-----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, OlRTLcUyQZ8PmMrQvXWVW+zamp17CXb8Zh4E8olw64VLy2q6ia6CWLlhevMK50jM kaz0bkmHe0pZ6dYbdBFlpA== 0000950144-98-006543.txt : 19980518 0000950144-98-006543.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950144-98-006543 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JR CONSULTING INC CENTRAL INDEX KEY: 0000704172 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 133121128 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 002-78335-NY FILM NUMBER: 98626151 BUSINESS ADDRESS: STREET 1: C\O BROAD & CASSEL STREET 2: 201 S BISCAYNE BLVD SUITE 3000 CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3053739400 MAIL ADDRESS: STREET 1: C/O BROAD & CASSEL STREET 2: 201 S BISCAYNE BLVD SUITE 3000 CITY: MIAMI STATE: FL ZIP: 33131 10QSB 1 J R CONSULTING, INC. FORM 10QSB 01/31/98 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark one) [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 ----------------------- OR [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission file number 2-78335-NY ------------ J R CONSULTING, INC. -------------------------------------------------------- (Exact name of small business issuer in its charter) Nevada 13-3121128 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 Varick Street, 13th Floor, New York, New York 10014 ------------------------------------------------------- (Address of principal executive offices) (212) 807-6777 --------------------------- (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 of 1934 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 number of shares outstanding of the issuer's Common Stock, $.04 par value per share, as of March 31, 1998, is 11,695,899. Transitional Small Business Disclosure Format (check one); YES NO X ------- ------- 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. J R CONSULTING, INC. CONSOLIDATED CONDENSED BALANCE SHEET
3/31/98 06/30/97 (UNAUDITED) (AUDITED) $'000 $'000 ----------- --------- ASSETS Current assets Cash 203 20 Accounts receivable 738 503 Inventories 58 35 Other current assets 20 25 ------ ------ Total current assets 1,019 583 Property plant and equipment, net of accumulated depreciation of $38,000 and $40,000 at 3/31/98 and 06/30/97, respectively 100 157 Other assets Goodwill and patents 810 855 ------ ------ Total assets 1,929 1,595 ====== ====== LIABILITIES Current liabilities Overdraft 68 -- Accounts payable 558 717 Accrued liabilities 437 526 Other current liabilities 951 639 ------ ------ Total current liabilities 2,014 1,882 Long-term debt 100 -- ------ ------ Total liabilities 2,114 1,882 SHAREHOLDERS' EQUITY Common Stock 535 513 Less 5,187,598 shares issued at discount below par value (154) (154) Paid in capital in excess of par value 2,857 2,516 Retained earnings (3,420) (3,162) Translation adjustment (3) -- ------ ------ Total shareholders' equity (185) (287) ------ ------ 1,929 1,595 ====== ======
The accompanying notes are an integral part of the consolidated financial statements. -2- 3 J R CONSULTING, INC. CONSOLIDATED CONDENSED STATEMENT OF INCOME
3 MONTHS ENDED 9 MONTHS ENDED (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) 3/31/98 3/31/97 3/31/98 3/31/97 $'000 $'000 $'000 $'000 --------------------------------- --------------------------------- Sales 389 533 1,481 1,618 Cost of sales 77 188 368 598 ----------- ----------- ----------- ----------- Gross margin 312 345 1,113 1,020 SG&A expenses 554 448 1,603 1,569 Amortization of goodwill and patents 15 15 46 46 ----------- ----------- ----------- ----------- Operating profit (loss) (257) (118) (536) (595) Loss on equity investment -- -- (247) -- Provision for liability -- -- (39) -- Interest expense 7 -- 8 -- ----------- ----------- ----------- ----------- Pre-tax profit (loss) (264) (118) (258) (595) Income tax expenses -- -- -- -- ----------- ----------- ----------- ----------- Net income (loss) (264) (118) (258) (595) =========== =========== =========== =========== Weighted average number of common shares outstanding 11,695,899 11,044,955 11,534,473 11,044,955 Net loss per share of common stock $ (0.02) $ (0.01) $ (0.02) $ (0.05)
The accompanying notes are an integral part of the consolidated financial statements. -3- 4 J R CONSULTING, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED) (UNAUDITED) 9 MONTHS ENDED 9 MONTHS ENDED 3/31/98 3/31/97 $'000 $'000 ------------------------------- Operating activities Net income (loss) (258) (595) Depreciation and amortization 155 85 Decrease in inventory (23) 93 Change in other operating assets (483) 221 Other 382 (32) ------ ------ Net cash provided by (used in) operating activities (227) (228) Investing activities (53) (52) Capital expenditures ------ ------ Net cash provided by (used in) investing activities (53) (52) Financing activities Proceeds from stock -- -- Proceeds from loans to be converted to stock 463 267 ------ ------ Net cash provided by (used in) financing activities 463 267 ------ ------ Increase in cash 183 (13) Cash at July 1 20 35 Cash at March 31 203 (22)
The accompanying notes are an integral part of the consolidated financial statements. -4- 5 J R CONSULTING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and such adjustments are of a normal recurring nature. Results for interim periods should not be considered indicative of results for any other interim period or for future years. NOTE 2 No income taxes were paid during the nine months ended March 31, 1998. NOTE 3 The effects of non-cash investing and financing activities have been excluded from the statement of cash flows in accordance with SFAS 95. NOTE 4 Translation of these financial statements at March 31, 1998, is at the mid-market rate of (pound)1 to $1.675, and for the nine months then ended, at an average rate of (pound)1 to $1.649. -5- 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The gross margin for the Registrant for the fiscal quarter ended March 31, 1998 is lower than the gross margin for the corresponding period in the previous fiscal year ($312,000 as compared with $345,000). Also, the operating loss is significantly higher for the fiscal quarter ended March 31, 1998, compared with the operating loss for the corresponding period in the previous year ($257,000 compared with $118,000). However, the improved performance in the first six months of the fiscal year beginning July 1, 1997 compared with the corresponding period in the pervious year has more than offset the decline in the fiscal quarter ended March 31, 1998. The gross margin for the fiscal nine months ended March 31, 1998, is higher than the gross margin for the corresponding period in the previous fiscal year ($1,113,000 compared with $1,020,000). The operating loss is lower for the fiscal nine months ended March 31, 1998, compared with the operating loss for the corresponding period in the previous fiscal year ($536,000 compared with $595,000). Management believes the exceptional items in the fiscal nine months to March 31, 1998, make any comparison of the Registrant's net losses for the fiscal nine months ended March 31, 1998, and 1997 meaningless. The fiscal nine months ended March 31, 1998, have much better results because of the exceptional items. The performance of Benatone Limited ("Benatone") in both the last fiscal quarter and the fiscal nine months ended March 31, 1998, showed a significant improvement on the corresponding periods in the previous year with losses being reduced by $62,000 and $119,000, respectively. These results are flattering because they include the reversal of $38,000 over provision for audit fees. Nevertheless, even after reducing the improvement by this amount, the results show a much-improved performance compared with the previous year. This should also be assessed in the context of operating in an environment of strong and aggressive competition from the less developed countries, particularly with the assembly work, and a weakening United Kingdom economy. Furthermore, this industry is typically beginning to reduce its level of sales during the quarter ended March 31. This may have been partly disguised due to the general slow down in most sectors of the United Kingdom economy but on examination of the sales, it has definitely been an important factor. Sales have declined in the fiscal quarter ended March 31, 1998, compared with the corresponding period in the previous fiscal year by a very large amount ($99,000 compared with $249,000). Similarly, sales have declined in the fiscal nine months ended December 31, 1997 compared with the corresponding period in the previous fiscal year ($465,000 compared with $820,000). This has meant the improvement is all coming from Benatone's drive to eliminate unnecessary expenses. The SG&A expenses in the fiscal quarter ended March 31, 1998, have declined compared with the corresponding period in the previous fiscal year ($46,000 - including the reversal of the over accrual - compared with $156,000). Similarly, SG&A expenses have declined in the fiscal nine months ended December 31, 1997 compared with the corresponding period in the previous fiscal year ($239,000 compared with $492,000). Benatone fully realizes that there is a limit to the improvement that can be achieved by reducing unnecessary expenses. While Benatone has not lost sight of the importance of maintaining a continuing program of reducing operating costs, to achieve a better result, the emphasis has been directed towards increasing the sales despite the difficulties of competition and an economic downturn. -6- 7 The performance of Prima in the fiscal quarter ended March 31, 1998, showed a small improvement on the corresponding period in the previous year (an operating loss of $8,000 compared with $18,000). The improvement in the fiscal nine months ended March 31, 1998, compared with corresponding period in the previous year was significant (an operating loss of $107,000 compared with $206,000). The fiscal quarter ended March 31, 1998, is different from the previous two fiscal quarters in that the sales did not increase compared with the corresponding period in the previous year ($228,000 compared with $283,000). However, sales remained significantly better for the fiscal nine months ended March 31, 1998, compared with the corresponding period in the previous year ($953,000 compared with $797,000). Prima appears to have reached a point where the SG&A expenses have become closely related to the sales because at the same time the sales declined by comparison with the previous year, the SG&A expenses also declined. The SG&A expenses were $225,000 for the fiscal quarter ended March 31, 1998, compared with $289,000 for the corresponding period in the previous year. Although there is no obvious reason for the slow down in growth of sales, it may be related to the start up of the new office in New York, which operates as an independent company from Prima and would have taken some of Prima's sales. The talent agency, Que Management, Inc., a wholly owned subsidiary of the Registrant, was started on January 5, 1998, in New York with the intention of both Que and Prima complimenting each other but based in different markets of the same industry. The intention is that a second office will ultimately lead to larger sales for the group and because it is a start up operation, there is no large purchase cost. However, it does mean that the sales will all need to be generated by Que because it does not have an established market position. To overcome this problem, Que has taken on two experienced managers who will be entitled to earn a limited amount of the equity in Que depending on performance. In deciding to proceed with Que, the management of the Registrant forecast that it would not be profitable immediately but providing targets were achieved, Que would become very profitable. In the fiscal quarter ended March 31, 1998, Que had sales of $62,000 and SG&A expenses of $183,000. The operating loss was $121,000. However, while all the start up expenses have not yet been incurred, they should not be repeated and therefore the performance in the first quarter operation of is not a good guide to the future. -7- 8 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. J R CONSULTING, INC. Date: May 15, 1998 By: /s/ Peter Zachariou ---------------------------------------- Peter Zachariou, President -8- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF J. R. CONSULTING INC. FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 203 20 738 58 58 1,019 100 14 1,929 2,014 100 0 0 535 (720) 1,929 465 1,481 368 317 1,272 0 8 (544) 0 (544) 0 286 0 (258) (0.02) (0.02)
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