-----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, T+tDJaLA8Yq4lCo42PEICWaWL65+vH1CfnW+oaKWYA/sN0sKFAaJNxtuKr7sb3dQ 1V3B3jNbC84/K2wvOSJY/w== 0001023856-98-000014.txt : 19980414 0001023856-98-000014.hdr.sgml : 19980414 ACCESSION NUMBER: 0001023856-98-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980413 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: 98592031 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-Q ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 1997 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) 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 dur- ing 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 require- ments for the past 90 days. Yes No X As of March 31, 1997, there were 14,343,091 shares of Common Stock outstanding. 1 PEGASUS INDUSTRIES, INC. INDEX Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements 3 Condensed Consolidated Balance Sheets March 31, 1997 and December 31, 1996 3 Condensed Consolidated Statement of Income - Three Months Ended March 31, 1997 and March 31, 1996 6 Condensed Consolidated Statement of Cash Flows - Three Months Ended March 31, 1997 and March 31, 1996 8 Item 2. Managements' Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 6. Exhibits 12 Signatures 12 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.
March 31, 1997 (1) December 31, (Unaudited) 1996 (1) ___________ ____________ Current Assets: Cash $ 58,310 $ 132,162 Financing Contract Receivables Current Portion 2,860,376 2,988,990 Inventories 564,782 624,141 Prepaid Expenses and Other 88,223 35,740 ___________ ____________ Total Current Assets 3,553,691 3,781,033 Property and Equipment, net of accumulated depreciation of $1,016,233 and $997,549 256,187 274,363 Financing Contracts Receivable - non current portion 953,459 1,102,395 Other Assets 69,799 60,010 ___________ ____________ $ 4,833,136 $ 5,217,801 ___________ ____________
The accompanying notes are an integral part of the Condensed Consolidated Balance Sheets 3 LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 1997 (1) December 31, (Unaudited) 1996 (1) ___________ ____________ Current Liabilities: Accounts Payable $ 641,835 $ 557,418 Accrued Expenses 365,922 516,243 Current maturities of long term debt 6,408,403 6,584,128 ___________ ___________ Total Current Liabilities 7,472,278 7,657,789 Long-term debt, less current maturities 35,045 - ___________ ___________ 7,507,323 7,657,789 Preferred Stockholders' Equity in Subsidiary 1,128,370 (2) 1,128,370 (2) Stockholders' Equity Common stock, $.01 par value, 50,000,000 shares authorized; 14,343,091 shares issued and outstanding at March 31, 1997 and 14,343,091 shares issued and out- standing at December 31, 1996 143,431 143,431 Additional Paid in Capital 58,536 58,536 Accumulated Loss (3,944,372) (3,770,325) ___________ ___________ (3,742,405) (3,568,358) ___________ ___________ $ 4,833,136 $ 5,217,801
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 whol- ly 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 reorgan- ization, 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 reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods presented. Ope- rating results for the three month period ended March 31, 1997 are not neces- sarily indicative of the results that may be expected for the year ended December 31, 1997.
For the Three Months Ended March 31, March 31, 1997 1996 _________ _________ (Unaudited) (Unaudited) Net Sales $ 302,221 $ 832,964 Cost of Sales 339,484 546,155 _________ _________ Gross Profit (37,263) 286,809 Financing Income 573,771 511,322 _________ _________ 536,508 798,131 Selling, General and Administrative Expenses 607,090 923,490 _________ _________ Operating Income (70,582) (125,359) Interest Expense 168,348 216,346 _________ _________ (238,930) (341,705) Other Income 4,731 - _________ _________ Net Loss $ (234,199) $ (341,705) Loss per Common Share (0.02) (1) (0.02) (1) _________ _________ Weighted Average Common Shares 14,343,091 14,352,151 _________ _________
6 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOW
For the Three Months Ended March 31, March 31, 1997 1996 _________ _________ (Unaudited) (Unaudited) Cash flow provided by (used in) operating activities: Net income /(loss) (234,199) (341,705) Adjustments to reconcile net cash provided (used in) operating activities: Depreciation and amortization 18,176 13,058 (Increase)decrease in finance contract receivables 276,500 716,130 (Increase)decrease in inventories 77,359 76,660 (Increase)decrease in prepaid expenses (52,483) 40,025 Increase(decrease) in accounts payable 84,417 110,784 Increase(decrease) in accrued expenses (150,321) (9,000) __________ __________ Net cash provided by (used) in operating activities 254,698 605,952 Cash flows (used in) investing activities: (Increase)decrease in property and equipment -0- (56,592) (Increase)decrease in other assets (9,789) -0- __________ __________ Net cash (used in) investing activities (9,789) (56,592) Cash flows (used in) financing activities: Increase(decrease) in long-term debt (84,562) (553,899) __________ __________ Net cash (used in) financing activities (84,562) (610,492) __________ __________ Net Increase in Cash (73,852) (4,540) Cash - beginning of period 132,810 73,782 __________ __________ Cash - end of period 58,310 69,242 __________ __________
7 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 elec- tronics and the related financing of those purchases with consumer finance contracts. LIQUIDITY AND CAPITAL RESOURCES - MARCH 31, 1997 COMPARED TO DECEMBER 31, 1996 During the three months ended March 31, 1997, the Company's current assets decreased by $227,342 primarily due to a decrease of $128,614 in the current portion of finance contract receivables and a $77,359 decrease in inventory. This is due to a 63% decrease in first quarter sales in 1997 as compared to 1996. The Company's wholly owned subsidiary Zearl T. Young, Incorporated ("ZTY"), is in serious financial difficulty due to a lack of working capital. The decrease in sales is primarily due to ZTY's inability to purchase inventory. Current liabilities decreased $185,511 during the three months ended March 31, 1997. Trade accounts payable increased $84,417 while accrued expenses de- creased $150,321. Current maturities of long term debt decreased $84,562 which consisted primarily of paydown of debt due to inventory liquidation and reduc- tion in finance contract receivable. The entire portion of ZTY's note payable to its primary lender is shown as a current liability. It matured December 31,1996 and has been renewed until April 1997. ZTY is currently in default of its financial covenants which gives the lender the right to accelerate the note at any time. ZTY is negotiating a Liquidation Agreement with its primary secured lender. Long term debt increased $35,045. Finance contracts receivable decreased $277,550. RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996 The Company's consolidated statements of income and cash flows for the three months ended March 31, 1997 and 1996 consist of the Company and of ZTY, its wholly owned subsidiary. Net retail sales for the quarter ended March 31, 1997 decreased $530,743 or 63% while gross profit was a deficit of $37,263. The decrease is primarily due to the Company's working 8 capital shortages which severely restricted its ability to purchase inventory. The Company was unable to replace merchandise sold and was forced to reduce prices on dated inventory to achieve sales. Financing income increased $573,771 compared to the first quarter in 1996 primarily due to the collection on accounts and due to ZTY selling finance con- tracts directly to third party finance companies for a premium. Selling, general and administrative expenses decreased $316,400 during this quarter as compared to a year earlier. The decrease was primarily related to reduced staff resulting from store closings and layoffs. The Company reported a net loss of $234,199 for the three months ended March 31, 1997 as compared to a loss of $341,705 for the same period a year earlier. 9 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) There are no exhibits to include. (b) There are no reports on Form 8-K 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 April 13, 1998. PEGASUS INDUSTRIES, INC. /s/ Robert W. Schleizer ___________________________________________ By: Robert W. Schleizer, President 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 MAR-31-1997 58,310 0 2,860,376 0 564,782 3,553,691 256,187 0 4,833,136 7,472,278 0 0 1,128,370 143,431 0 4,833,136 302,221 302,221 339,484 339,484 607,090 0 168,348 (234,199) 0 0 0 0 0 (234,199) (0.02) (0.02)
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