-----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, FP9Ga5/dGuCsDmsYmhhmbZeZYLbSb3SbQOXxB4x124DthHABOQIhI84v5qYAQI5E n37inu4AENmNCyR4hGc0lg== 0000043837-99-000011.txt : 19991215 0000043837-99-000011.hdr.sgml : 19991215 ACCESSION NUMBER: 0000043837-99-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991030 FILED AS OF DATE: 19991214 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: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06083 FILM NUMBER: 99773797 BUSINESS ADDRESS: STREET 1: 6801 JERICHO TURNPIKE STE 100 CITY: SYOSSET STATE: NY ZIP: 11791-4427 BUSINESS PHONE: 5166770500 MAIL ADDRESS: STREET 1: 6801 JERICHO TURNPIKE STREET 2: SUITE 100 CITY: SYOSSET STATE: NY ZIP: 11791 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 October 30, 1999 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 Incorporation or Organization) Identification Number) 6801 JERICHO TURNPIKE, SYOSSET, NEW YORK 11791 (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, Including Area Code (516) 677-0500 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 As of November 26, 1999, there were 7,603,890 outstanding shares of the issuer's common stock, par value $.001 per share (excluding 903,011 treasury shares). -1- TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page Item 1. - Financial Statements (Unaudited) Condensed Consolidated Balance Sheets October 30, 1999, October 31, 1998 and January 30, 1999 3 Condensed Consolidated Statements of Operations Thirteen and Thirty-Nine Weeks Ended October 30, 1999 and October 31, 1998 4 Condensed Consolidated Statements of Cash Flows Thirty-Nine Weeks Ended October 30, 1999 and October 31, 1998 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. - Quantative and Qualitative Disclosure About 13 Market Risk PART II - OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8K 14 SIGNATURES 15
-2- PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENT NOODLE KIDOODLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED
October 30, October 31, January 30, 1999 1998 1999 (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $ 22 $ 54 $10,188 Merchandise inventories 52,675 34,054 21,074 Prepaid expenses and other current assets 5,504 3,118 3,780 Total Current Assets 58,201 37,226 35,042 Property, plant and equipment - net 29,193 21,726 22,900 Other assets 53 38 20 Total Assets $87,447 $58,990 57,962 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 21 $ 20 $ 21 Revolving credit facility 21,578 5,419 - Trade accounts payable 19,541 13,019 8,576 Accrued expenses and taxes 13,158 8,842 9,738 Net liabilities of discontinued operations - 1,259 1,303 Total Current Liabilities 54,298 28,559 19,638 Long-term debt 697 719 712 Commitments and contingencies - - - Stockholders' equity: Preferred stock-authorized 1,000,000 shares, par value $.001,(none issued) - - - Common stock-authorized 15,000,000, par value $.001, issued 8,506,901 shares, respectively 9 9 9 Capital in excess of par value 43,097 43,083 43,087 Accumulated deficit (6,950) (9,627) (1,747) 36,156 33,465 41,349 Less treasury stock, at cost, 903,011, 914,761, and 910,861 shares, respectively 3,704 3,753 3,737 Total Stockholders' Equity 32,452 29,712 37,612 Total Liabilities and Stockholders' Equity $87,447 $58,990 $57,962 See accompanying notes to Condensed Consolidated Financial Statements.
-3- NOODLE KIDOODLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED
Thirteen Weeks Ended Thirty-Nine Weeks Ended October 30, October 31, October 30, October 31, 1999 1998 1999 1998 (In thousands, except per share data) Net sales $27,205 $22,670 $70,890 $59,146 Costs and expenses: Cost of product sold including buying and warehousing costs 16,683 13,816 43,149 35,935 Selling and administrative expenses 13,199 10,336 34,831 27,395 29,882 24,152 77,980 63,330 Operating loss (2,677) (1,482) (7,090) (4,184) Interest income 6 12 104 184 Interest expense (325) (84) (403) (128) Loss from continuing operations (2,996) (1,554) (7,389) (4,128) before income taxes Income taxes (benefit) - - - - Net loss from continuing operations (2,996) (1,554) (7,389) (4,128) Gain from disposal of discontinued operations 2,500 - 2,500 - Loss before cumulative effect of a change in accounting principle (496) (1,554) (4,889) (4,128) Cumulative effect of a change in accounting principle - - 314 - Net loss $ (496) $(1,554) $ (5,203) $(4,128) Net income (loss) per share: Continuing operations $ (0.39) $ (0.20) $ (0.97) $ (0.54) Discontinued operations 0.33 - 0.33 - Cumulative effect of a change in accounting principle - - (0.04) - Net loss per share basic and diluted: $ (0.06) $ (0.20) $ (0.68) $ (0.54) Weighted average shares outstanding 7,604 7,592 7,602 7,586 See accompanying notes to Condensed Consolidated Financial Statements
-4- NOODLE KIDODOLE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDTED STATEMENTS OF CASH FLOWS UNAUDITED
Thirty-Nine Weeks Ended October 30, October 31, 1999 1998 (In thousands) Cash flows from operating activities: Net loss from continuing operations $ (7,389) $ (4,128) Adjustments to reconcile to net cash provided (used): Depreciation 2,658 2,086 Decrease (increase) in non-cash working capital accounts: Merchandise inventories (31,601) (17,233) Prepaid expenses, taxes and other current assets (2,038) (94) Trade accounts payable, accrued expenses and taxes 14,385 8,087 Net cash (used in) continuing operations (23,985) (11,282) Gain from disposal of discontinued operating activities 2,500 - Decrease (increase) in non-cash working capital accounts (1,303) 86 Net cash provided by discontinued operations 1,197 86 Net cash (used in)operating activities (22,788) (11,196) Cash flows from investing activities: Property additions (8,951) (5,298) Other (33) (15) Net cash (used in)investing activities (8,984) (5,313) Cash flows from financing activities: Net increase in revolving credit facility 21,578 5,419 Proceeds from exercise of employee stock options 43 59 Reduction of long-term debt (15) (14) Net cash provided by financing activities 21,606 5,464 Net decrease in cash and cash equivalents (10,166) (11,045) Cash and cash equivalents - beginning of period 10,188 11,099 Cash and cash equivalents - end of period $ 22 $ 54 Supplemental cash flow information Interest expense $ 403 $ 128 Income taxes, net - - See accompanying notes to Condensed Consolidated Financial Statements
-5- NOODLE KIDOODLE, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED
NOTE 1. Basis of presentation. The accompanying interim unaudited consolidated financial statements include the accounts of Noodle Kidoodle, Inc. and subsidiaries (the "Company"). All intercompany accounts and transactions are eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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, such interim statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. Due to the seasonal nature of the Company's business, results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's annual Report on Form 10-K for the year ended January 30, 1999. NOTE 2. Cash and cash equivalents. 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 taxes. Income tax provisions are based on estimated annual effective tax rates. The Company did not record a tax benefit for the losses for the periods ended October 30, 1999 and October 31, 1998, respectively, since the Company has no available tax loss carrybacks and there are no available tax planning strategies that would enable the Company to utilize the tax benefit of the carryforwards, without relying on future income. The Company has recorded a 100% valuation allowance against its deferred tax assets, and management believes that it is premature to reverse the allowance at this time. The Company has available net operating loss carryforwards of approximately $16.5 million for income tax purposes. -6- NOTE 4. Earnings per share. The Company calculates earnings per share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." We use the weighted-average number of common shares outstanding during each period to compute basic earnings per common share. Diluted earnings per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding. Dilutive potential common shares are employee stock options assumed to be exercised. Average common and common equivalent shares used in computing diluted earnings per share as a result of applying the treasury stock method to outstanding employee stock options were as follows: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 30, October 31, October 30, October 31, 1999 1998 1999 1998 7,681,000 7,661,000 7,768,000 7,677,000 In accordance with FAS 128, as a result of losses from operations for the quarter and nine month period ended October 30, 1999 and October 31, 1998, the inclusion of employee stock options were antidilutive and, therefore, were not utilized in the computation of diluted earnings per share. NOTE 5. Accounting change. Effective January 31, 1999, the Company adopted Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up Activities". The change involves expensing store pre-opening costs as incurred. Previously, the Company capitalized such costs and amortized them over the first twelve months of a store's operations. The cumulative effect of the change in accounting principle resulted in the write-off of $314,000 of unamortized costs in the first quarter which is so reflected in the Statement of Operations. NOTE 6. Revenue Recognition. Revenue is recognized at the time that retail sales are made to customers. Returns and allowances are recorded at the time returns are received from or allowances made to customers. NOTE 7. Discontinued operations. In the third quarter ended October 30, 1999, the Company adjusted the estimated gain on disposal of its discontinued wholesale operations recognized in fiscal 1996. The adjustment resulted in an additional gain of $2.5 million. The additional gain arose from the sale of the Company's leasehold interest in its former distribution center in Birmingham, Alabama and the settlement of liabilities related to its discontinued operations. The leasehold interest in the Birmingham, Alabama distribution center was sold on November 15, 1999.
-7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Thirteen Weeks Ended October 30, 1999 Compared With Thirteen Weeks Ended October 31, 1998 Results of Operations Continuing operations Net sales increased 19.8% to $27.2 million in the thirteen weeks ended October 30, 1999 from $22.7 million in the comparable period in the prior year. The increase was due to the addition of seventeen stores since last year's third quarter, eight of which were opened in this quarter, offset by decreases in comparable store sales of 4% in the quarter. The Company had 35 comparable stores at October 30, 1999. The Company operated 56 Noodle Kidoodle stores at October 30, 1999 compared to 39 Noodle Kidoodle stores at October 31, 1998. Gross profit (derived from net sales less the cost of product sold, which includes buying and warehousing costs) increased 18.0% to $10.5 million in the thirteen weeks ended October 30, 1999 from $8.9 million in the comparable period in the prior year. Gross profit, as a percentage of net sales ("gross profit percentage") decreased to 38.7% for the third quarter ended October 30, 1999 from 39.1% in the comparable period in the prior year, primarily due to increased warehousing costs this year, partially offset by reduced markdowns. This year the Company incurred additional costs to lease additional warehouse space to support its peak seasonal inventory requirements. Selling and administrative expenses increased $2.9 million to $13.2 million in the third quarter ended October 30, 1999 from $10.3 million in the comparable period in the prior year. Direct store expenses, which consist of payroll, occupancy, advertising and other store operating costs, increased $2.5 million, primarily as a result of the increased store base. Home office expenses increased $0.2 million, including $0.1 million of costs this quarter associated with the development of the noodlekidoodle.com internet site. Store pre-opening costs increased $0.2 million. Selling and administrative expenses, as a percent of net sales, increased to 48.5% in the current quarter ended October 30, 1999 from 45.6% in the comparable period in the prior year, primarily as a result of the additional direct store expenses, increased home office costs, additional store pre-opening costs, and the negative impact of lower comparable store sales. Net interest expense in the third quarter ended October 30, 1999 was $.3 million as compared to $.1 million in the -8- comparable period in the prior year. The increase of $.2 million in the current quarter resulted primarily from increased borrowings under the Company's revolving credit facility, which funded the buildup of inventory levels needed for the upcoming holiday season. Income tax provisions are based on estimated annual effective tax rates. The Company did not record a tax benefit for the losses for the periods ended October 30, 1999 and October 31, 1998, respectively, since the Company has no available tax losses carrybacks and there are no available tax planning strategies that would enable the Company to utilize the tax benefit of the carryforwards, without relying on future income. The Company has recorded a 100% valuation allowance against its deferred tax assets, and management believes that it is premature to reverse the allowance at this time. Net loss from continuing operations increased $1.4 million to $3.0 million ($0.39 per share) for the third quarter ended October 30, 1999 from $1.6 million ($0.20 per share) in the comparable period in the prior year. Gain from disposal of discontinued operations was $2.5 million ($0.33 per share) for the thirteen week period ended October 30, 1999, as a result of the sale of the Company's leasehold interest in its former wholesale distribution center in Birmingham, Alabama and the settlement of liabilities relating to its discontinued operations. The Birmingham, Alabama distribution center was the final remaining tangible asset resulting from the decision to exit the wholesale business in August 1995 and was sold on November 15, 1999. The net loss decreased $1.1 million to $0.5 million ($0.06 per share) for the third quarter ended October 30, 1999 from $1.6 million ($0.20 per share) in the comparable period in the prior year. Thirty-Nine Weeks Ended October 30, 1999 Compared with Thirty-Nine Weeks Ended October 31, 1998 Continuing operations Net sales increased 20.0% to $70.9 million in the thirty-nine week period ended October 30, 1999 from $59.1 million in the comparable period in the prior year, primarily due to the addition of fourteen new stores in the current nine month period and three new stores in the fourth quarter of last year, offset by comparable store sales decreases of 3%. The Company had 35 comparable stores at October 30, 1999. The Company operated 56 Noodle Kidoodle stores at October 30, 1999 compared to 39 Noodle Kidoodle stores at October 31, 1998. Gross profit (derived from net sales less the cost of product sold, which includes buying and warehousing costs) increased 19.8% to $27.8 million in the nine months period ended October 30, 1999 from $23.2 million in the comparable period in the prior year. Gross profit percentage decreased to 39.1% for the thirty-nine week period ended October 30, 1999 -9- from 39.2% in the comparable period in the prior year, primarily due to increased warehousing costs this year, partially offset by reduced markdowns. This year the Company incurred additional costs to lease additional warehouse space to support its peak seasonal inventory requirements. Selling and administrative expenses increased $7.4 million to $34.8 million in the thirty-nine week period ended October 30, 1999 from $27.4 million in the comparable period in the prior year. Direct store expenses which consist of payroll, occupancy, advertising and other store operating costs increased $6.4 million. Home office expenses increased $0.5 million including $0.3 million of costs associated with the development of the noodlekidoodle.com internet site. Store pre-opening costs increased $0.5 million. Selling and administrative expenses as a percent of net sales increased to 49.1% in the current nine-month period ended October 30, 1999 from 46.3% in the comparable period in the prior year, primarily as a result of the additional direct store expenses, increased home office costs, additional store pre- opening costs, and the negative impact of lower comparable store sales. Net interest expense in the nine month period ended October 30, 1999 was $.3 million as compared to net interest income of $.1 million in the comparable period in the prior year. The increase of $.4 million resulted primarily from increased borrowing under the Company's revolving credit facility, which funded the buildup of inventory levels needed for the upcoming holiday season and the acquisition of fixed assets for new stores opened this year. Income tax provisions are based on estimated annual effective tax rates. The Company did not record a tax benefit for the losses for the periods ended October 30, 1999 and October 31, 1998, respectively, since the Company has no available tax losses carrybacks and there are no available tax planning strategies that would enable the Company to utilize the tax benefit of the carryforwards, without relying on future income. The Company has recorded a 100% valuation allowance against its deferred tax assets, and management believes that it is premature to reverse the allowance at this time. Net loss from continuing operations increased $3.3 million to $7.4 million ($0.97 per share) for the nine-month period ended October 30, 1999 from $4.1 million ($0.54 per share) in the comparable period in the prior year. Gain from disposal of discontinued operations was $2.5 million ($0.33 per share) for the thirty-nine week period ended October 30, 1999, as a result of the sale of the Company's leasehold interest in its former wholesale distribution center in Birmingham, Alabama and the settlement of liabilities relating to its discontinued operations. The Birmingham, Alabama distribution center was the final remaining tangible asset resulting from the decision to exit the wholesale business in August 1995 and was sold on November 15, 1999. -10- The cumulative effect of a change in accounting principle of $314,000 represents the write-off of unamortized pre-opening costs as a result of adopting SOP 98-5, "Reporting on the Costs of Start-Up Activities", in the first quarter of fiscal 2000. This accounting change requires the Company to expense on a current basis previously capitalized pre-opening costs. The net loss increased $1.1 million to $5.2 million ($0.68 per share) for the nine-month period ended October 30, 1999 from $4.1 million ($0.54 per share) in the comparable period in the prior year. Liquidity and Capital Resources. During the thirty-nine week period ended October 30, 1999 the Company's operating activities of its continuing operations used $24.0 million of cash. This use of cash resulted from the net loss of $7.4 million, and an increase in working capital of $19.3 million, offset by non-cash charges of $2.7 million. The increase in working capital resulted primarily from the seasonal build up of inventory in preparation for the upcoming holiday season, the addition of fourteen new stores and the need for inventories for the Company's planned store openings for the remainder of the year, as well as inventory to support expected increases in internet sales, offset by increases in trade accounts payable, accrued expenses and taxes. The operating activities of discontinued operations provided $1.2 million in cash as a result of the sale of the Company's former wholesale distribution center in Birmingham, Alabama and the settlement of liabilities related to the Company's discontinued wholesale operations. The Company used cash to fund investing activities of $9.0 million for the purchase of fixed assets for new stores. Cash provided from financing activities was $21.6 million, from borrowings under the Company's revolving credit facility. As a result of the foregoing, cash and cash equivalents decreased during the period by $10.2 million. On July 29, 1999 the Company announced its intent to form noodlekidoodle.com, a joint venture, between the Company and Daniel Nissan. Following the successful launch of the website, the joint venture will be 80% owned by the Company and 20% owned by Daniel Nissan. The Company estimates that it will invest up to $1 million in the internet venture this year, of which $0.3 million was charged to expense in the current nine month period. The website was launched on November 18,1999. The Company maintains a revolving credit facility, effective through June 2000, with The CIT Group/Business Credit, Inc. The agreement was amended on October 29,1999, to increase the maximum amount available to $27 million until November 30, 1999, reducing to $22 million through December 31, 1999, and further reducing to $15 million until expiration date. This facility may be used for direct borrowings and letters of credit and may not exceed a certain percentage of, and is collateralized by, the Company's inventory, receivables and certain other assets. The agreement provides for an annual collateral management fee and commitment fee on the unused -11- portion of the commitment. Outstanding borrowings bear interest, at the option of the Company, based on the prime rate or LIBOR. The agreement contains certain covenants which among other items, limits the payment of cash dividends when borrowings under the agreement are outstanding. As of October 30, 1999, the Company had $21.6 million of outstanding borrowings under the revolving credit facility. The Company opened fourteen stores during the thirty-nine week period ended October 30, 1999. The Company has subsequently opened two additional stores in the month of November. The Company has signed leases for four new locations scheduled to open in calendar 2000. In addition, the Company plans to continue to make investments in its distribution center and for store remodels to improve operational efficiencies and customer service. The Company leased a 65,000 square foot distribution facility on July 1, 1999 to support its peak seasonal inventory requirements as a result of the increased store base. The Company expects to further increase its distribution capacity in Fiscal 2001. The Company has available net operating loss carryforwards of approximately $16.5 million for income tax purposes. The Company expects to fund its near-term cash requirements principally from its existing cash balances and by borrowing under its revolving credit facility. The Company expects to finance its long-term expansion plan with internally and externally generated funds, which may include borrowings under future credit facilities, and through the sale of equity, equity-related or debt securities. There can be no assurance that financing will be available in amounts, or at rates or on terms and conditions acceptable to the Company. Seasonality The Company's operations are highly seasonal and a significant portion of its revenues occur in the fourth quarter which coincides with the Christmas selling season. New stores are expected to be opened throughout the year, but generally before the Christmas selling season, which will make the Company's fourth quarter revenues an even greater percentage of total year's revenues. Operations during the first three quarters are not expected to be profitable for the foreseeable future. Year 2000 Compliance The Company has completed its review of year 2000 ("Y2K") issues and does not believe that the business impact or cost of these issues is material. The following areas have been reviewed: Corporate Information Systems - All corporate information systems, both those developed by the Company and critical systems developed by third parties, have been developed in an environment and programming language which are not affected by the year 2000 problem, and no software changes are needed. -12- In-Store Systems - All in-store and point of sale (POS) software was developed by an outside software firm which has provided written assurance of the systems' year 2000 compliance. The Company has tested the systems' Y2K compliance during the first quarter of calendar 1999 and found the systems to be Y2K compliant. Personal Computers - Some personal computers used to run the Company's in-store POS systems were not year 2000 compliant. BIOS upgrades for these computers have been obtained at no cost. Embedded Systems - None of the Company's critical operations are dependent on hardware with embedded systems. The Company's home office telephone system was upgraded in the third quarter of calendar 1999 and is now Y2K compliant. Risk - While the Company has completed its testing and any necessary conversions and upgrades and believes its systems are now Y2K compliant, there can be no assurance that the Company's testing was adequate or that the conversions and upgrades will be effective. Further, there can be no assurance that the failure of such systems to be year 2000 compliant will not have a material adverse affect on the Company's results of operations, financial condition or liquidity. Management believes that the risks associated with the year 2000 problem are minimal. The greatest risk to the business is the possibility of an interruption in service from a vendor who is not properly prepared. Any impact to the business in this "worst case" scenario would be minimized by the likelihood that it will occur during the traditionally slower first quarter. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable. -13- PART II - OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K (a) The following exhibit is filed as part of this report: Exhibit 27 - Financial Data Schedule (SEC/EDGAR only) -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. NOODLE KIDOODLE, INC. (Registrant) Date: December 13, 1999 /s/ Stanley Greenman Stanley Greenman, Chairman of the Board, Chief Executive Officer, and Treasurer (Principal Executive Officer) Date: December 13, 1999 /s/ Kenneth S. Betuker Kenneth S. Betuker Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) -15- EX-27 2 ARTICAL 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 1000 9-MOS JAN-29-2000 JAN-31-1999 OCT-30-1999 22 0 0 0 52,675 58,201 40,089 11,896 87,447 54,298 0 0 0 9 32,443 87,447 70,890 70,890 43,149 43,149 34,831 0 403 (7,389) 0 (7,389) 2,500 0 314 (5,203) (0.68) (0.68)
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