-----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, Cv2ixDJUaGbA0kvlMOuAs/WOP/AZaw1Ku90+UzAAByR1BSTXurQmUWf+jF+4u7gk 2fjbxSGmxzfnQ90bWKOqBA== 0001019056-98-000636.txt : 19981104 0001019056-98-000636.hdr.sgml : 19981104 ACCESSION NUMBER: 0001019056-98-000636 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRUDY CORP CENTRAL INDEX KEY: 0000815098 STANDARD INDUSTRIAL CLASSIFICATION: BOOKS: PUBLISHING OR PUBLISHING AND PRINTING [2731] IRS NUMBER: 061007765 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16056 FILM NUMBER: 98737006 BUSINESS ADDRESS: STREET 1: 353 MAIN AVE CITY: NORWALK STATE: CT ZIP: 06850 BUSINESS PHONE: 2038462274 MAIL ADDRESS: STREET 1: 353 MAIN AVE CITY: NORWALK STATE: CT ZIP: 06850 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1998 Commission File No. 0-16056 TRUDY CORPORATION 353 Main Avenue Norwalk, Conn. 06851 Incorporated in the State of DELAWARE Federal Identification No. 06-1007765 Telephone: (203) 846-2274 Trudy Corporation has filed all reports required to be filed by section 13 or 15 (d) of the Securities Act of 1934 during the preceding twelve months and has been subject to such filing requirements for the past year. SHARES OUTSTANDING AT June 30, 1998 Common Stock, $.0001 par value 331,222,249 shares TRUDY CORPORATION INDEX PAGE NUMBER PART I. FINANCIAL INFORMATION Balance Sheets - March 31 (audited) and June 30, 1998 (unaudited) ........... 2 Unaudited Statements of Operations - Three months ended June 30, 1998 and June 30, 1997 ..................................... 3 Unaudited Statements of Cash Flows - Three months ended June 30, 1998 and June 30, 1997 ..................................... 4 Notes to Unaudited Financial Statements .................................... 5 Management's Discussion and Analysis ....................................... 6 PART II. OTHER INFORMATION .................................................. 7 SIGNATURES ................................................................... 7 -1- TRUDY CORPORATION BALANCE SHEETS
June 30, March 31, ASSETS 1998 1998 ----------- ----------- (Unaudited) Current assets Cash $ 3,727 $ -- Accounts receivable, net of allowance for doubtful accounts 39,953 (June 30) 31,361 (March 31) 536,633 321,898 Inventories 1,760,352 1,574,901 Prepaid expenses and other current assets 86,212 84,596 Prepaid income taxes 21,134 21,134 Deferred income taxes 59,000 59,000 ----------- ----------- Total current assets 2,467,058 2,061,529 Plant and equipment (net) 134,825 129,769 Pre-publication costs and royalty advances 327,148 379,546 Deferred income taxes 319,000 319,000 =========== =========== Total assets $ 3,248,031 $ 2,889,844 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 337,164 $ 318,693 Current portion of long-term debt 52,271 49,350 Current portion of notes payable to related parties and accrued interest 285,237 287,612 ----------- ----------- Total current liabilities 674,672 655,655 Bank note payable 858,688 388,689 Long-term debt 189,111 200,650 Notes payable to related parties 163,809 161,276 ----------- ----------- Total liabilities 1,886,280 1,406,270 ----------- ----------- Stockholders' equity Common stock, par value $.0001; 850,000 shares authorized; 331,222,249 issued and outstanding 33,123 33,123 Capital in excess of par value 4,000,316 4,000,316 Accumulated deficit (2,671,688) (2,549,865) ----------- ----------- Total stockholders' equity 1,361,751 1,483,574 ----------- ----------- Total liabilities and stockholders' equity $ 3,248,031 $ 2,889,844 =========== ===========
-2- TRUDY CORPORATION STATEMENTS OF INCOME AND DEFICIT
Three months ended June 30, ------------------------------ 1998 1997 ------------- ------------- (Unaudited) Net sales $ 710,733 $ 675,856 ------------- ------------- Operating costs and expenses (exclusive of depreciation) Cost of sales 427,650 396,286 Selling, general and administrative 384,867 367,765 ------------- ------------- 812,517 764,051 ------------- ------------- Loss from operations (101,784) (88,195) ------------- ------------- Other income (expense) Other income 4,309 8,644 Interest expense, net (15,348) (12,943) Depreciation (9,000) (2,807) ------------- ------------- (20,039) (7,106) ------------- ------------- Loss before income taxes (121,823) (95,301) Provision for income taxes 0 0 ------------- ------------- Net loss for the three months (121,823) (95,301) Deficit-beginning of period (2,549,865) (2,753,417) ------------- ------------- Deficit-end of period $ (2,671,688) $ (2,848,718) ============= ============= Net loss $ (121,823) $ (95,301) Weighted average of number of shares outstanding 331,222,249 324,457,249 ------------- ------------- Net loss per share $ (0.000368) $ (0.000294) ============= =============
-3- TRUDY CORPORATION STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three months ended ------------------------------- June 30, 1998 June 30, 1997 ------------- ------------- Cash flows from operating activities NET LOSS $(121,823) $ (95,301) Adjustments to reconcile net loss to net cash used in operating activities Amortization of pre-publication costs 36,000 13,501 Depreciation 9,000 2,807 Provision for losses on accounts receivable 7,500 1,267 Changes in current assets and current liabilities Accounts receivable (222,235) (225,018) Inventories (185,451) (145,797) Prepaid expenses and other current assets (1,616) (41,277) Accounts payable and accrued expenses 18,471 3,971 --------- --------- NET CASH USED IN OPERATING ACTIVITIES (460,154) (485,847) --------- --------- Cash flows from investing activities Pre-publication & royalty advances 16,398 (53,441) Additions to plant and equipment (14,056) (7,167) --------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES 2,342 (60,608) --------- --------- Cash flows from financing activities Net change in short-term borrowings (2,375) 526,979 Proceeds of loans - long-term 470,000 19,268 Repayment of loans - long-term (6,086) (2,500) --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 461,539 543,747 --------- --------- Net change in cash 3,727 (2,708) Cash, beginning of period 0 2,939 --------- --------- CASH, END OF PERIOD $ 3,727 $ 231 ========= =========
-4- TRUDY CORPORATION NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation: The accompanying unaudited 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, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 1998 are not necessarily indicative of the results that may be expected for the year ending March 31, 1999. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended March 31, 1998. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS REVENUES Trudy Corporation's revenues for the first three months of fiscal 1999 were $711,733, an increase of $34,877 or 5.2% over the first quarter of last year. Sales to warehouse clubs, the largest market segment, were up $66,765 to $285,516 as a result of earlier shipments than last year. Sales to schools and education wholesalers were also improved as the Company decided to target this growing category. Sales to bookstores and specialty retailers were below last year's levels. PROFIT AND LOSSES A net loss of $121,823 for the first quarter of fiscal 1999 compares to a loss of $95,301 for the same period last year. Given the seasonality of the Company's sales, a first quarter loss of this size was expected. Despite the higher sales volume, income was below last year primarily because of higher expenses associated with the amortization of book design costs. Expenses in the first quarter of fiscal 1998 were understated and not recorded until the fourth quarter. Without these additional amortization costs, the gross profit rate improved because of lower procurement costs. Selling, general, and administrative expenses were in line with last year's levels. Interest expense increased as a result of higher borrowing needed to fund working capital requirements. Depreciation expense was also higher than last year due to the acquisition of a new computer system and software. Early in the second quarter, having determined that the new software was inadequately serving its needs, the Company decided to purchase an alternative software package. LIQUIDITY AND CAPITAL RESOURCES Accounts receivable were $536,633 on June 30, 1998 compared with $321,898 on March 31, 1998. This increase is due entirely to increased sales activity especially to warehouse clubs which have extended payment terms. Inventory levels were $1,760,352 at the end of the first quarter compared with $1,574,901 at the March 31 year end. The increase was due to the need to build inventory levels to fill earlier orders for warehouse clubs. As of June 30, 1998, the balance owed on bank loans was $1,152,341 (compared with $638,659 on March 31) while loans to the president of the Company and his family totaled $449,046 (compared with $448,888 on March 31). The president loaned the Company an additional $338,900 in the second quarter of this year to fund working capital needs and the second computer system conversion. The Company continues to actively seek acquisitions or merger partners to capitalize on the growth opportunities it sees in the supplementary educational market. -6- PART II OTHER INFORMATION - Items 1-6. Not Applicable. SIGNATURES As required by Section 13 or 15(d) of the Securities Exchange Act of 1934, the President being duly authorized, has signed this report on behalf of TRUDY CORPORATION. Dated: October 30, 1998 By: /s/ WILLIAM W. BURNHAM ---------------- --------------------------- William W. Burnham, President -7- EX-27 2 FDS WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 This schedule contains summary financial information extracted from the consolidated balance sheet and the consolidated statement of operations (unaudited). 0000815098 Trudy Corporation 1 USD 3-MOS MAR-31-1999 APR-01-1998 JUN-30-1998 1 3,727 0 536,633 0 1,760,352 2,467,058 134,825 0 3,248,031 674,672 1,211,608 0 0 33,123 1,328,628 3,246,031 710,733 710,733 427,650 812,517 4,694 0 15,348 (121,823) 0 (121,823) 0 0 0 (121,823) (.0004) (.0004) The values for Receivables and PP&E represent net amounts.
-----END PRIVACY-ENHANCED MESSAGE-----