UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One) |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2002 |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
Commission File Number: 0-6664
K-TEL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Minnesota |
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41-0946588 |
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(State or other
jurisdiction of |
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(I.RS. Employer |
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2655 Cheshire Lane North, Suite 100, Plymouth Minnesota |
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55447 |
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(Address of principal executive offices) |
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(Zip Code) |
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(763) 559-5566 |
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(Registrant’s telephone number, including area code) |
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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 ý No o
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most recent practical date. As of November 13, 2002, there were 13,653,738 shares of the registrant’s common stock, par value $0.01 per share, outstanding.
K-TEL INTERNATIONAL, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2002
INDEX
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PART I. |
Financial Information (Unaudited): |
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Condensed
Consolidated Balance Sheets as of |
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Management’s
Discussion and Analysis of Financial |
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2
K-TEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
SEPTEMBER 30, 2002 AND JUNE 30, 2002
(in thousands)
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September
30, |
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June 30, |
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ASSETS |
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Current Assets: |
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Cash and equivalents |
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$ |
85 |
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$ |
75 |
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Accounts receivable, net |
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1,792 |
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1,656 |
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Inventories |
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763 |
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637 |
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Royalty advances |
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309 |
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282 |
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Prepaid expenses and other |
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299 |
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378 |
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Total Current Assets |
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3,248 |
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3,028 |
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Property and equipment, net of accumulated depreciation and amortization of $1,442 and $1,418 |
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153 |
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162 |
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Owned catalog masters, net of accumulated amortization of $2,596 and $2,829 |
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974 |
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1,060 |
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$ |
4,375 |
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$ |
4,250 |
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LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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Current Liabilities: |
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Loans payable to affiliate and other |
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$ |
10,510 |
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$ |
10,253 |
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Accounts payable |
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1,425 |
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1,264 |
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Accrued royalties |
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2,272 |
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2,245 |
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Reserve for returns |
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89 |
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40 |
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Net liabilities of discontinued operations |
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292 |
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92 |
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Total Current Liabilities |
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14,588 |
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13,894 |
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Shareholders’ Deficit: |
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Common stock – 50,000,000 shares authorized; par value $.01; 13,653,738 issued and outstanding |
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136 |
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136 |
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Additional paid-in capital |
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21,292 |
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21,292 |
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Accumulated deficit |
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(31,279 |
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(30,771 |
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Cumulative translation adjustment |
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(362 |
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(301 |
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Total Shareholders’ Deficit |
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(10,213 |
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(9,644 |
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$ |
4,375 |
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$ |
4,250 |
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See accompanying notes to condensed consolidated financial statements.
3
K-TEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(in thousands - except per share data)
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Three
Months Ended |
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2002 |
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2001 |
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Net Sales |
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$ |
1,498 |
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$ |
1,381 |
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Costs and Expenses: |
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Cost of goods sold |
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599 |
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522 |
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Advertising |
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46 |
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23 |
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Selling, general & administrative |
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951 |
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1,233 |
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Total Costs and Expenses |
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1,596 |
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1,779 |
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Operating Loss |
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(98 |
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(398 |
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Other Income (Expense): |
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Interest expense |
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(136 |
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(81 |
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Other expense |
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(64 |
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— |
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Total Other Expense |
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(200 |
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(81 |
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Loss from Continuing Operations |
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Before Taxes |
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(298 |
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(479 |
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Income Taxes |
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— |
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— |
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Loss from Continuing Operations |
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(298 |
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(479 |
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Discontinued Operations: |
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Loss from Discontinued Operations |
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(210 |
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(25 |
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Net Loss |
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$ |
(508 |
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(504 |
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Loss per Share – Basic and Diluted: |
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Continuing Operations |
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$ |
(.02 |
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$ |
(.04 |
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Discontinued Operations |
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(.02 |
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— |
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