-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GKJG6TAJjhvtS/Mo01XScQiPSWkyI3wJ96iLozCo+m2D9h+sx22rUp6IjHzAzIr9 COYI71JmRfQbxk1UUdJUsg== 0000950144-97-007780.txt : 19970715 0000950144-97-007780.hdr.sgml : 19970715 ACCESSION NUMBER: 0000950144-97-007780 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970714 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLORAFAX INTERNATIONAL INC CENTRAL INDEX KEY: 0000037525 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 410719035 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05531 FILM NUMBER: 97639858 BUSINESS ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 BUSINESS PHONE: 4075630263 MAIL ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS FLORAFAX CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS CORP DATE OF NAME CHANGE: 19671205 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS MAILING CORP DATE OF NAME CHANGE: 19671205 10QSB 1 FLORAFAX INTERNATIONAL, INC. FORM 10QSB 05/31/97 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended May 31, 1997 [ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For the transition period from _______________ to __________________ Commission File Number: 0-5531 FLORAFAX INTERNATIONAL, INC. ---------------------------- (Exact name of small business issuer as specified in its charter) Delaware 41-0719035 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8075 20th Street, Vero Beach, Florida 32966 (Address of principal executive offices) 561-563-0263 ------------ (Issuer's telephone number) (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 X NO___ The registrant had 7,788,622 shares of common stock, $0.01 par value, outstanding at May 31, 1997. Transitional Small Business Disclosure Format (Check one): Yes ; No X 2 INDEX
PART I FINANCIAL INFORMATION --------------------- Page No. -------- Item 1. Financial Statements (Unaudited): Consolidated Balance Sheets May 31, 1997 and August 31, 1996 1-2 Consolidated Statements of Income and Accumulated Deficit Three Months and Nine Months Ended May 31, 1997 and May 31, 1996 3-4 Consolidated Statements of Cash Flows Nine Months Ended May 31, 1997 and May 31, 1996 5-6 Notes to Consolidated Financial Statements 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13 PART II OTHER INFORMATION ----------------- Item 1. Legal Proceedings 14 Item 2. Changes in Securities 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14-16 Signatures 17
3 FLORAFAX INTERNATIONAL, INC. Consolidated Balance Sheets
(IN THOUSANDS) ASSETS MAY 31 AUGUST 31 1997 1996 ----------------------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 4,645 $ 3,671 Restricted cash 77 99 Accounts Receivable: Members, less allowances of $491 at May 31, 1997 and $532 at August 31, 1996 1,306 1,202 Charge card issuers 1,986 326 Other 85 73 -------------------- 3,377 1,601 Deferred tax asset 271 261 Prepaid and other assets 130 54 -------------------- TOTAL CURRENT ASSETS 8,500 5,686 Property and equipment, at cost: Fixtures and equipment 1,249 1,188 Computer systems 784 670 Communication Systems 1,035 929 Leasehold improvements 504 25 -------------------- 3,572 2,812 Accumulated depreciation and amortization 2,659 2,534 -------------------- 913 278 Excess of cost over net assets of acquired business 1,995 1,995 Deferred tax asset, net of allowance 654 602 Other 104 261 -------------------- 2,753 2,858 TOTAL ASSETS 12,166 8,822 ====================
See accompanying notes 1 4 FLORAFAX INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS) MAY 31 AUGUST 31 1997 1996 ----------------------- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 79 Accounts payable 5,682 3,913 Accrued expenses 1,616 1,036 Unearned directory income 95 Member benefits 192 170 -------------------- TOTAL CURRENT LIABILITIES 7,585 5,198 Long term debt, less current maturities 80 334 Membership security deposits 58 53 -------------------- TOTAL LIABILITIES 7,723 5,585 STOCKHOLDERS' EQUITY Preferred stock ($10 par value, 600,000 shares authorized, none issued) Common stock - ($.01 par value, 70,000,000 shares authorized, 8,243,597 and 8,232,727 issued at May 31, 1997 and August 31, 1996, respectively, 7,788,622 and 8,209,727 outstanding at May 31, 1997 and August 31, 1996, respectively 83 83 Additional paid-in capital 10,098 10,087 Treasury stock, 454,975 shares at cost (1,343) Accumulated deficit (4,395) (6,933) -------------------- TOTAL STOCKHOLDERS' EQUITY $ 4,443 $ 3,237 -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,166 $ 8,822 ====================
See accompanying notes 2 5 FLORAFAX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT (IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- MAY 31 MAY 31 MAY 31 MAY 31 1997 1996 1997 1996 ------------------ ----------------- (Unaudited) NET REVENUES: Member dues and fees $ 637 $ 538 $ 1,771 $ 1,514 Floral and other order Processing 2,079 1,916 5,002 4,643 Directory and advertising fees 372 362 1,028 954 Charge card processing 413 386 1,204 1,037 Other revenue 6 2 18 39 -------------------------------------------- 3,507 3,204 9,023 8,187 EXPENSES: General and administrative 1,670 1,614 4,514 4,150 Selling and advertising 974 804 2,535 2,133 Directory publishing 101 146 288 303 Depreciation, amortization and retirements 64 104 191 310 -------------------------------------------- 2,809 2,668 7,528 6,896 -------------------------------------------- OPERATING INCOME 698 536 1,495 1,291 OTHER INCOME (EXPENSE) Interest expense (1) (77) (5) (235) Other 1 919 1 Interest income 57 31 131 77 -------------------------------------------- 57 (46) 1,045 (157) INCOME BEFORE TAXES AND EXTRAORDINARY ITEM $ 755 $ 490 $ 2,540 $ 1,134 Income taxes 14 2 40 -------------------------------------------- INCOME BEFORE EXTRAORDINARY ITEM 755 476 2,538 1,094 Extraordinary item 125 -------------------------------------------- NET INCOME $ 755 $ 476 $ 2,538 $ 1,219
See accompanying notes 3 6 FLORAFAX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT (IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- MAY 31 MAY 31 MAY 31 MAY 31 1997 1996 1997 1996 ------------------ ----------------- (Unaudited) NET INCOME: $ 755 $ 476 $ 2,538 $ 1,219 Accumulated deficit at beginning of period (5,150) (8,452) (6,933) (9,195) --------------------------------------------------------- ACCUMULATED DEFICIT AT END OF PERIOD $ (4,395) $ (7,976) $ (4,395) $ (7,976) --------------------------------------------------------- Primary earnings per common share: Income before extraordinary item $ 0.09 $ 0.07 $ 0.29 $ 0.18 Extraordinary item 0.02 --------------------------------------------------------- NET INCOME $ 0.09 $ 0.07 $ 0.29 $ 0.20 ========================================================= WEIGHTED AVERAGE SHARES OUTSTANDING 8,655,000 6,503,000 8,685,000 6,211,000 Fully diluted earnings per common share: Income before extraordinary item $ 0.09 $ 0.07 $ 0.29 $ 0.17 Extraordinary item -- -- -- 0.02 --------------------------------------------------------- NET INCOME $ 0.09 $ 0.07 $ 0.29 $ 0.19 ========================================================= WEIGHTED AVERAGE SHARES OUTSTANDING 8,740,000 6,526,000 8,800,000 6,292,000
See accompanying notes 4 7 FLORAFAX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS ENDED MAY 31 MAY 31 1997 1996 ----------------- (Unaudited) OPERATING ACTIVITIES Net income $ 2,538 $ 1,219 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation, amortization, and retirements 150 225 Provision for doubtful accounts 162 193 Deferred Income Taxes (62) Amortization of discount on debt 24 Increase (decrease) in cash flows due to changes in: Accounts receivable (1,938) (1,538) Prepaid and other assets (76) (21) Other Assets 157 87 Accounts payable 1,769 1,323 Accrued liabilities 697 505 Membership security deposits 5 (7) -------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 3,402 2,010 INVESTING ACTIVITIES Capital expenditures (785) (112) Release of restricted cash 22 495 -------------------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES $ (763) $ 383
See accompanying notes (CONTINUED) 5 8 FLORAFAX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS ENDED MAY 31 MAY 31 1997 1996 ----------------- (Unaudited) FINANCING ACTIVITIES Proceeds from issuing debt 2,500 Purchases of treasury stock (1,343) Proceeds from issuing stock 11 127 Payments of debt (333) (3,168) -------------------- NET CASH USED IN FINANCING ACTIVITIES (1,665) (541) -------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 974 1,852 Cash and cash equivalents at beginning of year 3,671 1,972 -------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,645 3,824 ==================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 1 $ 245 Cash paid during the period for Income tax $ 52 $ 8 ====================
See accompanying notes 6 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note (1) Management's Opinion and Accounting Policies The accompanying interim financial statements should be read in conjunction with the Florafax International, Inc. (the Company's) Form 10-KSB for the year ended August 31, 1996. In the opinion of Management the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of May 31, 1997 and the consolidated results of operations and cash flows for the nine months ended May 31, 1997. Certain income statement items have been reclassified to conform to current period presentation. Historically, the Company's flowers-by-wire operation is seasonal in that its member florists send a much larger volume of orders during Thanksgiving, the Christmas season, Valentine's Day, Easter and Mother's Day. Therefore, the results of operations of an interim period may not necessarily be indicative of the results expected for a full year. In an effort to increase orders to member florists the Company continues to engage in non traditional campaigns through it's wholly owned subsidiary, The Flower Club (800-800 SEND). The Flower Club was formed to generate additional orders by pursuing relationships with nationally recognized corporations. The Company engages in joint marketing campaigns with these corporations not only during holidays, but also during non-seasonal periods in an effort to provide member florists with orders during slow periods of the year. Floral orders and handling fees generated through The Flower Club are significant, representing 62% of gross floral order revenue for the nine months ended May 31, 1997 compared to 57% for the nine months ended May 31, 1996. Note (2) Contingencies Florafax International, Inc. vs. Bellerose Floral Inc. and GTE Market Resources Inc., et al. During 1990 the Company filed a lawsuit against GTE Market Resources, Inc. (GTE/MR) for failure on the part of GTE/MR to fulfill certain contractual telecommunication services on behalf of Florafax. On November 23, 1993 a jury awarded Florafax $1,481,000 in net damages against GTE/MR. GTE/MR appealed the case and the case was ultimately ruled on by the Oklahoma Supreme Court. During the current fiscal year the Oklahoma Supreme Court upheld the decision of the trial court, and ruled in favor of Florafax. The Company's legal counsel tried this case on a contingency fee basis. The agreement between the Company and its legal counsel stipulated that the Company's attorneys were to receive 40% of the net proceeds if the case reached the appellate court. Consequently, during the nine months ended May 31, 1997 the Company received 60% of the ultimate proceeds, which amounted to $1,041,000. 7 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note (3) Pending Accounting Changes In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("FASB 128"), which establishes standards for computing and presenting earnings per share, FASB 128 replaces the presentation of primary and fully diluted earnings per share with basic and diluted earnings per share, respectively. Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share are computed similarly to fully diluted earnings per share. The standard is effective for financial statements for periods ending after December 15, 1997, with earlier application not permitted. 8 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Company's sustained profitability has allowed the Company to generate significant cash flows. Cash provided by operating activities was $3,402,000 (including a lawsuit settlement of $1,041,000, as discussed in note 2) for the nine months ended May 31, 1997 compared to $2,010,000 for the nine months ended May 31, 1996. Cash and cash equivalents at May 31, 1997 were $4,645,000 compared to $3,671,000 at August 31, 1996 and $3,824,000 at May 31, 1996. As a result of the significant cash flows during the current year the Company decided to use the cash to improve operations and increase shareholder value, as discussed in the following three paragraphs. First, during the first quarter of 1997 the Company retired $333,000 of long term debt bearing interest at 10%, thereby eliminating nearly all interest expense of the Company. This 10% interest rate was well in excess of the short-term rates the Company could obtain if it chose to hold and invest this cash. Second, at the end of the third quarter of 1997 the Company completed the expansion of its headquarters in Vero Beach, Florida. The cost of the expansion was approximately $500,000. The expansion provides for additional administrative and marketing offices, and increases the call center to allow for nearly 150 telephone sales representatives. Third, as previously reported to the public, the Company began repurchasing shares of it's own common stock in an effort to increase shareholder value. As of May 31, 1997 the Company had 454,975 shares of it's own common stock held in treasury, at a cost of $1,343,000. The Company may from time to time purchase additional shares of it's own common stock. Operating cash flows historically have been generated primarily from processing floral orders and charge card transactions for the Company's member florists, as well as collecting dues, fees and directory advertising from the members. Floral order processing may require settlement with the fulfilling florist before collection of funds from the sending florist. Charge card processing, however, generally allows the Company to collect funds from the charge card issuer prior to settlement with the merchant. Since in both types of transactions the Company is both collecting and settling funds, the timing of these cash flows has a significant impact on the Company's liquidity. As discussed in Note 1 to the consolidated financial statements the Company continues to engage in non traditional campaigns through it's wholly owned subsidiary, The Flower Club (800 800 SEND). 9 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This has helped to improve the Company's cash flow as the majority of orders generated through The Flower Club are paid for by credit cards. This allows the Company to receive a significant portion of its funds within days after processing the transaction. RESULTS OF OPERATIONS General Comments Revenues are up in every material category for the nine and three month periods ended May 31, 1997 when compared to the same periods in the previous year. Total net revenues are up 9% and 10% for the quarter and nine months ended May 31, 1997, respectively, when compared to the same periods in the prior year. Operating income increased 30% for the quarter and 16% for the nine months ended May 31, 1997. Net Revenues Revenue from member dues and fees has increased for both the nine and three-month periods ended May 31, 1997 when compared to the same periods in the prior year. This increase is attributable to two revenue areas. First, there has been a slight increase in dues as well as an increase in dues paying members. Second, there has been an increase in certain order fees resulting from increased order volume. Floral order revenue is up for both the quarter and nine months compared to the same periods last year. The increase is attributable primarily to an increase in Flower Club revenues and also revenues generated by the Talking Bouquet, a new product introduced by the Company in the current year. During the third quarter of 1996 the Company produced new selection guides for it's floral membership. These selection guides are produced only once every four or five years. The effect of the selection guides was to increase net order revenue in 1996. Had these selection guides not been produced in 1996 the Company would have experienced an even greater increase in current year revenues when compared to the previous year. Net revenues from credit card operations increased for both the quarter and nine months ended May 31, 1997 when compared to the same periods in the prior year. The increase is due to increased dollar volumes processed. The increase in credit card dollar volumes processed actually exceeds the increase in the net revenue because the Company has had to lower its discount rate in certain industries to remain competitive. Management believes the Companies current pricing strategy allows the company to remain fairly competitive in the industries the Company services. 10 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Advertising and directory fees increased for both the quarter and nine months ended May 31, 1997 when compared to the same periods in the prior year. This is due primarily to an increase in members. However, during the third quarter of the prior year the Company published two directories compared to only one being published in the third quarter of the current year, resulting in greater directory revenues being recorded in the prior year. Expenses Member support, general and administrative expenses increased for both the quarter and nine months ended May 31, 1997 when compared to the prior year. The primary component of the increase was labor costs associated with the increased Flower Club order volume. While labor costs associated with Flower Club orders increased, they were offset somewhat by a decrease in telephone expense due to a rate decrease from the Company's long distance carrier. Selling and advertising expenses increased for both the quarter and nine months ended May 31, 1997 when compared to the prior year. There are two main reasons for the increase. First, the Company has increased its sales staff in order to continue to grow its floral membership. Second, the Company paid higher marketing commissions and printing costs related to Flower Club volume in 1997 when compared to 1996. Directory publishing expense was greater for both the quarter and nine months ended May 31, 1996 when compared to the same periods this year. This is a result of publishing two directories in the third quarter of 1996 compared to only one directory in the third quarter of 1997. Depreciation and amortization declined significantly for both the quarter and nine months ended May 31, 1997 when compared to the prior year. Many of the Company's depreciable assets have become fully depreciated. In addition, a significant portion of the decline is a result of terminating the Floranet 5000 program in the last quarter of fiscal 1996. At the time this program was terminated all Floranet 5000 equipment and related software development costs were charged to expense. In addition, during the second quarter of 1997 the Company wrote off the remaining balance of a consulting agreement, thereby eliminating any further amortization related to this contract. This charge to earnings is included in other income, not depreciation and amortization. The Company has recently completed the expansion of its headquarters in Vero Beach, Florida. Now that the expansion is complete depreciation should be expected to increase as a result of depreciation on the building itself as well as the related furniture and equipment that is now being used in the new facility. 11 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other income (expense) Interest expense has been virtually eliminated during the quarter and nine months ended May 31, 1997. During the last quarter of fiscal 1996 the majority of the Company's debt was converted to equity, thereby eliminating the interest expense associated with this debt. In addition, shortly after year-end the Company retired another $333,000 of debt, bringing the total long-term debt of the Company to $80,000 as of May 31, 1997. The primary components of other income for the nine months ended May 31, 1997 are as follows. First, during February 1997 the Company received the proceeds from the GTE/MR litigation in the amount of $1,041,000 (see note 2). Second, the Company terminated a consulting agreement with a marketing consultant in Westlake Village, California. At the time the agreement was terminated the Company charged to earnings $87,000 which had been capitalized when the agreement was entered into. Income Taxes The Company accounts for income taxes using Financial Accounting Standard Board Statement No. 109, Accounting for Income Taxes, which requires the asset and liability method of accounting for income taxes. Under the asset and liability method deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Until 1996, the Company had provided the full valuation allowance on net deferred tax assets based on the Company's history of losses and the uncertainty surrounding the Company's ability to recognize such assets. However, during the year ended August 31, 1996 the Company re-evaluated its historical losses, and its projected future earnings, and reached the conclusion that it was more likely than not that some portion of the deferred tax asset would be realized. At that time the valuation allowance was reduced resulting in a net deferred tax benefit. For the quarter ended May 31, 1997 the Company has recorded no income tax expense. Based on facts and circumstances at May 31, 1997 it appears that the Company may have no material tax liability during the fiscal year ended August 31, 1997. Consequently, for the nine months ended May 31, 1997 the Company has recorded no income tax expense other than alternative minimum tax. The Company will continue to evaluate the valuation allowance based on current and projected future earnings and will make adjustments to the allowance based on the evidence and circumstances at that time. 12 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-looking statements When used in this report, the words "plan(s)", "intends(s)", "expect(s)", "feel(s)", "will", "may", "believe(s)", "anticipate(s)", and similar expressions are intended to identify forward-looking statements. The events described in such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company's business, including the disclosures made under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the report, as well as the Company's periodic reports of Form 10-KSB, 10-QSB and 8-K filed with the Securities and Exchange Commission. 13 16 PART II OTHER INFORMATION Item 1. Legal Proceedings For a summary of legal proceedings, reference is made to Item 3, Legal Proceedings, included in the Company's annual report on Form 10-KSB for the year ended August 31, 1996 and to Note 2 of the Notes to Consolidated Financial Statements included in this filing. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. The Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on form 8-K Exhibits (27) Financial Data Schedule (for SEC use only). The following items have been included as exhibits in filings by the Company in a previous filing and, accordingly, are incorporated here by reference. Exhibit Reference (3) Articles of incorporation and Bylaws of the Registrant, as amended. (10) Material Contracts 14 17 Exhibit Reference (a) Convertible subordinated notes due to Clark Estates maturing June 30, 1996. (b) Subordinated debentures maturing in 1998. (c) Agreement dated December 3 1993, Addendum, Second Addendum, Third Addendum, Fourth Addendum and Fifth Addendum thereto by and between the Registrant and Citizens Fidelity Bank and Trust Company (now PNC Bank, Kentucky, Inc.). (d) Purchase Agreement for certain assets formerly owned by Savannah Floral Services, Inc. dated March 10, 1994. (e) Note Payable to Andrew Williams dated March 10, 1994. (f) Promissory Note to Citrus Bank dated November 9, 1993. (g) Promissory Note to Citrus Bank dated November 17, 1993. (h) Promissory Note to Citrus Bank dated January 25, 1994. (i) Loan to James H. West, Director, President and Chief Financial Officer, dated August 28, 1994. (j) Consulting agreement with David Harper of Ventura County California dated December 10, 1993. (k) Promissory Note to Citrus Bank dated August 31, 1995. (l) Operating lease agreement between Registrant and Alvin Wunderlich dated April 1995. (m) Agreement of Purchase and Sale made and entered into to be effective December 29, 1995 by and between Registrant and St. James Partners, LTD. 7% Convertible Promissory Note in the amount of $2,500,000 dated Dated February 28, 1996 due February 28, 1997. (n) Security agreement dated February 28, 1996 executed in connection with the $2,500,000 Convertible Promissory Note. 15 18 Exhibit Reference (o) Common Stock Purchase Warrant for 250,000 shares of the registrants common stock expiring January 1, 2001. (p) Common Stock Purchase Warrant for 400,000 shares of the registrants Common stock expiring January 1, 2001. (q) Construction Agreement dated September 30, 1996 between Registrant And C.E. Block, Architect of Vero Beach, Florida. (22) Subsidiaries of the Registrant Reports on Form 8-K No reports on Form 8-K were filed during the third quarter of fiscal 1997. 16 19 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Florafax International, Inc. Date: July 11, 1997 James H. West ------------- ------------------- President and Chief Financial Officer 17 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS AUG-31-1997 SEP-01-1996 MAY-31-1997 4,722,000 0 3,868,000 491,000 0 8,500,000 3,572,000 2,659,000 12,166,000 7,585,000 80,000 0 0 83,000 4,360,000 4,443,000 0 9,023,000 0 0 7,528,000 162,000 5,000 2,540,000 2,000 2,538,000 0 0 0 2,538,000 0.29 0.29
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