilverKing lines amounting to approximately
$230,000 (vi) amortization of goodwill associated with the stock purchase
amounting to approximately $30,000 and (vii) offsetting decreases in advertising
costs of approximately $145,000 and miscellaneous costs of approximately
$50,000.
Other expenses for the nine months ended March 29, 1997 decreased by $157,011 to
$60,028 from $217,039 for the corresponding period of the prior year when the
Company expensed loan costs of approximately $170,000 associated with a bridge
loan.
Other Income and Expenses
During the nine months ended March 29, 1997, the Company recorded a $100,000
provision relating to potential environmental issues discovered at the Company's
plant during the due diligence review in conjunction with the Stock Purchase
Agreement. By amendatory Letter Agreement dated January 16, 1997 among the
Company, CAVC and Tracker, it was agreed among the parties that CAVC would
deposit in escrow the sum of $1,310,000 to secure CAVC's obligations with
respect to any costs and expenses incurred in connection with remedial, clean-up
and other costs associated with the removal of any contamination in, on or under
the "Property" (hereinafter defined) to the extent required to meet regulatory
requirements (the "Remedial Costs"). Under the terms of such amendatory Letter
Agreement, the Company is obligated to pay the first $100,000 of Remedial Costs.
Thereafter, such costs are paid in consecutive increments of $200,000 and
$50,000 by CAVC and the Company, respectively, until the Remedial Costs reach
$1,710,000. As a result of the foregoing, the Company is responsible for
payments of up to $400,000 in respect of the first $1,710,000 of Remedial Costs,
and for such amounts, if any, in excess of $1,710,000. Additional reports
10
<PAGE>
received by the Company from its environmental engineers during the third
quarter of fiscal 1997 appear to confirm management's previously disclosed
belief that a majority of the potential contamination on, in or under the
Property comes from off-site sources, and that the Company will not incur
material losses as a result of its limited obligation with respect to the
Remedial Costs. Discussions will be held with the Florida Department of
Environmental Resources Management to determine what if any remedial action is
appropriate.
Income Taxes
At March 29, 1997, the Company had a net tax operating loss carryforward of
approximately $8,650,000 to offset future taxable income. Due to the ownership
change caused by the IPO and the Tracker Stock Purchase, under Section 382 of
the Internal Revenue Code, the amount of net operating loss carryforwards
originating prior to the date of the IPO (approximately $2,500,000) and prior to
the Tracker Stock Purchase, but after the IPO, (approximately $5,450,000) which
may be utilized in any one year, is limited to approximately $800,000.
Liquidity and Capital Resources
Historically, the Company's internally generated cash flow has not been
sufficient to finance its operations.
During August 1995, the Company completed an initial public offering (IPO) which
generated net proceeds of $5,307,423. The Company initially anticipated that the
IPO proceeds, together with existing resources and cash generated from future
operations would be sufficient to satisfy the anticipated cash requirements of
the Company for 18 to 24 months from the date of the IPO.
On January 16, 1997, the Company sold the Mako Shares to Tracker for a purchase
price consisting of cash, in the amount of $4,140,000 and certain assets of
Tracker constituting its Saltwater Boat Business. Reference is made to the
"Overview" section above for a more complete description of the transaction.
During the nine months ended March 29, 1997, the Company used $2,113,546 for
operating activities, $2,674,754 for investing activities, and was provided net
cash of $4,339,012 for financing activities.
The cash used by operating activities resulted from the Company's net loss of
$3,417,190, and an increase in inventories and prepaid assets (such as insurance
and boat show costs) of $394,661 and $276,536, respectively. Cash was provided
by an increase in accounts payable and accrued expenses of $406,913, a decrease
in accounts receivable of $908,239 (also an increase in the allowance for
doubtful accounts of $57,000) and depreciation and amortization totaling
$602,689.
The cash used by financing activities resulted from the purchase of fixed assets
of $161,891 and purchase of marketable securities of $2,512,863.
11
<PAGE>
The cash provided by financing activities resulted from an issuance of common
stock with cash received of $4,140,000 and an increase in a due to affiliate of
$543,904. Uses of cash included principal payment on debt and indemnities
totaling $344,892.
Management believes the cash infusion of $4,140,000 from the common stock
purchase of $4,140,000 should be sufficient to satisfy the anticipated cash
requirements of the Company for 9 to 15 months, thereby affording the Company
sufficient time to increase sales levels and reduce expenses in order to operate
profitably. No assurance can be given, however, that the Company will be able to
increase its sales and/or reduce its costs to the extent necessary to operate
profitably.
12
<PAGE>
Part II. Other Information
Item 5. Other Information
In connection with its due diligence review, certain potential environmental
issues related to the Property were discovered and additional testing and
analysis is currently ongoing to determine the extent of such contamination and
whether or not such contamination arises from on-site or off-site sources. By
amendatory Letter Agreement dated January 16, 1997 among the Company, CAVC and
Tracker, it was agreed among the parties that CAVC would deposit in escrow the
sum of $1,310,000 to secure CAVC's obligations with respect to Remedial Costs.
Under the terms of such amendatory Letter Agreement, the Company is obligated to
pay the first $100,000 of Remedial Costs. Thereafter, such costs are paid in
consecutive increments of $200,000 and $50,000 by CAVC and the Company,
respectively, until the Remedial Costs reach $1,710,000,. As a result of the
foregoing, the Company is responsible for payments of up to $400,000 in respect
of the first $1,710,000 of Remedial Costs, and for such amounts, if any, in
excess of $1,710,000. Additional reports received by the Company from its
environmental engineers during the third quarter of fiscal 1997 appear to
confirm management's previously disclosed preliminary belief that a majority of
the potential contamination on, in or under the Property comes from off-site
sources, and that the Company will not incur material losses as a result of its
limited obligation with respect to the Remedial Costs. Discussions will be held
with the Florida Department of Environmental Resources Management to determine
what if any remedial action is appropriate.
In April, 1997, the Florida Department of Revenue rendered a Transferee
Liability Notice of Assessment and Jeopardy Finding to the Company alleging that
the Company, as a transferee of Mako Marine, Inc. ("Old Mako"), is liable for
delinquent sales tax, penalties and interest of $1,650,843.77 (the
"Assessment"). The sales tax liability which is the subject of the Assessment
was incurred by Old Mako prior to the acquisition by CreditAmerica Venture
Capital, Inc. in August, 1994 of substantially all of Old Mako's assets through
a foreclosure sale. Based upon its investigation of this matter to date, the
Company believes that it has meritorious defenses to any liability under the
Assessment and intends to defend this matter vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Exhibit Index.
(b) Reports on Form 8-K. The following reports on Form 8-K were filed for
the quarterly period ended March 29, 1997.
1. Form 8-K dated January 30, 1997, as amended, regarding (i) changes
in control of the Company as a result of completion on January 16,
1997 of the transaction by the Company (and its then principal
13
<PAGE>
shareholder) with Tracker Marine, L.P. (the "Tracker Transaction"),
(ii) the acquisition by the Company of SeaCraft and SilverKing
Divisions of Tracker Marine, L.P. (the "Saltwater Boat Business")
as a part of the Tracker Transaction, and (iii) changes in the
Company's certifying accountant.
2. Form 8-K/A dated March 17, 1997 amending the Company's Form 8-K
dated January 30, 1997 (as amended) to include (i) the audited
financial statements for the Saltwater Boat Business, and (ii)
unaudited proforma combined financial statements of the Company and
the Saltwater Boat Business.
3. Form 8-K dated March 17, 1997 regarding (i) the resignation of
Douglas W. Baena and Lawrence Tierney as Chairman of the Board,
President and Chief Executive Officer and the Vice President and
Chief Financial Officer, respectively, of the Company, and (ii) the
appointment of Kenneth Burroughs and Stephen W. Smith as Chairman
of the Board, President and Chief Executive Officer and Vice
President and Chief Financial Officer, respectively, of the
Company.
14
<PAGE>
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MAKO MARINE INTERNATIONAL, INC.
(Registrant)
Date: May 12, 1997 By: /s/ Kenneth Burroughs
Kenneth Burroughs
President (Principal
Executive Officer)
Date: May 12, 1997 By: /s/ Stephen W. Smith
Stephen W. Smith
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
27.1 Financial Data Schedule
(filed in EDGAR version only)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Statement of Financial Condition at March 29, 1997 (Unaudited) and the Statement
of Operations for the Nine Months Ended March 29, 1997 (Unaudited) and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-28-1997
<PERIOD-START> JUN-30-1996
<PERIOD-END> MAR-29-1997
<CASH> 80,835
<SECURITIES> 2,512,863
<RECEIVABLES> 533,089
<ALLOWANCES> 99,171
<INVENTORY> 3,540,960
<CURRENT-ASSETS> 7,125,995
<PP&E> 5,502,779
<DEPRECIATION> 556,536
<TOTAL-ASSETS> 16,858,947
<CURRENT-LIABILITIES> 4,966,427
<BONDS> 2,116,556
0
0
<COMMON> 90,550
<OTHER-SE> 9,685,414
<TOTAL-LIABILITY-AND-EQUITY> 16,858,947
<SALES> 13,858,439
<TOTAL-REVENUES> 13,858,439
<CGS> 12,689,623
<TOTAL-COSTS> 12,689,623
<OTHER-EXPENSES> 4,318,124
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 262,882
<INCOME-PRETAX> (3,417,190)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,417,190)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,417,190)
<EPS-PRIMARY> (.77)
<EPS-DILUTED> (.77)
</TABLE>
