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 |
For the Quarterly Period Ended September 30, 2002
or
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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: 0-23379
I.C. ISAACS & COMPANY, INC.
(Exact name of Registrant as specified in its Charter)
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DELAWARE |
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52-1377061 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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3840 BANK STREET |
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21224-2522 |
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(Address of principal executive offices) |
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(Zip Code) |
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(410) 342-8200 |
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(Registrant’s telephone number, including area code) |
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NONE |
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(Former name, former address and former |
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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
As of November 12, 2002, 7,834,657 shares of common stock, par value $.0001 per share, (“Common Stock”) of the Registrant were outstanding.
PART I—FINANCIAL INFORMATION
I.C. Isaacs & Company, Inc.
Consolidated Balance Sheets
Item 1. Financial Statements.
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December 31, |
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September 30, |
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Assets |
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Current |
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Cash, including temporary investments of $170,000 in 2001 |
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$ |
826,812 |
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$ |
771,690 |
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Accounts receivable, less allowance for doubtful accounts of $400,000 and $250,000 (Note 2) |
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9,337,333 |
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9,799,657 |
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Inventories (Notes 1 and 2) |
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5,070,802 |
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6,507,007 |
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Prepaid expenses and other |
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423,062 |
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205,410 |
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Refundable income taxes |
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31,192 |
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24,108 |
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Total current assets |
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15,689,201 |
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17,307,872 |
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Property, plant and equipment, at cost, less accumulated depreciation and amortization |
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2,521,696 |
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1,980,193 |
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Trademark and licenses, less accumulated amortization of $965,818 and $1,212,796 (Note 9) |
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384,182 |
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137,204 |
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Other assets |
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3,737,804 |
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4,460,767 |
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$ |
22,332,883 |
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$ |
23,886,036 |
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Liabilities And Stockholders’ Equity |
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Current |
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Checks issued against future deposits |
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$ |
348,856 |
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$ |
433,555 |
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Revolving line of credit (Note 2) |
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— |
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1,515,811 |
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Current maturities of long-term debt (Note 2) |
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1,160,134 |
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574,696 |
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Accounts payable |
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1,090,453 |
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1,072,247 |
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Accrued expenses and other current liabilities (Note 3) |
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1,936,150 |
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814,950 |
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Total current liabilities |
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4,535,593 |
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4,411,259 |
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Long-term debt (Note 2) |
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5,680,953 |
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5,983,213 |
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Redeemable preferred stock (Note 5) |
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3,300,000 |
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3,300,000 |
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Commitments and Contingencies (Note 9) |
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Stockholders’ Equity (Notes 5 and 7) |
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Preferred stock; $.0001 par value; 5,000,000 shares authorized, none outstanding |
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— |
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— |
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Common stock; $.0001 par value; 50,000,000 shares authorized, 9,011,366 shares issued; 7,834,657 shares outstanding |
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901 |
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901 |
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Additional paid-in capital |
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39,674,931 |
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39,674,931 |
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Accumulated deficit |
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(28,536,624 |
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(27,161,397 |
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Treasury stock, at cost (1,176,709 shares) |
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(2,322,871 |
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(2,322,871 |
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Total stockholders’ equity |
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8,816,337 |
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10,191,564 |
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$ |
22,332,883 |
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$ |
23,886,036 |
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See accompanying notes to consolidated financial statements.
2
I.C. Isaacs & Company, Inc.
Consolidated Statements of Operations
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Three Months Ended |
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Nine Months Ended |
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2001 |
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2002 |
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2001 |
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2002 |
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Net sales |
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$ |
24,867,482 |
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$ |
16,348,297 |
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$ |
67,233,231 |
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$ |
53,491,961 |
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Cost of sales |
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15,217,251 |
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10,109,501 |
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44,581,596 |
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31,689,587 |
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Gross profit |
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9,650,231 |
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6,238,796 |
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22,651,635 |
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21,802,374 |
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Operating Expenses |
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Selling |
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3,443,563 |
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3,206,899 |
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9,545,018 |
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9,433,439 |
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License fees |
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1,532,387 |
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1,197,228 |
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4,113,748 |
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3,880,384 |
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Distribution and shipping |
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772,848 |
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568,751 |
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2,263,352 |
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1,820,644 |
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General and administrative |
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1,526,242 |
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1,657,589 |
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4,571,349 |
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4,872,901 |
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Provision for severance |
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101,000 |
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— |
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621,000 |
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— |
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Total operating expenses |
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7,376,040 |
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6,630,467 |
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21,114,467 |
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20,007,368 |
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Operating income (loss) |
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2,274,191 |
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(391,671 |
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1,537,168 |
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1,795,006 |
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Other income (expense) |
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Interest, net of interest income of $168, $254, $1,853 and $808 |
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(387,442 |
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(158,363 |
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(1,048,023 |
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(468,639 |
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Other, net |
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(71,276 |
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39,635 |
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(184,411 |
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48,860 |
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Total other income (expense) |
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(458,718 |
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(118,728 |
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(1,232,434 |
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(419,779 |
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Income (loss) from continuing operations |
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1,815,473 |
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(510,399 |
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304,734 |
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1,375,227 |
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Loss from operations of discontinued subsidiary (Note 8) |
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(93,022 |
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— |
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(263,773 |
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