SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-Q
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(Mark One) |
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QUARTERLY REPORT under SECTION 13 OR 15(d) of the SECURITIES EXCHANGE ACT OF 1934 |
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For the quarter ended September 5, 2004 |
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OR |
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o |
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 0-20792
FRESH CHOICE, INC.
(Exact name of registrant
as specified in its charter)
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Delaware |
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77-0130849 |
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(State
or other jurisdiction of |
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(I.R.S.
Employee |
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485 Cochrane Circle, Morgan Hill, California 95037 |
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(Address of principal executives offices) (Zip Code) |
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Registrant’s telephone number, including area code: (408) 776-0799 |
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Former name, former address and former fiscal year, if changed since last report. |
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Indicate by check 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. |
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x Yes o No |
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Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12B-2 of the Exchange Act). |
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o Yes x No |
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APPLICABLE ONLY TO CORPORATE ISSUERS: |
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The number of shares of Common Stock, $.001 par value, outstanding as of October 1, 2004 was 6,037,461. |
FRESH CHOICE, INC.
INDEX
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PART I - FINANCIAL INFORMATION |
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Item 1 - Financial Statements |
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Unaudited Condensed Consolidated Balance Sheets at September 5, 2004 and December 28, 2003 |
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3 |
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4 |
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5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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6 |
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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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14 |
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Item 3 - Quantitative and Qualitative Disclosures About Market Risk |
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31 |
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Item 4- Controls and Procedures |
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31 |
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PART II - OTHER INFORMATION |
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Item 1 - Legal Proceedings |
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32 |
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Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds |
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32 |
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Item 3 - Defaults Upon Senior Securities |
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32 |
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Item 4 - Submission of Matters to a Vote of Security Holders |
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32 |
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Item 5 - Other Information |
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32 |
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Item 6 - Exhibits and Reports on Form 8-K |
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32 |
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33 |
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34 |
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2
Item 1 - Financial Statements
FRESH CHOICE, INC. (Debtor in Possession as of July 12, 2004)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per
share amounts)
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(Unaudited) |
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September. 5, |
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December 28, |
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ASSETS: |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
2,647 |
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$ |
1,379 |
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Assets held for sale |
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3,490 |
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- |
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Inventories |
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367 |
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357 |
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Prepaid expenses and other current assets |
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732 |
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609 |
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Total current assets |
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7,236 |
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2,346 |
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PROPERTY AND EQUIPMENT, net |
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15,232 |
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19,054 |
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DEPOSITS AND OTHER ASSETS |
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1,072 |
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720 |
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ASSETS FROM DISCONTINUED OPERATIONS |
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233 |
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8,735 |
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TOTAL ASSETS |
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$ |
23,773 |
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$ |
30,854 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY: |
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LIABILITIES |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
547 |
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$ |
1,500 |
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Other accrued expenses |
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3,628 |
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3,207 |
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Accrued salaries and wages |
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1,481 |
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1,293 |
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Sales tax payable |
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572 |
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465 |
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Current portion of long-term obligations |
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2,351 |
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579 |
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Liabilities subject to compromise |
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10,070 |
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- |
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Total current liabilities |
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18,649 |
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7,043 |
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CAPITAL LEASE OBLIGATIONS |
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- |
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987 |
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LONG-TERM DEBT |
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110 |
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1,886 |
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OTHER LONG-TERM LIABILITIES |
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1,900 |
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2,287 |
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LIABILITIES FROM DISCONTINUED OPERATIONS |
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431 |
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2,940 |
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Total liabilities |
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21,091 |
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15,144 |
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STOCKHOLDERS’ EQUITY: |
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Convertible
preferred stock, $.001 par value; |
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5,175 |
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5,175 |
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Common
stock - $.001 par value; |
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42,744 |
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42,714 |
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Accumulated deficit |
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(45,237 |
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(32,179 |
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Total stockholders’ equity |
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2,682 |
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15,710 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
23,773 |
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$ |
30,854 |
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The
December 28, 2003 amounts are derived from the Company’s audited financial
statements.
See accompanying notes to condensed consolidated financial statements.
3
FRESH CHOICE, INC. (Debtor in Possession as of
July 12, 2004)
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Twelve Weeks Ended |
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Thirty-Six Weeks Ended |
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September 5, 2004 |
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September 7, 2003 |
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September 5, 2004 |
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September 7, 2003 |
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NET SALES |
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$ |
15,142 |
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$ |
16,311 |
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$ |
44,740 |
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$ |
46,598 |
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COSTS AND EXPENSES: |
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Cost of sales |
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3,447 |
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3,521 |
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9,914 |
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10,263 |
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Restaurant operating expenses: |
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Labor |
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4,945 |
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5,054 |
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14,769 |
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14,858 |
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Occupancy and other |
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5,081 |
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4,982 |
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14,455 |
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14,498 |
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General and administrative expenses |
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1,270 |
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1,195 |
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3,704 |
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3,865 |
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Depreciation and amortization |
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571 |
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592 |
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1,764 |
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1,812 |
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Store closure and asset impairment expenses |
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407 |
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- |
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3,511 |
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- |
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Total costs and expenses |
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15,721 |
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15,344 |
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48,117 |
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45,296 |
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OPERATING INCOME (LOSS) |
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(579 |
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967 |
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(3,377 |
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1,302 |
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Chapter 11 related reorganization expenses |
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(546 |
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- |
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(546 |
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- |
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Interest expense, net |
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(95 |
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(67 |
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(256 |
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(200 |
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INCOME (LOSS) FROM CONTINUING |
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(1,220 |
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900 |
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(4,179 |
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1,102 |
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Provision for income taxes |
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- |
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- |
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- |
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- |
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INCOME (LOSS) FROM
CONTINUING |
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(1,220 |
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900 |
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(4,179 |
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1,102 |
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LOSS FROM DISCONTINUED OPERATIONS |
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(3,539 |
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(1,151 |
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(8,878 |
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(2,125 |
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NET INCOME (LOSS) |
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$ |
(4,759 |
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$ |
(251 |
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$ |
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