-----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, IUA7Fnyt4uYUMSsHffHT42UJqHX7oYdwWoL8lKINBcwcBgbOPRD1I9uf3X4kmV5T NCpCE/dP4q2NGd2uVhgL6w== 0000950144-96-005031.txt : 19960812 0000950144-96-005031.hdr.sgml : 19960812 ACCESSION NUMBER: 0000950144-96-005031 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OCEAN OPTIQUE DISTRIBUTORS INC CENTRAL INDEX KEY: 0000876235 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 650052592 STATE OF INCORPORATION: FL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11063 FILM NUMBER: 96606910 BUSINESS ADDRESS: STREET 1: 14250 S W 119 AVENUE CITY: MIAMI STATE: FL ZIP: 33186 BUSINESS PHONE: 3052553272 MAIL ADDRESS: STREET 1: 14250 S W 119TH AVE CITY: MIAMI STATE: FL ZIP: 33186 10QSB/A 1 OCEAN OPTIQUE DISTRIBUTOR 10QSB/A 03/31/96 1 FORM 10-QSB/A AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- ---------- Commission File No. 0-19670 OCEAN OPTIQUE DISTRIBUTORS, INC. ----------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in Its Charter) Florida 65-0052592 ------------------------------- ------------------------ (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) Incorporation or Organization) 14250 S.W. 119 Ave. Miami, Florida 33186 - --------------------------------------- --------------- (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number, including area code: 305-255-3272 Indicate by check mark whether the Issuer (1) 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 and (2) has been subject to such filing requirements for the past 90 days. Y E S X N O --- --- State the number of shares outstanding of each of the Issuer's classes of common equity as of the latest practicable date: At May 1, 1996 there were outstanding 1,865,574 shares of Common Stock, no par value. Transitional Small Business Disclosure Format: YES NO X --- --- 2 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES INDEX TO FORM 10-QSB/A AMENDMENT NO. 1 PART I FINANCIAL INFORMATION PAGE Item 1. Financial Statements. Condensed Consolidated Balance Sheets as of March 31, 1996 and June 30, 1995 (Unaudited). 3 Condensed Consolidated Statements of Operations for the Nine Months Ended March 31, 1996 and 1995 (Unaudited). 4 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1996 and 1995 (Unaudited). 5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 1996 and 1995 (Unaudited). 6 Notes to Condensed Consolidated Financial Statements (Unaudited). 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 8 PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 12 Signatures. 13 2 3 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) MARCH 31, 1996 AND JUNE 30, 1995 ASSETS
March 31, June 30, 1996 1995 ----------- ----------- Current assets Cash & cash equivalents.......................$ 1,448,755 $ 1,748,781 Certificate of deposit - restricted........... 65,000 65,000 Short-term investments........................ 148,469 1,018,308 Accounts receivable (net of allowance for doubtful accounts of $136,103 and $214,693 respectively)...................... 2,962,220 2,571,026 Inventory..................................... 7,453,272 7,373,705 Prepaid expenses & other current assets....... 252,355 376,627 Deferred income taxes......................... 166,626 166,626 Income tax receivable......................... 155,020 257,240 ----------- ----------- Total current assets..................... 12,651,717 13,577,313 Property and equipment, net..................... 269,824 328,702 Security deposits............................... 14,728 14,728 Debt issue cost, net............................ 152,985 176,013 Intangible assets, net.......................... 3,460,498 3,673,207 ----------- ----------- Total assets.............................$16,549,752 $17,769,963 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Bank line of credit...........................$ 3,362,000 $ 3,173,800 Accounts payable.............................. 1,675,009 1,350,708 Due to related parties........................ 1,431,420 920,000 Due to foreign currency dealer................ 1,258,583 1,254,008 Accrued expenses.............................. 151,925 124,048 Notes payable to related party, current portion..................................... 419,241 391,975 Notes payable, current portion................ 84,393 71,275 Capital lease obligations, current portion.... 41,947 46,143 ----------- ----------- Total current liabilities............... 8,424,518 7,331,957 8% Convertible subordinated debentures.......... 1,575,000 1,575,000 Notes payable to related party, long-term portion..................................... 457,368 736,699 Notes payable, long-term portion................ - 17,317 Capital lease obligations, long-term portion.... 1,895 33,356 Deferred income taxes........................... 124,168 124,168 ----------- ----------- Total liabilities....................... 10,582,949 9,818,497 Commitments and contingencies................... - - Stockholders' equity Series A Cumulative Convertible 3% Preferred Stock; 5,000,000 shares authorized; 450,000 shares issued and outstanding (liquidation value - $1,575,000).......... 1,474,398 1,474,398 Series B 2% Convertible Preferred Stock; 5,000,000 shares authorized; 230,000 shares issued and outstanding (liquidation value - $1,150,000).......... 1,150,000 1,150,000 Common stock, no par value; 10,000,000 shares authorized; 1,865,574 and 2,119,420 issued and outstanding at March 31, 1996 and June 30, 1995, respectively................. 6,499,228 6,099,228 Retained earnings (accumulated deficit)....... (3,156,823) (772,160) ----------- ---------- Total stockholders' equity.............. 5,966,803 7,951,466 Total liabilities and stockholders' equity................................$16,549,752 $17,769,963 =========== ===========
The accompanying notes are an integral part of these statements. 3 4 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995 ----------- ---------- Net sales................................ $10,644,836 $6,640,156 Cost of goods sold....................... 8,306,440 3,478,172 ----------- ---------- Gross profit......................... 2,338,396 3,161,984 Selling, general and administrative expenses......................... 4,282,532 3,079,122 ----------- ---------- (1,944,136) 82,862 Interest expense, net.................... (404,895) (204,061) Other income............................. - 12,926 ----------- ---------- Income (loss) before income taxes.... (2,349,031) (108,273) Income tax benefit (expense)............. - 51,000 ----------- ---------- Net income (loss).................... $(2,349,031) $ (57,273) Dividends paid on convertible preferred stock............................ 35,632 - ----------- ---------- Net income (loss) applicable to common stockholders.............. $(2,384,663) $ (57,273) =========== ========== Net income (loss) per share of common stock............................ $ (1.47) $ (0.03) =========== ========== Weighted average number of common shares outstanding...................... 1,626,818 1,661,050 =========== ==========
The accompanying notes are an integral part of these statements. 4 5 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995 ---------- --------- Net sales .................................. $3,740,919 2,300,046 Cost of goods sold.......................... 3,608,316 1,185,528 ---------- --------- Gross profit........................ 132,603 1,114,518 Selling, general and administrative expenses............................ 1,391,672 981,356 ---------- --------- (1,259,069) 133,162 Interest expense, net....................... (150,545) (74,963) Other income................................ - 3,584 ---------- --------- Income (loss) before income taxes... (1,409,614) 61,783 Income tax benefit (expense)................ - 17,000 ---------- --------- Net income (loss)................... $(1,409,614) 78,783 Dividends paid on convertible preferred stock............................... 11,813 - ---------- --------- Net income (loss) applicable to common stockholders......... $(1,421,427) 78,783 ========== ========= Net income (loss) per share of common stock............................... $ (0.86) 0.05 ========== ========= Weighted average number of common shares outstanding......................... 1,649,175 1,661,087 ========== =========
The accompanying notes are an integral part of these statements. 5 6 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995 ------------ ----------- Cash flows from operating activities: Net loss .......................................... $(2,384,663) $ (57,273) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization ..................... 324,674 244,685 Changes in assets and liabilities: Decrease (increase) in short-term investments..... 869,839 (591,974) Decrease (increase) in accounts receivable, net... (391,194) 36,853 Increase in inventory ............................ (79,567) (783,379) Decrease (increase) in prepaid expenses, security deposits and intangible assets .................. 124,272 (167,471) Increase (decrease) in accounts payable and accrued expenses................................. 352,178 (176,095) Increase in due to related parties ............... 911,420 - Increase (decrease) in income taxes .............. 102,220 (64,067) ------------ ------------ Net cash provided by (used in) operating activities .................................. (170,821) (1,558,721) ------------ ------------ Cash flows from investing activities: Goodwill adjustments ................................ (4,352) - Capital expenditures ................................ (25,707) (51,068) ------------ ------------ Net cash used in investing activities ........ (30,059) (51,068) ------------ ------------ Cash flows from financing activities: Net borrowings (payments) on bank line of credit and notes payable .................................. (68,064) 319,474 Proceeds from borrowings from foreign currency dealer ............................................. 4,575 - Payments under capital lease obligation ............. (35,657) (29,447) Buyback of common stock ............................. - (318,750) Payments from the exercise of stock warrants ........ - (42,049) ----------- ----------- Net cash used in financing activities ........ (99,146) (70,772) ----------- ----------- Net decrease in cash and cash equivalents .... (300,026) (1,680,561) Cash and cash equivalents, beginning of period ....... 1,748,781 1,849,746 ----------- ----------- Cash and cash equivalents, end of period ............. $1,448,755 $ 169,185 =========== =========== Supplemental disclosure of cash flow information: Cash paid (received) during the period for income taxes, net .................................. $ (98,000) $ 13,067 Issuance of common stock in settlement of due to related parties ............................. 400,000 - =========== =========== Cash paid during the period for interest, net ....... $ 441,781 $ 181,411 =========== ===========
The accompanying notes are an integral part of these statements. 6 7 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of Management, necessary for a fair statement of results for the interim periods. The results of operations for the nine months ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-KSB, as amended, for the fiscal year ended June 30, 1995. (2) ORGANIZATION Ocean Optique Distributors, Inc. (the "Company") was incorporated under the laws of the State of Florida on May 31, 1988. The Company is an importer and distributor of eyeglass frames. On June 21, 1995, the Company acquired 100 percent of the capital stock of European Manufacturers Agency, Inc. ("EMA"), a Florida corporation. EMA is engaged in the business of distributing and marketing private label ophthalmic frames and related items and continues to conduct such business as a wholly-owned subsidiary of the Company. (3) BANK LINE OF CREDIT On June 29, 1994, and as subsequently amended in September 1995, the Company refinanced its credit facility. The new line of credit, which expires in September 1996, allows the Company to borrow up to $3,500,000, is secured by a pledge of all the Company's assets. Borrowings under this agreement are limited to the sum of 75 percent of accounts receivable, and 50 percent of inventory on hand, not to exceed $2,000,000. Interest on the line of credit is 3/4% above the bank's prime lending rate. (4) CALCULATION OF EARNINGS PER SHARE The Company calculates its earnings per share without including the 500,000 shares held in escrow pursuant to the terms of the EMA acquisition agreement. The EMA acquisition agreement provides for the escrow of 500,000 of the 533,333 total shares of the Company's Common Stock issued in exchange for the EMA shares, with a portion of such escrowed shares to be released to the former EMA shareholders, Robert D. Winn and Mary S. Winn, on each of the first, second, third and fourth anniversaries of the acquisition date. The acquisition agreement provides that the number of shares to be released on any such date will be determined by dividing 375,000 by the then-current market value of the Company's Common Stock, provided that the number of shares to be released on any anniversary date will not be less than 62,500 shares nor more than 150,000 shares. In the event that the number of shares of the Company's Common Stock to be released from escrow on an anniversary date is greater than the number of shares then held in escrow, the acquisition agreement provides that the Company will issue additional shares in the amount of any such shortfall, and such shares will be deemed to be issued as part of the original purchase price set forth in the acquisition agreement. Any shares of Common Stock remaining in escrow subsequent to the fourth anniversary of the acquisition date will be released to and cancelled by the Company. The acquisition agreement further provides that the Winns, as beneficial owners of the escrowed shares, are entitled to all voting, dividend and liquidation rights, preferences and privileges applicable to all of the escrowed shares, but will be unable to transfer such shares until released from escrow. Pursuant to the acquisition agreement, EMA entered into employment agreements with Robert Winn and Mary Winn relating to their continued service as executive officers of EMA. Under the terms of the acquisition agreement, if either of such employment agreements is terminated by the Company without cause, all shares then maintained in escrow in the name of the terminated executive officer will be released and delivered to that person. If either such agreement is terminated for cause or by the officer, the officer's shares will be released from escrow according to the above-described schedule. This escrow arrangement is intended primarily to assure the Company of a remedy in the event of a claim by the Company to the indemnification provided by the former EMA shareholders under the acquisition agreement. Pursuant to the terms of the agreement, any claim to such indemnification is to be first applied to the escrowed shares. As of the date hereof, no such claim has been made by the Company. Future years' earnings per share calculations will include the shares released from escrow, if any. 7 8 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is an analysis of the Company's results of operations and its liquidity and capital resources. To the extent that such analysis contains statements that are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. These risks include: risks of increases in the costs of the Company's products; the Company's relationships with its suppliers and licensors; risks related to purchasing inventory from foreign suppliers; the financial condition and operations of the Company's customers; changes in fashions and preferences of purchasers of eyewear; competitive and general economic factors in the markets where the Company's products are manufactured or sold; the impact of, and changes in, government regulations such as trade restrictions or prohibitions, or import and other charges and taxes; and other factors discussed in the Company's filings with the Securities and Exchange Commission. The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the related notes thereto of Ocean Optique Distributors, Inc. and subsidiaries (collectively, the "Company"), included elsewhere herein. OVERVIEW For the quarter ended March 31, 1996, the Company continued to experience a net loss. During the quarter the Company continued its assimilation of the business lines acquired in its June 1995 acquisition of European Manufacturers Agency, Inc. ("EMA"), which, as discussed more fully below, resulted in increased net sales for the Company, but also contributed to the Company's lower gross profit margin and higher selling, general and administrative ("SG&A") expenses for the quarter. The Company is in the process of reviewing its SG&A expenses in an effort to control such expenses. In an effort to reduce the Company's inventory levels and increase its cash position, management has examined closely the Company's excess and slow moving inventory and has made the decision to increase the reserve for markdowns, returns and defectives. Management continues to analyze the Company's operations and goodwill. If losses continue to the same extent as in the current fiscal year to date, management may determine to take further write-offs. Management cannot determine at this time the extent of such write-offs, if any, that may be taken. See "Results of Operations." During the quarter ended December 31, 1995, the Company's license agreement with Revlon was renewed for a one-year term ending December 31, 1996. The license agreement may be renewed for an additional three-year term if certain criteria are met. No assurance can be given that such criteria will be met and that therefore such renewals can be negotiated. However, the Company believes that there would be no material adverse effect on the Company's long-term future business should the agreement expire and not be renewed. 8 9 RESULTS OF OPERATIONS - For the nine months ended March 31, 1996 and 1995. For the nine months ended March 31, 1996, the Company had net sales of $10,644,836, an increase of $4,004,680 (60.3%) over the same period in 1995. This increase is attributable to sales by EMA (acquired by the Company in June 1995) totaling $3,106,267 and an $898,413 (13.5%) increase over last year's core business. The increase in core business was due in a large part to the addition of new products, new customers, and expanding sales from existing customers. The Company's gross profit for the nine months ended March 31, 1996 decreased by $823,588, or 26.0%, when compared to the same period in 1995, mainly due to additional net reserves of $1,144,500 for markdowns, returns and defectives ($300,000 of which was taken in the quarter ended December 31, 1995 and the balance of which was taken in the quarter ended March 31, 1996). The Company's new management team (see "Item 4. Submission of Matters to a Vote of Security Holders") has determined to increase the reserves for markdowns, returns and defectives and to focus its efforts on selling excess and slower moving inventories at reduced prices in order to reduce the Company's inventory levels. Management believes that the cash generated by these sales will help lower the Company's borrowings against its line of credit, thereby lowering interest expense. The Company's gross profit margin decreased from 47.6% for the nine months ended March 31, 1995 to 22.0% for the nine months ended March 31, 1996, primarily due to the additional net reserves totaling $1,144,500 taken in the December 31, 1995 and March 31, 1996 quarters for markdowns, returns and defectives. The gross profit margin at EMA is traditionally lower than the Company's gross profit margin, also contributing to a lower overall gross margin. SG&A expenses for the nine months ended March 31, 1996 increased by $1,203,410 (39.1%) over the same period last year, largely as a result of the SG&A expenses relating to EMA of $690,583, and to a lesser extent commissions of $69,986, professional fees of $111,151 and royalties of $107,291. Royalties increased due to sales increases of licensed products, and an increase in the minimum royalty to a licensor. SG&A as a percentage of net sales decreased to 40.2% from 46.4% for the nine months ended March 31, 1996 and 1995, respectively. This decrease is mainly due to the increase in sales volume over last year. Beginning with the 1995 fiscal year, the Company has been selectively purchasing foreign currency in advance of anticipated foreign inventory purchases in order to stabilize the Company's cost of goods sold. Management believes at the present time that its current foreign currency holdings are sufficient for the Company's anticipated inventory purchases for the next nine months. The Company's advance purchases of foreign currencies, however, may limit the Company's ability to benefit from further favorable changes in exchange rates and may not offset the impact of possible future increases in the prices of inventories purchased. The following are the foreign currencies held at March 31, 1996 in U.S. dollar equivalent: German mark, $103,303; Italian lira, $641,486; Japanese yen, $355,422; and French franc, $192,966. For the nine months ended March 31, 1996 the Company had a net loss of $2,349,031 compared to a net loss of $108,273 for the same period last year. This increase in the net loss of $2,240,758 is mainly due to lower gross margins as discussed above, an increase in SG&A expenses, and an increase in net interest expense, of $200,834, in the nine month period ended March 31, 1996 versus the same period in 1995. The increase in net interest expense was due to a higher level of borrowings, less cash available to invest and interest relating to note payable acquired in the acquisition of EMA. 9 10 RESULTS OF OPERATIONS - For the three months ended March 31, 1996 and 1995. For the three months ended March 31, 1996, the Company had net sales of $3,740,919, an increase of $1,440,873 (62.6%) over the same period in 1995. This increase is attributable to sales by EMA (acquired by the Company in June 1995) totaling $1,146,215 and a $294,658 (12.8%) increase over last year's core business. The increase in core business was due in a large part to the increase in new customers, new products and expanding sales from existing customers. The Company's gross profit for the three months ended March 31, 1996 decreased by $981,915, or 88.1%, when compared to the same period in 1995, mainly due to additional reserves of $921,500 for markdowns, returns and defectives. The Company's new management team (see "Item 4. Submission of Matters to a Vote of Security Holders") has determined to increase the reserves for markdowns, returns and defectives and to focus its efforts on selling excess and slower moving inventories in order to reduce the Company's inventory levels. Management believes that the cash generated by these sales will help lower the Company's borrowings against its line of credit, thereby lowering interest expense. The Company's gross profit margin decreased from 48.5% for the three months ended March 31, 1995, to 3.5% for the three-month period ended March 31, 1996. SG&A for the three months ended March 31, 1996 increased by $410,316 (41.8%) over the same period last year largely as a result of the SG&A expenses relating to EMA of $222,211 and to a lesser extent professional fees of $43,151 and royalties of $84,291. SG&A as a percentage of net sales decreased to 37.2% from 42.7% for the three months ended March 1996 and 1995, respectively. This decrease is mainly due to the increase in sales volume over last year. For the three months ended March 31, 1996, the Company had a net loss of $1,409,614 compared to a net profit of $78,783 for the same period last year. This decrease of $1,488,397 is mainly due to lower gross margins as discussed above, increase in SG&A expenses, and an increase in net interest expense of $75,582, for the three-month period ended March 1996 versus the same period in 1995. The increase in net interest expense was due to a higher level of borrowings, less cash available to invest and interest relating to a note payable acquired in the acquisition of EMA. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1996, the Company's working capital was $4,227,199 and its current ratio was 1.5:1, as compared to the working capital of $6,157,874 and a current ratio of 1.8:1 as of June 30,1995. The change in net cash provided by operating activities was primarily due to the net loss from operations of $2,384,663, depreciation and amortization (including goodwill) of $324,674, a decrease in short-term investments of $869,839, an increase in accounts receivable of $391,194 and an increase in accounts payable and accrued expenses and due to related parties of $1,263,598. The change in goodwill relates to the adjustment made at June 30, 1995 to reduce the note payable to related party and to reduce goodwill for the imputed interest on the note. Subsequent to the three months ended March 31, 1996, the Company realized it had amortized goodwill based on a gross goodwill amount prior to the imputed interest mentioned above. Therefore, there is an amount added back to goodwill to reflect this change. Societe Francaise de Lunetterie ("SFL") and 10 11 D'Arrigo Moda Italia ("Arrigo"), the related parties, are both principal shareholders of the Company and are major European suppliers of product to the Company. During the quarter ended March 31, 1996, the Company agreed to exchange $400,000 of debt to SFL for 246,154 shares of the Company's Common Stock. During the Company's 1995 fiscal year, it maintained a $3,500,000 line of credit agreement with Republic National Bank ("RNB"). As of March 31, 1996, total available credit under this line was $276,000. Interest on the line of credit is 3/4% above the prime lending rate. On September 27, 1995 the credit facility with RNB was renewed through September 1996. In connection with the renewal, EMA was added to the loan agreement as a co-borrower and the Company repaid an existing $150,000 line of credit from Barnett Bank. Management currently believes that cash from operations and from available credit sources are sufficient for the Company to maintain its operations at current levels, including the operations acquired in the EMA acquisition. PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (A) On April 12,1996, the Company held its Annual Meeting of Shareholders (the "Meeting"). (B) At the Meeting, Bruce Schindler and Robert D. Winn were re- elected to the Board of Directors and Neil B. Lande was elected as a new member of the Board. Directors whose terms of office continued after the Meeting were H. James Daigle, Lee S. Huntley and Ray Hyman, Jr. (C) At the Meeting, the following matters were voted upon: (i) Election of Directors The following table sets forth the name of each nominee and the voting with respect to each nominee for director. Withhold Broker Name For Authority Non-Votes Bruce Schindler 1,391,170 465,750 0 Ray Hyman, Sr. 699,138 1,157,782 0 Neil B. Lande 1,391,170 465,750 0 Robert D. Winn 1,391,170 465,750 0 11 12 Following the Meeting, Ray Hyman, Sr., a veteran of the optical industry and a founder of the Company, also stepped down as Chief Executive Officer of the Company. His new role will be senior advisor to the Board of Directors. Following the Meeting, the Board appointed Neil B. Lande to serve as Chairman and Chief Executive Officer and elected Mary S. Winn, currently Vice President of EMA, to fill the vacancy on the Board. (ii) Ratification of the appointment of Grant Thornton LLP as the Company's independent public accountants for the year ending June 30, 1996. With respect to the foregoing matter, 1,850,620 shares voted in favor, 5,300 shares voted against and 1,000 shares abstained from voting. There were no broker non-votes. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits. 27.1 Financial Data Schedule (for SEC use only). (B) Reports on Form 8-K. None. 12 13 OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES FORM 10-QSB/A AMENDMENT NO. 1 March 31, 1996 S I G N A T U R E S In accordance with the requirements of the Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Ocean Optique Distributors, Inc. /s/ Kenneth Gordon ---------------------------- By: Kenneth Gordon Principal Financial and Accounting Officer August 7, 1996 ---------------------------- Date 13 14 OCEAN OPTIQUE DISTRIBUTORS, INC. FORM 10-QSB/A AMENDMENT NO. 1 March 31, 1996 INDEX TO EXHIBITS
SEQUENTIALLY NUMBERED EXHIBIT NO. PAGE - ----------- ------------ 27.1 Financial Data Schedule (for SEC use only)......
EX-27.1 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF OCEAN OPTIQUE DISTRIBUTORS FOR THE NINE MONTHS ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1996 MAR-31-1996 1,662 0 3,098 136 7,453 12,652 885 615 16,550 8,425 0 0 2,624 6,499 (3,157) 16,550 10,645 10,645 8,306 8,306 4,283 0 405 (2,349) 0 0 0 0 0 (2,385) (1.47) 0
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