UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 28, 2004
OR
o 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: 0-18926
INNOVO GROUP INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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11-2928178 |
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(State
or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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5804 East Slauson Avenue, Commerce, California |
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90040 |
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(Address of principal executive offices) |
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(Zip Code) |
(323) 725-5516
(Registrant’s telephone number, including area code)
NO CHANGE
(Former name, former address and former fiscal year, if changed since last report)
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. ý Yes o No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). o Yes ý No
As of October 8, 2004, there were 29,189,390 shares of the issuer’s only class of common stock outstanding.
INNOVO GROUP INC.
QUARTERLY REPORT ON FORM 10-Q
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
INNOVO GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
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08/28/04 |
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11/29/03 |
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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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$ |
397 |
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$ |
7,248 |
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Accounts receivable and due from factor, net of allowance for customer credits and allowances of $1,254 (2004) and $2,158 (2003) |
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2,704 |
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1,683 |
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Inventories |
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9,293 |
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7,524 |
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Prepaid expenses and other current assets |
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458 |
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2,115 |
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Assets of discontinued operations |
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599 |
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1,217 |
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TOTAL CURRENT ASSETS |
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13,451 |
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19,787 |
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PROPERTY and EQUIPMENT, net |
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484 |
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850 |
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GOODWILL |
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12,592 |
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12,592 |
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INTANGIBLE ASSETS, NET |
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12,032 |
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13,058 |
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OTHER ASSETS |
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80 |
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78 |
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TOTAL ASSETS |
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$ |
38,639 |
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$ |
46,365 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable and accrued expenses |
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$ |
5,855 |
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$ |
6,128 |
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Due to factor |
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— |
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332 |
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Due to related parties |
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386 |
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579 |
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Convertible note payables, net |
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2,386 |
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— |
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Note payable to officer |
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500 |
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500 |
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Current portion of related party long-term debt |
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267 |
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— |
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Liabilities of discontinued operations |
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402 |
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476 |
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TOTAL CURRENT LIABILITIES |
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9,796 |
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8,015 |
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RELATED PARTY LONG-TERM DEBT |
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9,033 |
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21,868 |
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Commitments and Contingencies |
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8% Redeemable preferred stock, $0.10 par value: Authorized shares 5,000, 194 shares (2004) and (2003) |
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— |
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STOCKHOLDERS’ EQUITY |
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Common stock, $0.10 par – shares,
Authorized 40,000 |
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2,917 |
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2,579 |
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Additional paid-in capital |
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71,701 |
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59,077 |
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Accumulated deficit |
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(51,517 |
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(41,824 |
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Promissory note-officer |
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(703 |
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(703 |
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Treasury stock, 77 shares (2004) and (2003) |
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(2,588 |
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(2,588 |
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Accumulated other comprehensive loss |
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— |
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(59 |
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TOTAL STOCKHOLDERS’ EQUITY |
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19,810 |
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16,482 |
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TOTAL LIABILITIES and STOCKHOLDERS’ EQUITY |
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$ |
38,639 |
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$ |
46,365 |
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The accompanying notes are an integral part of these financial statements
1
INNOVO GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
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Three Months Ended |
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Nine Months Ended |
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08/28/04 |
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08/30/03 |
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08/28/04 |
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08/30/03 |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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NET SALES |
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$ |
41,122 |
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$ |
21,906 |
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$ |
87,748 |
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$ |
45,834 |
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COST OF GOODS SOLD |
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32,824 |
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18,013 |
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73,080 |
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35,275 |
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Gross profit |
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8,298 |
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3,893 |
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14,668 |
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10,559 |
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OPERATING EXPENSES |
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