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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File Number
November 30, 1995 2-85538-B
CCA INDUSTRIES, INC.
(Exact Name of Registrant as specified in Charter)
DELAWARE 04-2795439
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Murray Hill Parkway, East Rutherford, New Jersey 07073
(Address of principal executive offices, including zip code)
(201) 330 1400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock par value $.01 per share
(Title of Class)
Class A Common Stock par value $.01 per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirement
for the past 90 days. Yes X . No .
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant, i.e., by persons other than
officers and directors of the Registrant at the average bid and
ask prices at November 30, 1995.
Market Value at close
Class of Voting Stock of Business
High Low
5,603,871 shares Common
Stock, $.0l par value $8,405,807 $8,055,565
APPLICABLE ONLY TO REGISTRANTS
INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the Registrant has filed
all documents and reports required to be filed by Section 12, 13,
or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a Court.
Yes No x Not Applicable
APPLICABLE ONLY TO CORPORATE REGISTRANTS
At November 30, 1995 there were an aggregate of
6,795,101 shares of Common Stock and Class A Common Stock of the
Registrant outstanding.
TABLE OF CONTENTS
ITEM PAGE
PART I
1. Business 5
2. Property 9
3. Legal Proceedings 9
4. Submission of Matters to a Vote of
Security Holders 9
PART II
5. Market for Registrant's Common Stock
and Related Shareholder Matters 10
6. Selected Financial Data 11
7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 12
8. Financial Statements and
Supplementary Data 14
9. Disagreements On Accounting
and Financial Disclosure 15
PART III
10. Directors and Executive Officers
of the Registrant 15
11. Management Remuneration 18
12. Security Ownership of Certain
Beneficial Owners and Management 18
13. Certain Relationships and Related
Transactions 22
PART IV
14. Exhibits, Financial Statements,
Schedules and Reports on Form 8-K 23
PART I
Item 1. Description of Business
(a) General Development of Business
CCA INDUSTRIES, INC. (the "Company") was incorporated in
Delaware on March 25, 1983 under the name CATHETER CORPORATION OF
AMERICA. The Company discontinued the manufacture of thermal
dilution catheters in June 1984 and under new management
re-directed the Company's activities into the health and beauty
aids industry.
(b) The Registrant operates in one industry segment.
(c) Narrative Description of Business.
The Company is currently engaged in the health and
beauty aids business with a line of Health and Beauty Aids
products which it has manufactured on its behalf under its
formulations. The Company has registered trademarks on all of its
brand name products. The Company's products are sold under each
product's individual brand name. The nail treatment products are
sold under the name "Nutra Nail," the hair treatment products are
sold under the name "Pro Perm" and "Wash 'n Curl," "Wash n Tint"
and "Wash 'n Straight," and the depilatory products are sold under
the "Hair Off" label. Skin care products are sold under the
"Sudden Change" name and oral hygiene products are sold under the
"Plus+White" mark. The meal replacement products are sold under
the trademarks "EAT 'n LOSE," diet products under the marks
"Hungrex" and "Permathene". Some of the Company's products are
sold under exclusive license agreements.
All of the licensed products together with the Company's
non-licensed products are currently being sold to the major drug
and food chains, mass merchandisers and wholesale beauty aid
distributors throughout the country and Canada. Foreign sales
accounted for approximately 4.7% of sales.
Manufacturing and Shipping
The Company does not manufacture any of its own
products, other than its hot wax depilatory. In most cases, it
creates its own formulations, chooses colors and mixtures and
arranges with independent sub-contractors to manufacture its
products to its specifications. The Company has arrangements with
various suppliers for each of its products. The Company ships
substantially all of its products from its own warehouse
facilities instead of utilizing independent warehouses for storage
and shipping. The Company believes that it has greater control of
its inventory and more efficient shipping procedures from its own
facilities.
Marketing
The Company markets its products through its own sales
force and independent sales representatives throughout the United
States. The primary focus of its sales efforts are to the major
retail drug, food and mass merchandise chains plus leading
wholesalers.
The Company sells its products to approximately 600
accounts most of whom have numerous outlets. The Company
estimates that at least one of its brands are sold in
approximately 40,000 outlets. Most of the aforementioned accounts
have numerous retail outlets or service numerous retail outlets.
Approximately 90% of its sales during fiscal 1993 were to major
retail drug and food chains and mass merchandisers. During the
fiscal year ended November 30, 1995 no single customer accounted
for more than 5% of the Company's total sales other than the four
largest accounts, each of whom accounted for approximately 22.1%,
7.1% and 6.7% and 5.4% respectively of the Company's sales. These
four accounts combined, accounted for over 41% of the Company's
sales. If one of these customers was lost, the impact could
materially effect the Company's earnings.
The Company does not consider its products to be
dependent upon any one season, nevertheless certain products are
sensitive to seasonal trends. Depilatories and diet aids
customarily sell considerably stronger in the spring and summer.
The Company has its own in-house advertising agency that
places its own media, via media service companies and includes an
in-house art department that creates point-of-purchase displays,
sales brochures and packaging layouts. The actual manufacture of
point-of-purchase displays and blister cards is done by contract
suppliers.
License Agreements
On March 3, 1986, the Company entered into a License
Agreement with Alleghany Pharmacal Corporation under the terms of
which the Company was granted the exclusive right to use the
license products and trademarks for the manufacture and distri-
bution of the products subject to the license.
The Company is required to pay a 6% royalty on net sales
but no less than $360,000 per annum in order to maintain its
license. After the sum of $9,000,000 in royalties has been paid
to Alleghany, the royalty is reduced to 1% of net sales per annum.
As at November 30, 1995, the Company had paid or accrued
$4,434,510 in royalty payments under the License Agreement. The
Company is not required to pay the license fee unless it wishes to
maintain its license. Brand names under this license includes
"Nutra Nail," "Pro Perm," "Hair Off," "Permathene", "Hungrex Plus"
and "IPR 3." The Company also pays 1% royalty on sales of "Nutra
60" Nail Enamel" and the "Hair-Off Mitten". The Licensee products
accounted for approximately 34% of sales in fiscal 1995.
The Company has entered into various other License
Agreements, none of which materially affect the Company's sales or
financial results.
Advertising
The Company primarily utilizes television (national
network and local spots) to advertise its leading brands. On
certain occasions it will also utilize print and radio when it
deems such use expedient. In addition, cooperative and
promotional advertising with its customers are continuously used
to supplement its overall advertising campaigns.
Each of its brand products is targeted to a particular
demographic segment of the consumer market, and the Company's
advertising campaign is directed to that market.
The Company has its own in-house advertising staff that
is responsible for the placement of its advertising either
directly or through media service companies as well as the
creation and design of all products packaging and displays.
Trademarks and Patents
The Company has numerous trademarks in the health and
beauty aids field. The Company has sought to protect its pro-
prietary interest in its products by applying and obtaining
trademarks and tradenames on the products that it sells both
domestically and internationally.
The Company uses the trademarks and tradenames to
protect their products' individual identification and considers
these marks as valuable assets.
There is no assurance that because a trademark or patent
has been issued it is necessarily enforceable. Nor can there be
any assurance that the Company will derive substantial competitive
advantages therefrom. Further, there can be no assurance that
competitors will not develop similar products outside the
trademark protection of any trademark the Company has or may
obtain.
Competition
The cosmetic, health and beauty aids, fragrances and
patent medicines industries are characterized by vigorous
competition between companies having substantially greater
financial, technological and marketing resources than the Company.
Most of these concerns have a long history and greater public
recognition of their products. Competitors include major
companies such as REVLON, L'OREAL, COLGATE, DEL LABORATORIES,
INC., UNILEVER CORP., and PROCTER & GAMBLE. In addition, the
Company's products compete with a large number of smaller
manufacturers and distributors of similar products which may also
have greater resources than the Company.
New Products
The Company intends to add new products throughout the
year by extending its various product lines to increase the number
of SKUs available for distribution.
Government Regulation
On September 9, 1991 the Food & Drug Administration
("FDA") issued a "Warning Letter" to competitors marketing
products similar to "Plus+White," the Company's teeth whitener
product, stating that it is the FDA's opinion that utilization of
Hydrogen Peroxide as an ingredient for the whitening of teeth are
drugs and require a new drug application before they may be
marketed as over-the-counter drugs. Plus+White utilizes Hydrogen
Peroxide in its formulation. The Company disagreed with the
aforesaid classification by the FDA and met with the FDA on this
matter, although it was not served. It is the Company's
contention that Plus+White is a cosmetic, and as a cosmetic, does
not need FDA approval prior to marketing.
The Company retained three leading University Oral
Health Research Institutes to pass upon the safety of its product,
all of whom have reported their results to the effect that the
utilization of Hydrogen Peroxide as an ingredient to make teeth
whiter does not cause any safety problems when used as directed.
These reports were presented to the FDA.
The Company has alternatively made an application that
its product be included in a new oral health care monograph, to be
convened by the FDA shortly, to discuss the safety and efficacy of
over the counter drugs for oral health care. To date, the FDA has
not commented on its application.
In July 1992 the FDA withdrew its Warning Letters to the
Industry and advised retailers that they may continue to sell the
hydrogen peroxide tooth whiteners. They reserved the right to
reconsider their position.
The Company has no indication of what affect the FDA's
original position and the publicity that resulted from their
initial determination may have on the future sale of Plus+White
hydrogen peroxide gel.
Some of the products which the Company may develop in
the future may be subject to regulation by the Food and Drug
Administration, the Federal Trade Commission, and the Alcohol,
Firearms and Tobacco Tax Unit of the United States Treasury
Department and/or various state and local regulatory and
administrative agencies. The Company will attempt to obtain all
approvals or licenses as may be necessary, but there can be no
assurance that such approvals, as may be necessary, will be
obtained. Delays caused by the need for such license or approval
since some of the products which the Company expects to develop
may have certain dates assigned to them prescribing the date by
which they must be consumed or the failure to obtain them could
have a material adverse effect on the Company's planned
operations.
Item 2. Property
The principle executive offices of the Company are
located at 200 Murray Hill Parkway, East Rutherford, New Jersey,
where the Company leases approximately 55,000 square feet of space
consisting of 15,000 feet of office space and approximately 40,000
feet of warehouse space under a net lease at an annual rate of
$259,284. The lease expires on March 31, 2001. On September 22,
1995 the Company leased an additional 30,000 square feet of
warehouse space in Paterson, New Jersey on a net lease basis at a
rental of $6,875.00 per month. The lease expires on September 30,
1997.
Employees
As at November 30, 1995, the Company had 124 employees
consisting of DAVID EDELL, President and Chief Executive Officer;
IRA W. BERMAN, Chairman, Executive Vice President - Secretary;
STEVEN MANENTI, Vice-President Sales; JOHN BINGMAN, Financial
Vice-President; DUNNAN EDELL, Vice-President Marketing;
DREW EDELL, Vice-President Manufacturing; DAVID POST, Shipping;
and 117 other sales, administrative, creative, accounting,
receiving and warehouse personnel.
Item 3. Legal Proceedings
The Registrant is not engaged in any material litigation
but is involved in various legal proceedings in the ordinary
course of its business activities.
Item 4. Submission of Matters to a Vote of Security Holders
On June 10, 1995, the Company held its annual meeting of
shareholders. At the meeting David Edell, Ira W. Berman and Jack
Polak were elected as directors by the holders of Class A Common
Stock and, as proposed by the Board, Sidney Dworkin, Irwin
Gedinsky and Dunnan Edell (4,935,912 'for,' 59,700 'against') were
elected by the holders of Common Stock. Also, the Board's
appointment of Sheft Kahn & Company LLP as the Company's
independent certified public accountants for the fiscal year ended
November 30, 1995 was approved (4,915,066 'for,' 43,605
'against').
The annual meeting for the fiscal year ended November
30, 1995 will be held in June 1996.
PART II
Item 5. Market for the Registrant's Common
Stock and Related Shareholder Matters
(a) Principal Market and Sales Prices of Common Stock.
The Registrant's Common Stock is traded on NASDAQ. The
published market value of the Common Stock of the Registrant as
reported by the National Quotation Bureau was $1.50 high bid and
$1-7/16 low as at November 30, 1995.
(b) Approximate Number of Common Stock security
holders.
NUMBER OF RECORD HOLDERS AS OF
TITLE OF CLASS November 30, 1995
Common Stock, Approximately 350 (i)
par value $.01 per share
Class A Common Stock 7
par value $.01 per share
(i) There are a substantial number of shares held of
record in various street and depository trust accounts which
represent a number of additional shareholders (approximately
1000).
(c) Frequency and amount of dividends.
No dividends have been paid on the Common Stock since
the inception of the Company.
Item 6. SELECTED FINANCIAL DATA
Year Ended November 30,
1995 1994 1993 1992 1991
Statement of Income
Sales $36,849,803 $47,311,591 $43,973,633 $27,064,480 $26,605,018
Other income 316,927 357,080 367,248 297,105 160,218
37,166,730 47,668,671 44,340,881 27,361,585 26,765,236
Costs and Expenses 39,397,255 42,956,794 40,020,477 25,327,550 25,318,810
Income (Loss) Before Provision for
Income Taxes ( 2,230,524) 4,711,877 4,320,404 2,034,035 1,446,426
Income (Loss) Before Extraordinary Item ( 2,230,524) 2,815,926 2,605,818 1,210,490 884,263
Net Income (Loss) ( 1,566,568) 2,815,926 2,605,818 1,210,490 884,263
Earnings Per Share:
Net Income (Loss) ($ .23) $ .35 $ .32 $ .15 $ .12
Weighted Average Number of Shares
Outstanding 6,794,368 8,116,489 8,033,460 8,022,553 7,473,072
Balance Sheet Data:
As At November 30,
1995 1994 1993 1992 1991
Working Capital $ 7,815,761 $ 7,600,824 $ 5,424,524 $ 5,938,322 $ 5,796,225
Total Assets 17,744,086 20,053,893 18,218,629 12,597,015 10,541,521
Total Liabilities 7,176,503 8,293,534 9,127,235 5,850,567 5,010,563
Total Stockholders' Equity 10,456,516 11,760,359 9,091,394 6,746,448 5,530,958
-11-
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
On March 3, 1986, the Company entered into a License
Agreement with Alleghany Pharmacal Corporation under the terms of
which the Company was granted the exclusive right to use the
licensed products and trademarks for the manufacture and
distribution of the products subject to the License Agreement.
Under the terms of the Agreement, when $9 Million in royalties has
been paid to the Licensor, the royalty is reduced to 1% of net
sales. As at November 30, 1995, the Company had paid and/or
accrued $4,434,510 in royalties against the $9 Million. As at
November 30, 1995 there was $4,565,490 remaining to be applied
against the $9 million. (See "Business of the Company-License
Agreements").
Comparison of Results for Fiscal Year 1995 as Compared to Fiscal
Year 1994
The Company's sales for fiscal 1995 decreased from
$47,311,591 to $37,166,730. The decrease was due primarily to a
fall off of some of the Company's shampoo line.
Gross margins for the year were 62% compared to 64% for
the prior year. Advertising, cooperative and promotional expenses
were $13,332,216, 36% of sales, as compared to $13,428,116, 28% of
sales for the prior year.
Selling, General and Administrative Expenses were
$11,253,543, 31% of sales, as compared to $11,817,462, 25% of
sales for the prior year.
Comparison of Results for Fiscal Year 1994 as compared to Fiscal
Year 93
The Company's sales for fiscal 1994 increased from
$43,973,633 to $47,311,591. The increase was due principally from
the increase in sales of the Company's overall product lines.
Gross margins for the year were 64% compared to 62% from
the prior year. Advertising, cooperative and promotional expenses
were $13,428,116, 28% of sales, as compared to $11,638,793, 26% of
sales for the prior year.
Selling, General and Administrative Expenses were
$11,817,462, 25% of sales, as compared to $10,885,266, 25% for the
prior year.
Liquidity and Capital Resources
As at November 30, 1995, the Company had working capital
of $7,815,761 as compared to $7,600,824 for the prior year. Its
total current assets to current liability ratio is 2.09 to 1, as
compared to a ratio of 1.96 to 1 for the prior year.
Stockholders' equity decreased to $10,456,516 from $11,760,359 as
a result of a loss from operations. The loss from operations also
caused a decrease in the Company's cash position ($362,638) as did
the purchase of various assets and securities ($528,150) and the
net paydown of debt ($258,191). The Company, however, was able to
easily cover these cash drains by liquidating some of their
"Available for Sale" securities ($1,353,894) and issuing some new
stock ($6,530).
The management believes that the Company's loss from operations
should be temporary. The Company's biggest cash drain was its
advertising budget which was committed at the beginning of the
year predicated on sales of 45 - 50 million. Since the Company
was unable to achieve the expected sales, a loss from operations
resulted. As part of the registrant's business it is necessary to
enter into co-operative advertising agreements and other
promotional activities with its accounts, especially upon the
introduction of a new product. Both co-op advertising and
promotions have a material effect on the Company's operations. If
the advertising and promotions are successful, revenues will be
increased accordingly. Should the co-op and promotions not be
successful, it will have a negative impact on the Company's
promotional cost per sale, and have a negative effect on income.
The Company intends to anticipate its advertising and promotional
commitments as a percent of gross sales and keep its commitments
for advertising more flexible in 1996 and more in proportion to
the realized sales. The Company's accounts receivable turnover
and its reinvestment into new equipment should stay at about the
same level; so the Company believes that its current financial
condition will support its short-term and long-term needs for
capital.
The Company has a Term Note from a banking institution
in the amount of $399,067, at November 30, 1995 which will
liquidate, payable in March 1996 and a line of credit at prime
(minus one) of $3 million. As at year end, the Company was not
utilizing any of its available line of credit. The Company has
issued a Security Agreement in connection with the bank financing.
Backlog, Impact of Inflation, Seasonality
The Company attempts to keep its inventory at a level
where it is able to ship against all orders on each individual
product within a three week period. To some extent, however,
certain components must be inventoried well in advance of actual
orders because of the time necessary to obtain the component. For
the most part, purchases are based upon projected quarterly
requirements after calculating the anticipated sales indications
from the sales and marketing departments. All of the Company's
products and components are purchased from outside non -
affiliated entities. Shipping and warehousing is provided at the
Company's warehouse for all beauty aid products.
The Company does not believe that any of its products
are seasonal in nature other than its depilatory and diet brands
which are more active during the Spring and Summer seasons. The
Company does not have a product which can be identified as a
"Christmas" item.
Because its products are sold to retail stores
throughout the United States and, to a lesser extent, abroad, the
Company is affected by general economic conditions. Accordingly,
any adverse change in the economic climate may have an adverse
impact on the Company's sales and financial condition. The
Company does not believe that inflation and changing prices will
have a material impact on its net sales and revenues if it is able
to pass along to its customers any increases in costs resulting
from inflation. In the event the Company cannot pass along
increased costs to its customers, inflation could have an adverse
effect upon sales and revenues.
Item 8. Financial Statements and Supplementary Data
The Financial Statements are listed under Item 14 in
this Form 10-K. Selected quarterly financial data is set forth
below.
The following is a summary of the quarterly results
(unaudited) of operations for the years ended November 30, 1995
and 1994:
Three Months Ended
Feb. 28 May 31 Aug.31 Nov.30
Fiscal 1995
Net Sales $ 9,442,194 $10,936,213 $ 9,023,458 $ 7,447,938
Total revenue 9,534,235 11,005,479 9,126,706 7,500,311
Costs of
products sold 3,713,318 3,962,589 3,993,808 2,501,315
Net income (loss) (182,582) 260,579 (489,395) (1,155,170)
Net income (loss)
per common share (.03) .03 (.07) (.17)
Three Months Ended
Feb. 28 May 31 Aug.31 Nov.30
Fiscal 1994
Net Sales $12,034,803 $13,170,634 $11,146,324 $10,959,830
Total revenue 12,110,599 13,252,334 11,239,563 11,066,175
Costs of
products sold 4,357,051 4,615,274 4,239,718 3,672,499
Net income 774,160 893,678 502,874 645,214
Net income per
common share .10 .11 .06 .08
Item 9. Disagreements on Accounting and Financial Disclosure
The Registrant has not changed its accountants within
the twenty-four months prior to the date of the most recent
financial statements. There was no reported disagreement on any
matter of accounting principles or practices followed by the
Registrant.
PART III
Item 10. Directors and Executive
Officers Of The Registrant
The Executive Officers and Directors of the Company are
as follows:
DATE OF FIRST
NAME POSITION COMPANY SERVICE
David Edell President and Chief
Executive Officer, 1983
Director
Ira W. Berman Chairman of the Board
of Directors, Secretary,
Executive Vice-President 1983
Steven Manenti Senior Executive Vice -
President - Sales 1995
Dunnan Edell Executive Vice-President
Marketing 1984
Drew Edell Vice-President
Manufacturing and
New Product Development 1983
Jack Polak Director 1983
Sidney Dworkin Director 1985
Irwin Gedinsky Director 1991
John Bingman Treasurer 1986
DAVID EDELL, age 63, graduated from Syracuse University
in 1954 with a degree in Liberal Arts, (prior to joining the
Company) was an independent Marketing and Financial Consultant
specializing in the health and beauty aids industry. MR. EDELL
has had extensive experience in the health and beauty aids field,
having been the executive director and officer of HAZEL BISHOP,
INC., LANOLIN PLUS and other privately owned consumer product
companies.
IRA W. BERMAN, ESQ., AGE 64, has been engaged in the
practice of law since 1955 and was the senior partner of the New
York City law firm, BERMAN & MURRAY until December, 1995. Mr.
BERMAN received his Bachelor of Arts Degree (1953) and Bachelor of
Laws Degree (1955) from CORNELL UNIVERSITY. He is a member of the
AMERICAN BAR ASSOCIATION. Since June, 1995 MR. BERMAN devotes all
of his time on behalf of the Company.
STEVEN MANENTI, age 62, graduated with an MBA from
Bernard Baruch College in 1956. Mr. Manenti was the President of
Faberge, Ltd. from 1984-1987, and Eclipe Laboratories, Inc. from
1987-1989. From 1990-1992 he was the Executive Vice President of
Pavion, Ltd. and from 1992 until he joined CCA in December, 1995
he was Executive Vice President and General Manager of Mana
Products, Inc.
JACK POLAK, age 83, was an investment counselor and
Vice-President of EQUITY INTEREST, INC., a registered investment
advisor in New York, from 1955 to 1982. From 1982 until September
1, 1988 MR. POLAK was an investment consultant and consultant to
EQUITY INTEREST, INC. Since April 1983 MR. POLAK has served as a
director of NEW YORK OFFICES, INC., CHICAGO OFFICES, INC., and
ATLANTA OFFICES, INC., private companies engaged in subleasing
offices and providing office services. MR. POLAK was been a
director of PETROMINERALS CORPORATION, an oil producing and oil
service company of Tustin, California, from 1980 to 1995. In 1983
MR. POLAK became a director of CONVERGANT SOLUTIONS, INC., a
company engaged in the sale and distribution of computer software
programs. MR. POLAK holds a tax consultants certification from
the Netherlands.
SIDNEY DWORKIN, AGE 75, Chairman of the Board of
Directors of General Computer Corp., became a director of the
Registrant in December 1985. He was one of the founders, and
since 1966 had been the President and Chairman of the Board of
REVCO D.S.,INC., one of the largest drug chains in the United
States. Mr. Dworkin terminated his association with Revco in
September 1987. MR. DWORKIN is a certified public accountant and
a graduate of WAYNE STATE UNIVERSITY. He is also a Director of
CLEVELAND PLAYHOUSE ADVISORY BOARD, NORTHERN TECHNOLOGIES, INC.,
GENERAL COMPUTER CORP. and Chairman of the Board of Directors of
COMTREX SYSTEMS, INC. He was former Chairman of the NATIONAL
ASSOCIATION OF CHAIN DRUG STORES.
IRWIN M. GEDINSKY, age 60, joined Richard A. Eisner &
Company, a public accounting firm in New York City in July 1993.
Prior thereto, he was a partner of J.H. Cohn, a public accounting
firm in Roseland, New Jersey, having joined that firm in October
1989. From 1956 to October 1989 he was a partner in the public
accounting firm of Granet & Granet. Mr. Gedinsky is a certified
public accountant, a member of numerous accounting societies, a
lecturer on taxation and a member of the Board of Directors of
Ronson Corp.
DUNNAN EDELL, age 40, is the son of DAVID EDELL,
President of the Company. DUNNAN EDELL is a graduate of GEORGE
WASHINGTON UNIVERSITY He joined the Company in 1984 as a
Vice-President in Charge of Sales. In March 1986 he was appointed
a Divisional Vice-President. Prior to joining the Company he was
employed in a selling capacity with ALLEGHANY PHARMACAL CORP.,
from 1982 to 1984, and in a sales capacity with HAZEL BISHOP from
1977 to 1981.
DREW EDELL, age 38, Vice President, is the son of DAVID
EDELL, President of the Company. DREW EDELL is a graduate of
PRATT INSTITUTE where he received his Degree in Industrial Design.
He has been associated with the Company since 1983 in Product
Development and Production. In March 1985 he was appointed a
Divisional Vice-President.
JOHN BINGMAN, age 44, received his Bachelor of Science
degree from Farleigh Dickenson University in 1973. He is a
Certified Public Accountant in New Jersey, having worked for
Zarrow, Zarrow & Klein, CPA's for 10 years prior to joining the
Company in 1986.
Information relating to directors of the Registrant and
compliance with Section 16(a) of the Exchange Act will be
contained in a definitive Proxy Statement involving the election
of directors which the Registrant will file with the Securities
and Exchange Commission pursuant to Regulation 14A under the
Securities Exchange Act of 1934 not later than 120 days after
November 30, 1995, and such information is incorporated herein by
reference.
Item 11. Management Remuneration
The aggregate annual remuneration of all officers and
directors of the Company (9 persons) for the fiscal year ended
November 30, 1995 was $1,297,714. DAVID EDELL, President and IRA
W. BERMAN, Executive Vice President - Secretary, received $452,228
and $452,228, respectively, pursuant to contracts which on October
29, 1992, were extended to 1999 and amended in November 1993. Mr.
Berman's remuneration includes legal fees paid to his law firm,
Berman & Murray.
The Company has a Group Medical Insurance Plan for all
of its employees.
The Company purchased $1 Million life insurance policies
on Messrs. Edell and Berman, the Company being the beneficiary to
the extent of $500,000 and the other $500,000 at the discretion of
the insured.
The information required for this Item 11 is
incorporated by reference to the Company's definitive proxy
statement to be filed with the Commission pursuant to regulation
14A within 120 days from the date of this report on Form 10-K.
Item 12. Security Ownership of Certain
Beneficial Owners And Management
The following table sets forth, as of March 1, 1996, the
ownership of the Company's Common Shares and Class A Common Stock
combined by each person who owned beneficially more than 5% of its
outstanding shares. It also sets forth the present holdings of
such shares by all Officers and Directors of the Company and all
Officers and Directors as a group.
Amount of Beneficial
Ownership of Common % of Stock
Name and Address Stock/Class A Common Stock Outstanding
DAVID EDELL 657,915 (1)(2)(3)(4)(5)(7) 9.68
200 Murray Hill
Parkway
East Rutherford, NJ
IRA W. BERMAN 642,915 (1)(2)(3)(4)(5)(6) 9.46
62 The Intervale
Roslyn Estates, NY
Norman H. Pessin 382,500 5.63
c/o Neuberger & Berman
605 Third Avenue
New York, New York
Amount of Beneficial
Ownership of Common % of Stock
Name and Address Stock/Class A Common Stock Outstanding
Officers and
Directors as a 1,539,830 22.66
Group (9)
(1) The directors and officers of the Company (9 persons) own
22.66% of the outstanding capital stock of the Company. Messrs.
Edell, Berman and Polak converted all of their shares into Class A
Common Stock in December 1988.
(2) On January 10, 1985 David Edell and Ira W. Berman were
granted incentive stock options to purchase 200,000 shares of the
Company's common stock at $.44 per share.
On February 12, 1986 David Edell and Ira W. Berman were
granted Incentive Stock Options to purchase 98,765 shares of the
Company's Common Stock at $l.80 per share and 101,235
Non-Qualified Stock Options at $l.38 per share. These Options
were due to expire on February 12, 1991.
(3) On February 27, 1987 Messrs. Edell and Berman were each
granted Incentive Stock Options respectively to purchase 200,000
shares of the Company's Common Stock at $2.50 per share. These
options were due to expire on January 10, 1996.
(4) On May 20, 1987 Messrs. Edell, Berman and Jack Polak, a
director, exercised their options and purchased 200,000, 200,000
and 100,000 shares respectively by tendering to the Company
35,200, 35,200 and 16,000 shares respectively of the Company's
Common Stock. A permanent legend was placed on the shares
received upon the exercise of the options restricting the sale of
the shares to the public unless the Company reported a profit for
the prior quarter.
On December 10, 1987 the Board of Directors voted to cancel
the options issued to Messrs. Edell and Berman on February 12,
1986 and February 27, 1987 and in their place issued to each of
them options to purchase 185,000 shares of the Company's Common
Stock exercisable at $.50 per share. The Options expire on
December 9, 1997.
(5) On January 21, 1988 the Board of Directors authorized the
issuance of 185,000 Employee Stock Options to Messrs. Edell and
Berman at $.50 per share and expire on December 31, 1997 and
30,000 Non-Qualified Stock Options at $.50 per share. The Options
expire on December 9, 1997. In addition, the Board of Directors
voted 25,000 options to Messrs. Polak, Erenstein (subsequently
cancelled) and Young, and cancelled the Stock Option issued to
Sidney Dworkin on December 16, 1985 and issued a new Stock Option
for 100,000 shares exercisable at $.50 per share which options
expire on December 9, 1997.
On December 13, 1988 David Edell, Ira W. Berman and Jack
Polak converted their Common Stock into Class A Common Stock
pursuant to the Amendment to the Certificate of Incorporation
dated November 7, 1988. As a result of their conversion, Messrs.
Edell, Berman and Polak are in a position to vote four members to
the Board of Directors of the Company, thus giving them effective
control of the Company.
On January 10, 1990 the Board of Directors authorized the
issuance of 100,000 Stock Options to Messrs. Edell and Berman at
$1.50 per share. The Options expire on December 31, 1999.
On March 14, 1990, the Board of Directors authorized the
issuance of 100,000 Employee Stock Options to Messrs. Edell and
Berman at $.75 per share. These options expire on December 31,
1999.
On March 27, 1992 the exercise price of the options issued on
January 10, 1990 and the options issued on March 14, 1990 were
reduced to $.625 per share.
(6) Mr. Berman gifted each of his three grandchildren 5,000
shares of Class A Common Stock in December 1992 and 3,000 shares
each in 1993. Mr. Berman disclaims any beneficial interest in the
aforesaid shares.
(7) In December 1993 Mr. Edell gifted 1,250 shares of stock to
each of his two sons, Dunnan and Drew Edell. Mr. Edell disclaims
any beneficial interest in the aforesaid shares.
(8) On January 10, 1996 David Edell and Ira W. Berman exercised
their stock options and purchased 100,000 shares of the Company's
common stock respectively at $.50 per share. Messrs. Polak and
Dworkin, Directors of the Company each exercised their options and
purchased 25,000 and 50,000 shares of common stock respectively at
$.50 per share. Dunnan Edell, Vice President and Director
exercised his options and purchased 48,600 shares of common stock
at $.40 per share, and Drew Edell, Vice President exercised his
options and purchased 25,000 shares of common stock at $.40 per
share. All of the options, other than Mr. Polak's, were purchased
for 50% cash and the balance with a full recourse Promissory Note
payable on November 30, 1996. Other than Mr. Polak's, the Notes
are collateralized with the stock certificates. Mr. Polak paid
for his shares in full.
Stock Option Plans
On July 10, 1984, the Company's Board of Directors
authorized the adoption of the Company's 1984 Stock Option Plan
covering 1,500,000 shares of its Common Stock. The Plan was
approved by the shareholders on November 15, 1984.
On February 12, 1986, the Board of Directors authorized
the adoption of the Company's 1986 Stock Option Plan covering
1,500,000 shares of its Common Stock. The Plan was approved by
shareholders at the Annual Meeting.
The Option Plan provides for the granting of two (2)
types of options: "Incentive Stock Options" and "Non-Qualified
Stock Options". The Incentive Stock Options (but not the Non-
Qualified Stock Options) are intended to qualify as "Incentive
Stock Options" as defined in Section 422a of the Code. The Plan is
not qualified under Section 401(a) of the Code nor is it subject
to the provisions of the Employee Retirement Income Security Act
of 1974.
Options may be granted under the Option Plan to
employees (including officers and directors who are also
employees) and consultants of the Company, provided, however, that
Incentive Stock Options may not be granted to any non-employee
director or consultant.
The Option Plan is administered and interpreted by the
Board of Directors. Under the Option Plan the Board has the
power, subject to the provisions of the Plan to determine the
persons to whom and the dates on which the options will be
granted, the number of shares to be subject to each option, the
time or times during the term of each and the other terms of the
options. The Board has the power to delegate administration of
the Plan to a Committee of not less than two (2) Board members,
each of whom must be disinterested within the meaning of Rule
16b-3 under the Exchange Act and ineligible to participate in the
Plan or in any other stock purchase, option or appreciation right
plan of the Company or any of its affiliates. Members of the
Board receive no compensation for their services in connection
with the administration of the Option Plan.
The maximum term of each option is ten (10) years. No
option granted under the Option Plan is transferable by the
Optionee other than upon death.
Under the Option Plan an option will terminate three (3)
months after the optionee ceases to be employed by the
Company or a parent or subsidiary of the Company unless (i) the
termination of employment is due to such person's permanent and
total disability, in which case the option may, but need not,
provide that it may be exercised at any time within one (1) year
of such termination (to the extent the option was vested at the
time of such termination); or (ii) the optionee dies while
employed by the Company or a parent or subsidiary of the Company
or within three (3) months after termination of such employment,
in which case the option may, but need not provide that it may be
exercised (to the extent the option was vested at the time of the
optionee's death) within eighteen (18) months of the optionee's
death by the person or persons to whom the rights under such
option pass by will or the laws of descent or distribution; or
(iii) the option by its terms specifically provides otherwise.
The exercise price of all non-qualified stock options
granted under the Option Plan must be at least equal to 85% of the
fair market value of the underlying stock on the date of grant.
The exercise price of all Incentive Stock Options granted under
the Plan must be at least equal to the fair market value of the
underlying stock on the date of grant. The aggregate fair market
value of stock of the Company (determined at the date of the
option grant) for which any employee may be granted Incentive
Stock Options in any calendar year may not exceed $100,000, plus
certain carryover allowances. The exercise price of an Incentive
Stock Option granted to any participant who owns stock possessing
more than ten (10%) of the voting rights of the Company's
outstanding capital stock must be at least 110% of the fair market
value on the date of grant and the maximum term may not exceed
five (5) years. The Option Plan permits the exercise of options
for cash, other property acceptable to the Board or pursuant to a
deferred payment arrangement.
Consequences to the Company: There are no Federal income
tax consequences to the Company by reason of the grant or exercise
of an Incentive Stock Option. To the extent the optionee
recognizes ordinary income by reason of a disposition of stock
acquired through exercise of an Incentive Stock Option, the
Company will be entitled (subject to the requirement of
reasonableness) to a corresponding business expense deduction in
the tax year in which the disposition occurs. Otherwise, there
are no Federal Income tax consequences to the Company by reason of
the disposition of stock acquired through exercise of an Incentive
Stock Option.
As at March 1, 1996, stock options to purchase 1,267,000
shares of the Company's Common Stock were granted by the Board of
Directors and are currently outstanding.
Item 13. Certain Relationships and Related Transactions
The Company was organized on March 25, 1983, as a
Delaware corporation with an authorized capital consisting of
10,000,000 Common shares, par value $.01 per share. Between March
25, 1983 and April 30, 1983, the Company sold and issued 2,700,843
shares of Common stock to a group of private investors. On March
31, 1983, the Company sold and issued 30 units, each unit
consisting of 10,000 Common shares and a $10,000 Promissory Note.
As a result of that private placement the Company issued an
aggregate of 300,000 Common shares.
On September 22, 1983, the Company sold 2,000,000 units
at $1 per unit to the public, each unit consisting of one (1)
Common share and one (1) Common share Purchase Warrant to purchase
one-half fractional Common share.
On June 1, 1984, the Company discontinued its
thermo-dilution catheter operation, disposed of its plant and
equipment and began to manufacture and distribute cosmetic
products. Its first products were shipped in November 1984.
In December 1984 the Company's name was changed from
CATHETER CORPORATION OF AMERICA to CCA INDUSTRIES, INC., and its
Charter was amended to provide for the authorization of 20,000,000
shares of Common stock, par value $.01 per share.
On November 7, 1988, the Company amended its Certificate
of Incorporation to provide for the authorization of 20,000,000
shares of stock, par value $.01 per share, consisting of
15,000,000 shares of common stock and 5,000,000 shares of Class A
common stock. The shares are identical in all respects, and each
is entitled to one vote per share except that the common stock
holders are entitled to elect three members to the Board of
Directors, whereas the Class A common stock holders have the right
to elect four members to the Board of Directors. The Class A
common stock shall be entitled to convert back into common stock
at any time. On December 21, 1988, 1,490,030 shares were
converted to Class A Common Stock. As of December 31, 1989, no
additional shares could be converted.
The Company has retained the law firm of BERMAN &
MURRAY, as its General Counsel. IRA W. BERMAN, a member of the
firm is the Chairman of the Board of Directors and Executive Vice
President - Secretary, and a principal shareholder of the Company.
See "Management," "Principal Shareholders," and "Legal Matters."
The Company has an outstanding loan of $25,250 from its
Vice President in charge of Sales; which was made to aid him in
obtaining a first mortgage on his home. This loan is secured by a
second mortgage and carries an interest rate of 1% over prime.
Interest is payable semi-annually. The Vice President is the son
of Mr. David Edell, the President of the Company.
PART IV
Item 14. Exhibits, Financial Statements,
Schedules and Reports on Form 8-K
A (1)Financial Statements: Table of Contents,
Independent Auditors' Report, Consolidated Balance Sheets as of
November 30, 1995 and 1994, Consolidated Statements of Income for
the years ended November 30, 1995, 1994 and 1993, Consolidated
Statements of Shareholders' Equity, Consolidated Statements of
Cash Flows, Notes to Consolidated Financial Statements. PP. I-1 -
I-10.
(2)Financial Statement Schedules:
Schedule I Marketable Securities, Other
investments
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation
Schedule VIII Valuation Accounts
Schedule IX Short-Term Borrowings
Schedule X Supplementary Income Statement
Information
(3) a. Exhibits incorporated by reference to the
Registrant's Registration Statement and Prospectus dated September
22, 1983.
b. Exhibits incorporated by reference to the
Registrant's Registration Statement an Prospectus dated May 30, 1986.
c. Exhibit 11-Statement re: Per Share Earnings.
B No Form 8-K was filed during the last quarter of
1995.
C Articles of Incorporation and By-Laws incorporated
by reference to the Company's Registration Statement filed pursuant
to Rule 424(b) or (c) under the Securities Act.
Shareholders may obtain a copy of any Exhibit not contained
herein by writing to CCA INDUSTRIES, INC. 200 Murray Hill Parkway,
East Rutherford, New Jersey 07073.
PART IV, ITEM 14.A(3)c. (Continued) EXHIBIT 11
CCA INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Year Ended November 30,
1995 1994 1993
Item 14.A(3)c.
Primary:
Average shares outstanding 6,794,368 6,777,241 6,688,939
Net effect of dilutive stock
options--based on the
treasury stock method
using average market
price * 1,339,248 1,344,521
TOTALS 6,794,368 8,116,489 8,033,460
Net income (Loss) ($1,566,568) $2,815,926 $2,605,818
Per share amount ($.23) $.35 $.32
Fully Diluted:
Average shares outstanding 6,794,368 6,777,241 6,688,939
Net effect of dilutive stock
options--based on the
treasury stock method
using higher of ending or
average market price * * 1,395,255
TOTALS * * 8,084,194
Net income (Loss) ($1,566,568) $2,815,926 $2,605,818
Per share amount $ * $ * $ .32
* Anti-dilutive
-24B-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(A) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this Annual Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CCA INDUSTRIES, INC.
By: David Edell
DAVID EDELL, President
Pursuant to the requirements of the Securities Exchange
Act of 1934, this Annual Report has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
David Edell President, Director, Chief
DAVID EDELL Executive Officer, and
Chief Financial Officer February , 1996
Ira W. Berman Chairman of the Board of
IRA W. BERMAN Directors, Executive Vice
President, Secretary February , 1996
Irwin Gedinsky Director February , 1996
IRWIN GEDINSKY
Jack Polak Director February , 1996
JACK POLAK
Sidney Dworkin Director February , 1996
SIDNEY DWORKIN
Dunnan Edell Director February , 1996
DUNNAN EDELL
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1995 AND 1994
C O N T E N T S
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS . . . . .1
FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS . . . . . . . . . . . . . . . .2-3
CONSOLIDATED STATEMENTS OF INCOME (LOSS). . . . . . . . . . .4
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY . . . . . . .5
CONSOLIDATED STATEMENTS OF CASH FLOWS . . . . . . . . . . . .6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. . . . . . . . 7-20
INDEPENDENT AUDITORS' REPORT
Board of Directors
CCA Industries, Inc.
East Rutherford, New Jersey
We have audited the consolidated financial statements and related schedules
of CCA Industries, Inc. and Subsidiaries listed in Item 14(a)(1) and (2) of
the annual report on Form 10-K of CCA Industries, Inc. and Subsidiaries for
the years ended November 30, 1995, 1994 and 1993. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements and related schedules
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
a reasonable assurance about whether the financial statements and related
schedules are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and related schedules. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of CCA Industries,
Inc. and Subsidiaries as of November 30, 1995 and 1994, and the consolidated
results of their operations and cash flows for the years ended November 30,1995,
1994 and 1993, in conformity with generally accepted accounting principles.
In our opinion, the schedules referred to above present fairly, in all
material respects, in relation to the basic consolidated financial statements,
the information set forth therein in compliance with the applicable accounting
regulation of the Securities and Exchange Commission.
SHEFT KAHN & COMPANY LLP
CERTIFIED PUBLIC ACCOUNTANTS
February 1, 1996
Jericho, New York
-1-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
A S S E T S
November 30,
1995 1994
Current Assets
Cash and cash equivalents $ 312,150 $ 100,705
Short-term investments and marketable
securities (Note 6) 2,539,037 1,612,819
Accounts receivable, net of allowances of
$904,953 and $979,796, respectively
(Note 8) 4,044,420 5,339,028
Inventories (Notes 2, 3 and 8) 6,414,097 7,518,526
Prepaid expenses and sundry receivables 329,935 285,367
Duefrom officers - Current 1,500 21,231
Prepaid income taxes and refunds due 652,710 88,279
Deferred income taxes (Note 9) 698,415 529,336
Total Current Assets 14,992,264 15,495,291
Property and Equipment, net of accumulated
depreciation and amortization
(Notes 2 and 4) 713,125 683,015
Intangible Assets, net of accumulated
amortization (Note 5) 128,538 85,967
Other Assets
Marketable securities (Note 6) 1,701,138 3,615,161
Treasury bonds 87,300 81,108
Due from officers - Non-current 25,250 25,250
Deferred income taxes (Note 9) 33,807 17,531
Other 62,664 50,570
Total Other Assets 1,910,159 3,789,620
Total Assets $17,744,086 $20,053,893
See Notes to Consolidated Financial Statements.
-2-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
November 30,
1995 1994
Current Liabilities
Notes payable - Current portion (Note 8) $ 298,078 $ 288,000
Accounts payable and accrued
liabilities (Note 11) 6,878,425 7,600,113
Income taxes payable (Note 9) - 6,354
Total Current Liabilities 7,176,503 7,894,467
Long-Term Debt (net of current portion)
(Note 8) 111,067 399,067
Commitments and Contingencies
(Note 13)
Shareholders' Equity
Common stock, $.01 par; authorized
15,000,000 shares; issued and
outstanding 5,603,871 and 5,496,421
shares, respectively 56,039 54,964
Class A common stock, $.01 par; authorized
5,000,000 shares; issued and outstanding
1,191,230 and 1,293,030 shares,
respectively 11,912 12,930
Additional paid-in capital 4,282,008 4,275,535
Retained earnings 6,101,229 7,667,797
Unrealized gains (losses) on marketable
securities (Note 6) 5,328 ( 250,867)
Total Shareholders' Equity 10,456,516 11,760,359
Total Liabilities and Shareholders' Equity $17,744,086 $20,053,893
See Notes to Consolidated Financial Statements.
-3-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Year Ended November 30,
1995 1994 1993
Revenues
Sales of health and beauty
aid products, net $36,849,803 $47,311,591 $43,973,633
Other income 316,928 357,080 367,248
37,166,731 47,668,671 44,340,881
Costs and Expenses
Cost of sales 14,171,030 16,884,542 16,791,552
Selling, general and
administrative expenses 11,253,593 11,817,462 10,885,266
Advertising, cooperative and
promotions 13,332,216 13,428,116 11,628,793
Research and development 496,716 593,556 441,435
Provision for doubtful accounts 87,697 156,649 191,770
Interest expense 56,003 76,469 81,661
39,397,255 42,956,794 40,020,477
Income (Loss) before Provision
for Income Taxes ( 2,230,524) 4,711,877 4,320,404
Provision for Income Tax
(Benefit) ( 663,956) 1,895,951 1,714,586
Net Income (Loss) ($ 1,566,568) $ 2,815,926 $ 2,605,818
Weighted Average Shares
Outstanding 6,794,368 8,116,489 8,033,460
Income Per Common Share
(Note 2):
Net Income (Loss) ($ .23) $.35 $.32
See Notes to Consolidated Financial Statements.
-4-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE PERIODS DECEMBER 1, 1992 THROUGH NOVEMBER 30, 1995
Unrealized
Additional Gain(Loss) on
Common Stock Paid-In Retained Marketable
Shares Amount Capital Earnings Securities
Balance - December 1, 1992 6,957,533 $69,575 $4,430,820 $2,246,053 $ -
Issuance of common stock 206,000 2,060 107,440 - -
Repurchase of common stock ( 423,282) ( 4,233) ( 366,139) - -
Net income for the year - - - 2,605,818 -
Balance - November 30, 1993 6,740,251 67,402 4,172,121 4,851,871 -
Issuance of common stock 49,200 492 103,414 - -
Net income for the year - - - 2,815,926 -
Unrealized loss on marketable
securities - - - - ( 250,867)
Balance - December 1, 1994 6,789,451 67,894 4,275,535 7,667,797 ( 250,867)
Issuance of common stock 5,700 57 6,473 - -
Net loss for the year - - - (1,566,568) -
Unrealized gain on marketable
securities - - - - 256,195
Balance - November 30, 1995 6,795,151 $67,951 $4,282,008 $6,101,229 $ 5,328
See Notes to Consolidated Financial Statements.
-5-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED NOVEMBER 30,
1995 1994 1993
Cash Flows from Operating Activities:
Net income (loss) ($1,566,568) $2,815,926 $2,605,818
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 332,802 251,245 246,423
Amortization of bond discount 6,576 - -
Decrease in advanced royalties - 81,667 174,998
Decrease in intangible assets - - 17,770
(Gain) loss on disposal of assets 5 ( 26,033) 59,463
Decrease (increase) in accounts
receivable 1,294,608 ( 2,618,736) ( 679,966)
Decrease (increase) in inventory 1,104,429 ( 570,003) (3,408,592)
Decrease (increase) in prepaid
expenses and sundry receivables ( 608,999) 38,959 ( 49,657)
(Increase) in deferred income taxes ( 185,355) ( 92,464) ( 263,435)
(Decrease) increase in accounts
payable and accrued liabilities ( 721,688) ( 323,474) 3,413,378
Increase (decrease) in income
taxes payable ( 6,354) ( 295,601) 126,117
Decrease (increase) in security
deposits ( 12,094) 6,211 ( 11,126)
Net Cash (Used in) Provided by
Operating Activities ( 362,638) ( 732,303) 2,231,191
Cash Flows from Investing Activities:
Acquisition of property and
equipment ( 355,719) ( 440,962) ( 352,530)
Proceeds from sale of property - 42,150 -
Payment for intangible assets ( 49,764) ( 51,045) -
Purchase of marketable securities ( 116,475) (1,929,337) ( 838,222)
Proceeds from sale of marketable
securities 1,353,894 1,604,196 -
Proceeds of money due from officers 19,731 - -
Increase in other assets ( 6,192) - -
Net Cash Provided (Used In)
Investing Activities 845,475 ( 774,998) (1,190,752)
Cash Flows from Financing Activities:
Proceeds from borrowings 688,320 700,000 1,195,295
Payment on debt ( 966,242) ( 994,715) (1,458,806)
Proceeds from stock issuance 6,530 103,906 109,500
Purchase of common stock - - ( 370,372)
Net Cash (Used In)
Financing Activities ( 271,392) ( 190,809) ( 524,383)
Net Increase (Decrease) In Cash 211,445 (1,698,110) 516,056
Cash at Beginning of Year 100,705 1,798,815 1,282,759
Cash at End of Year $ 312,150 $ 100,705 $1,798,815
Supplemental Disclosures of Cash
Flow Information:
Cash paid during the year for:
Interest $ 72,021 $ 76,912 $ 83,196
Income taxes 102,625 2,219,481 1,941,275
See Notes to Consolidated Financial Statements.
-6-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated in Delaware on March 25, 1983.
The Company manufactures and distributes health and beauty aid products.
The Company has several subsidiaries (CCA Cosmetics, Inc., CCA Labs,
Inc., CCA Industries (International) Ltd., CCA Industries (UK) Limited and
Berdell, Inc.), all of which are currently inactive.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant inter-company ac-
counts and transactions have been eliminated. The consolidated financial
statements include the use of estimates, which management believes are
reasonable.
Short-Term Investments and Marketable Securities:
Short-term investments and marketable securities consist of corporate and
government bonds and equity securities. In 1994 the Company adopted the
accounting principles promulgated by SFAS No. 115 Accounting for Certain
Investments in Debt and Equity Securities. The Company has classified its
investments as Available-for-Sale securities. Accordingly, such investments
are reported at fair market value, with the resultant unrealized gains and
losses reported as a separate component of shareholders' equity. Prior to
1994, the Company reported marketable securities at the lower of cost or
market value; unrealized losses were charged to earnings.
Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an original maturity of less than
three months to be cash equivalents.
Inventories:
Inventories are stated at the lower of cost (first-in, first-out) or market.
Product returns are recorded in inventory when they are received at the lower
of their original cost or market, as appropriate. Obsolete inventory is
written off and its value is removed from inventory at the time its
obsolescence is determined.
-7-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment and Depreciation and Amortization
Property and equipment are stated at cost. The Company charges to
expense repairs and maintenance items, while major improvements and
betterments are capitalized. When the Company sells or otherwise disposes
of property and equipment items, the cost and related accumulated
depreciation are removed from the respective accounts and any gain or loss
is included in earnings.
Depreciation and amortization are provided on the straight-line method over
the following estimated useful lives or lease terms of the assets:
Machinery and equipment 7-10 years
Furniture and fixtures 5-7 years
Tools, dies and masters 2-7 years
Transportation equipment 7 years
Leasehold improvements 7-10 years or life of lease
whichever is shorter
Intangible Assets:
Intangible assets are stated at cost. Patents and trademarks are amortized
on the straight-line method over a period of 17 years; organization expenses
are amortized on the straight-line method over five (5) years.
Financial Instruments:
The carrying value of assets and liabilities considered financial instruments
under SFAS Note #107 approximate their respective fair value.
Tax Credits:
Tax credits, when present, are accounted for using the flow-through method
as a reduction of income taxes in the years utilized.
Income Per Common Share:
Income per common share has been computed using the weighted average
number of shares of common stock outstanding during the periods based on
the treasury stock method using average market price.
Fully diluted earnings per share are not presented because they are either
anti-dilutive or result in dilution of less than 3%.
-8-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Advertising and Related Costs:
In accordance with APB 28 Interim Financial Reporting the Company
expenses its advertising and related costs proportionately over the interim
periods based on its total expected costs per its various advertising
programs. Any necessary accrual or deferral is accordingly reflected in the
balance sheet for the interim period. However, for annual reporting
purposes, no advertising or related costs are capitalized and all are expensed
in the fiscal year in which they are incurred.
NOTE 3 - INVENTORIES
At November 30, 1995 and 1994, inventories consist of the following:
1995 1994
Raw materials $3,875,751 $3,903,028
Finished goods 2,538,346 3,615,498
$6,414,097 $7,518,526
NOTE 4 - PROPERTY AND EQUIPMENT
At November 30, 1995 and 1994, property and equipment consisted of the
following:
1995 1994
Machinery and equipment $ 225,312 $ 154,812
Furniture and equipment 264,589 228,377
Transportation equipment 1,917 1,917
Tools, dies, and masters 1,137,327 888,320
Leasehold improvements 108,474 108,474
1,737,619 1,381,900
Less: Accumulated depreciation
and amortization 1,024,494 698,885
Property and Equipment - Net $ 713,125 $ 683,015
Depreciation and amortization expense for the years ended November 30,
1995, 1994 and 1993 amounted to $325,609, $247,018 and $243,164,
respectively.
-9-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - INTANGIBLE ASSETS
Intangible assets consist of the following at November 30, 1995
and 1994:
1995 1994
Patents and trademarks $154,484 $104,720
Less: Accumulated amortization 25,946 18,753
Intangible Assets - Net $128,538 $ 85,967
Amortization expense for the years ended November 30, 1995, 1994 and
1993 amounted to $7,193, $4,227 and $3,259, respectively.
NOTE 6 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
Short-term investments and marketable securities, which consist of stock and
various corporate and government obligations, are stated at market value. In
accordance with SFAS No. 115, the Company has classified its investments
as Available-for-Sale securities and considers as current assets those
investments which will mature or are likely to be sold in the next fiscal
year. The remaining investments are considered non-current assets. The cost
and market values of the investments at November 30, 1995 and 1994 were as
follows:
1995 1994
Current: COST MARKET COST MARKET
Corporate obligations $ 701,026 $ 704,373 $1,153,281 $1,141,517
Government obligations
(including mortgage
backed securities) 1,633,616 1,631,664 339,702 294,302
Preferred stock 200,000 203,000 200,000 177,000
Total 2,534,642 2,539,037 1,692,983 1,612,819
Non-Current:
Corporate obligations 846,340 843,026 1,749,549 1,666,471
Government obligations 941,165 945,412 2,036,315 1,948,690
Total 1,787,505 1,788,438 3,785,864 3,615,161
Total $4,322,147 $4,327,475 $5,478,847 $5,227,980
-10-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
(Continued)
During the year ended November 30, 1995 available-for-sale securities were
liquidated and proceeds amounting to $1,353,894 were received, with
resultant realized losses totalling $5. Cost of available-for-sale
securities includes unamortized premium or discount.
NOTE 7 - PREPAID ROYALTY EXPENSE (DEFERRED)
On March 3, 1986, the Company entered into a License Agreement (the
"Agreement") with Alleghany Pharmacal Corporation ("Alleghany") under the
terms of which the Company was granted the exclusive right to use the
licensed products and trademarks for the manufacture and distribution of the
products subject to the license. Under the terms of the Agreement, on July
5, 1986, the Company paid to Alleghany a non-refundable advance payment
of $1,015,000. The license runs for an indeterminate period. An additional
$525,000 non-refundable advance payment was paid to Alleghany on July 5,
1987.
From the period March 3, 1986 to June 3, 1986, the Company was required
to pay a 7% royalty on all net sales. Thereafter, it is required to pay a 6%
royalty on net sales but no less than $360,000 per annum to maintain its
license. After the sum of $9,000,000 in royalties has been paid to
Alleghany, the royalty is reduced to 1% of net sales. As of November 30,
1995, $4,434,510 of royalties have been paid or accrued and only $4,565,490
still remains until the $9,000,000 level is reached.
As of November 30, 1995, all of the advance payments have been charged
against income.
NOTE 8 - LONG-TERM DEBT
Long-term debt consisted of the following at November 30, 1995 and 1994:
1995 1994
Note payable - Bank (A) $399,067 $687,067
Notes payable - AFCO (B) 10,078 -
409,145 687,067
Less: Current portion 298,078 288,000
$111,067 $399,067
-11-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - LONG-TERM DEBT (Continued)
(A) Note payable - Bank represents the balance of a $1,119,067 loan due in
monthly installments of $24,000 plus interest to February 1996.
Interest is calculated on the outstanding balance at prime plus 1%.
In connection with this loan, the bank has been given a secured interest
in all of the accounts receivable and inventory of the Company and its
subsidiaries. At November 30, 1995, the bank's prime rate was 8.75%.
(B) Notes payable - AFCO represent a 9-month financing arrangement of the
Company's insurance premiums at 8.065% during 1995.
The Company's long-term debt is due to mature as follows:
Year Ending
November 30,
1996 $298,078
1997 111,067
1998 -
1999 -
2000 -
$409,145
The Company has an available line of credit of $3,000,000. Interest is
calculated on the outstanding balance at prime minus 1% or Libor plus 150
basis points. As of November 30, 1995, the Company was not utilizing any
of its available line.
NOTE 9 - INCOME TAXES
The Company and its subsidiaries file a consolidated federal income tax
return. No returns have been examined by the Internal Revenue Service.
-12-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES (Continued)
The Company has temporary differences arising from the following:
Classified As
Deferred Short- Long-
Type Amount Tax Term Term
Asset (Liability)
Depreciation $ 129,422 $ 52,011 $ - $52,011
Reserve for bad debts 157,204 63,176 63,176 -
Reserve for returns 747,748 300,501 300,501 -
Reserve for obsolete
inventory 1,147,627 461,203 461,203 -
Section 263A costs 251,955 101,254 101,254 -
New Jersey net
operating loss
carryforward 1,582,395 148,350 148,350 -
$4,016,351 1,126,495 1,074,484 52,011
Tax asset valuation
allowance ( 394,273)( 376,069) ( 18,204)
Net deferred income
tax $ 732,222 $ 698,415 $33,807
The tax asset valuation allowance increased by $211,984 during the year
ended November 30, 1995.
Income tax expense (benefit) is made up of the following components:
November 30, 1995
State &
Federal Local Total
Current tax (benefit)
expense ($482,202) $ 10,781 ($471,421)
Tax credits ( 7,180) - ( 7,180)
Deferred tax (benefit) ( 68,364) ( 116,991) ( 185,355)
($557,746) ($106,210) ($663,956)
The current tax benefit for the year ended 1995 includes a net operating loss
carryback which is reflected in income tax refunds on the balance sheet.
-13-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES (Continued)
November 30, 1994
State &
Federal Local Total
Current tax expense $1,514,097 $495,485 $2,009,582
Tax credits ( 21,162) - ( 21,162)
Deferred tax benefit ( 70,905) ( 21,564) ( 92,469)
$1,422,030 $473,921 $1,895,951
November 30, 1993
State &
Federal Local Total
Current tax expense $ 1,551,853 $440,355 $1,992,208
Tax credits ( 12,266) - ( 12,266)
Deferred tax benefit ( 203,475) ( 61,881) ( 265,356)
$1,336,112 $378,474 $1,714,586
Income taxes payable are made up of the following components:
State &
Federal Local Total
November 30, 1995 $ - $ - $ -
November 30, 1994 $ - $ 6,354 $ 6,354
November 30, 1993 $ 153,761 $67,421 $221,182
-14-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES (Continued)
A reconciliation of income tax expense computed at the statutory rate to
income tax expense at the effective rate for each of the three years ended
November 30, 1995 is as follows:
1995 1994 1993
Percent Percent Percent
of Pretax of Pretax of Pretax
Amount Income Amount Income Amount Income
Income tax (benefit) expense at
statutory rate ($758,379) ( 34.00%) $1,602,038 34.00% $1,468,937 34.00%
Increases (decreases) in taxes
resulting from:
State income taxes, net of federal
income tax benefit ( 106,377) ( 4.77 ) 292,988 6.22 267,608 6.19
Non-deductible expenses and
other adjustments 207,980 9.32 22,087 .47 ( 9,693) ( .22 )
Utilization of tax credits ( 7,180) ( .32 ) ( 21,162) (.45) ( 12,266) ( .28 )
Income tax expense at
effective rate ($663,956) ( 29.77%) $1,895,951 40.24% $1,714,586 39.69%
-15-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - STOCK OPTIONS
On November 15, 1984, the Company authorized the granting of incentive
stock options as well as non-qualified options. The following summarizes the
stock options outstanding under this plan as of November 30, 1995.
Number Per Share
Of Option
Date Granted Shares Price Expiration
January 1985 98,600 $ .40 1997
December 1987 569,500 .50 1997
January 1988 370,000 .55 1997
March 1989 200,000 .75 1999
January 1990 200,000 .63 1999
December 1991 27,500 .50 1996
June 1995 50,000 4.50 2000
1,515,600
The following summarizes the activity of shares under option for the two
years ended November 30, 1995:
Number Per Share
Of Option
Shares Price Value
Balance - December 1,
1993 1,520,500 $ .40 - $6.00 $ 938,125
Exercised ( 49,200) $ .40 - $6.00 ( 103,905)
Expired ( 5,000) $3.50 ( 17,500)
Balance - November 30,
1994 1,466,300 $ .40 - $ .75 816,720
Granted 55,000 $1.25- $4.50 231,250
Exercised ( 5,700) $ .40 - $ .75 ( 6,530)
Balance - November 30,
1995 1,515,600 $ .40 - $4.50 $1,014,440
-16-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE
The following items which exceeded 5% of total current liabilities are
included in accounts payable and accrued liabilities as of:
November 30,
1995 1994
(In Thousands)
Media advertising $1,812 $1,460
Coop advertising 519 547
Accrued returns 435 443
Payroll and bonuses * 547
$2,766 $2,997
All other liabilities were for trade payables or individually did not exceed 5%
of total current liabilities.
* Under 5%
NOTE 12 - OTHER INCOME
Other income was comprised of the following:
November 30,
1995 1994 1993
Interest income $271,505 $311,684 $297,432
Dividend income 16,164 16,357 15,972
Realized gain (loss) on
disposal of assets ( 5) 26,033 30,184
Royalty income 11,648 - -
Miscellaneous 17,616 3,006 23,660
$316,928 $357,080 $367,248
NOTE 13 - COMMITMENTS AND CONTINGENCIES
On April 1, 1995, the Company renewed their lease for approximately 55,000
square feet of office and warehouse space at an annual rental of $259,284.
This lease on the Company's premises expires March 31, 2001. On
September 22, 1995 the Company leased an additional 30,000 square feet of
warehouse space in Paterson, NJ on a net lease basis at a rental of $6,875
per month. The lease expires on September 30, 1997.
-17-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued)
The Company has entered into various operating leases with expiration dates
ranging through February 1998.
Rent expense for the years ended November 30, 1995, 1994 and 1993 was
$414,907, $381,805 and $343,722, respectively.
Future commitments under noncancelable operating lease agreements for
each of the next five (5) years and in the aggregate are as follows:
Year Ending
November 30,
1996 $ 407,206
1997 362,899
1998 262,575
1999 259,284
2000 259,284
2001 and thereafter 86,428
Total $1,637,676
On March 3, 1986, the Company entered into a License Agreement with
Alleghany Pharmacal Corporation (See Note 7).
The Company has entered into various other License Agreements, none of
which materially affect the Company's sales, financial results, financial
condition, or should materially affect its future results of operations.
There are various matters in litigation that arose out of the normal operations
of the Company which, in the opinion of management, will not have a
material adverse effect on the financial condition of the Company.
NOTE 14 - RELATED PARTY TRANSACTIONS
The Company has an outstanding loan of $25,250 from its Vice President in
charge of Sales; which was made to aid him in obtaining a first mortgage on
his home. This loan is secured by a second mortgage and carries an interest
rate at 1% over prime. Interest is payable semi-annually. The Vice
President is the son of Mr. David Edell, the President of the Company.
The Company has retained the law firm of Berman & Murray as its general
counsel. Ira W. Berman, a member of the firm, is the Secretary, Chairman of
the Board and a principal shareholder of the Company.
-18-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - MAJOR CUSTOMERS AND FOREIGN SALES
During the years ended November 30, 1995, 1994 and 1993, certain
customers each accounted for more than 5% of the Company's total sales,
as follows:
Customer 1995 1994 1993
A 22% 18% 18%
B 7 9 9
C 7 9 9
D 5 * *
* Under 5%
Foreign sales have been under 5% in total for each of the last three years.
NOTE 16 - COMMON STOCK TRANSACTIONS
On December 31, 1992, the Company repurchased for redemption 423,282
shares of its common stock for $370,371.75 ($.875 per share). These shares
represented new certificates which had been issued to Morton Erenstein, a
Director of the Company, who since then has been removed from its Board;
after he gave the Board his affidavit, on August 31, 1988, swearing that he
had lost his stock certificate with regard to 300,077 shares. Upon his
issuing a personal indemnification to the Company, the Company authorized
the issuance of a new certificate for such shares. Subsequently, in
November 1992, the National Westminster Bank advised the Company that it
had foreclosed a loan to Mr. Erenstein secured by this new certificate for
300,077 shares and one for 123,205 additional shares of the Company's
common stock, and wished to have them repurchased.
Concurrently, on October 11, 1991, the Company received a letter from
counsel for the Federal Deposit Insurance Corporation ("F.D.I.C.") demanding
delivery of the subject shares, upon representations that Mr. Erenstein had
pledged the subject certificate as security for a loan from First Commercial
Bank of Florida, that he had defaulted to repay the loan, and that the F.D.I.C.
now owned the interests. The F.D.I.C. advised, however, that it could not
locate the pledged certificate, and the Company advised F.D.I.C. counsel that
it had issued a new certificate to Mr. Erenstein.
-19-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 - COMMON STOCK TRANSACTIONS
In December 1992, the Company was notified by counsel for the F.D.I.C. that
it found the original Erenstein certificate which the Company had been
advised had been lost. In fiscal 1993, the Company issued a certificate for
51,000 shares to the F.D.I.C. as full satisfaction of the F.D.I.C. claim.
NOTE 17 - SUBSEQUENT EVENTS
On January 10, 1996 David Edell and Ira W. Berman exercised their stock
options and purchased 100,000 shares of the Company's common stock
respectively at $.50 per share. Messrs. Polak and Dworkin, Directors of the
Company each exercised their options and purchased 25,000 and 50,000
shares of common stock respectively at $.50 per share. Dunnan Edell, Vice
President and Director exercised his options and purchased 48,600 shares of
common stock at $.40 per share and Drew Edell, Vice President exercised
his options and purchased 25,000 shares of common stock at $.40 per share.
All of the options except for Mr. Polaks were purchased for 50% cash and
the balance with a full recourse Promissory Note payable on November 30,
1996. Other than Mr. Polak's, the Notes are collateralized with the stock
certificates. Mr. Polak paid for his shares in full.
In December 1995, the Company issued options to purchase 100,000 shares
at $1.50 per share in conjunction with an employment agreement with their
new Senior Executive Vice President - Sales.
-20-
SCHEDULE I
CCA INDUSTRIES, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
CORPORATE OBLIGATIONS:
AT&T 6/01/98 4.750% $ 100,000 $ 99,006 $ 97,938 $ 97,938
AT&T 2/15/96 4.500 100,000 100,017 99,688 99,688
AT&T 2/15/96 4.500 300,000 300,113 299,064 299,064
Bank America 7/15/97 6.000 200,000 200,000 200,824 200,824
Bankers Trust 7/01/96 4.700 100,000 100,146 99,303 99,303
Con Edison 12/15/96 5.900 100,000 99,875 99,973 99,973
Dayton P & L 5/01/97 5.625 100,000 98,265 99,785 99,785
General Motors Acceptance
Corp. 10/01/96 8.000 200,000 200,500 203,440 203,440
SCHEDULE I (Continued)
CCA INDUSTRIES, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
CORPORATE OBLIGATIONS: (continued)
Merrill Lynch 6/24/96 4.750% $100,000 $ 100,100 $ 99,470 $ 99,470
Merrill Lynch 6/24/96 4.750 100,000 100,100 99,470 99,470
Tennessee Valley 3/04/98 5.125 100,000 100,000 98,594 98,594
Union Electric 3/01/97 5.500 50,000 49,244 49,850 49,850
$1,547,366 $ 1,547,399 $ 1,547,399
SCHEDULE I (Continued)
CCA INDUSTRIES, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
GOVERNMENT OBLIGATIONS:
US Treasury Note 10/31/98 4.750% $ 100,000 $ 99,684 $ 98,125 $ 98,125
US Treasury Note 10/31/98 4.750 200,000 199,992 196,250 196,250
US Treasury Note 5/15/96 4.250 100,000 99,939 99,438 99,438
US Treasury Note 5/15/96 4.250 100,000 100,002 99,438 99,438
US Treasury Note 11/15/96 4.375 100,000 99,969 99,031 99,031
US Treasury Note 10/15/98 7.125 250,000 253,057 261,173 261,173
US Treasury Note 5/15/96 4.250 100,000 99,909 99,438 99,438
US Treasury Note 1/31/97 6.250 100,000 99,500 100,938 100,938
US Treasury Note 12/31/96 6.125 200,000 197,423 201,626 201,626
US Treasury Note 11/15/96 4.375 200,000 197,852 198,062 198,062
US Treasury Note 11/15/96 4.375 200,000 196,133 198,062 198,062
US Treasury Note 11/15/96 4.375 100,000 98,003 99,031 99,031
US Treasury Note 11/15/96 4.375 100,000 97,855 99,031 99,031
US Treasury Bill 7/25/96 5.330 45,000 42,552 43,465 43,465
SCHEDULE I (Continued)
CCA INDUSTRIES, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
(CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
GOVERNMENT OBLIGATIONS: (Continued)
US Treasury Note 8/15/96 4.375% $ 200,000 $ 195,936 $ 198,500 $ 198,500
FHLMC 1628-N 12/25/2013 6.500 50,000 48,024 46,958 46,958
EE Bonds - 7.050 90,000 87,300 87,300 87,300
FNMA 93-6-26-B 8/25/2023 7.000 10,000 8,897 8,785 8,785
FNMA 93-224-D 11/25/2023 6.500 104,000 101,873 96,362 96,362
FNMA 92-2-N 1/28/2024 6.500 52,000 47,424 46,482 46,482
FHJMC 1702-U 3/15/2024 7.00 4,000 3,507 3,519 3,519
FNMA 11/10/98 5.050 200,000 199,950 196,062 196,062
2,574,781 2,577,076 2,577,076
EQUITY SECURITIES:
Number of
Shares
Preferred Stock:
Bank America Corp. 8,000 200,000 203,000 203,000
$4,322,147 $4,327,475 $4,327,475
SCHEDULE V
CCA INDUSTRIES, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Balance
Beginning Additions Retirements Other At End
Classification Of Year At Cost Other Or Sales Deductions Of Year
Year Ended November 30, 1995:
Machinery and equipment $ 154,812 $ 70,500 $ - $ - $ - $ 225,312
Furniture and equipment 228,377 36,212 - - - 264,589
Transportation equipment 1,917 - - - - 1,917
Tools, dies, and masters 888,320 249,007 - - - 1,137,327
Leasehold improvements 108,474 - - - - 108,474
Total $1,381,900 $355,719 $ - $ - $ - $1,737,619
Year Ended November 30, 1994:
Machinery and equipment $ 218,100 $ - $ - $ 63,288 $ - $ 154,812
Furniture and equipment 197,294 31,083 - - - 228,377
Transportation equipment 170,071 - - 168,154 - 1,917
Tools, dies, and masters 483,941 404,379 - - - 888,320
Leasehold improvements 102,974 5,500 - - - 108,474
Total $1,172,380 $440,962 $ - $ 231,442 $ - $1,381,900
Year Ended November 30, 1993:
Machinery and equipment $ 244,509 $ 82,455 $ - $ 108,864 $ - $ 218,100
Furniture and equipment 377,235 69,188 - 249,129 - 197,294
Transportation equipment 170,071 - - - - 170,071
Tools, dies, and masters 511,244 148,876 - 176,179 - 483,941
Leasehold improvements 50,963 52,011 - - - 102,974
Total $1,354,022 $352,530 $ - $ 534,172 $ - $1,172,380
SCHEDULE VI
CCA INDUSTRIES, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
COL. A COL. B COL. C COL. D COL. E COL. F
Charged
Balance at To Costs Balance
Beginning And Retirements Other At End
Classification Of Year Expenses Other Or Sales Deductions Of Year
Year Ended November 30, 1995:
Machinery and equipment $ 102,815 $ 31,525 $ - $ - $ - $ 134,340
Furniture and equipment 87,616 47,955 - - - 135,571
Transportation equipment 958 274 - - - 1,232
Tools, dies, and masters 450,667 235,149 - - - 685,816
Leasehold improvements 56,829 10,706 - - - 67,535
Total $ 698,885 $ 325,609 $ - $ - $ - $1,024,494
Year Ended November 30, 1994:
Machinery and equipment $ 84,669 $ 37,132 $ - $ 18,986 $ - $ 102,815
Furniture and equipment 46,389 41,227 - - - 87,616
Transportation equipment 126,689 273 - 126,004 - 958
Tools, dies, and masters 293,866 156,801 - - - 450,667
Leasehold improvements 45,244 11,585 - - - 56,829
Total $ 596,857 $247,018 $ - $ 144,990 $ - $698,885
Year Ended November 30, 1993:
Machinery and equipment $ 145,597 $ 40,525 $ - $ 101,453 $ - $ 84,669
Furniture and equipment 229,496 50,949 - 234,056 - 46,389
Transportation equipment 102,393 24,296 - - - 126,689
Tools, dies, and masters 327,680 116,506 - 150,320 - 293,866
Leasehold improvements 34,356 10,888 - - - 45,244
Total $839,522 $243,164 $ - $ 485,829 $ - $596,857
SCHEDULE VIII
CCA INDUSTRIES, INC. AND SUBSIDIARIES
VALUATION ACCOUNTS
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
COL. A COL. B COL. C COL. D COL. E
Additions
Balance at Charged To Balance
Beginning Costs and At End
Description Of Year Expenses Deductions Of Year
Year ended November 30, 1995:
Allowance for doubtful accounts $208,863 $139,355 $191,014 $157,204
Reserve for returns $770,933 $2,841,439 $2,864,623 $747,749
Year ended November 30, 1994:
Allowance for doubtful accounts $102,388 $156,649 $50,174 $208,863
Reserve for returns $779,273 $3,056,002 $3,064,342 $770,933
Year ended November 30, 1993:
Allowance for doubtful accounts $39,620 $191,770 $129,002 $102,388
Reserve for returns $482,862 $3,163,188 $2,866,787 $779,273
CCA INDUSTRIES, INC. AND SUBSIDIARIES SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
COL. A COL. B COL. C COL. D COL. E COL. F
Weighted
Maximum Average Average
Weighted Amount Amount Interest
Balance at Average Outstanding Outstanding Rate
Category of Aggregate End Interest During the During During
Short-term Borrowings Of Year Rate Period the Year (3) Year (4)
YEAR ENDED:
NOVEMBER 30, 1995:
Notes payable to
bank (1) - 8.75 $ 400,000 $ 58,333 8.75
Notes payable - AFCO
(2) 10,078 8.07 88,320 36,289 8.07
NOVEMBER 30, 1994:
Notes payable to
bank (1) $ - 6.72 $700,000 $170,833 7.73
Notes payable - AFCO
(2) - 6.59 6,715 560 6.59
NOVEMBER 30, 1993:
Notes payable to
bank (1) $ - - $ - $ - -
Notes payable - AFCO
(2) 6,715 6.59 52,419 24,298 6.59
(1) Notes payable to bank represent borrowings under a revolving line of credit
borrowing arrangement which expires on April 30, 1996.
(2) Notes payable - AFCO matures nine months from date of issue.
(3) The average amount outstanding during the year was computed by dividing the
total of month-end outstanding principal balances by the number of months in
the year.
(4) The weighted average interest rate during the year was computed by dividing
the annualized interest expense for the period with balances, by the average
short-termdebt outstanding.
SCHEDULE X
CCA INDUSTRIES, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED NOVEMBER 30, 1995, 1994 AND 1993
Column A Column B
Charged to Costs and
Item Expenses
Year ended November 30, 1995:
1. Maintenance and repairs (1)
2. Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals (1)
3. Taxes, other than payroll and income taxes (1)
4. Royalties $663,949
5. Advertising $13,332,216
Year ended November 30, 1994:
1. Maintenance and repairs (1)
2. Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals (1)
3. Taxes, other than payroll and income taxes (1)
4. Royalties $807,069
5. Advertising $13,428,116
Year ended November 30, 1993:
1. Maintenance and repairs (1)
2. Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals (1)
3. Taxes, other than payroll and income taxes (1)
4. Royalties $500,153
5. Advertising $11,628,793
(1) These amounts are not presented, as such amounts are less than 1% of total
sales and revenues.