SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 2002
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 1-12676
COASTCAST CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3454926
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3025 EAST VICTORIA STREET, RANCHO DOMINGUEZ, CA 90221
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310)638-0595
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
--- ---
At August 14, 2002 there were outstanding 7,635,042 shares of common stock, no
par value.
1
COASTCAST CORPORATION
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2002 (Unaudited) and December 31, 2001 3
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30, 2002 and 2001 4
Six Months Ended June 30, 2002 and 2001 5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2002 and 2001 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION:
Item 4. Submission of Matter to a Vote of Securities Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Forward Looking Statements
This document includes certain "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may differ materially from these
expectations due to changes in political, economic, business, competitive,
market and regulatory factors.
2
COASTCAST CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2002 2001
------------------------ ----------------------
A S S E T S
Current assets:
Cash and cash equivalents $ 14,354,000 $ 13,248,000
Trade accounts receivable, net
of allowance for doubtful accounts of $200,000
at June 30, 2002 and at December 31, 2001 8,009,000 7,293,000
Inventories (Note 2) 7,414,000 9,319,000
Prepaid expenses and other current assets 3,069,000 2,376,000
Deferred income taxes - 264,000
------------------------ ----------------------
Total current assets 32,846,000 32,500,000
Property, plant and equipment, net 17,945,000 21,127,000
Deferred income taxes - 2,346,000
Other assets 1,455,000 1,458,000
------------------------ ----------------------
$52,246,000 $ 57,431,000
======================== ======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,749,000 $ 3,196,000
Accrued liabilities 3,070,000 4,252,000
------------------------ ----------------------
Total current liabilities 5,819,000 7,448,000
Long term liabilities 1,769,000 1,728,000
------------------------ ----------------------
Total liabilities 7,588,000 9,176,000
------------------------ ----------------------
Commitments and contingencies
Shareholders' Equity:
Preferred stock, no par value, 2,000,000 shares
authorized; none issued and outstanding
Common stock, no par value, 20,000,000 shares
authorized; 7,635,042 shares issued and outstanding 26,067,000 26,067,000
Retained earnings 19,015,000 22,435,000
Accumulated other comprehensive loss (424,000) (247,000)
------------------------ ----------------------
Total shareholders' equity 44,658,000 48,255,000
------------------------ ----------------------
$ 52,246,000 $ 57,431,000
======================== ======================
See accompanying notes to condensed consolidated financial statements.
3
COASTCAST CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
---------------------------------------------------
For the Three Months
Ended June 30,
---------------------------------------------------
2002 2001
--------------------- ---------------------
Sales $ 19,945,000 $ 32,184,000
Cost of sales 18,172,000 30,548,000
--------------------- ---------------------
Gross profit 1,773,000 1,636,000
Selling, general and administrative expenses 1,468,000 1,820,000
Impairment of fixed assets 1,750,000 -
Restructuring charges
- employee termination benefits 1,433,000 -
--------------------- ---------------------
Loss from operations (2,878,000) (184,000)
Other income, net 95,000 44,000
--------------------- ---------------------
Loss before income taxes (2,783,000) (140,000)
Provision for income taxes 1,360,000 192,000
--------------------- ---------------------
Net loss $ (4,143,000) $ (332,000)
===================== =====================
NET LOSS PER SHARE (Note 3)
Net loss per share - basic $ (0.54) $ (0.04)
===================== =====================
Weighted average shares outstanding 7,635,042 7,676,042
===================== =====================
Net loss per share - diluted $ (0.54) $ (0.04)
===================== =====================
Weighted average shares outstanding - diluted 7,635,042 7,676,042
===================== =====================
See accompanying notes to condensed consolidated financial statements.
4
COASTCAST CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
------------------------------------------------
For the Six Months
Ended June 30,
------------------------------------------------
2002 2001
--------------------- ---------------------
Sales $ 41,901,000 $ 59,487,000
Cost of sales 37,236,000 57,324,000
--------------------- ---------------------
Gross profit 4,665,000 2,163,000
Selling, general and administrative expenses 3,071,000 3,664,000
Impairment of fixed assets 1,750,000 -
Restructuring charges - employee termination benefits 1,433,000 -
--------------------- ---------------------
Loss from operations (1,589,000) (1,501,000)
Other income, net 129,000 229,000
--------------------- ---------------------
Loss before income taxes (1,460,000) (1,272,000)
Provision (benefit) for income taxes 1,960,000 (283,000)
--------------------- ---------------------
Net loss $ (3,420,000) $ (989,000)
===================== =====================
NET LOSS PER SHARE (Note 3)
Net loss per share - basic $ (0.45) $ (0.13)
===================== =====================
Weighted average shares outstanding 7,635,042 7,675,024
===================== =====================
Net loss per share - diluted $ (0.45) $ (0.13)
===================== =====================
Weighted average shares outstanding - diluted 7,635,042 7,675,024
===================== =====================
See accompanying notes to condensed consolidated financial statements.
5
COASTCAST CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months
Ended June 30,
--------------------------------------
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,420,000) $ (989,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,105,000 2,273,000
Goodwill amortization and impairment - 231,000
Impairment of fixed assets 1,750,000 -
Loss on disposal of machinery and equipment 26,000 244,000
Deferred compensation 140,000 150,000
Pension liability (99,000) -
Deferred income taxes 2,433,000 -
Changes in operating assets and liabilities:
Trade accounts receivable (716,000) (3,981,000)
Inventories 1,905,000 (3,375,000)
Prepaid expenses and other current assets (693,000) 810,000
Accounts payable and accrued liabilities (896,000) 907,000
----------- -----------
Net cash provided by (used in) operating activities 2,535,000 (3,730,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (1,485,000) (1,690,000)
Proceeds from disposal of machinery and equipment 53,000 1,026,000
Other assets 3,000 -
----------- -----------
Net cash used in investing activities (1,429,000) (664,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon exercise of
options net of related tax benefit - 410,000
Dividends paid - (40,376,000)
----------- -----------
Net cash used in financing activities - (39,966,000)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,106,000 (44,360,000)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 13,248,000 52,168,000
----------- -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $14,354,000 $ 7,808,000
=========== ===========
See accompanying notes to condensed consolidated financial statements.
6
COASTCAST CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated balance sheet as of June 30, 2002, the related
condensed consolidated statements of operations for the three and six months and
cash flows for the six months ended June 30, 2002 and 2001 have been prepared by
Coastcast Corporation (the "Company") without audit. In the opinion of
management, all adjustments (consisting only of normal recurring accruals,
unless otherwise noted) have been made which are necessary to present fairly the
financial position, results of operations and cash flows of the Company at June
30, 2002 and for the periods then ended.
Although the Company believes that the disclosure in the condensed consolidated
financial statements is adequate for a fair presentation thereof, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The December 31, 2001
audited statements were included in the Company's annual report on Form 10-K
under the Securities Exchange Act of 1934 for the year ended December 31, 2001.
These condensed consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto contained in that annual
report.
The results of operations for the periods ended June 30, 2002 are not
necessarily indicative of the results for the full year.
2. INVENTORIES
Inventories consisted of the following:
June 30, December 31,
2002 2001
---------------- ------------------
Raw materials and supplies $4,438,000 $ 5,009,000
Tooling 239,000 245,000
Work-in-process 2,458,000 3,658,000
Finished goods 279,000 407,000
-------------- --------------
$7,414,000 $9,319,000
========== ===========
3. EARNINGS PER SHARE
Basic and diluted net loss per share is based on the weighted average number of
shares of common stock outstanding.
7
4. COMPREHENSIVE LOSS
Comprehensive loss consisted of the following:
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- -----------------------------
2002 2001 2002 2001
----------- ------------ ------------- -------------
Net loss $(4,143,000) $ (332,000) $(3,420,000) $(989,000)
Unrealized gain (loss) on investments (14,000) 26,000 (1,000) -
Excess of additional pension
liability over unrecognized prior service cost (176,000) - (176,000) -
----------- ------------ ------------- -------------
Comprehensive loss $(4,333,000) $(306,000) $(3,597,000) $(989,000)
=========== ============ ============= =============
5. BUSINESS SEGMENTS
The Company's management has organized its operations into 2 business segments:
Golf and Non-Golf. The following tables set forth summarized financial
information on the Company's reportable segments:
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- ---------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Net sales:
Golf $17,255,000 $29,244,000 $36,840,000 $53,593,000
Non-golf 2,690,000 2,940,000 5,061,000 5,894,000
----------- ----------- ----------- -----------
Total net sales 19,945,000 32,184,000 41,901,000 59,487,000
----------- ----------- ----------- -----------
Loss from operations:
Golf (2,857,000) (117,000) (1,384,000) (1,417,000)
Non-golf (21,000) (67,000) (205,000) (84,000)
----------- ----------- ----------- -----------
Total loss from operations $(2,878,000) $ (184,000) $(1,589,000) $(1,501,000)
=========== =========== =========== ===========
June 30, December 31,
2002 2001
----------- -----------
Identifiable assets:
Golf $29,944,000 $34,057,000
Non-golf 5,120,000 5,484,000
Corporate 17,182,000 17,890,000
----------- -----------
Total identifiable assets $52,246,000 $57,431,000
=========== ===========
The impairment of fixed assets and the restructuring charges for employee
termination benefits were included in the Golf business segment (See Note 6).
8
6. FIXED ASSET IMPAIRMENT, EMPLOYEE SEVERANCE AND OTHER RESTRUCTURING CHARGES
The Company continues to experience a diminishment of its golf clubhead sales
and market share due principally to the increasing use by our customers of
suppliers in China. The products coming from China are at prices lower than
those the Company is able to offer. As a result, the Company has reviewed its
long lived assets for impairment, experienced workforce reductions and recorded
other restructuring charges.
Fixed Asset Impairment - The Company specifically identified fixed assets which
were not in use and expected to be disposed of. During the second quarter of
2002, the Company recorded an impairment charge of $1,750,000 representing the
difference between the carrying value of the assets to their estimated fair
value as of June 30, 2002.
Employee Severance - During the second quarter of 2002, the Company recorded
employee termination benefits of $1,433,000, representing 808 and 70 employees
who were involuntarily terminated at the Company's facilities in Mexico and
California, respectively. The amount of termination benefits paid as of June 30,
2002 was $1,311,000 and the remaining $122,000 was paid in July 2002.
CPAC Operations - In December 2001, the Company ceased the operations of its
subsidiary, California Precision Aluminum Castings, Inc. ("CPAC"), which
manufactured aluminum turbocharger compressor wheels for automotive
applications. An accrual of $775,000 for various exit activities was recorded as
of December 31, 2001. As of June 30, 2002, the remaining accrual was $77,000
related to expected charges to operations in the last half of fiscal 2002.
Mexicali Lease - In December 2001, the Company decided to abandon one of the
Company's four leased facilities in Mexicali, Mexico. An accrual of $375,000
representing the estimated total lease obligation, net of estimated sublet
income, was recorded as of December 31, 2001. As of June 30, 2002, the remaining
accrual was $319,000.
The Company is continuing the process of consolidation and downsizing. The
Company expects further significant restructuring charges to occur during the
third quarter. This process is expected to be substantially complete by the end
of the third quarter.
7. OTHER
In February 2002, the New York Stock Exchange (NYSE) notified the Company that
it had fallen below the NYSE's minimum equity and capitalization standards, and
requested that the Company provide a business plan demonstrating how it intends
to achieve and sustain compliance. In April 2002, the Company announced that it
had submitted a plan to the NYSE setting forth the action that the Company
intends to take to comply with the eligibility standards. In early June 2002,
the NYSE Committee accepted the Company's business plan, which subjects the
Company to a formal quarterly monitoring process.
The Company intends to submit a quarterly update to the NYSE shortly after the
Form 10-Q has been filed which will be subject to the NYSE Committee review.
After reviewing the quarterly update, the Committee will either accept and
continue the quarterly monitoring process or will suspend trading and delist the
Company. The Company is evaluating its alternatives should the Company's shares
cease being traded on the NYSE. In the event that the NYSE suspends trading and
delists the Company, shareholders liquidity will be negatively impacted which
could have an adverse effect on the market price per share.
9
Recent Accounting Pronouncements - In June 2002, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard ("SFAS") No.
146, "Accounting for Exit or Disposal Activities." SFAS No. 146 requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of a commitment to an exit or disposal
plan. SFAS No. 146 replaces previous accounting guidance provided by EITF Issue
No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)" and will be effective for the Company for exit or disposal
activities initiated after December 31, 2002. The Company has not determined the
impact that this statement will have on its consolidated financial position or
results of operation.
10
COASTCAST CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales decreased 38.2% and 29.6% to $19.9 million and $41.9 million for the three
and six months ended June 30, 2002, respectively, from $32.2 million and $59.5
million for the three and six months ended June 30, 2001, respectively. The
decline in sales was mainly due to a 41% and 31.3% decrease in golf sales for
the three and six months ended June 30, 2002 as compared to the three and six
months ended June 30, 2001, respectively. The Company believes that this
decrease in sales of golf clubheads resulted principally from the loss of market
share to Chinese competitors which are able to offer lower prices because of
their lower labor costs.
Gross profit increased to $1.8 million and $4.7 million for the three and six
months ended June 30, 2002, respectively, from $1.7 million and $2.2 million for
the three and six months ended June 30, 2001, respectively. The gross profit
margin increased to 8.9% and 11.1% for the three months and six months ended
June 30, 2002, respectively, from 5.1% and 3.6% for the three and six months
ended June 30, 2001, respectively. The increase in gross margin was primarily
due to high scrap rates incurred in the titanium golf clubheads manufacturing
operations during 2001 and the cost reductions from employee terminations
incurred during the second quarter of 2002.
The Company continues to experience a diminishment of its golf clubhead sales
and market share due principally to the increasing use by our customers of
suppliers in China. The products coming from China are at prices lower than
those the Company is able to offer. As a result, the Company has reviewed its
long lived assets for impairment, experienced workforce reductions and recorded
other restructuring charges.
Fixed Asset Impairment - The Company specifically identified fixed assets which
were not in use and expected to be disposed of. During the second quarter of
2002, the Company recorded an impairment charge of $1.8 million, representing
the difference between the carrying value of the assets to their estimated fair
value as of June 30, 2002.
Employee Severance - During the second quarter of 2002, the Company recorded
employee termination benefits of $1.4 million, representing 808 and 70 employees
who were involuntarily terminated at the Company's facilities in Mexico and
California, respectively. The amount of termination benefits paid as of June 30,
2002 was $1.3 million and the remaining $.1 million was paid in July 2002.
CPAC Operations - In December 2001, the Company ceased the operations of its
subsidiary, California Precision Aluminum Castings, Inc. ("CPAC"), which
manufactured aluminum turbocharger compressor wheels for automotive
applications. An accrual of $.8 million for various exit activities was recorded
as of December 31, 2001. As of June 30, 2002, the remaining accrual was $.1
million related to expected charges to operations in the last half of fiscal
2002.
Mexicali Lease - In December 2001, the Company decided to abandon one of the
Company's four leased facilities in Mexicali, Mexico. An accrual of $.4 million
representing the estimated total lease obligation, net of estimated sublet
income, was recorded as of December 31, 2001. As of June 30, 2002, the remaining
accrual was $.3 million.
11
The Company is continuing the process of consolidation and downsizing. The
Company expects further significant restructuring charges to occur during the
third quarter. This process is expected to be substantially complete by the end
of the third quarter.
A full valuation allowance on the deferred tax asset balance of $2.4 million was
charged to provision for income taxes for the quarter ended June 30, 2002.
The effective tax rate, excluding the deferred tax asset charge, for the six
months ended June 30, 2002 was 32.5% compared to 22.2% for the comparable prior
year period. The increase in tax rate was mainly due to non-deductible expenses
for Mexico and non-deductible goodwill amortization in the US in 2001.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents position at June 30, 2002 was $14.4
million compared to $13.3 million on December 31, 2001, an increase of $1.1
million. Net cash provided by operating activities was $2.5 million for the six
months ended June 30, 2002. The net cash provided by operating activities
included the write-off of the deferred tax asset of $2.4 million, depreciation
and amortization of $2.1, a decrease in inventories of $1.9 million and the
impairment of fixed assets of $1.8 million partially offset by a net loss of
$3.4 million, a decrease in accounts payable and accrued liabilities of $.9
million, an increase in receivables of $.7 million and an increase in prepaid
expenses and other current assets of $.7 million. Net cash used in investing
activities of $1.4 million consisted mainly of $1.5 million of net capital
expenditures.
In December 1999, the Board of directors authorized the repurchase of up to one
million shares of Coastcast common stock from time to time in the open market or
negotiated transactions. For the six months ended June 30, 2002, no shares were
repurchased under this authorization. As of June 30, 2002, there are 747,842
shares remaining to be purchased under this authorization.
The Company has no long term debt. In response to declining sales, the Company
reduced its workforce and has taken other steps in an effort to maintain its
current cash position. The Company expects further significant workforce
reductions and restructuring charges to occur during the third quarter of 2002.
The Company believes that its current cash position and cash flow from
operations should be adequate to meet its financing requirements for the
foreseeable future.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
12
COASTCAST CORPORATION
PART II. OTHER INFORMATION
Item 4. Submission of Matter to a Vote of Securities Holders
The Company held its annual meeting of shareholders on June 5, 2002. The
following matters were voted on and approved by the shareholders.
1. Election of Directors to hold office until the 2003 Annual Meeting:
Votes For Votes Withheld
--------- --------------
Hans H. Buehler 7,439,135 87,871
Robert H. Goon 7,446,221 87,785
Edwin A. Levy 7,463,521 63,485
Gary V. Meloni 7,463,821 63,185
Lee E. Mikles 7,462,921 64,085
Paul A. Novelly 7,330,321 196,685
Luann G. Smith 7,463,921 63,085
2. Approval of proposal to amend Coastcast Corporation's Articles of
Incorporation to effect a one-for-three reverse stock split of the issued and
outstanding shares of Coastcast Corporation common stock at the discretion of
the Board of Directors: holders of 7,373,724 shares voted for the proposal,
holders of 130,812 shares voted against the proposal, and holders of 22,470
shares abstained from voting on such proposal.
Item 5. Other Information
The following business risks, as disclosed in Part II, Item 5 "Market for
Registrant's Common Equity and Related Stockholder Matters" on Form 10-K for the
fiscal year ended December 31, 2001, are hereby incorporated by reference as
though set forth fully herein:
Customer concentration
Competition
New products
New materials and processes
Manufacturing cost variations
Dependence on manufacturing plants in Mexico
Hazardous waste
Dependence on discretionary consumer spending
Seasonality; fluctuations in operating results
Reliance on key personnel
Shares eligible for future sale
Fluctuations in Callaway Golf Company share values
Adverse effect of increase in energy costs
Shareholder rights plan could discourage acquistion proposals.
13
In February 2002, the New York Stock Exchange (NYSE) notified the Company that
it had fallen below the NYSE's minimum equity and capitalization standards, and
requested that the Company provide a business plan demonstrating how it intends
to achieve and sustain compliance. In April 2002, the Company announced that it
had submitted a plan to the NYSE setting forth the action that the Company
intends to take to comply with the eligibility standards. In early June 2002,
the NYSE Committee accepted the Company's business plan, which subjects the
Company to a formal quarterly monitoring process.
The Company intends to submit a quarterly update to the NYSE shortly after the
Form 10-Q has been filed which will be subject to the NYSE Committee review.
After reviewing the quarterly update, the Committee will either accept and
continue the quarterly monitoring process or will suspend trading and delist the
Company. The Company is evaluating its alternatives should the Company's shares
cease being traded on the NYSE. In the event that the NYSE suspends trading and
delists the Company, shareholders liquidity will be negatively impacted which
could have an adverse effect on the market price per share.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1.1 Articles of Incorporation of the Company, as amended (1)
3.1.2 Certificate of Amendment of Articles of Incorporation filed
with the California Secretary of State on December 6,
1993(1)
3.2 Bylaws of the Company, as amended April 19, 2001 (2)
11 Statement re: computation of per share earnings
99.1 Pages 10-12 of Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001 (incorporated by reference
to such Form 10-K filed with the Commission)
----------------------------------------------
(1) Incorporated by reference to the exhibits to the
Registration Statement on Form S-1 (Registration No.
33-71294) filed on November 17, 1993, Amendment No. 2
filed on December 1, 1993, and Amendment No. 3 filed on
December 9, 1993
(2) Incorporated by reference to the exhibits to Form 10-Q
for the fiscal quarter ended June 30, 2001
(b) Reports on Form 8-K:
None
14
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.
CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an officer of
Coastcast Corporation (the "Company") that the Quarterly Report of the Company
on Form 10-Q for the periods ended June 30, 2002 fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 and that
the information contained in such report fairly presents, in all material
respects, the financial condition of the Company at the end of such period and
the results of operations of the Company for such periods.
COASTCAST CORPORATION
August 14, 2002 By /s/ Hans H. Buehler
- ----------------- --------------------------------------
Dated Hans H. Buehler
Chief Executive Officer (Duly Authorized
and Principal Executive Officer)
August 14, 2002 By /s/ Norman Fujitaki
- --------------- --------------------------------------
Dated Norman Fujitaki
Chief Financial Officer (Duly Authorized
and Principal Financial Officer)
15
COASTCAST CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- ---------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Common stock outstanding
at beginning of period 7,635,042 7,676,042 7,635,042 7,641,769
Exercise of options - - - 34,273
----------- ----------- ----------- -----------
Common stock outstanding at end of period 7,635,042 7,676,042 7,635,042 7,676,042
=========== =========== =========== ===========
Weighted average shares outstanding,
for computation of basic earnings per share 7,635,042 7,676,042 7,635,042 7,675,024
Dilutive effect of stock options after
application of Treasury stock method - - - -
----------- ----------- ----------- -----------
Total diluted weighted average
shares outstanding, for
computation of diluted earnings per share 7,635,042 7,676,042 7,635,042 7,675,024
=========== =========== =========== ===========
Net loss $(4,143,000) $(332,000) $(3,420,000) $(989,000)
=========== =========== =========== ===========
Net loss per common share - basic $(.54) $(.04) $ (.45) $ (.13)
=========== =========== =========== ===========
Net loss per share common share - diluted $ (.54) $(.04) $ (.45) $ (.13)
=========== =========== =========== ===========
Exhibit 11
16