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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarter ended March 31, 2004
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or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number: 0-24176
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Marisa Christina, Incorporated
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-3216809
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8101 Tonnelle Avenue, North Bergen, New Jersey 07047-4601
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(Address of principal executive offices) (Zip Code)
(201)-758-9800
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(Registrant's telephone number, including area code)
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 requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes No X
---- -----
The number of shares outstanding of the Company's Common Stock on May 11,
2004 was 7,295,065.
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -- March 31, 2004 (Unaudited) and
December 31, 2003 2
Consolidated Statements of Operations -- Three
months ended March 31, 2004 and 2003 (Unaudited) 3
Consolidated Statements of Cash Flows -- Three months ended March 31, 2004 and
2003 (Unaudited) 4
Notes to Consolidated Financial Statements
(Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
Item 4. Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
PART I: FINANCIAL INFORMATION
ITEM I: CONSOLIDATED FINANCIAL STATEMENTS
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 2004 and December 31, 2003
ASSETS 2004 2003(1)
---- -------
(Unaudited)
Current assets:
Cash and cash equivalents $ 2,621,926 4,845,410
Trade accounts receivable, less allowance for doubtful accounts
of $317,317 in 2004 and $296,043 in 2003 3,798,725 1,678,686
Inventories 1,942,005 2,600,595
Deferred taxes 912,419 800,000
Prepaid expenses and other current assets 355,416 508,537
------------ ----------
Total current assets 9,630,491 10,433,228
Property and equipment, net 258,422 235,547
Noncurrent deferred taxes 5,752,240 5,752,240
Other assets 55,021 55,133
------------ ----------
Total assets $ 15,696,174 16,476,148
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 861,555 1,503,118
Accrued expenses and other current liabilities 341,911 205,307
------------ ----------
Total current liabilities 1,203,466 1,708,425
------------ ----------
Stockholders' equity:
Preferred stock, $0.01 par value. Authorized 1,000,000 shares;
none issued -- --
Common stock, $0.01 par value. Authorized 15,000,000 shares;
issued 8,586,769 shares 85,868 85,868
Additional paid-in capital 31,664,680 31,664,680
Accumulated deficit (13,096,318) (12,818,828)
Accumulated other comprehensive loss (57,246) (59,721)
Treasury stock, 1,291,704 common shares at cost (4,104,276) (4,104,276)
------------ ----------
Total stockholders' equity 14,492,708 14,767,723
Commitments and contingencies
------------ ----------
Total liabilities and stockholders' equity $ 15,696,174 16,476,148
============ ==========
(1) Accounts were derived from the audited consolidated balance sheet as of
December 31, 2003.
See accompanying notes to consolidated financial statements.
2
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
Three months ended March 31, 2004 and 2003
(Unaudited)
2004 2003
---- ----
Net sales $ 5,620,896 5,306,645
Cost of goods sold 4,198,500 3,530,059
----------- ---------
Gross profit 1,422,396 1,776,586
Selling, general, and administrative expenses 1,848,206 2,120,821
----------- ---------
Operating loss (425,810) (344,235)
Other income, net 33,599 13,226
Interest income, net 8,282 11,916
----------- ---------
Loss before income tax benefit (383,929) (319,093)
Income tax benefit (107,734) (32,042)
----------- ---------
Net loss $ (276,195) (287,051)
=========== =========
Basic and diluted net loss per common share $ (0.04) (0.04)
=========== =========
See accompanying notes to consolidated financial statements.
3
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended March 31, 2004 and 2003
(Unaudited)
2004 2003
---- ----
Cash flows from operating activities:
Net loss $ (276,195) (287,051)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 36,970 36,375
Bad debt expense 45,000 48,000
Deferred income taxes (112,419) (24,812)
Changes in assets and liabilities:
Trade accounts receivable (2,165,039) (1,431,364)
Inventories 658,590 494,265
Prepaid expenses and other assets 153,233 (159,985)
Trade accounts payable (641,563) (488,580)
Accrued expenses and other current liabilities 137,847 31,872
----------- ----------
Net cash used in operating activities (2,163,576) (1,781,280)
Cash flows used by investing activities --
acquisitions of property and equipment (59,908) (15,970)
----------- ----------
Net decrease in cash and cash equivalents (2,223,484) (1,797,250)
Cash and cash equivalents at beginning of period 4,845,410 4,721,614
----------- ----------
Cash and cash equivalents at end of period $ 2,621,926 2,924,364
=========== ==========
See accompanying notes to consolidated financial statements.
4
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2004
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Marisa Christina, Incorporated and its wholly owned
subsidiaries (the Company). Significant intercompany accounts and
transactions are eliminated in consolidation.
The unaudited consolidated financial statements do not include all
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America. For further information, such as
the significant accounting policies followed by the Company, refer to the
notes to the Company's audited consolidated financial statements, included
in its annual report on Form 10-K for the year ended December 31, 2003.
In the opinion of management, the unaudited consolidated financial
statements include all necessary adjustments (consisting of normal,
recurring accruals) for a fair presentation of the financial position,
results of operations and cash flows for the interim periods presented.
The results of operations for the three months ended March 31, 2004 and
2003 are not necessarily indicative of the operating results to be
expected for a full year.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) REVENUE AND RECEIVABLES
Revenue is recognized when title and risk of ownership transfers to
the customer, which is when the product is shipped to the customer.
Allowances are provided for estimated uncollectible receivables
based on review of specific accounts and historical experience.
Allowances and credits, which are given to customers in connection
with sales incentives and promotional activities, are recognized as
reductions of sales when the related sales revenue is earned and
recognized. As of March 31, 2004 and December 31, 2003, the
Company's reserves for sales allowances were $938,000 and
$1,328,000, respectively. Such amounts are recorded as reductions to
accounts receivable.
(b) STOCK OPTION PLAN
The Company applies the intrinsic-value-based method of accounting
prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and related
interpretations including FASB Interpretation No. 44, Accounting for
Certain Transactions Involving Stock Compensation, an interpretation
of APB Opinion No. 25, issued in March 2000, to account for its
fixed-plan stock options. Under this method, compensation expense is
recorded on the date of grant only if the current market price of
the underlying stock exceeded the exercise price. SFAS No. 123,
Accounting for Stock-Based Compensation, established accounting and
disclosure requirements using a fair-value-based method of
accounting for stock-based employee compensation plans. As allowed
by SFAS No. 123, the Company has elected to continue to apply the
intrinsic-value-based method of accounting described above, and has
adopted only the disclosure requirements of SFAS No. 123.
(Continued)
5
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2004
(Unaudited)
The following table illustrates the effect on net loss if the
fair-value-based method had been applied to all outstanding and
unvested awards for the three months ended March 31, 2004 and 2003:
2004 2003
--------- ---------
Net loss, as reported $(276,195) (287,051)
Deduct total stock-based employee compensation
expense determined under fair-value-based method
for all rewards, net of tax (36,000) (39,000)
--------- ---------
Pro forma net loss $(312,195) (326,051)
========= =========
Diluted net loss per weighted average common share:
As reported $ (0.04) (0.04)
Pro forma $ (0.04) (0.04)
========= =========
(c) COMPREHENSIVE LOSS
Comprehensive loss was ($273,720) and ($287,051) for the three
months ended March 31, 2004 and 2003, respectively. Comprehensive
loss includes the Company's net loss and the change in the foreign
currency translation adjustment for the respective three-month
periods.
(3) INVENTORIES
Inventories at March 31, 2004 and December 31, 2003 consist of the
following:
2004 2003
---------- ----------
Piece goods $ 40,320 86,495
Finished goods 1,901,685 2,514,100
---------- ----------
$1,942,005 2,600,595
========== ==========
(4) CREDIT FACILITY
The Company has a $17.5 million line of credit facility with a finance
company, which may be utilized for commercial letters of credit, banker's
acceptances, commercial loans and letters of indemnity. Borrowings under
the facility are secured by certain of the Company's assets, primarily
trade accounts receivable and inventory, and bear interest at the prime
rate plus 0.75%. The Company is required to pay an annual commitment fee
of $50,000. The credit facility contains various covenants that require
minimum levels of working capital and net tangible worth.
As of March 31, 2004, there were no borrowings outstanding and
approximately $79,200 of commercial letters of credit were outstanding
under the credit facility. Available borrowings at March 31, 2004 were
approximately $4.9 million. The arrangement expires on June 14, 2004 and
is cancelable by either party with 90 days' written notice. Management
expects to renew the arrangement at that time. The Company expects to have
sufficient financing to meet its working capital needs throughout 2004.
(Continued)
6
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2004
(Unaudited)
(5) NET LOSS PER COMMON SHARE
Basic and diluted net loss per common share is based on the weighted
average number of common shares outstanding, which was 7,295,065 for the
three months ended March 31, 2004 and 2003. The effect of stock options
outstanding during the three months ended March 31, 2004 and 2003 was not
included in the computation of diluted net income per common share because
the effect would have been antidilutive.
(6) LEGAL PROCEEDINGS
The Company is involved, from time to time, in litigation and proceedings
arising out of the ordinary course of business. There are no pending
material legal proceedings or environmental investigations to which the
Company is a party or to which the property of the Company is subject.
7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with Marisa Christina's
consolidated financial statements.
FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. The statements
regarding Marisa Christina in this document that are not historical in nature,
particularly those that utilize terminology such as "may," "will," "should,"
"likely," "expects," "anticipates," "estimates," "believes" or "plans," or
comparable terminology, are forward-looking statements based on current
expectations about future events, which Marisa Christina has derived from
information currently available. These forward-looking statements involve known
and unknown risks and uncertainties that may cause our results to be materially
different from results implied in such forward-looking statements. Those risks
include, among others, risks associated with the apparel industry, the
dependence on senior management, maintaining sufficient working capital
financing, price pressures and other competitive factors and a softening of
retailer or consumer acceptance of the Company's products leading to a decrease
in anticipated revenues and gross profit margins.
OVERVIEW
Over the three-year period ended December 31, 2003, the Company has undertaken a
number of initiatives to focus resources, improve profitability and return the
Company to its core business and history of success. During that period, net
sales have decreased by $11 million primarily as the result of closing two
unprofitable divisions, which had combined net sales of $7 million for the year
ended December 31, 2001, and due to a general downturn in the economy. These
initiatives had returned the Company to profitable operations in 2001 and 2002,
but softer demand for the Company's product in 2003 led to an operating loss.
The softer economy has hurt margins during this period as customers required
greater discounts and markdowns to move the product at the retail level. The
Company has reduced selling, general and administrative expenses by $2.5 million
over the last three years, primarily related to the closing of two unprofitable
divisions, but also to reducing operating costs commensurate with the size of
the business.
Over most of the past three years, the Company's focus has been to eliminate
unprofitable lines and reduce operating costs. During 2003, senior management
sharpened its focus on rebuilding the volume of the core business. In this
regard, the sales function was restructured by hiring a new group of highly
experienced people and realigning the sales function by dividing it into the
Company's three main distribution segments (i.e., department stores, specialty
stores and private label customers). The Company's new sales leadership is
establishing tools to analyze profitability by customer for each of its selling
locations in order to provide merchandise mixes for each retail location based
on their consumer profile. Management believes that these initiatives together
with a stronger economy will enable the Company to return to profitable
operations in 2004.
While the Company's plans for the future are not dependent on one single
strategy, the possible failure of a large number of our new initiatives could
have an adverse impact on profitability. In addition, the Company's results are
heavily dependent upon demand for its Fall and Holiday product lines. In 2003,
sales of Fall and Holiday product represented 59% of the Company's net sales.
Should the Company's customers not react positively to styles offered by the
Company for the 2004 Fall and Holiday seasons or should the economy not improve,
the Company may not be able to return to profitable operations in 2004.
8
CRITICAL ACCOUNTING POLICIES
Critical accounting policies are those that are both important to the
presentation of our financial condition and results of operations and require
management's most difficult, complex or subjective judgments. The Company's most
critical accounting policies relate to estimates related to allowances for
uncollectible receivables, customer sales allowances, valuation of inventories
and valuation of deferred tax assets.
RECEIVABLES
Allowances are provided for estimated uncollectible receivables based on review
of specific accounts and historical experience. Allowances and credits, which
are given to customers in connection with sales incentives and promotional
activities, are recognized as reductions of sales when the related sales revenue
is earned and recognized. Events or changes in market conditions that adversely
impact our customers or the Company's ability to generate sales, could impact
management's estimates of uncollectible receivables or require the Company to
offer greater sales incentives, which could negatively impact sales or profits
in the future. As of March 31, 2004, the Company has allowances for bad debts of
approximately $317,000 and reserves for sales allowances of approximately
$938,000.
INVENTORIES
Inventories are stated at the lower of cost, by the first-in, first-out method,
or market. In assessing the market value of its inventories, particularly those
with slower turnover, the Company considers the estimated sales value less costs
to dispose and a reasonable profit margin and assesses the likelihood of
realizing the recorded amounts of inventory. Changes in market conditions could
impact the Company's ability to achieve sales at the estimated selling prices
and could negatively impact the carrying value of the Company's inventory.
VALUATIONS OF DEFERRED TAX ASSETS
Deferred income taxes arise from temporary differences between the tax bases of
assets and liabilities and their reported amounts in the financial statements.
Management makes an assessment of the realizability of the Company's deferred
tax assets. In making this assessment, management considers whether it is more
likely than not that some or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of
deferred tax liabilities and projected future taxable income of the Company in
making this assessment. A valuation allowance is recorded to reduce the total
deferred income tax assets to its net realizable value. At March 31, 2004 and
December 31, 2003, the Company's deferred tax assets related primarily to a U.S.
net operating loss carryforward of $29.8 million which can be utilized over the
next twenty years. Based on the Company's recent operating results and
projections of future profitability, management believes it is more likely than
not that the Company will generate sufficient taxable income to recover $6.7
million of its deferred tax assets. The recovery of the remaining net deferred
tax assets is significantly less certain and, accordingly, the Company has
established a valuation allowance for the balance of its deferred tax assets. If
future taxable income is less than management's estimates, the amount of the net
deferred tax assets on the Company's consolidated balance sheet will require an
additional valuation allowance. Additionally, if the Company is able to realize
higher taxable income the valuation allowance could be reduced.
9
RESULTS OF OPERATIONS
The following table sets forth the Company's operating results for the three
months ended March 31, 2004 and 2003:
PERCENTAGE PERCENTAGE
OF NET OF NET
2004 SALES 2003 SALES
----------- ------ ----------- -------
Net sales $ 5,620,896 100.0% $ 5,306,645 100.0%
----------- ----- ----------- -----
Gross profit 1,422,396 25.3% 1,776,586 33.5%
Selling, general, and administrative expenses 1,848,206 32.9% 2,120,821 40.0%
----------- ----- ----------- -----
Operating (loss) (425,810) (7.6%) (344,235) (6.5%)
Other income, net 33,599 0.6% 13,226 0.3%
Interest income, net 8,282 0.2% 11,916 0.2%
Income tax (benefit) (107,734) (1.9%) (32,042) (0.6%)
----------- ----- ----------- -----
Net (loss) $ (276,195) (4.9%) $ (287,051) (5.4%)
=========== ===== =========== =====
THREE MONTHS ENDED MARCH 31, 2004 (2004) COMPARED WITH THREE MONTHS ENDED MARCH
31, 2003 (2003)
Net sales. Net sales increased 5.9% from $5.3 million in 2003, to $5.6 million
in 2004, primarily as a result of increased sales of the Marisa Christina label
for the resort season. Sales increased despite the elimination of a label during
2003 that provided sales of $567,000 in the first quarter of 2003.
Gross profit. Gross profit decreased 19.9% from $1.8 million in 2003, to $1.4
million in 2004. As a percentage of net sales, gross profit decreased from 33.5%
in 2003 to 25.3% in 2004. Gross profit as a percentage of net sales was
adversely impacted by price compression including deeper discounts to the major
department stores without a corresponding decrease in the cost of goods sold.
Management expects gross margins to return to their historical levels in the
third and fourth quarters of 2004.
Selling, general and administrative expenses. Selling, general and
administrative expenses (SG&A) decreased 12.8% as a result of continuous cost
reduction initiatives including reduced rent and salaries. As a percentage of
net sales, SG&A decreased from 40.0% in 2003 to 32.9% in 2004.
Interest income, net. Interest income, net decreased from $11,916 in 2003 to
$8,282 in 2004 as a result of lower average invested cash balances.
Income tax benefit. Income tax benefit increased from $32,042 in 2003 to
$107,734 in 2004. As of December 31, 2003, the Company had net operating loss
carryforwards of approximately $29.8 million, which can be used to offset future
taxable income through 2023. The tax benefit recorded in the first quarter of
2004 is expected to be recovered throughout the balance of 2004.
Over the past several years, the Company has implemented a number of initiatives
which management believes will return the Company to profitability. Based on the
Company's operating results over the past three years, excluding the impact of
certain discontinued unprofitable labels and projection of future profitability,
management believes it is more likely than not that the Company will be able to
recover $6.6 million of its net deferred tax assets and has reduced its
valuation allowance to $4.9 million at December 31, 2003.
Net loss. Net loss changed from ($287,051) in 2003 to ($276,195) in 2004, due to
factors discussed above.
10
SEASONALITY
The Company's business is seasonal, with a substantial portion of its revenues
and earnings occurring during the second half of the year as a result of the
Fall and Holiday selling seasons. This is due to both a larger volume of unit
sales in these seasons and traditionally higher prices for Fall and Holiday
season garments, which generally require more costly materials than the
Spring/Summer and Resort seasons. Merchandise from the Fall collection, the
Company's largest selling season and Holiday, the Company's next largest season,
is shipped in the last two fiscal quarters. Merchandise for Resort,
Spring/Summer and Early Fall, the Company's lower volume seasons, is shipped
primarily in the first two quarters. In addition, prices of products in the
Resorts, Spring/Summer and Early Fall collections average 5% to 10% lower than
in other selling seasons.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $17.5 million line of credit facility with a finance company,
which may be utilized for commercial letters of credit, banker's acceptances,
commercial loans and letters of indemnity. Available borrowings at March 31,
2004 were approximately $4.9 million. Borrowings under the facility are secured
by certain of the Company's assets, primarily inventory and trade accounts
receivable, and bear interest at the prime rate plus 0.75%. The Company is
required to pay an annual commitment fee of $50,000. The credit facility
contains various covenants that require minimum levels of working capital and
net tangible worth. The Company's credit facility expires in June 2004 and
management expects to renew the facility at that time. The Company expects to
have sufficient financing to meet its working capital needs through 2004.
The Company used cash flows in operating activities of $2.2 million and $1.8
million during the three months ended March 31, 2004 and 2003, respectively,
principally related to the increases in accounts receivable which were related
to the sale of spring-season goods.
During the first quarter of 2004, the Company had capital expenditures of
approximately $60,000, primarily for computer systems. Capital expenditures for
the remainder of 2004 are expected to be approximately $60,000. These capital
expenditures will be funded by internally generated funds and, if necessary,
borrowings under the Company's credit facility. The Company's contractual cash
obligations related to operating leases as of March 31, 2004 include $387,397
for the remainder of 2004; $529,061 in 2005, $546,344 in 2006, $547,912 in 2007,
$526,491 in 2008 and $2,737,930, thereafter.
OFF-BALANCE SHEET ARRANGEMENTS
The Company did not enter into any off-balance sheet arrangements during 2004 or
2003, nor did the Company have any off-balance sheet arrangements outstanding at
March 31, 2004.
EXCHANGE RATES
Although it is Company policy to contract for the purchase of imported
merchandise in United States dollars, reductions in the value of the dollar
could result in the Company paying higher prices for its products. During the
last three fiscal years, however, currency fluctuations have not had an impact
on the Company's cost of merchandise. The Company does not engage in hedging
activities with respect to such exchange rate risk.
IMPACT OF INFLATION
The Company has historically been able to adjust prices, and, therefore,
inflation has not had, nor is it expected to have, a significant effect on the
operations of the Company.
11
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's major market risk exposure is to changing interest rates. However,
interest expense has not been and is not expected to be a material expense of
the Company. The Company has implemented management monitoring processes
designed to minimize the impact of sudden and sustained changes in interest
rates. The Company's floating rate debt is based on the prime rate; however,
there were no borrowings outstanding at March 31, 2004.
Currently, the Company does not use foreign currency forward contracts or
commodity contracts and does not have any material foreign currency exposure.
All purchases from foreign contractors are made in United States dollars and the
Company's investment in its foreign subsidiary was $140,000 at March 31, 2004.
ITEM 4: CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Company carried out, under
the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to Rule
13a-14 of the Securities Exchange Act of 1934. Based on that evaluation, the
Company's Chief Executive Offer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information which is required to be included in the periodic
reports that the Company must file with the Securities and Exchange Commission.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.
12
PART II OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is involved, from time to time, in litigation and proceedings
arising out of the ordinary course of business. There are no pending material
legal proceedings or environmental investigations to which the Company is a
party or to which the property of the Company is subject.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed herewith:
Exhibit 31.1 - Section 302 Certification - Michael H. Lerner
Exhibit 31.2 - Section 302 Certification - S.E. Melvin Hecht
Exhibit 32 - Section 1350 Certification
(b) Reports on Form 8-K -- The following reports on Form 8-K were filed by the
Company during the quarter ended March 31, 2004:
Marisa Christina Incorporated News Release dated March 22, 2004.
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 11, 2004 /s/ S. E. Melvin Hecht
--------------------------------------
S. E. Melvin Hecht
Vice Chairman, Chief Financial Officer
and Treasurer
14