-----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, By2ToVpEOGPZMHXGrk9FB48RAa72tZK8/4T4mVW6aeANBwE126LyFv4XcKFRPfRb aNNCTaz0vKLFe+FEyFmT9Q== 0001066849-02-000006.txt : 20020506 0001066849-02-000006.hdr.sgml : 20020506 ACCESSION NUMBER: 0001066849-02-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SITE2SHOP COM INC CENTRAL INDEX KEY: 0001066849 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 880382813 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26093 FILM NUMBER: 02634801 BUSINESS ADDRESS: STREET 1: 2001 W SAMPLE RD STREET 2: SUITE 101 CITY: POMPANO BEACH STATE: FL ZIP: 33064 BUSINESS PHONE: 9549691010 MAIL ADDRESS: STREET 1: 2001 WEST SAMPLE ROAD STE 101 CITY: POMPANO STATE: FL ZIP: 33064 10QSB 1 q10sb33102.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (Mark One) (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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:0-26093 -------------------------------------------------------- INTERMEDIA MARKETING SOLUTIONS, INC. - --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 88-0382813 - ---------------------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 2001 West Sample Road, Suite 101, Pompano Beach, Florida 33064 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (954) 969-1010 -------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not applicable - ------------------------------------------------------------------------------- (Former name former address and former fiscal year,if changed since last report) 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 6, 2002, the registrant had a total of 12,647,702 common shares outstanding. INTERMEDIA MARKETING SOLUTIONS, INC. Index to Form 10-QSB March 31, 2002 PART I. FINANCIAL INFORMATION Page Item 1. Consolidated Financial Statements (Unaudited) Consolidated Balance Sheet at March 31, 2002 3 Consolidated Statements of Operations for the three months ended March 31, 2002 and 2001 4 Consolidated Statements of Cash Flows for the three months Months ended March 31, 2002 and 2001 5 Note to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis or Plan of Operations 7 PART II. OTHER INFORMATION 9 Not Applicable 2 INTERMEDIA MARKETING SOLUTIONS, INC. AND SUBSIDIARIES Consolidated Balance Sheet (UNAUDITED) March 31, 2002 Assets -------- Current assets: Cash and cash equivalents $ 185,961 Accounts receivable, net of allowance for doubtful accounts of $667,964 2,034,658 Inventories 1,891,069 Prepaid expenses and other current assets 835,640 --------------- Total current assets 4,947,328 Equipment and leasehold improvements, net 1,117,225 Goodwill 67,663 Other assets 181,580 --------------- Total assets $6,313,796 =============== Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $1,296,954 Deferred income taxes payable 1,829,486 Lines of credit 1,224,177 Deferred revenue 1,880,312 --------------- Total current liabilities 6,230,929 Stockholders' equity: Common stock, $.001 par value: Authorized 150,000,000 shares; issued and outstanding, 12,647,702 shares, 12,648 Additional paid-in capital 1,626,392 Accumulated deficit (1,556,173) -------------- Total stockholders' equity 82,867 -------------- Total liabilities and stockholders' equity $ 6,313,796 ============== See notes to unaudited consolidated financial statements 3
INTERMEDIA MARKETING SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH, -------------------------------- 2001 2002 ------------- ------------- Revenues $ 3,493,927 2,423,723 Cost of revenues 1,215,201 982,425 ------------- ------------- Gross Margin 2,278,726 1,441,298 Operating Expenses: Selling 694,973 622,254 General and administrative 1,211,986 1,189,666 ------------ ------------- Total operating expenses 1,906,959 1,811,920 ------------ ------------- Operating income (loss) 371,767 (370,622) Interest Expense -- (14,375) ------------ ------------ Net Income Before Taxes 371,767 (384,997) Income tax expense (Benefit) 148,707 (153,999) ------------ ------------- Net Income (loss) $ 223,060 $ (230,998) ============= ============= Net Income (loss) per Common Share-Basic $ .02 $ (.02) ============= ============= Net Income (loss) per Common Share-Diluted $ .02 $ (.02) ============= ============= Weighted Average Number of Common Shares-Basic 12,614,702 12,647,702 ============= ============= Weighted Average Number of Common Shares-Diluted 12,614,702 12,647,702 ============= ============= See notes to unaudited consolidated financial statements 4
INTERMEDIA MARKETING SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED MARCH 31, ------------------------------- 2001 2002 ------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income 223,060 $ (230,998) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 71,557 174,946 Provision for deferred income taxes 149,007 (153,999) Provision for bad debts (116,286) -- Changes in assets and liabilities: (Increase) decrease in Accounts receivable (399,394) 528,376 Increase in Inventories (248,817) (98,818) Increase in Prepaid expenses and other current assets (134,600) (31,585) Increase in Other assets (69,500) (15,500) Increase in Accounts payable and accrued expenses (30,940) (367,517) Decrease in Deferred revenue 628,609 196,908 --------- ---------- Net cash provided by operating activities 72,696 1,813 --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (132,598) (152,949) --------- ---------- Net cash used in investing activities (132,598) (152,949) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Line of Credit -- 198,133 ---------- ---------- Net cash provided by (used in) financing activities -- 198,133 ---------- ---------- Net increase (decrease) in cash and cash equivalents (59,902) 46,997 Cash and cash equivalents, beginning of period 421,359 138,964 ---------- ---------- Cash and cash equivalents, end of period $ 361,457 $ 185,961 ========== ========== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $ 925 $ 14,375 ========= ========== Taxes $ 1,238 $ -- ========= ==========
See Notes to Unaudited Consolidated Financial Statements 5 INTERMEDIA MARKETING SOLUTIONS, INC. Notes to Consolidated Financial Statements March 31, 2002 (Unaudited) 1. BASIS OF PRESENTATION AND OPERATIONS The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-QSB and Items 303 and 310(b) of 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, the accompanying unaudited consolidated financial statements contain all normal and recurring adjustments which are necessary for a fair presentation of the Company's financial position, results of operations and cash flows as of the dates and for the periods presented. The consolidated results of operations for the three months ended March 31, 2002 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements and footnotes thereto included in the Intermedia Marketing Solutions, Inc. ("Intermedia Marketing Solutions" or the "Company") audited financial statements for the year ended December 31, 2001. 6 INTERMEDIA MARKETING SOLUTIONS, INC. PART I. ITEM 2- MANAGEMENT'S DISCUSSION OR PLAN OF OPERATIONS March 31, 2002 The following discussion of the results of the operations and financial condition of Intermedia Marketing Solutions, Inc. ("Intermedia Marketing Solutions" and the "Company") should be read in conjunction with Intermedia Marketing Solutions unaudited Consolidated Financial Statements and Notes thereto included elsewhere in this report and the Company's 10-KSB for the year ended December 31, 2001. Overview The Company is an integrated multimedia marketing-solutions company. Site2shop.com, its consumer shopping division, markets and sells unique, newly launched, and nationally branded consumer products using their integrated media approach through 30-minute shop-at-home television programs, and e-commerce web sites. The Company's Tricom Pictures division produces television programs to educate viewers on breakthroughs, emerging trends, innovations, and lifestyles. These two divisions are related in that both deal with the Company marketing the client's products to the consumers. The Company's third division is a full service state-of-the-art multimedia production facility that produces television, print and web material for Integrated Media Solutions, its divisions as well as other clients. All programs and commercials are distributed to national audiences through a combination of any and all of the following: ABC affiliates, NBC affiliates, CBS affiliates, FOX affiliates, UPN affiliates and WB affiliates (collectively "network affiliates"), independent television stations and targeted cable networks. Products and services featured on the shopping divisions shows and direct response commercials are sold through its telephone call centers, the Company's websites, other e-commerce websites and the Company's retail stores. Historically part of the Company's strategy is to grow through the opening of new offices domestically and the expansion of the number of distribution opportunities for the participants on the Company's television programs. The Company's expansion and growth plans will depend on its ability to identify appropriate targets and markets and obtain the necessary financing to bring these plans to fruition. Further, the success of the Company's efforts will depend on its ability to identify these opportunities, attract highly qualified personnel and manage geographically dispersed operations. There can be no assurances that the Company will be successful in its plan of operational expansion nor the management of such growth. In addition financial constraints may make this strategy extremely difficult to achieve. Results of Operations COMPARISION OF THE THREE MONTHS ENDED MARCH 31, 2002 TO THE THREE MONTHS ENDED MARCH 31, 2001. Total revenues for the three months ended March 31, 2002 were $2,423,723, a decrease of $1,070,204 from $3,493,927 for the prior comparable period in 2001. The decrease is attributable to a decrease in revenues from the TV shopping division of approximately $600,000 and the education division of $500,000 in the quarter as a result of fewer contracts written in the third and fourth quarter last year due to advertising revenue, across the nation being significantly down. Cost of Revenues decreased to $982,425, or 40% of revenues versus $1,215,201 or 35% for the prior comparable period. The increase in expenses on a percentage basis is a result of lower sales as compared to the amount of fixed costs directly related to cost of sales. The decrease on a dollar for dollar basis is a result of less airtime and a reduction in personnel as compared to last year. Selling expenses were $622,254 during the three months ended March 31, 2002, a decrease of $72,219 from the prior comparable period in 2001. This reduction is a result of less commission paid to sales personnel due to fewer sales. Selling expenses in 2002 were 25 % of net revenues as compared to 20% in 2001. The increase of selling expenses on a percentage basis is a result of fixed costs remaining constant from year to year and with the decrease of selling expenses would be lower on a percentage basis as compared to the decrease in revenues. General and administrative expenses were $1,189,666 during the three months ended March 31, 2002, a decrease of $22,320 from the prior comparable period in 2001. General and administrative expenses in 2002 were 49% of net revenues as compared to 35% in 2001. The increase of general and administrative expenses on a percentage basis is a result of fixed costs remaining constant from year to year and with the decrease of general and administrative expenses being lower on a percentage basis as compared to the decrease in revenues. 7 Liquidity and Capital Resources The Company generated $16,188 from operating activities in 2002 as opposed to $72,696 during the same period in 2001. The increase and decreases in operating assets and liabilities resulted in a net increase to cash flow of approximately $56,000 as compared to the same three months last year. Cash used in investing activities totaled $152,949 in 2002 as a result of capital expenditures relating to purchase of production equipment and the upgrade of computer hardware and software in order to promote and upgrade the Company's website and MIS infrastructure. At March 31, 2002, the Company's backlog for contracts signed and work not begun or contracts partially completed and work is to be done totaled $4,534,000 as compared to $5,220,000 at March 31, 2001. This decrease is mainly a result of more deferred revenue becoming sales as a result of improved efficiencies in the production department and a larger portion of contract being completed on a percentage basis. Based on the current state of the economy and the events of September 11, the Company has experienced a severe reduction in its business and future cash flows. The Company believes despite these events that cash flows from operations could be sufficient to satisfy the Company's contemplated cash requirements for at least the next year. In the event that the Company is unable to sufficiently meet cash flow, the Company could be required to seek additional financing. In the event that the Company requires additional financing, the Company may seek to raise cash in the form of strategic partners or in combination with equity financing, additional bank debt or other debt financing to raise capital through the sale of its equity securities, potentially at prices which may represent significant discounts from the market price of the Common Stock. The Company anticipates based on current backlog of contracts and assumptions relating to operations, the Company's revenues and net income for the year ended December 31, 2002 will be less than the prior year. This mainly is a result of economic conditions and events occurring during the past 12 months. The current state of the economy has resulted in less contracts signed 2002 as compared to the same period in 2001 reducing the Company's backlog. As a result of the decrease in new contracts and reduced backlog the company may be required to reduce personnel and close divisions in order to meet its cash needs for the rest of the year. 8 CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS The foregoing Management's Discussion and Analysis or Plan of Operation contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations and beliefs concerning future events. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: the Company's ability to manage growth, acceptance of the Internet as a means for commerce, decrease in advertising budgets, market demand for e-commerce, decline in demand for the Company's services; increases in expenses and costs of sales and the effect of general economic conditions and factors affecting the industries the Company markets its service to and the ability of the Company to recruit and retain qualified management and employees. These statements by their nature involve substantial risks and uncertainties and actual events or results may differ as a result of these and other factors. 9 PART II. OTHER INFORMATION Not Applicable 10 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized. Intermedia Marketing Solutions, Inc. (Registrant) /s/ Mark Alfieri /s/ Brad Hacker - ------------------------- ------------------------------------- Mark Alfieri Brad Hacker President Chief Financial Officer Dated: May 6, 2002 11 -----END PRIVACY-ENHANCED MESSAGE-----