FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Quarterly
Report Pursuant to Section 13 or 15(d) of |
For the quarterly period ended: 01/31/03
Commission file number: 1-14091
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SHERWOOD BRANDS, INC. |
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(Exact name of Registrant as specified in its charter) |
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North Carolina |
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56-1349259 |
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(State or other jurisdictions of |
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(I.R.S. Employer |
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1803 Research Blvd. Suite 201, Rockville MD 20850 |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: 301-309-6161 |
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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 requirement for the past 90 days. Yes ý No o
The number of shares outstanding of issuer’s Class A Common Stock, $.01 par value per share, as of March 6, 2003 was 2,993,476. The number of shares outstanding of issuer’s Class B Common Stock, $.01 par value per share, as March 6, 2003 was 1,000,000. The Class B Common Stock is not publicly traded.
Transitional Small Business Disclosure Format (check one):
Yes o No ý
SHERWOOD BRANDS, INC.
INDEX
SHERWOOD BRANDS, INC. AND SUBSIDIARIES
Unaudited
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January 31, 2003 |
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July 31, 2002 |
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(unaudited) |
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(audited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
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228,683 |
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709,247 |
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Accounts receivable, less allowance of $284,000 and $189,000 |
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6,610,681 |
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2,547,452 |
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Inventory |
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15,979,694 |
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15,956,145 |
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Income taxes receivable |
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126,164 |
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1,555,078 |
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Other current assets |
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631,452 |
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450,375 |
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Deferred taxes on income |
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512,000 |
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512,000 |
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Total Current Assets |
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24,088,674 |
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21,730,297 |
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Net property and equipment |
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7,490,784 |
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7,350,488 |
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Goodwill |
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2,001,330 |
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2,001,330 |
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Other assets |
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414,938 |
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308,839 |
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TOTAL ASSETS |
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33,995,726 |
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31,390,954 |
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Line of credit |
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10,133,909 |
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8,203,971 |
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Current portion of long-term debt |
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481,111 |
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90,000 |
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Current portion of capital lease obligation |
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15,718 |
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15,718 |
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Accounts payable |
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4,991,204 |
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5,833,301 |
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Accrued expenses |
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2,016,653 |
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1,368,928 |
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Income taxes payable |
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— |
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— |
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Total current liabilities |
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17,638,595 |
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15,511,918 |
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Deferred taxes on income |
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331,000 |
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331,000 |
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Long-term debt |
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1,534,291 |
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1,722,000 |
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Obligations under capital lease |
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431,405 |
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438,696 |
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TOTAL LIABILITIES |
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19,935,291 |
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18,003,614 |
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Stockholders’ equity |
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Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued or outstanding |
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— |
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— |
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Common stock, Class A, $.01 par value, 30,000,000 shares authorized, 2,993,476 and 1,150,000 shares issued and outstanding |
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29,935 |
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29,869 |
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Common stock, Class B, $.01 par value, 5,000,000 shares authorized, 1,000,000 shares issued and outstanding |
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10,000 |
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10,000 |
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Additional paid-in-capital |
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9,827,624 |
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9,816,856 |
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Retained earnings |
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4,192,876 |
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3,561,754 |
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Accumulated other comprehensive income / (loss) |
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— |
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(31,139 |
) |
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TOTAL STOCKHOLDERS’ EQUITY |
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14,060,435 |
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13,387,340 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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33,995,726 |
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31,390,954 |
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See accompanying summary of accounting policies and notes to consolidated financial statements.
1
SHERWOOD BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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THREE MONTHS ENDED JANUARY 31, |
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SIX MONTHS ENDED JANUARY 31, |
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Unaudited |
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Unaudited |
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2003 |
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2002 |
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2003 |
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2002 |
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Net sales |
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$ |
19,390,601 |
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$ |
15,931,434 |
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$ |
37,852,813 |
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$ |
36,978,318 |
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Cost of sales |
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14,343,300 |
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11,054,530 |
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27,299,042 |
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25,339,089 |
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Gross profit |
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5,047,301 |
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4,876,904 |
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10,553,771 |
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11,639,229 |
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Selling, general and administrative expenses |
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2,748,809 |
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2,548,744 |
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5,312,509 |
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5,003,147 |
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Pre-Production costs |
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880,440 |
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— |
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1,384,376 |
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— |
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Salaries and related expenses |
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1,283,401 |
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1,305,121 |
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2,458,409 |
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2,675,052 |
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Total operating expenses |
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4,912,650 |
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3,853,865 |
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9,155,294 |
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7,678,199 |
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Income (loss) from operations |
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134,651 |
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1,023,039 |
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1,398,477 |
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