-----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, Gyz+SYZ01DIyZFltgFMKhpnnG89O4AdvtXDd0LBN/LH1Uxz2B1JTO3FgikkX2Y8Q jwwhvWICIeCZk1ep1vKBVA== 0001019056-98-000498.txt : 19980813 0001019056-98-000498.hdr.sgml : 19980813 ACCESSION NUMBER: 0001019056-98-000498 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELL NATIONAL CORP CENTRAL INDEX KEY: 0000075439 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [2200] IRS NUMBER: 941451828 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00935 FILM NUMBER: 98683580 BUSINESS ADDRESS: STREET 1: 4209 VINELAND ROAD STREET 2: SUITE J I CITY: ORLANDO STATE: FL ZIP: 32811 BUSINESS PHONE: 4078490290 MAIL ADDRESS: STREET 1: 4209 VINELAND ROAD, SUITE J-1 CITY: ORLANDO STATE: FL ZIP: 32811 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC COAST HOLDINGS INC DATE OF NAME CHANGE: 19830303 10-Q 1 FORM 10-Q 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, 1998 ------------------------------------------------ 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 0-935 ----- BELL NATIONAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 94-1451828 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. employer identification no.) incorporation or organization) 3600 RIO VISTA AVENUE, SUITE A, ORLANDO, FLORIDA 32805 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (407) 849-0290 ----------------------------- - -------------------------------------------------------------------------------- (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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ] As of August 9, 1998, the number of shares of the registrant's common stock outstanding is 5,916,686. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. BELL NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) ASSETS June 30, December 31, 1998 1997 ----------- ---------- (Unaudited) Cash and cash equivalents $ 1,256 $ 1,300 Accounts receivable, net -- 41 Inventory, net -- -- Prepaid expenses and other current assets 7 7 ----------- ---------- Total current assets 1,263 1,348 Property and equipment, net -- -- Goodwill, net -- -- Deferred sample books, net -- -- ----------- ---------- $ 1,263 $ 1,348 =========== ========== 2 The accompanying notes are an integral part of these consolidated financial statements. BELL NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) LIABILITIES AND STOCKHOLDERS' EQUITY June 30, December 31, 1998 1997 ----------- ---------- (Unaudited) Current Liabilities: Accounts payable $ -- $ -- Accrued compensation and employee benefits 502 502 Accrued expenses 335 318 Reserve for asset sale 86 140 ----------- ---------- Total current liabilities 923 960 Accrued stock appreciation rights -- -- Other liabilities -- -- ----------- ---------- 923 960 Stockholders' equity: Common stock, no par value; authorized 12,000,000 shares, issued and outstanding 5,916,686 shares at June 30, 1998 and December 31, 1997 15,849 15,849 Additional paid-in capital 10 10 Accumulated deficit (15,519) (15,471) ----------- ---------- Total stockholders' equity 340 388 ----------- ---------- $ 1,263 $ 1,348 =========== ========== 3 The accompanying notes are an integral part of these consolidated financial statements.
BELL NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------ 1998 1997 1998 1997 --------- -------- --------- -------- Net sales $ -- $ 2,860 $ -- $ 5,434 Costs and expenses: Cost of sales -- 1,649 -- 3,008 Selling, general and administrative 42 1,242 88 2,585 --------- -------- --------- -------- Operating income (loss) (42) (31) (88) (159) Other expense: Interest expense -- (79) -- (133) Other 14 18 40 8 --------- -------- --------- -------- Income (loss) before income taxes (28) (92) (48) (284) Provision for income taxes -- -- -- -- --------- -------- --------- -------- Net income (loss) $ (28) $ (92) $ (48) $ (284) ========= ========= ========= ========= Net income (loss) per common share, basic and diluted $ (0.01) $ (0.02) $ (0.01) $ (0.05) ========= ========= ========= ========= Weighted average number of common shares outstanding, basic and diluted 5,916,686 5,561,701 5,916,686 5,525,111 ========= ========= ========= =========
4 The accompanying notes are an integral part of these consolidated financial statements.
BELL NATIONAL CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Dollars in Thousands) (Unaudited) Common Stock Additional Total --------------------------------- Paid-in Accumulated Stockholders' Shares Dollars Capital Deficit Equity ---------------- ------------- ----------- ------------ ------------ Balance at December 31, 1997 5,916,686 $ 15,849 $ 10 $ (15,471) $ 388 Net income (loss) -- -- -- (48) (48) ---------------- ------------- ----------- ----------- ----------- Balance at June 30, 1998 5,916,686 $ 15,849 $ 10 $ (15,519) $ 340 ================ ============= =========== =========== ===========
5 The accompanying notes are an integral part of these consolidated financial statements.
BELL NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Six Months Ended June 30, ------------------------- 1998 1997 --------- --------- OPERATING ACTIVITIES: Net income (loss) $ (48) $ (284) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation -- 27 Amortization of goodwill -- 10 Amortization of deferred sample books -- 520 Amortization of deferred debt commitment fee -- -- (Increase) decrease in assets: Accounts receivable 41 (37) Inventory -- 71 Prepaid expenses and other current assets -- (11) Increase (decrease) in liabilities: Accounts payable -- 65 Accrued compensation and employee benefits -- 89 Accrued expenses 17 (24) Accrued stock appreciation rights -- (109) Reserve for asset sale (54) -- -------- -------- Net cash provided by operating activities (44) 317 -------- -------- INVESTING ACTIVITIES: Acquisition of property and equipment -- -- Purchase of deferred sample books -- (346) -------- -------- Net cash used in investing activities -- (346) -------- -------- FINANCING ACTIVITIES: Net (payments) borrowings on bank debt -- (5) Issuance of common stock from SAR's -- 34 Principal payments on capital lease obligations -- -- -------- -------- Net cash (used for) provided by financing activities $ -- $ 29 -------- --------
6 The accompanying notes are an integral part of these consolidated financial statements.
BELL NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Dollars in thousands) (Unaudited) Six Months Ended June 30, -------------------------------- 1998 1997 ---------- --------- Net decrease in cash and cash equivalents $ (44) $ -- Cash and cash equivalents at beginning of period 1,300 -- ---------- --------- Cash and cash equivalents at end of period $ 1,256 $ -- ========== ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for: Interest $ -- $ 132 Income taxes -- --
7 The accompanying notes are an integral part of these consolidated financial statements. BELL NATIONAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1998 (Unaudited) NOTE 1. THE COMPANY GENERAL. The information contained in this report is unaudited but, in management's opinion, all adjustments necessary for a fair presentation have been included and were of a normal and recurring nature. The results for the three and six months ended June 30, 1998 are not necessarily indicative of results to be expected for the entire year. These financial statements and notes should be read in conjunction with Bell National Corporation's (the "Company") Annual Report on Form 10-K for the year ended December 31, 1997. Bell National Corporation's wholly owned subsidiary Payne Fabrics, Inc. ("Payne") is a designer and distributor of decorative drapery and upholstery fabrics. Payne was acquired by Bell National Corporation on June 15, 1990. On August 4, 1997 Payne Fabrics, Inc. sold substantially all of its assets and most of its liabilities related to the business of designing and distributing decorative drapery and upholstery fabrics to an unaffiliated third party (the "Asset Sale"). The Asset Sale included the transfer to the buyer of the use and rights to the Payne Fabrics name, accordingly, Payne Fabrics, Inc., changed its name to PFI National Corporation ("PFI"). The Asset Sale left PFI without any substantial assets and on August 4, 1997 all operations were ceased. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company's revenues and expenses result from the operations of PFI in the first six months of 1997. With the sale of PFI on August 4, 1997 the first six months 1998 results reflect the absence of an operating business. SIX MONTHS ENDED JUNE 30, 1998 The Company's results for the first six months of 1998 consisted entirely of administrative costs offset by interest income on the cash balances remaining after the Asset Sale of PFI on August 4, 1997. Administrative functions include the ongoing payment of PFI liabilities (previously reserved for) and investigation of the investment alternatives being considered by the Company. Among alternatives are the possible sale of stock or debt to raise additional capital to either fund the acquisition of an operating company or to fund a start-up company (either from inception or in an early development phase). It is highly likely that in order to fund an acquisition of a meaningful size significant additional funds would be required, and no assurance can be given that such funds could be obtained on terms deemed favorable by management. Among other options are the possibility of a liquidating dividend. The discussion contained in this section is not intended to be an exhaustive review of alternatives available to the Company, nor does inclusion or omission of any alternative provide any indication of what course of action may finally be decided upon. However, the Company is not, nor does it intend to engage in, the business of investing, reinvesting, owning, holding or trading securities. 8 SIX MONTHS ENDED JUNE 30, 1997 The Company had net sales of $5,434,000, cost of goods sold of $3,008,000, selling, general and administrative expenses of $2,585,000 and an operating loss of $159,000 during the first six months of 1997. The operating loss was increased by interest expense of $133,000, offset by other income of $8,000 resulting in a net loss of $284,000. COMPARISON OF SIX MONTHS 1998 RESULTS TO 1997 A comparison of the 1997 first six months results (which included the operations of PFI) to 1998 first six months results (which have no operating business included in them) is not meaningful. QUARTER ENDED JUNE 30, 1998 As discussed above, the Company's results for the second quarter of 1998 consisted entirely of administrative costs offset by interest income on the cash balances remaining after the Asset Sale of PFI on August 4, 1997. Administrative functions include the ongoing payment of PFI liabilities (previously reserved for) and investigation of the investment alternatives being considered by the Company. QUARTER ENDED JUNE 30, 1997 The Company had net sales of $2,860,000, cost of goods sold of $1,649,000, selling, general and administrative expenses of $1,242,000 and an operating loss of $31,000 during the second quarter of 1997. The operating loss was increased by interest expense of $79,000, offset by other income of $18,000 resulting in a net loss of $92,000. COMPARISON OF SECOND QUARTER 1998 RESULTS TO 1997 A comparison of the 1997 second quarter results (which included the operations of PFI) to 1998 second quarter results (which have no operating business included in them) is not meaningful. LIQUIDITY AND CAPITAL RESOURCES AVAILABLE RESOURCES Absent an acquisition, the Company can survive as a non-operating entity on its current cash balances for the foreseeable future as it investigates investment alternatives. FUTURE NEEDS FOR AND SOURCES OF CAPITAL During the first six months of 1998, the Company lost $44,000 of cash from operations. The cash from operations derived from the net loss of $48,000, payment of items related to the reserve for Asset Sale of $54,000, offset by collection of receivables of $41,000 and increased accrued expenses of $17,000. 9 These items represent the entire change from the beginning cash balance of $1,300,000 at December 31, 1997 to the ending cash balance of $1,256,000 at June 30, 1998. During the first six months of 1997, the Company generated $317,000 of cash from operation. The cash from operations derived from the net loss of $284,000, offset by amortization of deferred sample books and other items. The operating cash generated in 1997 was used to purchase $346,000 of sample books and repay bank principal of $5,000. PART II. OTHER INFORMATION -none- 10 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. BELL NATIONAL CORPORATION ------------------------- (Registrant) Date: August 12, 1998 /s/ Alexander M. Milley ------------------------------------- Alexander M. Milley, Chairman of the Board and Secretary Date: August 12, 1998 /s/ Thomas R. Druggish ------------------------------------- Thomas R. Druggish, Chief Financial Officer (Principal Financial Officer and Accounting Officer) 11 EX-27 2 FDS
5 0000075439 BELL NATIONAL CORPORATION 1 USD 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 1 1,256,000 0 0 0 0 1,263,000 0 0 1,263,000 923,000 0 15,849,000 0 0 (15,509,000) 1,263,000 0 0 0 88,000 40,000 0 0 (48,000) 0 (48,000) 0 0 0 (48,000) (0.01) (0.01)
-----END PRIVACY-ENHANCED MESSAGE-----