-----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, GsepvzKadyPwbQROacP0eqQ6pZ6m87wpJVZBg8xAMzjZhzMyGLB/f98MkliFgbLm 4rVN5WfET6CLAInlisxbOQ== 0000043837-96-000002.txt : 19960617 0000043837-96-000002.hdr.sgml : 19960617 ACCESSION NUMBER: 0000043837-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960504 FILED AS OF DATE: 19960614 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOODLE KIDOODLE INC CENTRAL INDEX KEY: 0000043837 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISC DURABLE GOODS [5090] IRS NUMBER: 111771705 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06083 FILM NUMBER: 96581087 BUSINESS ADDRESS: STREET 1: 105 PRICE PKWY CITY: FARMINGDALE STATE: NY ZIP: 11735 BUSINESS PHONE: 5162935300 MAIL ADDRESS: STREET 2: 105 PRICE PARKWAY CITY: FARMINGDALE STATE: NY ZIP: 11735 FORMER COMPANY: FORMER CONFORMED NAME: GREENMAN BROTHERS INC DATE OF NAME CHANGE: 19920703 10-Q 1 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 May 4, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period from __________________ to _________________ Commission file number 1-6083 NOODLE KIDOODLE, INC. (Exact name of Registrant as specified in its charter) DELAWARE 11-1771705 (State or Other Jurisdiction of (I.R.S. Employer Identification Incorporation or Organization) Number) 105 PRICE PARKWAY, FARMINGDALE, NEW YORK 11735 (Address of Principal Executive Office) (Zip Code) Registrants Telephone Number, Including Area Code (516) 293-5300 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 periods that the Registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. YES X No ___ Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date 7,556,140 shares outstanding as of May 22, 1996. TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Page Condensed Consolidated Balance Sheets May 4, 1996, April 29, 1995, and February 3, 1996 3 Condensed Consolidate Statements of Operations Thirteen Weeks Ended May 4, 1996 and April 29, 1995 4 Condensed Consolidated Statements of Cash Flows Thirteen Weeks Ended May 4, 1996 and April 29, 1995 5 Notes to Condensed Consolidated Financial Statements 6 Managements Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION NONE SIGNATURES 9
NOODLE KIDOODLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED May 4, April 29, February 3, 1996 1995 1996 (in thousands except share date) ASSETS Current assets: Cash and cash equivalents $18,637 $10,314 $ 7,272 Merchandise inventories 12,412 5,401 10,328 Prepaid expenses and other current assets 3,100 2,582 3,043 Net assets of discontinued operations 3,292 20,995 3,584 Total current assets 37,441 39,292 24,227 Property, plant and equipment - net 14,371 5,913 12,994 Other assets 68 45 55 Total Assets $51,880 $45,250 $37,276 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Trade accounts payable $ 5,773 $ 2,804 $ 5,283 Accrued expenses and taxes 5,711 3,633 4,913 Total current liabilities 11,484 6,437 10,196 Commitments and contingencies - - - Stockholders equity: Preferred stock-authorized 1,000,000, 500,000 and 1,000,000 shares, par value $.001, $1.00 and $.001,respectively, (none issued) - - - Common stock-authorized 15,000,000, 10,000,000 and 15,000,000 shares, par value $.001, $.10 and $.001, issued 8,480,401, 6,187,551 and 6,300,401 shares, respectively 8 619 6 Capital in excess of par value 42,962 25,810 26,955 Retained earnings 1,218 16,176 3,911 44,188 42,605 30,872 Less treasury stock, at cost, 924,261 shares 3,792 3,792 3,792 Total stockholders equity 40,396 38,813 27,080 Total Liabilities and Stockholders Equity $51,880 $45,250 $37,276 See accompanying notes to Condensed Consolidated Financial Statements.
- 3 - <
NOODLE KIDOODLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED Thirteen Weeks Ended May 4, April 29, 1996 1995 (in thousands, except per share data) Net Sales $ 9,113 $ 3,281 Costs and expenses: Cost of products sold including buying and warehousing costs 5,927 2,119 Selling and administrative expenses 6,100 2,512 12,027 4,631 Operating loss (2,914) (1,350) Interest income 231 135 Interest expense (10) (11) Loss from continuing operations before income taxes (2,693) (1,226) Income taxes (benefit) - - Net loss from continuing operations (2,693) (1,226) Net loss from discontinued operations - (840) Net loss $(2,693) $(2,066) Net loss per share: Continuing operations $(.37) $(.23) Discontinued operations - (.16) Net loss per share $(.37) $(.39) Weighted average shares outstanding 7,239 5,263 See accompanying notes to Condensed Consolidated Financial Statements.
- 4 -
NOODLE KIDOODLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED Thirteen Weeks Ended May 4, April 29, 1996 1995 (in thousands) Cash flows from operating activities: Net loss from continuing operations $(2,693) $(1,226) Adjustments to reconcile to net cash provided (used): Depreciation 387 166 Decrease (increase) in non-cash working capital accounts: Merchandise inventories (2,084) (1,071) Prepaid expenses and other current assets (57) 398 Trade accounts payable, accrued expenses and taxes 1,288 (602) Income taxes - (133) Net cash (used in) continuing operations (3,159) (2,468) Net loss from discontinued operations - (840) Adjustments to reconcile to net cash provided (used): Depreciation and other non-cash changes - 211 Decrease (increase) in non-cash working capital accounts and other 292 3,462 Net cash provided by discontinued operations 292 2,833 Net cash provided by (used in) operating activities (2,867) 365 Cash flows from investing activities: Property additions: Continuing operations (1,834) (916) Discontinued operations - (47) Other 57 (5) Net cash (used in) investing activities (1,777) (968) Cash flows from financing activities: Proceeds from public offering 16,009 - Proceeds from exercise of employee options - 9 Net cash provided by financing activities 16,009 9 Net increase (decrease) in cash and cash equivalents 11,365 (594) Cash and cash equivalents - beginning of period 7,272 10,908 Cash and cash equivalents - end of period $18,637 $10,314 See accompanying notes to Condensed Consolidated Financial Statements.
- 5 - NOODLE KIDOODLE, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED NOTE 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments are of a normal recurring nature. This financial information should be read in conjunction with the financial statements and notes thereto included in the Registrants annual report on Form 10-K for the year ended February 3, 1996. It should be noted that amounts included in the financial statements of the prior year have been reclassified to conform to the current years presentation. Due to the seasonal nature of the Company's business, results for the interim period are not necessarily indicative of the results to be expected for the fiscal year. NOTE 2. All highly liquid investments with a maturity date of three months or less are considered to be cash equivalents. These investments are stated at cost which approximates market. NOTE 3. Income tax provisions are based on estimated annual effective tax rates. The loss from continuing and discontinued operations for the periods ended May 4, 1996 and April 29, 1995 provided no tax benefit. NOTE 4. On August 30, 1995 the Company adopted a formal plan to discontinue its wholesale business segment. The plan provides for the sale of two of the Companys distribution centers and the disposition through sales or liquidation of substantially all of the operating assets. The operations and net assets of the wholesale business segment are being accounted for as a discontinued operation, and accordingly, its operating results and net assets are reported in this manner in all periods presented in the accompanying consolidated financial statements. Revenues from such operations were $21.2 million for the thirteen weeks ended April 29, 1995. - 6 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Thirteen Weeks Ended May 4, 1996 Compared With Thirteen Weeks Ended April 29, 1995 Continuing Operations Net sales increased $5.8 million to $9.1 million in the thirteen week period ended May 4, 1996 from $3.3 in the comparable period in the prior year. Noodle Kidoodle sales increased $5.8 million to $8.2 in the first quarter from $2.4 million in the comparable period in the prior year, primarily due to the addition of 15 new stores, of which four opened in the second quarter of last year, nine opened in the second half of last year, and two opened in the first quarter of the current year. Other retail sales remained virtually flat in the thirteen week period ended May 4, 1996 compared to the comparable period in the prior year. The Company closed one Playworld store in the first quarter ended May 4, 1996. The Company operated 20 Noodle Kidoodle stores, one Playworld store and two Toy Park stores at May 4, 1996, compared to five Noodle Kidoodle stores, two Playworld stores, and two Toy Park stores at April 29, 1995. Gross profit (derived from net sales less the cost of product sold, which includes buying and warehousing costs) increased $2.1 million to $3.2 million in the thirteen week period ended May 4, 1996 from $1.2 million in the comparable period in the prior year. Gross profit, as a percentage of net sales (gross profit percentage), decreased to 35.0% in the first quarter ended May 4, 1996 from 35.4% in the comparable period in the prior year. Gross profit percentage at Noodle Kidoodle stores decreased to 35.2% in the current quarter from 35.6% in the comparable period in the prior year, primarily due to higher warehousing costs resulting from operating its own warehouse in the current period. The Noodle Kidoodle stores shared a warehouse with the discontinued wholesale business in the comparable period in the prior year. The increase in warehousing costs was partially offset by decreases in buying and the cost of merchandise. Gross profit percentage in the other retail stores decreased to 32.5% in the period ended May 4, 1996 from 35.0% in the comparable period in the prior year, primarily from markdowns taken in closing one of the Playworld stores in the first quarter ended May 4, 1996. Selling and administrative expenses increased $3.6 million to $6.1 million in the period ended May 4, 1996 from $2.5 million in the comparable period in the prior year, primarily as a result of changes in the store base. Selling and administrative expenses at Noodle Kidoodle increased to $5.7 million in the first quarter ended May 4, 1996 from $2.1 million in the comparable period in the prior year, primarily as a result of higher direct store expenses, which increased by $2.6 million, higher home office expenses, which increased by $.7 million and higher advertising expenses. Selling and administrative expenses at the other retail stores remained virtually flat. Selling and administrative expenses, as a percent of net sales, decreased to 66.9% in the thirteen week period ended May 4, 1996 from 76.6% in the comparable period in the prior year. The decrease resulted primarily from the leveraging of home office expenses over a larger store base. - 7 - Net loss from continuing operations increased $1.5 million to $2.7 million($.37 per share) in the period ended May 4, 1996 from $1.2 million ($.23 per share) in the comparable period in the prior year. Net loss from discontinued operations was $.8 million ($.16 per share) in the period ended April 29, 1996. The discontinued operations represent the Companys wholesale operation which was closed effective August 30, 1995. Liquidity and Capital Resources During the thirteen week period ended May 4, 1996 the Company used $3.2 million of cash flows from operating activities of the continuing operations primarily to fund the net loss of $2.7 million and an increase in working capital of $.9 million partially offset by depreciation of $.4 million. The discontinued operations generated $.3 million of cash flows primarily from decreases in working capital. The Company also used cash to fund investing activities of $1.8 million primarily for the purchase of fixed assets for new stores. In February 1996, the Company completed a secondary stock offering of 2.2 million shares of common stock, which resulted in $16.0 million in cash flows from financing activities. As a result of the foregoing, cash and cash equivalents increased during the period by $11.4million.The Company has entered into a contract to sell its Farmingdale facility. This sale is expected to close by mid-July and provide approximately $6.0 million of cash. In February 1996 the Company obtained a line of credit from a bank which is unsecured, provides for maximum borrowing of $10.0 million in short-term loans and letters of credit, and expires on April 30, 1997. The Company has available net operating loss carryforwards of approximately $15.0 million for income tax purposes. Quarterly fluctuation in results and seasonality. The timing of new store openings and related pre-opening expenses and the amount of revenue contributed by new stores have caused, and are expected to cause in the future,the Companys quarterly results of operations to fluctuate. In addition, the Companys operations are highly seasonal, a significant portion of a typical stores revenues is generated during the Companys fourth fiscal quarter, which coincides with the Christmas selling season. The Company does not expect to generate positive operating income during the first three fiscal quarters for the foreseeable future. - 8 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NOODLE KIDOODLE, INC. (Registrant) Date: June 13, 1996 STANLEY GREENMAN Stanley Greenman, Chairman of the Board, Chief Executive Officer, and Treasurer (Principal Executive Officer) Date: June 13, 1996 WILLIAM A. JOHNSON, JR. William A. Johnson, Jr., Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) - 9 - EX-27 2 ARTICAL 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS FEB-01-1997 FEB-04-1996 MAY-04-1996 18,637 0 0 0 12,412 37,441 18,245 3,874 51,880 11,484 0 0 0 8 40,388 51,880 9,113 9,113 5,927 5,927 6,100 0 10 (2,693) 0 (2,693) 0 0 0 (2,693) (0.37) (0.37)
-----END PRIVACY-ENHANCED MESSAGE-----