-----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, TK1eDMvKxHgM8QO/a9DKI1DXfd3exBHGUR+VsurYcTXvLaZItYi9/i+KiooF8Q03 5QL+7lKD+tM5mgBwJG8tgg== 0001023856-98-000012.txt : 19980406 0001023856-98-000012.hdr.sgml : 19980406 ACCESSION NUMBER: 0001023856-98-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19980403 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEGASUS INDUSTRIES INC CENTRAL INDEX KEY: 0000757073 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] IRS NUMBER: 953599648 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12977 FILM NUMBER: 98586954 BUSINESS ADDRESS: STREET 1: 400 N ST PAUL STREET 2: SUITE 950 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2145208300 FORMER COMPANY: FORMER CONFORMED NAME: PATHFINDER CORP DATE OF NAME CHANGE: 19940324 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 1996 Commission File Number 0-12977 PEGASUS INDUSTRIES, INC. ---------------------------------------------------------------------- (Exact name of registrant as specified in charter) Nevada 95-3599648 - ----------------------------- ------------------------------------------ (State or other jurisdiction) (I.R.S. Employer Identification Number) 400 N. St. Paul, Suite 950, Dallas, TX 75201 ------------------------------------------------------ (Address of principal executive offices) (214) 520-8300 ------------------------------------------- (Registrant's telephone number) Title of each class Name of each exchange on which to be so registered each class is to be registered - ---------------------- --------------------------------- None None Securities registered pursuant to Section 12(g) of the Act: Common Stock Par Value $0.01 Outstanding as of September 30, 1996 - ----------------------------- -------------------------------------- (Title of Class) 14,352,151 Indicate by check mark whether the registrant (1) has filed all reports re- quired 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 re- gistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrants knowledge [in definitive proxy or information state- ments incorporated by reference in Part III this form 10-K or any amendment to this form 10-K. [ X ] PEGASUS INDUSTRIES, INC. INDEX PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Condensed consolidated financial statements 3 Condensed Consolidated Balance Sheets June 30, 1996 and December 31, 1995 3 Condensed Consolidated Statement of Income Three Months Ended June 30, 1996 and June 30, 1995 6 Condensed Consolidated Statement of Income -- Six Months Ended June 30, 1996 and June 30, 1995 7 Condensed Consolidated Statement of Cash Flows Six Months Ended June 30, 1996 and June 30, 1995 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION 11 Signatures 11 2 PART I ITEM I. PEGASUS INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS In the opinion of management, the information set forth in the Condensed Consolidated Balance Sheets is fairly stated in all material aspects in relation to the consolidated balance sheets from which it has been derived.
Pro Forma June 30, December 31, 1996 (1) 1995 (1) ---------- ------------- Current Assets: Cash $ 17,842 $ 73,782 Financing Contract Receivables Current Portion 3,976,056 4,456,621 Inventories 1,024,090 1,026,491 Prepaid Expenses and Other 126,989 219,645 ---------- ------------- Total Current Assets 5,144,412 5,776,539 Property and Equipment, net of accumulated depreciation of $957,020 and $918,472 210,778 350,869 Financing Contracts Receivable - non current portion 2,140,953 2,625,230 Deferred Tax Benefits 60,152 60,152 Other Assets 69,428 61,420 ---------- ------------- $7,726,288 $ 8,874,210 ---------- -------------
The accompanying notes are an integral part of the Condensed Consolidated Balance Sheets. 3
LIABILITIES AND STOCKHOLDERS' EQUITY Pro Forma March 31, December 31, 1996 (1) 1995 (1) ----------- -------------- Current Liabilities: Accounts Payable $ 680,143 $ 795,324 Accrued Expenses 342,671 238,317 Current maturities of long term debt 7,232,642 7,678,870 ----------- -------------- Total Current Liabilities 8,255,456 8,712,511 Long-term debt, less current maturities 344,442 286,828 ----------- -------------- 8,599,898 8,999,339 Preferred Stockholders' Equity in Subsidiary 1,128,370 (2) 1,128,370 Stockholders' Equity Common stock, $.01 par value, 50,000,000 shares authorized; 14,352,151 shares issued and outstanding at June 30, 1996 and 14,342,151 shares issued and outstanding at December 31, 1995 143,521 143,521 Additional Paid in Capital 58,446 58,446 Accumulated Loss (2,203,947) (1,455,466) ----------- ------------- (2,001,980) (1,253,499) ----------- ------------- $7,726,288 $8,874,210
The accompanying notes are an integral part of the Condensed Consolidated Balance Sheets. 4 NOTES TO CONDENSED CONSOLIDATED BALANCE SHEET (1) The unaudited condensed consolidated balance sheet represent the consoli- dated assets, liabilities and stockholders' equity of the Company and its wholly owned subsidiary, Zearl T. Young, Incorporated ("ZTY"). (2) Reflects the preferred stockholders' equity interest in ZTY as a result of a reorganization in 1994. The preferred stock, issued as part of the reorgani- zation, has a $5.00 par value and 5% cumulative dividend. 5 CONSOLIDATED CONDENSED STATEMENT OF INCOME The interim consolidated condensed statement of income contained herein re- flects all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods presented. Opera- ting results for the three month period ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996.
For the Three Months Ended June 30, June 30, 1996 1995 ------------ ------------ (unaudited) (unaudited) Net Sales $1,117,109 $1,486,088 Cost of Sales 793,394 778,396 ------------ ------------ Gross Profit 323,715 707,692 Financing Income 477,916 581,337 ------------ ------------ 801,631 1,289,029 Selling, General and Administrative Expenses 801,631 1,104,989 ------------ ------------ Operating Income (170,910) 184,040 Interest Expense 235,866 228,001 Net Income/(Loss) $ (406,776) $ (43,961) ------------ ------------ Loss per Common Share (0.028)(1) (0.003)(1) ------------ ------------ Weighted Average Common Shares 14,352,151 14,352,151 ------------ ------------
6 CONSOLIDATED CONDENSED STATEMENT OF INCOME The interim consolidated condensed statement of income contained herein reflects all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods presented. Operating results for the six month period ended June 30, 1996 are not neces- sarily indicative of the results that may be expected for the year ended December 31, 1996.
For the Six Months Ended June 30, June 30, 1996 1995 ------------ ------------ (unaudited) (unaudited) Net Sales $ 1,950,073 $ 2,692,974 Cost of Sales 1,339,549 1,503,155 ------------ ------------ Gross Profit 610,524 1,189,819 Financing Income 989,238 1,195,707 ------------ ------------ 1,599,762 2,385,528 Selling, General and Administrative Expenses 1,896,031 2,101,918 ------------ ------------ Operating Income (296,269) 283,610 Interest Expense 452,212 458,541 Net Income/(Loss) $ (748,481) $ (174,931) ------------ ------------ Loss per Common Share (0.05)(1) (0.01)(1) ------------ ------------ Weighted Average Common Shares 14,352,151 14,352,151 ------------ ------------
7 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOW
For the Six Months Ended June 30, June 30, 1996 1995 ------------ ------------ (unaudited) (unaudited) Cash flow provided by (used in) operating activities: Net income/(loss) (748,481) (174,931) Adjustments to reconcile net cash provided (used in) operating activities: Depreciation and amortization 38,548 126,679 (Increase)decrease in finance contract receivables 964,842 163,173 (Increase)decrease in inventories 2,401 (72,224) (Increase)decrease in prepaid expenses 92,656 (56,282) Increase(decrease) in accounts payable (115,181) 68,840 Increase(decrease) in accrued expenses 104,354 (41,275) ------------ ------------ Net cash provided by (used) in operating activities 339,139 576,847 Cash flows (used in) investing activities: (Increase)decrease in property and equipment 1,543 (1,509) (Increase)decrease in other assets (8,008) 31,860 ------------ ------------ Net cash (used in) investing activities (6,465) 30,351 Cash flows (used in) financing activities: Increase(decrease) in long-term debt (388,615) 55,535 ------------ ------------ Net cash (used in) financing activities (388,615) 55,535 ------------ ------------ Net Increase in Cash (55,941) 99,866 Cash - beginning of period 73,782 317,723 ------------ ------------ Cash - end of period 17,842 417,589 ------------ ------------
8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company's business consists of the sale of retail consumer products, primarily consumer durable goods such as furniture, appliances, carpet and electronics and the related financing of those purchases with consumer finance contracts. Accordingly, the Company experiences the normal cyclical fluctuations of most retailers with operations during the fourth quarter (October through December) comprising a disproportionate portion of its annual revenues and gross profits. LIQUIDITY AND CAPITAL RESOURCES JUNE 30, 1996 COMPARED TO DECEMBER 31, 1995 During the six months ended June 30, 1996, ZTY's current assets de- creased by $631,562,primarily due to a decrease of $480,565 in the current portion of finance contract receivables. The decrease is normal for ZTY due to ZTY's inability to purchase inventory, resulting in reduced gross sales. Inventories decreased $2,401 from December 31, 1995 to June 30, 1996. Inven- tories are typically at the lowest levels at the end of December each year. The Company's working capital shortages kept inventory at very low levels throughout the first months of 1996. Management was forced to close the car- pet store and repair shop during the second quarter due to insufficient inven- tory. Cash balances decreased $55,940, primarily due to a $115,181 reduction in trade accounts payable. Current liabilities decreased $457,055, primarily due to the decrease in accounts payable and due to the $446,228 reduction in current maturities in long term debt. Long term debt increased $57,614 during the six month period. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995 The Company's Statements of Income for the three months ended June 30, 1996 and the pro forma Statement of Income for June 30, 1995 consist solely of operations of ZTY, its wholly owned subsidiary acquired February 28, 1995. Net sales for the second fiscal quarter decreased from $1,486,088 in 1995 to $1,117,109 in 1996, a 25% decrease, while gross profit declined $383,977, a 54% decrease. Reduced sales for the quarter was due to ZTY operating two fewer stores in 1996 as compared to 1995 and due to difficulties due to sales discounts to sell aged inventory and liquidation of inventory in the two closed stores. 9 Financing income for the quarter decreased $103,461 compared to the three month period a year earlier, an 18% decrease, primarily due to lower retail sales and reduced base of finance contract receivables. Selling, general and administrative expenses for the quarter decreased by $132,448 compared to the prior year. The Company had an operating loss of $170,910 for the three months ended June 30, 1996 as compared to operating income of $184,040 for the same period a year earlier. The operating loss was primarily due to reduced sales raised by working capital shortages. Results in Operations for the Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995 ZTY's sales during the six months ended June 30, 1996 were $1,950,073 compared to $2,692,974, a decrease of $257,099 (10%). Gross profit for the six months decreased $579,295 or 49%. Financing income decreased $206,469 a 17% decrease. Selling, general and administrative expenses decreased $205,887, a 10% decrease due to the additional store closings. The Company reported a net loss of $748,481 for the six months ended June 30, 1996 as compared to a net loss of $174,931 for the six month period a year earlier. The Company reported a net operating loss of $170,910 in the quarter com- pared to a profit of $184,040 for the same period in 1995. Net loss for the quarter was $406,776 compared to a loss of $43,961 a year earlier. 10 PART II OTHER INFORMATION None of the items are applicable. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 on March 6, 1998. PEGASUS INDUSTRIES, INC. /s/ Robert W. Schleizer -------------------------------------- By: Robert W. Schleizer, President 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1996 SEP-30-1996 37,264 0 4,197,149 0 1,059,147 5,402,960 292,984 0 7,624,333 8,518,489 0 0 1,128,370 143,521 0 7,624,333 3,025,872 3,025,872 2,143,367 2,143,367 2,804,955 0 621,427 0 0 0 0 0 0 (1,049,106) (0.073) (0.073)
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