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UNITED STATES
SECURITIES AND FORM 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 quarterly period ended April 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
--------- ----------
Commission file number 0-19000
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JLM COUTURE, INC.
- ----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3337553
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 West 37th Street, New York, New York 10018
- ----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 921-7058
- ----------------------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
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]
The number of shares outstanding of the issuer's common
stock, par value $.0002 per share, as of June 20, 2004 was
2,334,530.
Page 1 of 22.
The Exhibit Index is located on Page 20-21.
JLM COUTURE, INC.
INDEX
Page
----
Part I. Financial Information:
Item 1. Financial Statements.
Independent Accountants Report 5
Condensed Consolidated Balance Sheets at
April 30, 2004 (unaudited) and
October 31, 2003 6-7
Condensed Consolidated Statements of Income
for the Three and Six Months ended April 30,
2004 and 2003 (unaudited) 8
Condensed Consolidated Statements of Cash Flows
for the Six Months ended April 30,
2004 and 2003 (unaudited) 9-10
Notes to Condensed Consolidated
Financial Statements 11-15
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 16-18
Item 3. Quantitative and Qualitative Disclosures
Disclosures About Market Risk. 19
Item 4. Controls and Procedures. 19
Item 5. Other Information 20
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K. 20
Signature 21
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This report includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. For example,
statements included in this report regarding the Company's
financial position, business strategy and other plans and
objectives for future operations, and assumptions and predictions
about future product demand, supply, manufacturing, costs,
marketing and pricing factors are all forward-looking statements.
When the Company uses words like "intend," "anticipate,"
"believe," "estimate," "plan" or "expect," it is making forward-
looking statements. The Company believes that the assumptions and
expectations reflected in such forward-looking statements are
reasonable, based on information available to it on the date
hereof, but the Company cannot assure you that these assumptions
and expectations will prove to have been correct or that the
Company will take any action that it may presently be planning.
The Company is not undertaking to publicly update or revise any
forward-looking statement if it obtains new information or upon
the occurrence of future events or otherwise.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To JLM Couture, Inc.
We have reviewed the accompanying condensed consolidated
balance sheet of JLM Couture, Inc. and Subsidiaries as of April
30, 2004, and the related condensed consolidated statements of
income for the three-month and six-month periods ended April 30,
2004 and 2003 and the related condensed consolidated statements
of cash flows for the six-months periods ending April 30, 2004
and 2003. These financial statements are the responsibility of
the Company's management.
We conducted our reviews in accordance with standards of the
Public Company Accounting Oversight Board (United States). A
review of interim financial information consists principally of
applying analytical procedures and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with standards of the Public Company Accounting Oversight Board,
the objective of which is the expression of an opinion regarding
the condensed consolidated financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the condensed consolidated
interim financial statements referred to above for them to be in
conformity with United States generally accepted accounting
principles.
We have previously audited, in accordance with standards of
the Public Company Accounting Oversight Board, the consolidated
balance sheet as of October 31, 2003, and the related
consolidated statements of income, shareholders' equity, and cash
flows for the year then ended (not presented herein), and in our
report dated January 21, 2004, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of October 31, 2003 is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it is derived.
GOLDSTEIN GOLUB KESSLER LLP
New York, New York
June 17, 2004
PART I. FINANCIAL INFORMATION
JLM COUTURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
April 30, October 31,
2004 2003
--------- ---------
(Unaudited)
Current assets:
Cash and cash equivalents $ 669,720 $ 1,219,063
Accounts receivable, net of allowance
for doubtful accounts of $301,000 4,700,120 3,610,523
Inventories, net 4,504,180 4,070,192
Prepaid expenses and other current
assets 384,894 325,283
Deferred income taxes 9,800 20,000
Prepaid taxes - 76,188
---------- ----------
Total current assets 10,268,714 9,321,249
Equipment and leasehold improvements, net
of accumulated depreciation and
amortization of $572,970 at April 30,
2004 and $515,333 at October 31, 2003 637,044 677,357
Goodwill 211,272 211,272
Samples, net of accumulated amortization
of $226,336 at April 30, 2004 and
$108,190 at October 31, 2003 196,774 247,120
Other Assets 94,416 94,416
---------- ----------
Total Assets $11,408,220 $10,551,414
========== ==========
See accompanying notes to condensed consolidated financial statements.
JLM COUTURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, October 31,
2004 2003
---------- ----------
(Unaudited)
Current liabilities:
Accounts payable $ 1,564,332 $ 1,193,570
Accrued expenses and
other current liabilities 742,326 917,630
Income taxes payable 187,812 -
---------- ----------
Total current liabilities 2,494,470 2,111,200
Deferred income taxes 615,000 615,000
---------- ----------
Total liabilities 3,109,470 2,726,200
---------- ----------
Shareholders' equity:
Preferred stock - $.0001 par value,
authorized 1,000,000 shares; issued
and outstanding- none
Common stock - $.0002 par value,
authorized 10,000,000 shares;
issued 2,344,530 at April 30,
2004 and October 31, 2003;
Outstanding 1,912,694 at April 30,
2004 and October 31, 2003 465 465
Additional paid-in capital 3,679,542 3,679,542
Retained earnings 6,247,209 5,879,980
---------- ----------
9,927,216 9,559,987
Less: Deferred compensation (205,625) (248,750)
Notes receivable and accrued
interest (265,960) (317,960)
Treasury stock at cost:
431,836 shares at April 30,
2004 and October 31, 2003 (1,142,968) (1,142,968)
Accumulated other comprehensive loss (13,913) (25,095)
---------- ----------
Total shareholders' equity 8,298,750 7,825,214
---------- ----------
Total Liabilities and
Shareholders' Equity $11,408,220 $10,551,414
========== ==========
See accompanying notes to condensed consolidated financial statements.
JLM COUTURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS
ENDED APRIL 30, 2004 AND 2003
(Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
2004 2003 2004 2003
-------- ------- ------ -------
Net sales $7,685,109 $8,021,560 $13,005,805 $13,675,508
Cost of goods sold 4,673,257 4,713,779 7,938,884 7,954,475
--------- --------- ---------- ----------
Gross profit 3,011,852 3,307,781 5,066,921 5,721,033
Selling, general and
administrative
expenses 2,414,247 2,620,927 4,419,418 4,686,541
--------- --------- ---------- ----------
Operating income 597,605 686,854 647,503 1,034,492
Interest Income, net of
interest expense of $3,696
and $4,961 for 2004 and
2003, respectively 1,078 1,131 4,726 3,998
--------- --------- ---------- ----------
Income before provision
for income taxes 598,683 687,985 652,229 1,038,490
Provision for income
taxes 263,000 295,000 285,000 445,000
--------- --------- ---------- ----------
Net income $ 335,683 $ 392,985 $ 367,229 $ 593,490
========= ========= ========== ==========
Net income per weighted
average number of common
shares:
Basic $ 0.18 $ 0.21 $ 0.19 $ 0.31
========= ========= ========== ==========
Diluted $ 0.17 $ 0.19 $ 0.19 $ 0.29
========= ========= ========== ==========
Weighted average number
of common shares outstanding:
Basic 1,912,694 1,908,999 1,912,694 1,920,708
========= ========= ========== ==========
Diluted 1,968,294 2,060,727 1,970,737 2,069,912
========= ========= ========== ==========
See accompanying notes to condensed consolidated financial statements.
JLM COUTURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
APRIL 30, 2004 and 2003
(Unaudited)
2004 2003
--------- -------
Cash Flows from Operating Activities:
Net income $ 367,229 $593,490
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation 57,637 44,585
Accrued interest on note receivable (1,250) -
Deferred compensation 43,125 43,125
Provision for doubtful accounts
and trade discounts - 50,000
Changes in operating assets and liabilities:
Increase in accounts receivable (1,089,597) (1,587,912)
(Increase) decrease in inventories (433,988) 105,046
(Increase) decrease in prepaid expenses
and other current assets (59,611) 152,958
Decrease in prepaid taxes 76,188 -
Decrease (increase) in samples 50,346 (542)
Decrease (increase) in deferred income taxes 10,200 (44,875)
Increase in accounts payable 370,762 630,248
Decrease in accrued expenses and
other current liabilities (175,304) (219,203)
Increase (decrease) in taxes payable 187,812 (175,200)
---------- ----------
Net cash used in Operating Activities (596,451) (408,280)
---------- ----------
Cash Flows From Investing Activities:
Purchase of property and equipment (17,324) (154,822)
Net proceeds from notes receivable 53,250 -
---------- ----------
Net cash provided by (used in) Investing
Activities 35,926 (106,947)
---------- ----------
Cash Flows from Financing Activities:
Purchase of treasury stock - (214,261)
---------- ----------
Net cash used in Financing Activities - (214,261)
---------- ----------
Foreign currency translation 11,182 -
---------- ----------
Net decrease in cash (549,343) (729,488)
Cash, beginning of period 1,219,063 958,810
---------- ----------
Cash, end of period $ 669,720 $ 229,322
========== ==========
See accompanying notes to condensed consolidated financial statements.
JLM COUTURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
APRIL 30, 2004 and 2003
(Unaudited)
Supplemental Disclosures of Cash Flow Information:
2004 2003
------- -------
Cash paid during the period for:
Interest $12,841 $ 9,360
======= =======
Income taxes - $520,000
======= =======
See accompanying notes to condensed consolidated financial
statements.
JLM COUTURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The condensed consolidated balance sheet as of April 30,
2004, the condensed consolidated statements of income for the
three and six month periods ended April 30, 2004 and 2003 and the
condensed consolidated statements of cash flows for the six month
periods ended April 30, 2004 and 2003 have been prepared by the
Company, without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position,
results of operations and cash flows, as of April 30, 2004 and
for all periods presented have been made. The results of
operations are not necessarily indicative of the results to be
expected for the full year.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted. It
is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's Form 10-K/A for its fiscal year ended
October 31, 2003, which was filed with the Securities and
Exchange Commission.
Sales for the three and six month period ended April 30,
2003, have been reclassified to include shipping charges billed
to customers.
The Company has elected to apply Accounting Principles Board
("APB") Opinion No. 25, Accounting for Stock Issued to Employees,
and related interpretations in accounting for its stock options
issued to employees (intrinsic value) and has adopted the
disclosure-only provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation. Had the Company elected to recognize compensation
cost based on the fair value of the options granted at the grant
date as prescribed by SFAS No. 123, the Company's net income and
income per common share would have been as follows:
JLM COUTURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Three months ended April 30, 2004 2003
- ----------------------------------------------------------------
Net income - as reported $335,683 $392,985
Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax effects 11,475 14,416
- ----------------------------------------------------------------
Net income - pro forma $334,208 $378,569
================================================================
Basic income per share - as reported $ 0.18 $ 0.21
================================================================
Basic income per share - pro forma $ 0.17 $ 0.20
================================================================
Diluted income per share - as reported $ 0.17 $ 0.19
================================================================
Diluted income per share - pro forma $ 0.16 $ 0.18
================================================================
Six months ended April 30, 2004 2003
- ----------------------------------------------------------------
Net income - as reported $367,229 $593,490
Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax effects 27,991 23,790
- ----------------------------------------------------------------
Net income - pro forma $339,238 $569,700
================================================================
Basic income per share - as reported $ 0.19 $ 0.31
================================================================
Basic income per share - pro forma $ 0.18 $ 0.30
================================================================
Diluted income per share - as reported $ 0.19 $ 0.29
================================================================
Diluted income per share - pro forma $ 0.17 $ 0.28
================================================================
JLM COUTURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2. Inventories
Inventories are stated at the lower of cost (first in, first
out) or market and include material, labor and overhead.
Inventories consisted of the following:
April 30, 2004 October 31, 2003
-------------- ----------------
Raw materials $3,206,957 $3,319,321
Work-in-process 691,259 180,816
Finished goods 605,964 570,055
--------- ---------
$4,504,180 $4,070,192
========= =========
Raw materials are shown net of $150,000 obsolescence reserve
at April 30, 2004 and October 31, 2003.
Note 3. Revolving Line of Credit
The Company has an available line of credit of up to
$1,250,000 with a financial institution. Borrowings are
collateralized by the Company's cash, accounts receivable,
securities, deposits and general intangibles. At April 30, 2004
and October 31, 2003 the Company had no outstanding balances
under the revolving line of credit.
JLM COUTURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Critical Accounting Policies
The preparation of our condensed consolidated financial
statements in conformity with accounting principles generally
accepted in the United States of America requires us to make
estimates and judgments that affect the reported amounts of
assets and liabilities, net sales and expenses, and the related
disclosures. We base our estimates on historical experience, our
knowledge of economic and market factors and various other
assumptions that we believe to be reasonable under the
circumstances. Actual results may differ from these estimates
under different assumptions or conditions. We believe the
following critical accounting policies are affected by
significant estimates, assumptions and judgments used in the
preparation of our condensed consolidated financial statements.
Allowances for Doubtful Accounts
We maintain an allowance for doubtful accounts for losses
that we estimate will arise from our customers' inability to make
required payments. We make our estimates of the uncollectability
of our accounts receivable by analyzing historical bad debts,
specific customer creditworthiness and current economic trends.
The allowance for doubtful accounts was $301,000 at April 30,
2004 and October 31, 2003.
Inventory Valuation
We regularly assess the valuation of our inventories and
write down those inventories which are obsolete or in excess of
our forecasted usage to their estimated realizable value. Our
estimates of realizable value are based upon our analyses and
assumptions including, but not limited to, forecasted sales
levels by product, expected product lifecycle, product
development plans and future demand requirements. If market
conditions are less favorable than our forecasts or actual demand
JLM COUTURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
from our customers is lower than our estimates, we may be
required to record additional inventory write-downs. If demand is
higher than expected, we may sell our inventories that had
previously been written down. At April 30, 2004 and October 31,
2003 we maintained an obsolescence reserve of $150,000.
Impairment of Goodwill
In determining the recoverability of goodwill, assumptions
must be made regarding estimated future cash flows and other
factors to determine the fair value of the asset. If these
estimates or their related assumptions change in the future, the
Company may be required to record charges not previously
recorded. Effective November 1, 2002, the Company adopted
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets". Under the provisions of SFAS No.
142, the cost of certain intangibles will no longer be subject to
amortization but was reviewed for potential impairment during the
first six months of Fiscal 2004 and on an annual basis
thereafter. The Company concluded, as of April 30, 2004, that
there was no impairment to goodwill, and, pursuant to SFAS 142,
goodwill is no longer being amortized.
Revenue Recognition
Revenue is recognized when persuasive evidence of an
arrangement exists, the product has been delivered, the rights
and risks of ownership have passed to the customer, the price is
fixed and determinable, and collection of the resulting
receivable is reasonably assured. For arrangements which include
customer acceptance provisions, revenue is not recognized until
the terms of acceptance are met. Reserves for sales returns and
allowances are estimated and provided for at the time revenue is
recognized.
JLM COUTURE, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Six months ended April 30, 2004 as compared to six months
ended April 30, 2003.
For the first six months of the Company's fiscal year ending
October 31, 2004 ("Fiscal 2004"), revenues decreased to
$13,005,805 from $13,675,508, a decrease of 5% over the same
period a year ago. The Company believes the decrease was due to
reduced demand for the Company's products in the current economic
environment as there is a nationwide trend towards simpler
weddings. In addition, the temporary increase in the number of
weddings subsequent to September 11, 2001 has subsided. Also,
brides-to-be purchase their wedding gowns 10 to 12 months in
advance of their wedding. As such, the decrease in sales is
reflective of the slower economy of one year ago. Gross profit
as a percentage of sales decreased to 39% from 42%. The lower
margin was a result of the current year's product mix which
included a higher percentage of lower margin bridesmaids' gowns
as compared to last year when the Company sold more bridal gowns.
This product mix reduced gross margin by 1.5%. Additionally,
despite the reduced sales level, production salaries and other
costs were $225,000 higher than last year as the Company added a
new designer and associated staff in the latter part of Fiscal
2003. Selling, general and administrative expenses were
$4,419,418, a reduction of $267,123 from last year's $4,686,541
primarily due to a charge of $208,000 for the canceling of
certain stock options in the prior period.
For three months ended April 31, 2004 as compared to three
months ended April 31, 2003.
For the quarter ended April 30, 2004 ("Fiscal 2004"),
revenues decreased to $7,685,109 from $8,021,560, a decrease of
4% over the same period a year ago. This decrease was due to
reduced demand for the Company's products in the current economic
environment as there is a nationwide trend towards simpler
weddings. In addition, the temporary increase in the
JLM COUTURE, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(Continued)
number of weddings subsequent to September 11, 2001 has subsided.
Also, brides-to-be purchase their wedding gowns 10 to 12 months
in advance of their wedding. As such, the decrease in sales is
reflecting of the slower economy of one year ago. Gross profit as
a percentage of sales decreased to 39% from 41%. The lower margin
was a result of the current year's product mix which included a
higher percentage of lower margin bridesmaids gowns as compared
to last year when the Company sold more bridal gowns. This
product mix reduced gross margin by 2.5%. Additionally, despite
the reduced sales level, production salaries and other costs were
$100,000 higher than last year as the Company added a new
designer and associated staff in the latter part of Fiscal 2003.
Selling, general and administrative expenses were $2,414,247 a
reduction of $206,680 from $2,620,927 in the second quarter of
Fiscal 2003. This is primarily due to a charge of $208,000
for the canceling of certain stock options in the prior period.
Liquidity and Capital Resources
The Company's working capital increased to $7,798,244 at
April 30, 2004 from $7,210,049 at October 31, 2003. This increase
was due primarily to the net income for the period as adjusted for
non cash charges to income such as depreciation and amortization of
property and equipment and deferred compensation.
During the six months ended April 30, 2004, the Company used
$596,451 for operations as compared to $408,280 of cash in the
year earlier primarily due to the decrease in net income. Cash
provided by investing activities was $35,926 in the current
period compared to cash used of $106,947 a year earlier. Last
year, the Company expanded its production facilities and the
change is primarily due to the purchase of property and equipment
for the expansion in the prior period. The Company did not use any
cash for financing activities in the current six month period, as
compared to last year when the Company repurchased $214,261 of
treasury stock.
Safe Harbor Statement
Statements which are not historical facts, including
statements about the Company's confidence and strategies and its
JLM COUTURE, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(Continued)
expectations about new and existing products, technologies and
opportunities, market and industry segment growth, demand and
acceptance of new and existing products are forward looking
statements that involve risks and uncertainties. These include,
but are not limited to, product demand and market acceptance
risks; the impact of competitive products and pricing; the
results of financing efforts; the loss of any significant
customers of any business; the effect of the Company's accounting
policies; the effects of economic conditions and trade, legal,
social, and economic risks, such as import, licensing, and trade
restrictions; the results of the Company's business plan and the
impact on the Company of its relationship with its lenders.
JLM COUTURE, INC. AND SUBSIDIARIES
Item 3. Quantitative and Qualitative Disclosures about Market
Risk.
Not applicable.
Item 4. Controls and Procedures.
The Company maintains "disclosure controls and procedures,"
as such term is defined in Rules 13a-14(c) and 15d-14(c)of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that are designed to ensure that information required to be
disclosed in its reports, pursuant to the Exchange Act, is
recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to its management,
including its Chief Executive Officer and Principal Accounting
Officer, as appropriate, to allow timely decisions regarding the
required disclosures. In designing and evaluating the disclosure
controls and procedures, management has recognized that any
controls and procedures, no matter how well designed and
operated, can provide only reasonable assurances of achieving the
desired control objectives, and management necessarily is
required to apply its judgment in evaluating the cost benefit
relationship of possible controls and procedures.
The Company's Chief Executive Officer and Principal
Accounting Officer (its principal executive officer and principal
accounting officer, respectively) have evaluated the
effectiveness of its "disclosure controls and procedures" as of
the end of the period covered by this Quarterly Report on Form 10-
Q. Based on their evaluation, the principal executive officer and
principal financial officer concluded that its disclosure
controls and procedures are effective. There were no significant
changes in its internal controls or in other factors that could
significantly affect these controls subsequent to the date the
controls were evaluated.
JLM COUTURE, INC. AND SUBSIDIARIES
Item 5. Other Information.
In April 2004, Jim Hjelm informed the Company that he wished
to resign and work for another bridal manufacturer. Mr. Hjelm
had not been involved in the management of the Company for over
ten years. The Company believes Mr. Hjelm's resignation will
have no adverse effect on the Company since Mr. Hjelm had not
designed any bridal or bridesmaids lines for the Company for
several years. Mr. Hjelm's contract with the Company expired in
February 2001. Mr. Hjelm's primary responsibility at the Company
was to represent the Jim Hjelm collection in the marketplace from
time to time. The Company owns the federally registered
trademarks "Jim Hjelm", "Jim Hjelm, A Private Collection" and
"Jim Hjelm Occasions", and is committed to continuing to support
the Jim Hjelm brand name in the marketplace.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
--------
3.1 Certificate of Incorporation of the
Company as amended dated December 30, 1994,
incorporated by reference to Exhibit 3.1 of the
Company's annual Report on Form 10-KSB filed for
its fiscal year ended October 31, 1995 ("1995 10-
K").
3.2 The Company's By-Laws are incorporated
by reference to Exhibit 3.03 of Registration
Statement No. 33-10278 NY filed on Form S-18
("Form S-18").
31.1 Certification pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Certification pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32.1 Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
32.2 Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
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.
JLM COUTURE, INC.
Registrant
By:/s/Joseph L. Murphy
-------------------------
Joseph L. Murphy,
President
(Duly authorized officer)
Dated: June 21, 2004