FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 |
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Commission File No. 0-22545 |
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DSI Toys, Inc.
(Exact name of Registrant as specified in its charter)
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Texas |
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74-1673513 |
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(State or other jurisdiction |
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(I.R.S. Employer |
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10110 West Sam
Houston Parkway South, #150 |
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77099 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number including area code: (713) 365-9900 |
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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, 10,866,365 shares of common stock, par value $.01 per share, of DSI Toys, Inc. were outstanding.
TABLE OF CONTENTS
PART I - - FINANCIAL INFORMATION
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DSI Toys, Inc.
Consolidated Balance Sheet
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September 30 |
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December 31, |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
1,602,249 |
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$ |
284,637 |
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Accounts receivable, net |
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11,414,071 |
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8,767,550 |
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Inventories |
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9,407,746 |
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6,739,920 |
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Prepaid expenses |
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3,284,552 |
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1,981,592 |
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Deferred income taxes |
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— |
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893,000 |
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Total current assets |
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25,708,618 |
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18,666,699 |
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Property and equipment, net |
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2,241,095 |
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1,769,284 |
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Deferred income taxes |
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— |
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1,312,000 |
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Goodwill, net |
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9,241,128 |
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9,241,128 |
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Other assets |
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822,602 |
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323,624 |
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Total assets |
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$ |
38,013,443 |
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$ |
31,312,735 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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$ |
18,661,154 |
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$ |
6,580,780 |
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Current portion of long-term debt |
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9,702,055 |
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1,120,650 |
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Current portion of long-term debt due to a related party |
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951,685 |
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1,751,485 |
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Income taxes payable |
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168,760 |
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69,638 |
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Total current liabilities |
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29,483,654 |
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9,522,553 |
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Long-term debt |
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— |
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9,210,390 |
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Long-term debt due to a related party |
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4,797,547 |
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3,289,552 |
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Deferred income taxes |
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156,642 |
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156,642 |
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Total liabilities |
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34,437,843 |
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22,179,137 |
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Shareholders’ equity: |
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Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued or outstanding |
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— |
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— |
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Common stock, $.01 par value, 35,000,000 shares authorized, 10,866,365 and 9,066,365 shares issued and outstanding, respectively at September 30, 2002 and December 31, 2001 |
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108,664 |
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90,664 |
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Additional paid-in capital |
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7,855,465 |
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5,173,465 |
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Common stock warrants |
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102,500 |
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2,802,500 |
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Accumulated other comprehensive loss |
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(79,374 |
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(70,928 |
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Accumulated earnings (deficit) |
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(4,411,655 |
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1,137,897 |
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Total shareholders’ equity |
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3,575,600 |
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9,133,598 |
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Total liabilities and shareholders’ equity |
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$ |
38,013,443 |
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$ |
31,312,735 |
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See accompanying notes to consolidated financial statements.
1
DSI Toys, Inc.
Consolidated Statement of Operations
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2002 |
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2001 |
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2002 |
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2001 |
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Net sales |
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$ |
20,683,800 |
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$ |
29,927,783 |
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$ |
34,824,317 |
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$ |
46,065,190 |
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Costs of goods sold |
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16,721,603 |
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21,203,145 |
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27,255,720 |
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33,622,175 |
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Gross profit |
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3,962,197 |
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8,724,638 |
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7,568,597 |
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12,443,015 |
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Selling, general and administrative expenses |
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4,386,867 |
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5,192,933 |
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10,353,689 |
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13,169,780 |
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Operating income (loss) |
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(424,670 |
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3,531,705 |
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(2,785,092 |
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(726,765 |
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Interest expense |
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(198,773 |
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(326,668 |
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(649,037 |
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(864,358 |
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Other income |
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6,912 |
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107,316 |
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89,577 |
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167,106 |
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Income (loss) before income taxes |
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(616,531 |
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3,312,353 |
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(3,344,552 |
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(1,424,017 |
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Benefit (expense) from income taxes |
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(3,132,527 |
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(1,331,064 |
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(2,205,000 |
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374,029 |
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Net profit (loss) |
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$ |
(3,749,058 |
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1,981,289 |
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$ |
(5,549,552 |
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$ |
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