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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended June 29, 2003.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from _____ to _____.
Commission File Number: 0-14146
WOMEN'S GOLF UNLIMITED, INC.
----------------------------
(Exact Name of Registrant as Specified in its Charter)
New Jersey 22-2388568
- ---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18 Gloria Lane, Fairfield, NJ 07004
- ----------------------------- -----
(Address of Principal Executive Office) (Zip Code)
(973) 227-7783
--------------
(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 Rule 12b-2 of the Exchange Act)
YES NO X
--- ---
On August 14, 2003, 3,229,031 shares of common stock, $.01 par value, were
issued and outstanding.
WOMEN'S GOLF UNLIMITED, INC.
FORM 10-Q
For Quarterly Period Ended JUNE 29, 2003
INDEX
PART I. FINANCIAL INFORMATION Page Number
-----------
Item 1. Financial Statements
Balance Sheets -
June 29, 2003 and December 31, 2002 2
Statements of Operations -
Three Months Ended June 29, 2003 and
June 30, 2002 3
Statements of Operations -
Six Months Ended June 29, 2003 and
June 30, 2002 4
Statements of Cash Flows -
Six Months Ended June 29, 2003 and
June 30, 2002 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 10
PART II. OTHER INFORMATION 11
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 11
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
EXHIBIT AND INDEX 13
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WOMEN'S GOLF UNLIMITED, INC.
BALANCE SHEETS
AS OF JUNE 29, 2003 (UNAUDITED)
AND DECEMBER 31, 2002 (AUDITED)
June 29, December 31,
2003 2002
---- ----
ASSETS
Current Assets
Cash $ 6,007 $ 3,551
Accounts Receivable - Net 2,856,037 2,318,286
Inventories 4,529,434 3,742,026
Prepaid Expenses 76,632 63,522
Deferred Income Taxes 223,000 177,000
------------ ------------
Total Current Assets 7,691,110 6,304,385
Plant and Equipment - Net 187,247 231,898
Deferred Income Taxes 94,000 61,000
Intangible Assets - Net 2,810,603 2,925,023
Other Assets - Net 49,745 49,745
------------ ------------
Total Assets $ 10,832,705 $ 9,572,051
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current Portion Long Term Debt $ 50,000 $ 202,413
Obligation under Capital Lease, Current Portion 33,537 33,537
Short-term Borrowings 3,608,612 2,857,920
Accounts Payable 1,084,862 889,150
Accrued Expenses 520,548 244,887
------------ ------------
Total Current Liabilities 5,297,559 4,227,907
Long-Term Liabilities
Obligation under Capital Lease, less Current Portion 41,423 62,143
------------ ------------
Total Liabilities 5,338,982 4,290,050
------------ ------------
Shareholders' Equity
Common Stock, $.01 Par; 12,000,000 Shares
Authorized; 3,227,215 Issued
& Outstanding at June 29, 2003 and
December 31, 2002 32,272 32,272
Additional Paid in Capital 6,354,274 6,354,274
Accumulated Deficit (892,823) (1,104,545)
------------ ------------
Total Shareholders' Equity 5,493,723 5,282,001
------------ ------------
Total Liabilities and Shareholders' Equity $ 10,832,705 $ 9,572,051
============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
2
WOMEN'S GOLF UNLIMITED, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
JUNE 29, 2003 AND JUNE 30, 2002
(UNAUDITED)
June 29, June 30,
2003 2002
---- ----
Net Sales $ 3,568,676 $ 3,914,338
Cost of Goods Sold 2,079,466 2,217,112
----------- -----------
Gross Profit 1,489,210 1,697,226
----------- -----------
Operating Expenses:
Selling 599,979 686,005
General & Administrative 530,472 574,860
----------- -----------
Total Operating Expenses 1,130,451 1,260,865
----------- -----------
Operating Income 358,759 436,361
----------- -----------
Other Income (Expense)
Interest Expense (51,307) (74,660)
Other Income 167,299 187,910
----------- -----------
115,992 113,250
----------- -----------
Income Before Income Taxes 474,751 549,611
Provision for Income Taxes 201,223 217,246
----------- -----------
Net Income $ 273,528 $ 332,365
----------- -----------
Earnings per Common Share
Basic $ 0.08 $ 0.10
=========== ===========
Diluted $ 0.08 $ 0.10
=========== ===========
Weighted Average Number of Common Shares Outstanding -
Basic 3,227,215 3,225,173
Diluted 3,227,391 3,249,140
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
3
WOMEN'S GOLF UNLIMITED, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 29, 2003 AND JUNE 30, 2002
(UNAUDITED)
June 29, June 30,
2003 2002
---- ----
Net Sales $ 6,342,322 $ 7,537,133
Cost of Goods Sold 3,886,315 4,382,690
----------- -----------
Gross Profit 2,456,007 3,154,443
----------- -----------
Operating Expenses:
Selling 1,132,867 1,347,272
General & Administrative 1,052,900 1,134,097
----------- -----------
Total Operating Expenses 2,185,767 2,481,369
Operating Income 270,240 673,074
----------- -----------
Other Income (Expense)
Interest Expense (101,322) (146,628)
Other Income 200,977 223,017
----------- -----------
99,655 76,389
----------- -----------
Income Before Income Taxes 369,895 749,463
Provision for Income Taxes 158,173 286,298
----------- -----------
Income before Cumulative Effect of Change in Accounting Principle 211,722 463,165
----------- -----------
Cumulative Effect of Change in Accounting Principle, Net of Tax 1,806,448
----------- -----------
Net Income (Loss) $ 211,722 $(1,343,283)
=========== ===========
Earnings per Common Share before Cumulative
Effect of Accounting Change Basic $ 0.07 $ 0.14
=========== ===========
Diluted $ 0.07 $ 0.14
=========== ===========
Cumulative Effect of Change in Accounting Principle
Basic $ -- $ (0.56)
=========== ===========
Diluted $ -- $ (0.56)
=========== ===========
Earnings (Loss) Per Share Basic $ 0.07 $ (0.42)
=========== ===========
Diluted $ 0.07 $ (0.42)
=========== ===========
Weighted Average Number of Common Shares Outstanding -
Basic 3,227,215 3,225,173
Diluted 3,227,284 3,256,479
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
4
WOMEN'S GOLF UNLIMITED, INC.
STATEMENTS OF CASHFLOWS
FOR THE SIX MONTHS ENDED
JUNE 29, 2003 AND JUNE 30, 2002
(UNAUDITED)
June 29, June 30,
2003 2002
---- ----
OPERATING ACTIVITIES
Net Income (Loss) $ 211,722 $(1,343,283)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided By (Used In) Operating Activities:
Depreciation 52,963 31,305
Amortization 107,120 99,504
Goodwill Impairment 1,806,448
Deferred Income Taxes (79,000) (39,000)
Bad Debt Expense 122,052 144,000
Changes in Assets and Liabilities:
Accounts Receivable (659,803) (299,089)
Inventories (787,408) (65,566)
Prepaid Expenses (13,110) 63,995
Other Assets 7,300 11,602
Accounts Payable 195,712 416,100
Accrued Expenses 275,661 117,626
Other Current and Non-Current Liabilities 0 (15,735)
----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (566,791) 927,907
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES, Purchases of Equipment (8,312) (42,113)
----------- -----------
FINANCING ACTIVITIES
Repayments of long-term debt (173,133) (403,622)
Proceeds from (Repayment of) Revolving Line of Credit, Net 750,692 (489,059)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 577,559 (892,681)
----------- -----------
NET INCREASE (DECREASE) IN CASH 2,456 (6,887)
CASH - BEGINNING OF PERIOD 3,551 7,717
----------- -----------
CASH - END OF PERIOD $ 6,007 $ 830
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash Paid During the Period For:
Interest $ 94,337 $ 191,437
=========== ===========
Income Taxes $ 44,251 $ 130,470
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
5
NOTES TO FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements of Women's Golf Unlimited, Inc.,
(the "Company") have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
reporting. In the opinion of management, all material adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six months ended June 29, 2003 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2003. The unaudited financial statements and related notes
are presented as permitted by Form 10-Q and do not contain certain information
included in the Company's annual financial statements and notes thereto. For
further information, refer to the Company's annual financial statements and
notes thereto included in the Company's annual report on Form 10-K for the
fiscal year ended December 31, 2002.
1) EARNINGS (LOSS) PER SHARE
Basic earnings per share ("EPS") excludes dilution and is computed by dividing
net income available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if stock options or other contracts to issue common
stock were exercised and resulted in the issuance of common stock that then
shared in the earnings of the Company. Diluted EPS is computed using the
treasury stock method when the effect of common stock equivalents would be
dilutive. The only reconciling item between the denominator used to calculate
basic EPS and the denominator used to calculate diluted EPS is the dilutive
effect of stock options issued to employees of the Company and other parties.
The Company has issued no other potentially dilutive common stock equivalents.
2) STOCK BASED COMPENSATION
In December 2002, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 148, Accounting for
Stock Based Compensation. SFAS No. 148 amends SFAS No. 123, to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
Statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method used in reported results. The Company has implemented SFAS No. 148. Due
to the insignificant effect on the financial statements, interim disclosure is
not presented.
NEW ACCOUNTING PRONOUNCEMENTS
In April 2003, the FASB issue SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under SFAS 133. The Statement is generally effective for contracts entered into
or modified after June 30, 2003 and for hedging relationships designated after
June 30, 2003 and should be applied prospectively. The Company is currently
evaluating SFAS 149 and has not yet determined the impact of adopting its
provisions.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with characteristics of both liabilities and equity. SFAS No. 150
requires certain freestanding
6
financial instruments, such as mandatorily redeemable preferred stock, to be
measured at fair value and classified as liabilities. The adoption of SFAS No.
150 is not expected to have a material effect on the Company's financial
position or results of operations.
INVENTORIES
Inventories are valued at the lower of cost, determined on the basis of the
first-in, first-out method, or market.
Inventories at June 29, 2003 and December 31, 2002 consisted of the following
components:
6/29/03 12/31/02
------- --------
Raw Materials $ 815,298 $ 673,565
Finished Goods 3,714,136 3,068,461
---------- ----------
$4,529,434 $3,742,026
========== ==========
SHORT-TERM BORROWINGS
The Company has a secured a revolving line of credit allowing a maximum credit
limit of $8,000,000, less 50% of the aggregate face amount of all outstanding
letters of credit, and subject to various borrowing bases through September 30,
2003. The availability of funds under this line of credit varies as it is based,
in part, on a borrowing base of 80% of eligible accounts receivable and 60% of
qualified inventory. Substantially all of the Company's assets are used as
collateral for the credit line. Interest rates are at prime plus one-quarter
percent, paid monthly; the interest rate was 4.25% as of June 29, 2003 and 4.5%
as of December 31, 2002. The Company's remaining availability on the line of
credit, as of June 29, 2003 was approximately $ 1,331,000. The Company is in the
process of negotiating a new line of credit.
The credit facility contains certain covenants, which, among other items,
require the maintenance of certain financial ratios including tangible net worth
and working capital. Any event of default under the credit facility permits the
lender to cease making additional loans there-under. The Company was in
compliance with all covenants and conditions of the facility as of June 29,
2003.
QUARTERLY ENDS
The Company reports its interim financial statements as of the Friday closest to
month-end of the quarter. Therefore, the interim quarters for fiscal 2003 will
end on March 30, 2003, June 29, 2003 and September 28, 2003. The Company reports
its year-end financial statements as of December 31.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net Sales for the three-months and six-months ended June 29, 2003 were
$3,568,676 and $6,342,322, respectively, compared to $3,914,338 and $ 7,537,133
for the same periods in 2002. Management attributes this 15.9% decrease for the
six-month period to the softness in the equipment industry caused by the general
economic slowdown and bad weather in parts of the country in the spring. The
Square Two brand was down 25.9% and the NancyLopezGolf brand was down 17.4% for
the six-months ended June 29, 2003. The Lady Fairway shoe brand has
7
increased sales of 26.2% for the six-months ended June 29, 2003. This increase
was the result of an entirely new marketing program highlighting improved
styling, retail price points and fit. Net sales for the three-month period ended
June 29, 2003 were 8.8% less than the same period in 2002. The Square Two brand
was down 9.3%, the NancyLopezGolf brand was up 1.3% and Lady Fairway was down
..6% for the three-months ended June 29, 2003.
Gross profit as a percentage of sales for the three-month and six-month periods
ended June 29, 2003 was 41.7% and 38.7%, respectively, as compared to 43.4% and
41.9% for the same periods in 2002. Management attributes this decrease to lower
sales volume and an effort by the company to increase sales by offering programs
that have lower average selling prices.
Selling expenses for the three-month and six-month periods ended June 29, 2003
were $599,979 and $1,132,867, respectively, compared to $686,005 and $ 1,347,272
for the same periods in 2002. The six-month decrease of approximately $214,000
is a result of a decrease in advertising, national shows expense as well as a
reduction in commissions, due to decreased sales, offset by an increase in
salaries. The three-month decrease of approximately $86,000 was due a reduction
of advertising and commissions, offset by an increase in salaries. The increase
in salaries is the result of adding an inside sales team.
General and Administrative expenses for the three-month and six-month periods
ended June 29, 2003 were $530,472 and $1,052,900, respectively, compared to
$574,860 and $1,134,097 the same periods in 2002. The three-month and six-month
decreases are mainly due to a reduction in salaries, professional and legal fees
as well as bad debt expense, offset by an increase in insurance and depreciation
expense.
Interest expense for the three-month and six-month periods ended June 29, 2003
was $51,307 and $101,322, respectively, compared to $74,660 and $146,628 for the
same periods in 2002. The average loan balance for the six-month period ended
June 29, 2003 was $4,682,256 compared to $4,817,287 for the same period in 2002.
For the three-months ended June 29, 2003, the average loan balance was
$4,146,171 compared to $4,028,059 for the same period in 2002. Interest rates
for the three-month and six-month periods ended June 29, 2003 are lower than the
same periods in 2002, therefore decreasing the interest paid on the term loan
and line of credit. In addition, in 2002 interest was paid on a promissory note
that was paid in full as of December 31, 2002.
Other income for the three-month and six-month periods ended June 29, 2003 was
$167,299 and $200,977 respectively compared to $187,910 and $223,017 for the
same periods in 2002. The three-month period ended June 29, 2003, other income
was $187,910 compared to $223,017 for the same period in 2002. This decrease is
mainly due to a reduction of royalty income from the Company's European
distributor.
The provision for income taxes for the three-month and six-month periods ended
June 29, 2003 was $201,223 and $158,173, respectively, compared to $217,246 and
$286,298 for the same periods in 2002. This decrease is mainly the result of
relatively consistent deferred tax rate applied to a lower net income.
The Company's net income before Cumulative Effect of Accounting Change for the
three-month and six-month periods ended June 29, 2003 was $273,528 and $211,722,
respectively compared to $332,565 and $463,165 for the same periods in 2002. The
decrease in net income before Cumulative Effect of Accounting change for the
three-months ended June 29, 2003 was a result of decreased net revenue as well
as decreased margins offset by reduced selling of approximately $86,000, general
and administrative expense of approximately $45,000 and interest of
approximately $24,000. The
8
decrease in net income before Cumulative Effect of Accounting change of
$251,443 for the six-months ended June 29, 2003 was a result of decreased net
revenue offset by a reduction of selling expense of approximately $214,000,
reduced general and administrative of approximately $81,000 and reduced interest
of approximately $45,000.
FINANCIAL CONDITION AND LIQUIDITY
The Company's working capital increased by $317,073 for the six-month period
ended June 29, 2003, compared to December 31, 2002. Current assets increased by
$1,386,725 and current liabilities increased $1,069,652. Accounts receivable
increased by approximately $538,000 and Inventory increased by $787,000, which
was typical for the Company due to the cyclical nature of the golf industry. In
addition, Prepaid expenses increased approximately $13,000. The short-term
borrowings of the Company increased by approximately $751,000. In addition,
accounts payable increased by approximately $196,000 and accrued expenses
increased approximately $276,000 for the six-month period ended June 29, 2003.
Cash used by operations was $566,791 for the six-month period ended June 29,
2003, compared to cash provided by operations of $927,907 for the same period
ended June 30, 2002. Cash provided by financing activities totaled $577,559 for
the six-months ended June 29, 2003, compared to cash used of $892,681 for the
same period ended June 20, 2002. During the six-month period ended June 29,
2003, cash used for the payment of equipment purchased was $8,312 compared
$42,113 for the same period ended June 30, 2002. Cash paid for interest charges
on short and long-term borrowing was $94,337 and $191,437 for the six-month
periods ended June 29, 2003 and June 30, 2002, respectively.
CRITICAL ACCOUNTING POLICIES
The Company's accounting policies and practices are described in Note 1 in the
Company's financial report on Form 10-K included in, "Summary of Significant
Account Policies." Application of the Company's accounting policies requires
judgments by management and incorporates expectations about future events. The
Company has established reserves and accruals for possible losses on collection
of accounts receivable as well as on obsolete inventory. Management uses all
available facts and circumstances in establishing such accruals or reserves.
CALCULATION OF ALLOWANCES FOR DOUBTFUL ACCOUNTS
Management reviews on a revolving basis a schedule listing each customer account
containing balances that are 90 or more days past due, and determines whether
collection of each outstanding balance is anticipated. If collection is
anticipated, no reserve for such account is established. If collection is
questionable, management applies a reserve of between 20% and 100% of the total
amount due. In determining whether to apply a reserve and if so, the amount of
such reserve, management draws on its knowledge of the progress of internal
collection efforts, the customer's payment history, and other information about
the customer. Management also applies a reserve of 2% of accounts receivable
that are up to 90 days past due.
CALCULATION OF RESERVES FOR OBSOLESCENCE
Periodically, management reviews all inventory for the purpose of evaluating
current reserves for obsolescence, which is determined on the basis of
historical and current sales of each product, inventory level, and other
factors. A reserve of between 10% and 90% of present book value is assigned for
all questionable inventory, to which is added an additional miscellaneous
amount.
9
Certain information in the preceding "Management's Discussion and Analysis of
Financial Condition and Results of Operations" constitutes forward-looking
information that involves certain risks and uncertainties.
ACCOUNTS RECEIVABLE
The Company carries its accounts receivable at cost less an allowance for
doubtful accounts. On a periodic basis, the Company evaluates its accounts
receivable and establishes an allowance for doubtful accounts based on a history
of past write-offs, collections and current credit conditions. Accounts are
written off as un-collectible on a case-by-case basis.
INVENTORIES
Inventories are valued at the lower of cost, determined on the basis of the
first-in, first-out method, or market. Inventories consist of materials, labor
and manufacturing overhead.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company periodically assessed the recoverability of the carrying amounts of
long-lived assets, including intangible assets. A loss is recognized when
expected undiscounted future cash flows are less than the carrying amount of the
asset. The impairment loss is the difference by which the carrying amount of the
asset exceeds its fair value.
CONTRACTUAL COMMITMENTS
The Company is obligated under various contractual commitments over the next
several years. Following is a summary of those commitments as of December 31,
2002:
GREATER
1 YEAR 1-3 YEARS THAN 3 YEARS
------ --------- ------------
Note Payable $ 50,000 $ $
Revolving Line of Credit 3,608,612
Obligation under Capitalized Lease 33,537 41,423
Rent 192,489 80,203
License Agreements 50,000
Royalties 236,000 454,000 300,000
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Within 90 days prior to the date of this Quarterly Report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer/Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based upon that evaluation, the
Chief Executive Officer/Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective. There are no significant
changes in the Company's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation.
Disclosure controls and procedures are the controls and other procedures of the
Company that are designed to ensure that the information required to be
disclosed by the Company in its reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and
10
procedures include, with limitation, controls and procedures designed to ensure
that information required to be disclosed by the Company, in its reports filed
under the Exchange Act is accumulated and communicated to the Company's
management, including the principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding disclosure.
The Company's exposure to market risks is limited to interest rate risks
associated with the variable interest rates on its revolving line of credit and
term loan. Changes in the interest rates affect the Company's earnings and cash
flows, but not the fair value of the Company's debt instruments. If the
indebtedness outstanding at December 31, 2002 were to remain constant, a 1.0%
increase in interest rates occurring on January 1, 2003 would result in an
increase in interest expense for the following 12 months of approximately
$36,586. There have been no material changes in the market risks faced by the
Company since December 31, 2002.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting was held on June 17, 2003. The only matter voted
upon at the meeting was the election of each of the following directors to a
one-year term of office:
DIRECTOR VOTES FOR VOTES WITHHELD
Douglas A. Buffington 2,823,216 10,270
James E. Jones 2,821,216 12,270
Mary Ann Jorgenson 2,823,916 9,570
Nancy Lopez 2,824,216 9,270
Richard M. Maurer 2,823,666 9,820
Robert L. Ross 2,823,466 10,020
Frederick B. Ziesenheim 2,823,916 9,570
There were no abstentions or broker no-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits listed on the attached Exhibit Index are filed as part of this
report.
(b) The Company filed no reports on for 8K during the quarter for which this
report is filed.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
WOMEN'S GOLF UNLIMITED, INC.
08/14/2003 /s/ Douglas A. Buffington
- ---------------- -------------------------
Dated By:
Douglas A. Buffington
Director, President, Chief
Financial Officer, Chief Operating
Officer and Treasurer
12
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT*
3.1 Amended and Second Restated Certificate of Incorporation of the
registrant dated June 28, 1991 (incorporated by reference to Exhibit
3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1991).
3.2 Certificate of Amendment to the Amended and Second Restated Certificate
of Incorporation of the registrant (incorporated by reference to
Exhibit 99.0 to the registrant's current report on Form 8-K reporting
the event dated June 12, 2001).
3.3 Amended and Restated By-laws of the registrant dated December 6, 1991
(incorporated by reference to Exhibit 3.2 of the registrant's Annual
Report on Form 10-K for the year ended December 31, 1991).
4.1 Common Stock Purchase Warrant in favor of Wesmar Partners dated
February 28, 1988 (incorporated by reference to Exhibit 4.4 of the
registrant's Registration Statement No. 33-37371 on Form S-3).
4.2 Common Stock Purchase Warrant in favor of Wesmar Partners dated
February 28, 1988 (incorporated by reference to Exhibit 4.5 of the
registrant's Registration Statement No. 33-37371 on Form S-3).
4.3 Stock Option Agreement between the registrant and Wesmar Partners dated
February 29, 1988 (incorporated by reference to Exhibit 4.6 of the
registrant's Registration Statement No. 33-37371 on Form S-3).
10.0 Loan and Security Agreement between the registrant and Midlantic Bank,
National Association dated December 29, 1994 (incorporated by reference
to Exhibit 99 of the registrant's Current Report on Form 8-K dated
December 26, 1994).
10.1 First Amendment to Loan and Security Agreement between the registrant
and Midlantic Bank, National Association made as of April 9, 1996
(incorporated by reference to Exhibit 10.1 of the registrant's Annual
Report on Form 10-K for the year ended December 31, 2000).
10.2 Second Amendment to Loan and Security Agreement between registrant and
PNC Bank, National Association as successor in interest of Midlantic
Bank, National Association made as of December 1, 1997 (incorporated by
reference to Exhibit 10.12 of the registrant's Annual Report on Form
10-K for the year ended December 31, 1997).
10.3 Fourth Amendment to Loan and Security Agreement between the registrant
and PNC Bank, National Association dated as of July 3l, 2000
(incorporated by reference to Exhibit 10.14 to the registrant's
Registration Statement No. 333-47908 on Form S-4).
10.4 Fifth Amendment to Loan and Security Agreement between the registrant
and PNC Bank, National Association made of January 3, 2001
(incorporated by reference to Exhibit 10.4 of the registrant's Annual
Report on Form 10-K for the year ended December 31, 2000).
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT*
10.5 Sixth Amendment to Loan and Security Agreement between the registrant
and PNC Bank, National Association made as of August 13, 2001
(incorporated by reference to Exhibit 10.20 of the registrant's
Quarterly Report on Form 10-Q for the quarter ended September 28,
2001).
10.6 Replacement Promissory Note of the registrant in favor of James E.
Jones dated December 29, 2000 and letter agreement in connection with
same (incorporated by reference to Exhibit 10.6 of the registrant's
Annual Report on Form 10-K for the year ended December 31, 2001).
10.7 Lease between the registrant and Kobrun Investments, III, L.L.C. dated
August 30, 2001 (incorporated by reference to Exhibit 10.7 of the
registrant's Annual Report on Form 10-K for the year ended December 31,
2001).
10.8 Amended and Restated Licensing Agreement between Ladies Professional
Golf Association and the registrant dated January 1, 1999 (incorporated
by reference to Exhibit 10.2 of the registrant's Annual Report on Form
10-K for the year ended December 31, 1999).
10.9 Endorsement Agreement between the registrant and Kathy Whitworth dated
October 13, 1999 (incorporated by reference to Exhibit 10.13 to the
registrant's Annual Report on Form 10-K for the year ended December 31,
1999).
10.10 Licensing Agreement between Nancy Lopez Enterprises, Inc. and the
registrant made as of July 31, 2000 (incorporated by reference to
Exhibit 10.10 of the registrant's Annual Report on Form 10-K for the
year ended December 31, 2000).
10.11 License Agreement between the registrant and Raymond Lanctot Ltee/Ltd.
dated June 28, 1999 (incorporated by reference to Exhibit 10.12 to the
registrant's Annual Report on Form 10-K for the year ended December 31,
1999).
10.12 Asset Purchase Agreement among the registrant, APGC Holdings Company,
LLC and The Arnold Palmer Golf Company dated July 31, 2000
(incorporated by reference to Exhibit 2.0 to the registrant's Current
Report on Form 8-K reporting the event dated July 31, 2000).
10.13 Agreement and Plan of Reorganization, dated as of June 22, 2000, among
the registrant, S2 Golf Acquisition Corp., Ladies Golf Equipment
Company, Inc., James E. Jones and Brian Christopher (incorporated by
reference to Exhibit 2.0 of the registrant's Registration Statement No.
333-47908 on Form S-4).
10.14 1992 Stock Plan for Independent Directors of S2 Golf Inc. dated
December 29, 1992 (incorporated by reference to Exhibit 10.11 to the
registrant's Annual Report on Form 10-K for the year ended December 31,
1992).
10.15** 1998 Employee Stock Plan of the registrant (incorporated by reference
to Exhibit 10.15 to the registrant's Annual Report on Form 10-K for the
year ended December 31, 2000).
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT*
10.16** Agreement between the registrant and Randy A. Hamill dated January 2,
1997 (incorporated by reference to Exhibit 10.10 to the registrant's
Annual Report on Form 10-K for the year ended December 31, 1997).
10.17** Employment Agreement between the registrant and Douglas A. Buffington,
made April 3, 2001 and effective as of January 1, 2001 (incorporated by
reference to Exhibit 10.17 of the registrant's Quarterly Report on Form
10-Q for the quarter ended March 30, 2001).
10.18** Consulting Services Agreement between the registrant and MR &
Associates made as of December 15, 2000, effective as of January 1,
2000 (incorporated by reference to Exhibit 10.18 of the registrant's
Annual Report on Form 10-K for the year ended December 31, 2000).
10.19** Employment Agreement among the registrant, S2 Golf Acquisition Corp.
and James E. Jones dated as of January 1, 2001 (incorporated by
reference to Exhibit 10.19 of the registrant's Annual Report on Form
10-K for the year December 31, 2000).
10.20 Agreement and Plan of Merger between the registrant and its
wholly-owned subsidiary S2 Golf Acquisition Corp. dated as of June 15,
2001 (incorporated by reference to Exhibit 10.20 of the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).
10.21 Sixth Amendment to Loan and Security Agreement between the
registrant and PNC Bank, National Association made as of August 13,
2001 (incorporated by reference to Exhibit 10.21 of the registrant's
Quarterly Report on Form 10-Q for the quarter ended September 28, 2001)
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a)/15D-14(a)
31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a)/15D-14(a)
32 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350.
32 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350.
* In the case of incorporation by reference to documents filed by the
registrant under the Exchange Act, the registrant's file number under the
Act is 0-14146.
** Management contract or management compensatory plan or arrangement.