-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UlyEaWY2Y+3uj/l08Up/Vk+0M3dCWLnD8nEEdXwkI9rmcSA4ZPWNlikoWYGac0DB p+88xREWNKh4WL0XXucTcw== 0000912057-00-024433.txt : 20000516 0000912057-00-024433.hdr.sgml : 20000516 ACCESSION NUMBER: 0000912057-00-024433 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RETROSPETTIVA INC CENTRAL INDEX KEY: 0001015383 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 954298051 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-13101 FILM NUMBER: 632358 BUSINESS ADDRESS: STREET 1: 8825 WEST OLYMPIC BLVD CITY: BEVERLY HILLS STATE: CA ZIP: 90211 10QSB 1 10QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to ___________ For the quarterly period ended __________________________ Commission file number: 333-29295 RETROSPETTIVA, INC. (Exact name of small business issuer as specified in its charter) California 95-4298051 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8825 West Olympic Boulevard Beverly Hills, CA 90211 (Address of principal executive offices) (310) 657-1745 (Issuer's telephone number) Check whether the registrant (1) has 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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, No Par Value, 3,177,916 shares as of May 9, 2000. Transitional Small Business Disclosure Format: Yes [ ] No [ X ] RETROSPETTIVA, INC. AND SUBSIDIARY BALANCE SHEETS ASSETS
DECEMBER 31, MARCH 31, 1999 2000 ------------------------------------ (UNAUDITED) CURRENT ASSETS Cash $ 85,857 $ 20,342 Accounts receivable, net, pledged 1,088,811 1,767,590 Due from factor 742,950 923,074 Note receivable, current portion,pledged 36,000 27,000 Note receivable, stockholder,pledged 300,160 304,156 Inventories, pledged 10,253,949 9,166,861 Income taxes receivable 72,949 85,007 Accrued interest receivable, stockholder 78,551 78,551 Due from vendors 580,882 446,520 Product development costs 179,721 306,573 Other current assets 87,812 87,812 ------------------------------------ Total Current Assets 13,507,642 13,213,486 PROPERTY AND EQUIPMENT, at cost, net 1,085,117 1,056,340 NOTES RECEIVABLE, net of current portion 50,851 50,851 DEFERRED TAX ASSETS 47,000 47,000 OTHER ASSETS 18,295 18,295 ------------------------------------ $ 14,708,905 $ 14,385,972 ==================================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable, trade $ 3,126,098 $ 2,479,481 Line of credit 2,110,817 2,245,988 Vendor Advances - 104,588 Accrued expenses 45,621 37,220 Payroll taxes payable - 12,306 Customer advances - 50,000 ------------------------------------ Total Current Liabilities 5,282,536 4,929,583 ------------------------------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock - authorized 1,000,000 shares - none issued or outstanding Common stock - authorized 15,000,000 shares, no par value; issued and outstanding 3,177,916 shares 6,765,480 6,765,480 Subscription receivable (164,790) (164,790) Additional paid-in capital 230,000 230,000 Retained earnings 2,595,679 2,625,699 ------------------------------------ Total Stockholders' Equity 9,426,369 9,456,389 ------------------------------------ $ 14,708,905 $ 14,385,972 ====================================
RETROSPETTIVA, INC. AND SUBSIDIARY STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 2000 ------------------------------- SALES $ 8,219,114 $ 6,429,651 ------------------------------- Total Sales 8,219,114 6,429,651 COST OF SALES 7,251,725 5,510,954 ------------------------------- GROSS PROFIT 967,389 918,697 OPERATING EXPENSES Selling expenses 133,380 178,380 General and administrative 492,014 606,446 ------------------------------- Total Operating Expenses 625,394 784,826 ------------------------------- INCOME FROM OPERATIONS 341,995 133,871 OTHER INCOME (EXPENSES) Interest income 2,573 197 Interest income, related party 7,932 - Interest expense (41,353) (105,368) Other income 35,497 1,320 Net Other Income (Expenses) 4,649 (103,851) ------------------------------- INCOME BEFORE INCOME TAXES 346,644 30,020 PROVISION FOR INCOME TAXES 134,000 - ------------------------------- NET INCOME $ 212,644 $ 30,020 ------------------------------- NET INCOME PER SHARE, BASIC $ 0.07 $ 0.01 =============================== WEIGHTED AVERAGE NUMBERS OF SHARES OUTSTANDING, BASIC 2,954,778 3,103,198 =============================== NET INCOME PER SHARE, DILUTED $ 0.06 $ 0.01 =============================== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, DILUTED 3,291,457 3,648,157 ===============================
RETROSPETTIVA, INC. AND SUBSIDIARY STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 2000 ----------------------------------------- CASH FLOWS FROM (TO) OPERATING ACTIVITIES: Net income $ 212,644 $ 30,020 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 6,870 34,330 Changes in: Accounts receivable (1,114,619) (678,779) Prepaid income taxes 82,016 (12,058) Due from factor (866,485) (180,124) Accrued interest receivable, shareholder (7,932) - Product development cost - (126,852) Advances to vendor (203,220) 134,362 Inventories 2,244,032 1,087,088 Accounts payable and accrued expenses (381,882) (655,018) Accrued income taxes 8,109 - Customer advances 50,000 Accrued payroll taxes - 12,306 ----------------------------------------- Cash flows (used) by operating activities (20,467) (304,725) ----------------------------------------- CASH FLOWS FROM (TO) INVESTING ACTIVITIES: Purchase of fixed assets (8,215) (5,552) Payments on notes receivable - 9,000 ----------------------------------------- Cash flows provided (used) by investing activities (8,215) 3,448 ----------------------------------------- CASH FLOWS FROM (TO) FINANCING ACTIVITIES: Vendor advance 0 104,588 Loans to stockholder (25,553) (3,996) Proceeds from line of credit 100,007 135,171 Payments on note payable (26,580) - Proceeds from issuance of common stock 212,500 - ----------------------------------------- Cash flows provided by financing activities 260,374 235,763 ----------------------------------------- NET INCREASE (DECREASE) IN CASH 231,692 (65,514) CASH IN BANK, beginning of period 115,890 85,857 ----------------------------------------- CASH IN BANK, end of period $ 347,582 $ 20,343 =========================================
RETROSPETTIVA, INC. AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The accompanying reviewed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-QSB. 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, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented. The results for the three months ended March 31, 2000 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 1999. NOTE 2 - INVENTORIES Inventories at March 31, 2000 consisted of the following: Raw Material $2,328,529 Work-in-process 5,639,237 Finished goods 1,199,095 ------------- Total $9,166,861
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company contracts for the manufacture of a variety of garments, primarily basic women's sportswear which includes suits, skirts, blouses, blazers, pants, shorts, vests and dresses, using assorted fabrics including rayons, linens, cotton and wool. The Company arranges for the manufacture of garments for customers under private labels selected by its customers. It markets its products exclusively in the United States directly to large wholesalers directly and indirectly to national retailers and buying organizations, and directly to women's chain clothing stores and catalogues. Substantially, all of the Company's garments are sold on a "package" basis pursuant to which the Company markets at fixed prices finished garments to the customer's specifications and quantity requirements, arranges for production of the garments and delivers the garments directly to the customer at the port of entry. In its marketing, the Company emphasizes these package arrangements and what it believes to be the better quality and lower prices of garments produced by skilled Macedonian workers as compared to lower paid workers in certain other regions. See Item 1. As a package provider, the Company sources and purchases fabrics and trims, arranges for cutting and sewing, and coordinates any other services required to provide a finished garment. Since the Company manufactures its finished products only upon receipt of purchase orders from its wholesale and retail customers, it therefore does not maintain an inventory of finished products. The Company believes that in this way it minimizes the marketing and fashion risk generally associated with the apparel industry. Fabrics and trims are purchased from suppliers in China, India, Russia, Romania, Italy and the United States. After dying the fabric, if necessary, the fabric and trim are shipped to factories selected by the Company (primarily located in Macedonia) where they are manufactured into finished garments under the Company's management and quality control guidance. The finished products are then shipped directly to New York City where the Company's customers claim the goods either at the port in New York City or at a consolidating warehouse in Astoria, New York. Except for historical information contained herein, the matters set forth may include forward-looking statements that are subject to risks and uncertainty that may cause actual results to differ materially. Such forward-looking statements that may be contained in this document could include in particular statements concerning business back-logs, operating efficiencies and capacities, capital spending, and other expenses. Among other factors that could cause actual results to differ materially are the following; dependence upon unaffiliated manufacturers and fabric suppliers, dependence on certain customers, foreign operations, competition, risks associated with significant growth, uncertainties in apparel industry, general economic conditions, seasonality, political instability, concentration of accounts receivable and possible fluctuations in operating results. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, the percentage relationship to net revenues of certain items in the Company's statements;
THREE MONTHS ENDED MARCH 31, 1999 2000 --------------------------- Revenues 100.0% 100.0% Cost of goods sold 88.2% 85.7% Gross profit 11.8% 14.3% Selling, General and Administrative 7.6% 12.2% Operating income 4.2% 2.1%
THREE MONTHS ENDED MARCH 31, 2000 ("2000") COMPARED TO THREE MONTHS ENDED MARCH 31, 1999 ("1999") SALES Sales for 2000 were $6,429,651 which represented a decrease of $1,789,463 or 21.8% from 1999 net sales of $8,219,114. The decrease in sales was primarily attributable to decreased purchases by existing customers. The Company has a backlog of orders for approximately $700,000 that it expects to fulfill early in the second quarter. COST OF GOODS SOLD Cost of goods sold in 2000 was $5,510,954 or 85.7% of sales, a decrease of $1,740,771 from $7,251,725 or 24% of sales in 1999. The decrease in cost of goods sold was primarily attributable to the decrease in sales. The decrease in the percentage of cost of goods sold was primarily attributable to decreases in cost of materials and shipping expenses. GROSS PROFIT Gross profit was $918,697 for 2000, a decrease of $48,692 from $967,389 for 1999. The gross profit percentage was 14.3% in 2000, an increase from 11.8% in 1999. The increase in the gross profit percentage was primarily attributable to decreased cost of materials and shipping expenses. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative ("SG&A") expenses were $784,826 or 12.2% of sales for 2000, an increase of $159,432 from $625,394 or 7.6% of sales for 1999. The increase in SG&A expense levels was primarily attributable to payments related to factoring, office salaries, travel and trade shows. INTEREST EXPENSE Interest expense for 2000 was $105,368 compared to $41,353 for 1999. The increase in interest was primarily attributable to the increase in the utilization of existing financing vehicles. PROVISION FOR INCOME TAXES There was no provision for income taxes for 2000 compared to $134,000 for 1999. The decrease in the provision for income taxes for 2000 was primarily attributable to decreased earnings. LIQUIDITY The Company has 575,000 warrants outstanding with an exercise price of $7.50 per warrant expiring September 23, 2002. The Company has 50,000 underwriter warrants outstanding with an exercise price of $14.40 per unit. Each unit consists of two shares of the Company's common stock and one warrant as described above. The Company does not know whether the warrants will be exercised in 1999. Without exercise of those warrants, the Company may need to limit its growth in order to more efficiently manage its available funds and funds generated by operations. It is the Company's intention, however, to utilize more fully and possibly increase its existing line of credit with a major lending institution and its credit facility arrangement with a New York factoring company. These measures are required due to the significant cash requirements related to increases in revenues. The Company does not expect its historical rate of increase in sales growth to continue and further expects its rate of growth to be lower in the future as it begins to reach its full operating capacity constraints and utilization of its existing capital resources. In the event the Company is able to obtain additional equity capital through the exercise, if any, of its outstanding warrants or other increases in potential working capital as mentioned above, however, the Company believes that this new working capital may allow it to grow more quickly. CAPITAL RESOURCES Since its formation, the Company has financed its operations and met its capital requirements primarily through cash flows from operations, customer advances, from principals, credit facilities, bridge loans, a private placement and its IPO. The initial use of IPO funds was to repay certain debt and to purchase raw materials, for working capital and the eventual purchase of wool manufacturing equipment. The Company's primary need for cash is for working capital purposes. The Company may raise capital through the issuance of long-term or short-term debt, or the issuance of securities in private or public transactions to fund future expansion of its business. There can be no assurance that acceptable financing for future transactions can be obtained. INFLATION The Company does not anticipate a significant increase in inflation in the United States over the short-term. All of the Company's transactions worldwide are conducted on a dollar-denominated basis which is intended to mitigate the possible impact of volatile currencies that may arise as a result of global corporations crowding emerging markets in search of growth. SEASONALITY The Company's revenues and operating results have exhibited some degree of seasonality in past periods. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS CHANGES IN SECURITIES Not applicable USE OF PROCEEDS Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable ITEM 5. OTHER INFORMATION Not applicable ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Not applicable 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 thereto duly authorized. Date: May 9, 2000 RETROSPETTIVA, INC. ------------------- (Registrant) /s/ Hamid Vaghar -------------------------------- Hamid Vaghar Chief Financial Officer (Principal Accounting Officer) EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RETROSPETTIVA, INC. 10QSB FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 20,342 0 0 0 9,166,861 13,213,486 1,056,340 0 14,385,972 4,929,583 0 0 0 6,765,480 2,690,909 14,385,972 6,429,651 6,429,651 5,510,954 6,295,780 0 0 105,368 30,020 0 0 0 0 0 30,020 .01 .01
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