1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995, or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
--------------------
Commission File Number: 0-3839
--------------------
BOOK CENTERS, INC.
(Exact name of registrant as specified in its charter)
OREGON
(State or other jurisdiction of incorporation or organization)
5600 N.E. HASSALO STREET
PORTLAND, OREGON
(Address of principal executive offices)
93-0508266
(IRS Employer Identification Number)
97213
(Zip code)
(503) 287-6657
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of common
stock was 636,889 shares of common stock, no par value, outstanding as of
September 30, 1995.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2
BOOK CENTERS, INC.
FORM 10-Q
INDEX
PART I: Financial Information Page
--------------------- ----
Item 1: Financial Statements Book Centers, Inc.
---------------------------------------
Consolidated Balance Sheet<F1>
at September 30, 1995 and June 30, 1995. . . . . . . . . . . . . . 4
Consolidated Statements of Operations<F1>
for the three month periods ended September 30, 1995 and 1994. . . 6
Consolidated Statements of Cash Flows<F1>
for the three month periods ended September 30, 1995 and 1994. . . 7
Consolidated Statements of Operations<F1>
for the three month periods ended September 30, 1995 and 1994. . . 9
Note to Consolidated Financial Statements. . . . . . . . . . . . . 10
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . 11
<F1>
In the opinion of Management, such financial statements contain all adjustments
necessary to present fairly the financial position as of September 30, 1995 and
June 30, 1995 and the results of the operations and cash flows for the three
month period ended September 30, 1995.
- 2 -
3
BOOK CENTERS, INC.
FORM 10-Q
INDEX
PART II: Other Information Page
----------------- ----
Item 1: Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 2: Changes in Securities. . . . . . . . . . . . . . . . . . . . . . . 13
Item 3: Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . . 14
Item 4: Submission of Matters to a Vote of Security Holders. . . . . . . . 15
Item 5: Other Information. . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 6: Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . 17
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
- 3 -
4
PART I: Item 1: Financial Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited)
9/30/95 6/30/95
---------- ----------
ASSETS
Current assets:
Accounts receivable, net of allowance
for doubtful accounts of
$39,520 and $24,525 $3,528,079 $3,453,628
Book inventories 1,259,541 1,083,856
Prepaid expenses 326,139 254,381
--------- ---------
Total current assets 5,113,759 4,791,865
Office furnishings and equipment, at cost
less accumulated depreciation of
$669,035 and $650,667 153,038 157,370
Other assets 6,392 ----
--------- ---------
$5,273,189 $4,959,235
========= =========
See note to consolidated financial statements.
- 4 -
5
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited)
(Continued)
9/30/95 6/30/95
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $1,664,774 $ 216,421
Notes payable 427,344 1,029,136
Current portion of long-term debt 6,415 16,649
Accounts payable 2,084,853 3,073,561
Deferred revenue 1,643,331 1,129,164
Accrued expenses 216,429 262,097
--------- ---------
Total current liabilities 6,043,146 5,727,028
Long-term debt, less current portion 47,020 43,201
--------- ---------
Total liabilities 6,090,166 5,770,229
Stockholders' equity:
Common stock, no-par value
50,000,000 shares authorized
636,889 shares issued 688,837 688,837
Paid in capital 428,988 428,988
Accumulated deficit (1,934,802) (1,938,819)
--------- ---------
Total stockholders' deficit ( 816,977) ( 820,994)
--------- ---------
$5,273,189 $4,949,235
========= =========
See note to consolidated financial statements.
- 5 -
6
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
For the
Three Month Periods
Ended September 30,
---------------------------
1995 1994
---------- ----------
Net sales $5,259,806 $5,244,391
Expenses:
Cost of goods sold 4,445,277 4,356,738
Operating and administrative 790,804 819,969
Interest 19,708 40,334
--------- ---------
Total expenses 5,255,791 5,217,041
Income (loss) before taxes 4,017 27,350
Income taxes ---- ----
--------- ---------
Net income (loss) 4,017 27,350
========= =========
Earnings (loss) per share:
Income (loss) $ .01 $ .04
--------- ---------
Net income (loss) per share $ .01 $ .04
========= =========
See note to consolidated financial statements.
- 6 -
7
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
For the
Three Month Periods
Ended September 30,
---------------------------
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income (loss) $ 4,017 $ 27,350
Gain on sale of equipment ---- ----
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 18,368 16,526
Changes in account balances:
Accounts receivable ( 74,451) ( 78,485)
Book inventories ( 175,685) ( 238,791)
Prepaid expenses and other ( 78,150) 12,257
Accounts payable ( 988,708) ( 520,857)
Deferred revenue 514,167 939,251
Accrued expenses ( 45,668) ( 87,286)
--------- ---------
Net cash provided by (used in)
operating activities ( 826,110) ( 26,089)
--------- ---------
See note to consolidated financial statements.
- 7 -
8
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
(Continued)
For the
Three Month Periods
Ended September 30,
--------------------------
1995 1994
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to office furnishings
and equipment ( 14,036) ( 9,734)
Other ( 15)
--------- ---------
Net cash used in investing activities ( 14,036) ( 9,749)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in notes payable
to commercial factors ( 601,792) ( 345,137)
Net (payments) borrowings on long term debt ( 6,415) ( 6,365)
--------- ---------
Net cash provided by (used in)
financing activities ( 608,207) ( 351,502)
--------- ---------
Net increase (decrease) in cash (1,448,353) ( 291,286)
Bank overdraft, beginning of period ( 216,421) ( 738,721)
Bank overdraft, end of period $(1,664,774) $(1,030,007)
========= =========
See note to consolidated financial statements.
- 8 -
9
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
For the
Three Month Periods
Ended September 30,
----------------------------
1995 1994
----------- -----------
Net sales $ 5,259,806 $ 5,244,391
Expenses:
Cost of goods sold 4,445,277 4,356,738
Operating and administrative 790,804 819,969
Interest 19,708 40,334
---------- ----------
Total expenses 5,255,789 5,217,041
Income (loss) before taxes 4,017 27,350
Income taxes ---- ----
---------- ----------
Net income (loss) $ 4,017 $ 27,350
========== ==========
Earnings (loss) per share:
Income (loss) .01 .04
---------- ----------
Net income (loss) per share $ .01 $ .04
========== ==========
See note to consolidated financial statements.
- 9 -
10
BOOK CENTERS, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
NOTE A: Earnings (loss) per Common Share
- -----------------------------------------
Earnings (loss) per common share is based on the average number of common
shares outstanding (exclusive of shares held in treasury). The number of
shares outstanding at September 30, 1995, was 636,889.
- 10 -
11
PART I: Item 2: Financial Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis
of Financial Condition
and Results of Operations
------------------------------------
Earnings decreased in the first quarter of 1995 over the first quarter of
1994 by $23,333. Although sales increased by $15,415, Operating costs
decreased by $29,165, and Interest expense declined by $20,626, the Cost of
Goods increased by $88,539. Efforts to improve purchasing from publishers and
to review customer pricing are in place. It is believed this will improve the
situation in future quarters.
Increased sales overseas has resulted in a slow down in payments.
Accounts over 90 days have been increased from 8.15% of Accounts Receivable in
1994 to 14.8% in 1995. Additional efforts to contact customers earlier in the
payment cycle are being made to reduce the percentage of unpaid accounts.
- 11 -
12
PART II: Item 1: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Legal Proceedings
-----------------
There are no additional matters to be reported beyond those contained in the
Registrant's Annual Report on Form 10-K for the year ended June 30, 1995.
- 12 -
13
PART II: Item 2: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Changes in Securities
---------------------
a. Modification of Instruments
- None applicable
b. Modification of Any Other Class of Securities
- None applicable
- 13 -
14
PART II: Item 3: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Defaults Upon Senior Securities
-------------------------------
a. Default in Installment Payments
- None applicable
b. Default in Dividend Payments
- None applicable
- 14 -
15
PART II: Item 4: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
- 15 -
16
PART II: Item 5: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Other Information
-----------------
None applicable
- 16 -
17
PART II: Item 6: Exhibits and Reports on Form 8-K
BOOK CENTERS, INC.
AND SUBSIDIARIES
Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
Exhibit 27 - Financial Data Schedule (filed electronically only)
b. Reports on Form 8-K
- None applicable
- 17 -
18
PART II: Signatures
BOOK CENTERS, INC.
AND SUBSIDIARIES
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 HEREUNTO DULY AUTHORIZED.
BOOK CENTERS, INC.
Date: September 10, 1995 /s/ DANIEL P. HALLORAN
--------------------------------------
DANIEL P. HALLORAN, PRESIDENT,
CHAIRMAN OF THE BOARD OF
DIRECTORS, CHIEF FINANCIAL
OFFICER, CONTROLLER, AND SECRETARY/
TREASURER (PRINCIPAL ACCOUNTING
OFFICER)
- 18 -
19
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
EX-27 Financial Data Schedule