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 December 31, 1995, or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
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Commission File Number: 0-3839
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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
December 31, 1995.
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BOOK CENTERS, INC.
FORM 10-Q
INDEX
PART I: Financial Information Page
--------------------- ----
Item 1: Financial Statements Book Centers, Inc.
---------------------------------------
Consolidated Balance Sheet<F1>
at December 31, 1995 and June 30, 1995. . . . . . . . . . . . . . 4
Consolidated Statements of Operations<F1>
for the three month periods ended December 31, 1995 and 1994. . . 6
Consolidated Statements of Cash Flows<F1>
for the six month periods ended December 31, 1995 and 1994. . . . 7
Consolidated Statements of Operations<F1>
for the six month periods ended December 31, 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 December 31, 1995 and
June 30, 1995 and the results of the operations and cash flows for the six
month period ended December 31, 1995.
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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
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PART I: Item 1: Financial Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited)
12/31/95 6/30/95
---------- ----------
ASSETS
Current assets:
Accounts receivable, net of allowance
for doubtful accounts of
$34,674 and $24,525 $3,961,043 $3,453,628
Book inventories 1,179,736 1,083,856
Prepaid expenses 339,772 254,381
--------- ---------
Total current assets 5,480,551 4,791,865
Office furnishings and equipment, at cost
less accumulated depreciation of
$240,016 and $650,667 177,231 157,370
Other assets 5,599 ----
--------- ---------
$5,663,381 $4,959,235
========= =========
See note to consolidated financial statements.
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BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheet
(Unaudited)
(Continued)
12/31/95 6/30/95
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $1,477,612 $ 216,421
Notes payable 296,936 1,029,136
Current portion of long-term debt 9,367 16,649
Accounts payable 2,491,462 3,073,561
Deferred revenue 1,797,493 1,129,164
Accrued expenses 234,377 262,097
--------- ---------
Total current liabilities 6,307,247 5,727,028
Long-term debt, less current portion 68,805 43,201
--------- ---------
Total liabilities 6,376,052 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 (1,830,496) (1,938,819)
--------- ---------
Total stockholders' deficit ( 712,671) ( 820,994)
--------- ---------
$5,663,381 $4,949,235
========= =========
See note to consolidated financial statements.
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6
BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
For the
Three Month Periods
Ended December 31,
---------------------------
1995 1994
---------- ----------
Net sales $6,371,162 $6,028,207
Expenses:
Cost of goods sold 5,338,776 5,049,822
Operating and administrative 912,261 865,142
Interest 15,814 41,944
--------- ---------
Total expenses 6,266,851 5,956,908
Income (loss) before taxes 104,311 71,299
Income taxes ---- ----
--------- ---------
Net income (loss) 104,311 71,299
========= =========
Earnings (loss) per share:
Income (loss) $ .16 $ .11
--------- ---------
Net income (loss) per share $ .16 $ .11
========= =========
See note to consolidated financial statements.
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BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
For the
Six Month Periods
Ended December 31,
---------------------------
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income (loss) $ 108,323 $ 98,649
Gain on sale of equipment ---- ----
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 39,028 39,141
Changes in account balances:
Accounts receivable ( 507,415) ( 452,134)
Book inventories ( 95,880) ( 403,666)
Prepaid expenses and other ( 90,990) ( 14,301)
Accounts payable ( 582,099) 124,701
Deferred revenue 668,329 830,236
Accrued expenses ( 27,720) ( 76,283)
--------- ---------
Net cash provided by (used in)
operating activities ( 488,424) ( 146,343)
--------- ---------
See note to consolidated financial statements.
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BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(Unaudited)
(Continued)
For the
Six Month Periods
Ended December 31,
--------------------------
1995 1994
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to office furnishings
and equipment ( 58,889) ( 27,036)
Other ( 5)
--------- ---------
Net cash used in investing activities ( 58,889) ( 27,041)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in notes payable
to commercial factors ( 732,200) ( 514,791)
Net (payments) borrowings on long term debt 18,322 ( 12,998)
--------- ---------
Net cash provided by (used in)
financing activities ( 713,878) ( 527,789)
--------- ---------
Net increase (decrease) in cash (1,261,191) ( 408,487)
Bank overdraft, beginning of period ( 216,421) ( 738,721)
Bank overdraft, end of period $(1,477,612) $(1,147,208)
========= =========
See note to consolidated financial statements.
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BOOK CENTERS, INC.
AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
For the
Six Month Periods
Ended December 31,
----------------------------
1995 1994
----------- -----------
Net sales $11,630,968 $11,272,598
Expenses:
Cost of goods sold 9,784,053 9,406,560
Operating and administrative 1,703,010 1,685,111
Interest 35,522 82,278
---------- ----------
Total expenses 11,522,644 11,173,949
Income (loss) before taxes 108,323 98,649
Income taxes ---- ----
---------- ----------
Net income (loss) $ 108,323 $ 98,649
========== ==========
Earnings (loss) per share:
Income (loss) .17 .16
---------- ----------
Net income (loss) per share $ .17 $ .16
========== ==========
See note to consolidated financial statements.
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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 December 31, 1995, was 636,889.
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PART I: Item 2: Financial Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis
of Financial Condition
and Results of Operations
------------------------------------
Sales in the first six months of this fiscal year increased by 3.18 percent
over the comparable period in the previous year. This included a 1.26 percent
increase in the number of units sold. Operating and administrative costs
increased only 1.07 percent. The new financing arrangement resulted in a
decrease of 56.83 percent in interest expense during the period. As reported
in previous periods, the cost of goods sold increased by 4.01 percent from the
year earlier period. As a result of the improvement in sales, lower interest
payments, and increase in the cost of goods sold, profits for the period
increased by 9.81 percent.
Overdue foreign receivables are still running at high levels; about 15 percent
are over normal terms. It is expected that increased collection efforts and
the end of many foreign libraries' fiscal years in March will result in a
significant improvement.
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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.
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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
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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
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PART II: Item 4: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
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PART II: Item 5: Other Information
BOOK CENTERS, INC.
AND SUBSIDIARIES
Other Information
-----------------
None applicable
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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
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PART II: Signatures
BOOK CENTERS, INC.
AND SUBSIDIARIES
Signatures
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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: February 12, 1996 /s/ DANIEL P. HALLORAN
--------------------------------------
DANIEL P. HALLORAN, PRESIDENT,
CHAIRMAN OF THE BOARD OF
DIRECTORS, CHIEF FINANCIAL
OFFICER, CONTROLLER, AND SECRETARY/
TREASURER (PRINCIPAL ACCOUNTING
OFFICER)
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE
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EX-27 Financial Data Schedule