Attached files
file | filename |
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EX-10.1 - AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT - SIGNATURE EYEWEAR INC | ex10-1_16754.htm |
EX-31.1 - EXECUTIVE OFFICER CERTIFICATION - SIGNATURE EYEWEAR INC | ex31-1_16754.htm |
EX-10.2 - LICENSE AGREEMENT - SIGNATURE EYEWEAR INC | ex10-2_16754.htm |
EX-32.1 - EXECUTIVE OFFICER CERTIFICATION - SIGNATURE EYEWEAR INC | ex32-1_16754.htm |
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
quarterly period ended January 31, 2010
OR
o
|
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 0-23001
SIGNATURE
EYEWEAR, INC.
(Exact
Name of Registrant as Specified in its Charter)
California
(State
or Other Jurisdiction of
Incorporation or
Organization)
|
95-3876317
(I.R.S.
Employer
Identification
No.)
|
498
North Oak Street
Inglewood,
California 90302
(Address
of Principal Executive Offices)
(310)
330-2700
(Registrant’s
Telephone Number, Including Area Code)
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by checkmark whether the registrant: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (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. ý
Yes ¨ No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer o
|
Accelerated
Filer ¨
|
Non-accelerated
Filer o
(Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). ¨
Yes ý No
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 6,955,639 shares issued and
outstanding as of March 1, 2010.
SIGNATURE
EYEWEAR, INC.
INDEX
TO FORM 10-Q
PART
I
|
FINANCIAL
INFORMATION
|
Page
|
Item
1
|
Financial
Statements
|
|
Balance
Sheets
|
3 | |
Statements
of Income
|
5 | |
Statements
of Cash Flows
|
6 | |
Notes
to the Financial Statements
|
7 | |
Item
2
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
11 |
Item
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
13 |
Item
4
|
Controls
and Procedures
|
14 |
PART
II
|
OTHER
INFORMATION
|
14 |
Item
1
|
Legal
Proceedings
|
14 |
Item
1A
|
Risk
Factors
|
14 |
Item
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
14 |
Item
3
|
Defaults
upon Senior Securities
|
14 |
Item
4
|
Removed
and Reserved
|
14 |
Item
5
|
Other
Information
|
15 |
Item
6
|
Exhibits
|
15 |
References
in this Report to the “Company,” “Signature,” “we” or “us” refer to Signature
Eyewear, Inc.
- 2
-
PART
I.
FINANCIAL
INFORMATION
Item
1. Financial Statements
SIGNATURE
EYEWEAR, INC
BALANCE
SHEETS
AT
JANUARY 31, 2010 (UNAUDITED)
AT
OCTOBER 31, 2009 (AUDITED)
ASSETS
|
||||||||
January
31,
|
October
31,
|
|||||||
2010
|
2009
|
|||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 398,662 | $ | 431,037 | ||||
Accounts
receivable - trade, net of allowance for doubtful accounts of
$42,163
|
2,788,890 | 2,565,125 | ||||||
Inventory
|
3,841,218 | 3,843,793 | ||||||
Promotional
products and materials
|
180,142 | 209,847 | ||||||
Prepaid
expenses and other current assets
|
345,433 | 263,594 | ||||||
Deferred
income taxes
|
376,500 | 376,500 | ||||||
Total
current assets
|
7,930,845 | 7,689,896 | ||||||
Property and equipment,
net
|
328,228 | 313,324 | ||||||
Deposits
and other assets
|
104,000 | 250,500 | ||||||
Deferred
income taxes
|
2,600,700 | 2,600,700 | ||||||
Total
assets
|
$ | 10,963,773 | $ | 10,854,420 |
The
accompanying notes are an integral part of these financial
statements.
- 3
-
SIGNATURE
EYEWEAR, INC
BALANCE
SHEETS
AT
JANUARY 31, 2010 (UNAUDITED)
AT
OCTOBER 31, 2009 (AUDITED)
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
January
31,
|
October
31,
|
|||||||
2010
|
2009
|
|||||||
Current
liabilities
|
||||||||
Accounts
payable - trade
|
$ | 3,558,698 | $ | 3,532,159 | ||||
Accrued
expenses and other current liabilities
|
1,451,173 | 1,538,516 | ||||||
Current
portion of long-term debt
|
415,000 | 415,000 | ||||||
Total
current liabilities
|
5,424,871 | 5,485,675 | ||||||
Long-term debt, net of
current portion
|
3,832,500 | 3,805,000 | ||||||
Total
liabilities
|
9,257,371 | 9,290,675 | ||||||
Commitments
and contingencies
|
||||||||
Shareholders’
equity
|
||||||||
Preferred
stock, $0.001 par value
|
||||||||
5,000,000
shares authorized
|
||||||||
Series
A 2% convertible preferred stock, $0.001 par value; liquidation
preference (approximately $919,000 and $915,000 at January 31, 2010 and
October 31, 2009, respectively)
|
||||||||
1,360,000
shares authorized
|
||||||||
1,200,000
shares issued and outstanding
|
1,200 | 1,200 | ||||||
Common
stock, $0.001 par value
|
||||||||
30,000,000
shares authorized
|
||||||||
6,955,639
shares issued and outstanding
|
6,956 | 6,956 | ||||||
Additional
paid-in capital
|
15,656,812 | 15,656,812 | ||||||
Accumulated
deficit
|
(13,958,566 | ) | (14,101,223 | ) | ||||
Total
shareholders’ equity
|
1,706,402 | 1,563,745 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 10,963,773 | $ | 10,854,420 |
The
accompanying notes are an integral part of these financial
statements.
- 4
-
SIGNATURE
EYEWEAR, INC.
STATEMENTS
OF INCOME
FOR
THE THREE MONTHS ENDED JANUARY 31, 2010 (UNAUDITED)
AND
JANUARY 31, 2009 (UNAUDITED)
2010
|
2009
|
|||||||
Net
sales
|
$ | 5,168,880 | $ | 5,959,355 | ||||
Cost
of sales
|
1,920,797 | 2,110,716 | ||||||
Gross
profit
|
3,248,083 | 3,848,639 | ||||||
Operating
expenses
|
||||||||
Selling
|
1,905,636 | 2,138,817 | ||||||
General
and administrative
|
1,108,591 | 1,424,125 | ||||||
Depreciation
and amortization
|
44,929 | 34,828 | ||||||
Total
operating expenses
|
3,059,156 | 3,597,770 | ||||||
Income
from operations
|
188,927 | 250,869 | ||||||
Interest
expense
|
(45,835 | ) | (51,043 | ) | ||||
Income
before taxes
|
143,092 | 199,826 | ||||||
Income
taxes
|
435 | 1,081 | ||||||
Net
income
|
142,657 | 198,745 | ||||||
Preferred
stock dividend
|
$ | (4,554 | ) | $ | (4,464 | ) | ||
Net
income available to common shareholders
|
$ | 138,103 | $ | 194,281 | ||||
Basic
earnings per share
|
$ | 0.02 | $ | 0.03 | ||||
Diluted
earnings per share
|
$ | 0.02 | $ | 0.02 | ||||
Weighted-average
common shares
|
||||||||
outstanding
- Basic
|
6,955,639 | 6,955,639 | ||||||
Weighted-average
common shares
|
||||||||
outstanding
- Diluted
|
8,327,761 | 8,300,776 |
The
accompanying notes are an integral part of these financial
statements.
- 5
-
SIGNATURE
EYEWEAR, INC
STATEMENTS
OF CASH FLOWS
FOR
THE THREE MONTHS ENDED JANUARY 31, 2010 (UNAUDITED)
AND
JANUARY 31, 2009 (UNAUDITED)
2010
|
2009
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
$ | 142,657 | $ | 198,745 | ||||
Adjustments
to reconcile net income to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
44,929 | 34,828 | ||||||
(Increase)
decrease in:
|
||||||||
Accounts
receivable - trade
|
(223,765 | ) | (754,105 | ) | ||||
Inventories
|
2,575 | 344,458 | ||||||
Promotional
products and materials
|
29,705 | (73,489 | ) | |||||
Prepaid
expenses and other current assets
|
(81,839 | ) | 78,069 | |||||
Increase
(decrease) in:
|
||||||||
Accounts
payable - trade
|
26,539 | (58,581 | ) | |||||
Accrued
expenses and other current liabilities
|
(87,343 | ) | (172,156 | ) | ||||
Net
cash used in operating activities
|
(146,542 | ) | (402,231 | ) | ||||
Cash
flows from investing activities
|
||||||||
Purchase
of property and equipment
|
(59,833 | ) | (31,045 | ) | ||||
Deposits
and other assets
|
146,500 | (145 | ) | |||||
Net
cash provided by (used in) investing activities
|
86,667 | (31,190 | ) | |||||
Cash
flows from financing activities
|
||||||||
Net
increase in lines of credit
|
100,000 | 550,000 | ||||||
Payments
on short-term debt
|
— | — | ||||||
Payments
on long-term debt
|
(72,500 | ) | (72,500 | ) | ||||
Borrowings
on long-term debt
|
— | — | ||||||
Net
cash provided by financing activities
|
27,500 | 477,500 | ||||||
|
||||||||
Net
(decrease) increase in cash and cash equivalents
|
(32,375 | ) | 44,079 | |||||
Cash
and cash equivalents, beginning of period
|
431,037 | 305,628 | ||||||
Cash
and cash equivalents, end of period
|
$ | 398,662 | $ | 349,707 | ||||
Supplemental
disclosures of cash flow information
|
||||||||
Interest
paid
|
$ | 23,542 | $ | 33,759 | ||||
Income
taxes paid
|
$ | 435 | $ | 1,081 |
The
accompanying notes are an integral part of these financial
statements.
- 6
-
NOTES
TO FINANCIAL STATEMENTS
(Information
as of January 31, 2010 and for the three months ended January 31, 2010 and 2009
is unaudited)
Note
1.
|
Organization
and Line of Business
|
Signature
Eyewear, Inc. (the “Company”) designs, markets and distributes eyeglass frames
throughout the United States and internationally. The Company
conducts its operations primarily from its principal executive offices and a
warehouse in Inglewood, California.
Note
2.
|
Summary
of Significant Accounting Policies
|
Basis of
Presentation
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form 10-Q and
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In
the opinion of management, all normal, recurring adjustments considered
necessary for a fair presentation have been included. These financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company’s Annual Report on Form 10-K for the
year ended October 31, 2009. The results of operations for the three
months ended January 31, 2010 are not necessarily indicative of the results that
may be expected for the year ending October 31, 2010.
Inventory
Inventory
consists of finished goods, which are valued at the lower of cost or
market. Cost is computed using the weighted-average cost, which
approximates actual cost on a first-in, first-out basis.
The
Company regularly and periodically evaluates its inventory to ensure that it is
valued at the lower of cost or market based on current market trends, product
history, and turnover.
Property
and Equipment
Property
and equipment are recorded at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives of the
assets as follows:
Office
furniture and equipment
|
7
years
|
Computer
equipment
|
3
years
|
Software
|
3
years
|
Machinery
and equipment
|
5
years
|
Leasehold
improvements
|
Term
of the lease or the estimated life of the related improvements, whichever
is shorter
|
Expenditures
for major renewals and betterments that extend the useful lives of property and
equipment are capitalized.
- 7
-
Fair Value of Financial
Instruments
For
certain of the Company’s financial instruments, including cash and cash
equivalents, accounts receivable, accounts payable - trade, and line of credit,
the carrying amounts approximate fair value due to their short-term
maturities. The amounts shown for long-term debt also approximate
fair value because current interest rates offered to the Company for debt of
similar maturities are substantially the same.
Income per
Share
Basic
income per share is computed by dividing the income available to common
shareholders by the weighted-average number of common shares
outstanding. Diluted income per share is computed similar to basic
income per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were
dilutive. The following data show the amounts used in computing
earnings per share and the effect on the weighted average number of shares of
dilutive potential common stock:
Three
months ended January 31, 2010
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per
Share
Amount
|
|||||||||
Basic
earnings per share
|
$ |
138,103
|
6,955,639
|
$ |
0.02
|
|||||||
Conversion
of preferred stock
|
4,554
|
1,372,122
|
0.00
|
|||||||||
Diluted
earnings per share
|
$
|
142,657
|
8,327,761
|
$
|
0.02
|
Three
months ended January 31, 2009
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per
Share
Amount
|
|||||||||
Basic
earnings per share
|
$ | 194,281 | 6,955,639 | $ | 0.03 | |||||||
Conversion
of preferred stock
|
4,464 | 1,345,137 | 0.00 | |||||||||
Diluted
earnings per share
|
$ | 198,745 | 8,300,776 | $ | 0.02 |
The
following potential common shares have been excluded from the computations of
diluted income per share for the three months ended January 31, 2010 and 2009
because the effect would have been anti-dilutive:
2010
|
2009
|
|||||||
Stock
options
|
— | 34,300 | ||||||
Warrants
|
300,000 | 300,000 | ||||||
Total
|
300,000 | 334,300 |
Foreign Currency
Translation
The
Belgium branch was closed as of October 31, 2009.
The
Company’s Belgium branch’s functional currency is the euro. Assets
and liabilities are translated at exchange rates in effect at the balance sheet
date. Income and expense accounts
- 8
-
are
translated at average rates. In addition, some of the Company’s
liabilities are denominated in foreign currencies. Such liabilities
are converted into U.S. dollars at the exchange rate prevailing at the balance
sheet date. The resulting gains or losses were not material for the
three months ended January 31, 2010 and 2009.
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Recently Issued Accounting
Pronouncements
The FASB
recently amended its guidance surrounding an entity’s analysis to determine
whether any of its variable interests constitute controlling financial interests
in a variable interest entity. This analysis identifies the primary
beneficiary of a variable interest entity as the enterprise that has both of the
following characteristics: (a) the power to direct the activities of a variable
interest entity that most significantly impact the entity’s economic
performance; and (b) the obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could potentially be significant to the
variable interest entity. Additionally, an enterprise is required to
assess whether it has an implicit financial responsibility to ensure that a
variable interest entity operates as designed when determining whether it has
the power to direct the activities of the variable interest entity that most
significantly impact the entity’s economic performance. The amended
guidance also requires ongoing reassessments of whether an enterprise is the
primary beneficiary of a variable interest entity. The amended
guidance is effective for the first annual reporting period that begins after
November 15, 2009, which for the Company is the fiscal year ending October
31, 2011. The Company does not expect the adoption of this guidance
to have a material impact on its financial statements for the fiscal year ending
October 31, 2010.
The
recent accounting pronouncements discussed in the notes to the Company’s audited
financial statements for the year ended October 31, 2009 included in the Annual
Report on Form 10-K for the year ended October 31, 2009 that were required
to be adopted during the year ended October 31, 2009 did not have and are
not expected to have a significant impact on the Company’s financial statements
for the year ending October 31, 2010.
Note
3.
|
Long-Term
Debt
|
Long-term
debt (excluding accrued and unpaid interest) consisted of the following at the
dates indicated:
- 9
-
January
31,
2010
|
October
31,
2009
|
|||||||
Revolving
line of credit from Comerica Bank
|
$ | 2,600,000 | $ | 2,500,000 | ||||
Revolving
line of credit from Bluebird Finance Limited
|
1,522,500 | 1,595,000 | ||||||
Term
note payable to Ashford Capital, LLC.
|
125,000 | 125,000 | ||||||
4,247,500 | 4,220,000 | |||||||
Less
current portion
|
(415,000 | ) | (415,000 | ) | ||||
Long-term
portion
|
$ | 3,832,500 | $ | 3,805,000 |
Note
4.
|
Income
Taxes
|
As of
January 31, 2010, the Company had net operating loss carry-forwards for federal
and state income tax purposes of approximately $15,374,000 and $4,458,000,
respectively, which expire at various times from 2021 through 2028.
The
Company has recorded a partial benefit for income taxes based on its net
operating loss carryforwards. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not a portion of deferred tax assets will not be realized.
Realization of this deferred tax asset
is dependent on the Company’s ability to generate future taxable
income. Management believes that it is more likely than not that the
Company will generate taxable income to utilize some of the tax carry-forwards
before their expiration. However, there can be no assurance that the
Company will meet its expectation of future income. As a result, the
amount of the deferred tax asset considered realizable could be reduced in the
near term if estimates of future taxable income are reduced. Such
occurrence could materially adversely affect the Company’s results of operations
and financial condition.
- 10
-
Item 2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
The
following discussion and analysis, which should be read in connection with our
financial statements and accompanying footnotes, contains forward-looking
statements that involve risks and uncertainties. Important factors
that could cause actual results to differ materially from our expectations are
set forth in Item 1 – Business – Factors That May Affect Our Future Operating
Results” in our Form 10-K for the year ended October 31, 2009 as well as those
discussed elsewhere in this Form 10-Q. Those forward-looking
statements may relate to, among other things, our plans and strategies, new
product lines, and relationships with licensors, distributors and customers,
distribution strategies and the business environment in which we
operate.
Overview
We
generate revenues through the sale of prescription eyeglass frames and sunwear
under licensed brand names, including bebe, Carmen Marc Valvo, Cutter &
Buck, Dakota Smith, Hart Schaffner Marx, Hummer, Laura Ashley, Michael Stars and
Nicole Miller, and under our proprietary Signature brand. Our cost of
sales consists primarily of purchases from foreign contract manufacturers that
produce frames and cases to our specifications.
We
reported net income of $143,000 on net sales of $5.2 million for the three
months ended January 31, 2010 (the “2010 Quarter”) compared to net income of
$199,000 on net sales of $6.0 million for the three months ended January 31,
2009 (the “2009 Quarter”). The decrease in net sales was due
primarily to the general slowdown in the domestic economy and the optical frame
market, which adversely affected sales of our higher priced
lines. The decrease in net income was due primarily to lower sales
and lower gross margin, which was offset somewhat by a decrease in selling,
general and administrative expenses. Selling, general and
administrative expenses declined $549,000 from the 2009 Quarter to the 2010
Quarter, representing 58.2% of net sales in the 2010 Quarter as compared to
59.8% of net sales in the 2009 Quarter.
- 11
-
Results
of Operations
The
following table sets forth for the periods indicated selected statements of
operations data shown as a percentage of net sales.
Three
Months Ended
|
||||||||
January
31,
|
||||||||
2010
|
2009
|
|||||||
Net
sales
|
100.0 | % | 100.0 | % | ||||
Cost
of sales
|
37.2 | 35.4 | ||||||
Gross
profit
|
62.8 | 64.6 | ||||||
Operating
expenses:
|
||||||||
Selling
|
36.8 | 35.9 | ||||||
General
and administrative
|
21.4 | 23.9 | ||||||
Depreciation
and amortization
|
0.9 | 0.6 | ||||||
Total
operating expenses
|
59.1 | 60.4 | ||||||
Income
from operations
|
3.7 | 4.2 | ||||||
Interest
expense
|
0.9 | 0.9 | ||||||
Income
before taxes
|
2.8 | 3.3 | ||||||
Income
taxes
|
0.0 | 0.0 | ||||||
Net
income
|
2.8 | % | 3.3 | % |
Net Sales. Net
sales decreased by 13.3% or $790,000 from the 2009 Quarter to the 2010
Quarter. The decrease in net sales was due primarily to the general
slowdown in the domestic economy and the optical frame market, which adversely
affected sales of our higher priced lines. Net sales of Nicole Miller
Eyewear and bebe eyewear decreased $810,000 to $3.2 million from the 2009
Quarter to the 2010 Quarter. Net sales of the Company’s three largest
lines, bebe eyewear, Nicole Miller Eyewear and Laura Ashley Eyewear, amounted to
74.3% of our net sales in the 2010 Quarter compared to 78.5% in the 2009
Quarter.
Direct
sales to independent optical retailers and distributors decreased $457,000 in
the 2010 Quarter. Sales to optical and retail chains decreased
$246,000 in the 2010 Quarter. International sales decreased $77,000
in the 2010 Quarter due primarily to the weak global optical
market.
Net sales
reflect gross sales less a reserve for product returns established by us based
on products that we are aware will be returned as of that date. We
had $760,000 and $765,000 in product returns for the 2010 Quarter and 2009
Quarter, respectively, resulting in a product returns percentage of 12.8% and
13.8%, respectively.
Gross Profit and Gross
Margin. Gross profit decreased $601,000 from the 2009 Quarter
to the 2010 Quarter due to decreased sales. Gross margin decreased
slightly to 62.8% in the 2010 Quarter from 64.6% in the 2009 Quarter due to
competitive pricing and market conditions.
Selling
Expenses. Selling expenses decreased $233,000 from the 2009
Quarter to the 2010 Quarter primarily due to decreases of $112,000 in
compensation expense, $90,000 in travel expense and $88,000 in advertising and
promotional expense.
- 12
-
General and Administrative
Expenses. General and administrative expenses for the 2010
Quarter decreased $316,000 from the 2009 Quarter primarily due to decreases of
$106,000 in international general and administration expense resulting from
closing our Belgium sales office in September 2009, $61,000 in legal, accounting
and consulting expenses, $56,000 in compensation expense and $55,000 in
telephone expense.
Interest Expense. Interest
expense consists of interest expense offset by other income. Interest
expense decreased $5,000 in the 2010 Quarter primarily due to reduction in the
weighted average rate on our borrowings.
Income Taxes. As a
result of our net loss carry-forward, we had no income tax expense other than
franchise taxes in various states in the 2010 Quarter or the 2009
Quarter.
Financial
Condition, Liquidity and Capital Resources
Our
accounts receivable (net of allowance for doubtful accounts) were $2.8 million at
January 31, 2010 compared to $2.6 million at October 31, 2009.
Our
inventories (at lower of cost or market) were $3.8 million at both January 31,
2010 and October 31, 2009.
Current
liabilities were $5.4 million at January 31, 2010 as compared to $5.5 million at
October 31, 2009.
Our
long-term debt (including current portion) was $4.2 million at October 31, 2009
and at January 31, 2010. See Note 3 of Notes to Financial Statements
for further information regarding our long-term debt. At January 31,
2010, the interest rate on our Comerica Bank revolving line of credit was 4.0%
per annum and we had $1.4 million of additional borrowing capacity available
under that line.
Of the
Company’s accounts payable at January 31, 2010, approximately $158,000 were
payable in foreign currency. To monitor risks associated with
currency fluctuations, the Company periodically assesses the volatility of
certain foreign currencies and reviews the amounts and expected payment dates of
its purchase orders and accounts payable in those currencies.
We
believe that, at least for the next four fiscal quarters, assuming that there
are no unanticipated material adverse developments, we continue to be in
compliance with our credit facilities and we maintain current sales levels, our
cash flows from operations and through credit facilities will be sufficient to
enable us to pay our debts and obligations as they mature.
Inflation
We do not
believe our business and operations have been materially affected by
inflation.
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Not
applicable.
- 13
-
Item
4.
|
Controls
and Procedures
|
We
maintain disclosure controls and procedures (as defined in Exchange Act Rule
13a-15(e)) that are designed to assure that information required to be disclosed
in our Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s
rules and forms, and that such information is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required
disclosures.
In
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide reasonable assurance only of achieving the desired control
objectives, and management necessarily is required to apply its judgment in
weighing the costs and benefits of possible new or different controls and
procedures. Limitations are inherent in all control systems, so no
evaluation of controls can provide absolute assurance that all control issues
and any fraud within the company have been detected.
As
required by Exchange Act Rule 13a-15(b), as of the end of the period covered by
this report, management, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer (the same person has both
titles), evaluated the effectiveness of our disclosure controls and
procedures. Based on this evaluation, management concluded that our
disclosure controls and procedures were effective as of that date.
There was
no change in our internal control over financial reporting during our most
recently completed fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
PART
II.
OTHER
INFORMATION
Item
1.
|
Legal
Proceedings
|
Nothing
to report.
Item
1A.
|
Risk
Factors
|
Not
applicable.
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Nothing
to report.
Item
3.
|
Defaults
upon Senior Securities
|
Nothing
to report.
Item
4.
|
Removed
and Reserved
|
Removed
- 14
-
Item
5.
|
Other
Information
|
Nothing
to report.
Item
6.
|
Exhibits
|
See
Exhibit Index Attached
- 15
-
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.
Date:
March 5, 2010
|
SIGNATURE
EYEWEAR, INC.
By:
/s/ Michael Prince
Michael
Prince
Chief
Executive Officer
Chief
Financial Officer
|
- 16
-
EXHIBIT
INDEX
Exhibit
Number
|
Exhibit Description
|
10.1
|
Amendment
No. 1 dated December 15, 2009 to Loan and Security Agreement between
Signature Eyewear, Inc. and Comerica Bank.
|
10.2
|
License
Agreement dated January 19, 2010 between Signature Eyewear, Inc. and Laura
Ashley, Inc. [Portions of this Exhibit have been deleted and
filed separately with the Commission pursuant to a request for
Confidential Treatment.]
|
31.1
|
Certification
Pursuant to SEC Rule 13a-14(a)/15d-14(a)
|
32.1
|
Certification
Pursuant to 18 U.S.C. § 1350
|
- 17
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