FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 28, 2001
Commission File Number 2-85538
CCA INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 04-2795439
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
200 Murray Hill Parkway
East Rutherford, NJ 07073
(Address of principal executive offices) (Zip Code)
(201) 330-1400
Registrant's telephone number, including area code
Not applicable
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 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
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Stock, $.01 Par Value - $5,873,227 shares of as February 28, 2001
Class A Common Stock, $.01 Par Value - $1,020,930 shares as of
February 28, 2001
CCA INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Page
Number
PART I FINANCIAL INFORMATION:
Consolidated Balance Sheets as of
February 28, 2001 and November 30, 2000 1-2
Consolidated Statements of Operations
for the three months ended February 28, 2001
and February 29, 2000 3
Consolidated Statements of Comprehensive Income
for the three months ended February 28, 2001
and February 29, 2000 4
Consolidated Statements of Cash Flows for
the three months ended February 28, 2001
and February 29, 2000 5
Notes to Consolidated Financial Statements 6-14
Management Discussion and Analysis of
Results of Operations and Financial
Condition 15-16
PART II OTHER INFORMATION 17-18
SIGNATURES 19
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
A S S E T S
February 28, November 30,
2001 2000
Current Assets
Cash and cash equivalents $ 451,907 $ 804,508
Short-term investments and marketable
securities (Notes 3 and 10) 2,595,516 2,536,344
Accounts receivable, net of allowances of
$1,237,795 and $1,379,424, respectively 7,947,449 6,329,755
Inventories 4,961,750 5,735,427
Prepaid expenses and sundry receivables 377,941 324,980
Deferred income taxes 1,514,778 1,529,522
Prepaid income taxes and refunds due 591,288 777,691
Deferred advertising 862,885 -
Total Current Assets 19,303,514 18,038,227
Property and Equipment, net of accumulated
depreciation and amortization 584,597 675,790
Intangible Assets, net of accumulated
amortization of $103,271 at February 28, 2001
and $96,920 at November 30, 2000 635,059 641,410
Other Assets
Marketable securities 1,103,667 845,101
Due from officers - Non-current 20,962 21,485
Deferred income taxes 41,540 34,517
Other 55,526 55,526
Total Other Assets 1,221,695 956,629
Total Assets $21,744,865 $20,312,056
See Notes Consolidated to Financial Statements.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
February 28, November 30,
2001 2000
Current Liabilities
Notes payable - Current portion $ - $ 1,500,000
Accounts payable and accrued liabilities 6,918,301 4,288,852
Total Current Liabilities 6,918,301 5,788,852
Subordinated Debentures (due August 1, 2005) 511,656 556,656
Shareholders' Equity
Common stock, $.01 par; authorized
15,000,000 shares; issued and
outstanding 6,042,823 and
6,042,823 shares, respectively 60,428 60,428
Class A common stock, $.01 par; authorized
5,000,000 shares; issued and outstanding
1,020,930 and 1,020,930 shares,
respectively 10,209 10,209
Additional paid-in capital 3,836,296 3,836,296
Retained earnings 10,637,538 10,300,693
Accumulated other comprehensive income ( 25,329) ( 64,846)
14,519,142 14,142,780
Less: Treasury Stock (169,596 and 107,496
shares at February 28, 2001 and
November 30, 2000, respectively) 204,234 176,232
Total Shareholders' Equity 14,314,908 13,966,548
Total Liabilities and Shareholders' Equity $21,744,865 $20,312,056
See Notes to Consolidated Financial Statements.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
February 28, February 29,
2001 2000
Net sales of health and beauty products $10,426,369 $8,581,108
Other income 81,556 62,201
10,507,925 8,643,309
Costs and Expenses
Costs of sales 4,244,147 3,704,031
Selling, general and administrative
expenses 3,021,331 3,242,853
Advertising, cooperative and promotions 2,442,312 1,816,301
Research and development 90,948 125,020
Provision for doubtful accounts 90,518 67,127
Interest expense 40,306 22,477
9,929,562 8,977,809
Income (Loss) before Income Taxes 578,363 ( 334,500)
Provision (Benefit) for Income Taxes 241,517 ( 128,378)
Net Income (Loss) $ 336,846 ($ 206,122)
Earnings per Share:
Basic $.05 ($.03)
Diluted $.05 ($.03)
See Notes to Consolidated Financial Statements.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Three Months
Ended Ended
February 28, February 29,
2001 2000
Net Income (Loss) $336,846 ($206,122)
Other Comprehensive Income
Unrealized holding gains (loss)
on investments 39,517 ( 44,845)
Provision (Benefit) for Taxes 16,000 ( 16,500)
Other Comprehensive Income - Net 23,517 ( 28,345)
Comprehensive Income (Loss) $360,363 ($234,467)
Earnings Per Share:
Basic $.05 ($.03)
Diluted $.05 ($.03)
See Notes to Consolidated Financial Statements.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Three Months
Ended Ended
February 28, February 29,
2001 2000
Cash Flows from Operating Activities:
Net income $ 336,846 ($ 206,122)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 101,744 99,464
(Gain) on sale of securities ( 2,048) ( 923)
Decrease (increase) in deferred income
taxes 7,721 ( 35,784)
(Increase) in accounts receivable ( 1,617,694) ( 2,089,337)
Decrease in inventory 773,677 33,998
(Increase) decrease in prepaid expenses ( 52,438) 415,058
(Increase) in deferred advertising ( 862,885) ( 1,684,810)
Increase in accounts payable 2,629,449 3,036,767
Decrease (increase) in prepaid income taxes 186,403 ( 90,585)
Net Cash Provided by (Used in)
Operating Activities 1,500,775 ( 522,274)
Cash Flows from Investing Activities:
Acquisition of property, plant and equipment ( 4,200) ( 195,861)
Purchase of short-term investments ( 1,693,657) ( 408,529)
Proceeds from sale and maturity of
investments 1,394,983 415,326
Net Cash (Used in) Investing Activities ( 302,874) ( 189,064)
Cash Flows from Financing Activities:
Proceeds from borrowings - 200,000
Repayment of debt ( 1,500,000) -
Purchase of treasury stock ( 28,002) -
Repurchase of outstanding debenture ( 22,500) -
Net Cash (Used in) Provided by
Financing Activities ( 1,550,502) 200,000
Net (Decrease) in Cash ( 352,601) ( 511,338)
Cash and Cash Equivalents at Beginning
of Period 804,508 807,360
Cash and Cash Equivalents at End
of Period $ 451,907 $ 296,022
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ 46,552 $ 16,663
Income taxes 51,444 600
See Notes to Consolidated Financial Statements.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operat
ing results for the three month period ended February 28, 2001 are not
necessarily indicative of the results that may be expected for the year
ended November 30, 2001. For further information, refer to the consoli-
dated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended November 30,
2000.
NOTE 2 - ORGANIZATION AND DESCRIPTION OF BUSINESS
CCA Industries, Inc. ("CCA") was incorporated in the State of Delaware on
March 25, 1983.
CCA manufactures and distributes health and beauty aid products.
CCA has several wholly-owned subsidiaries (CCA Cosmetics, Inc., CCA Labs,
Inc., Berdell, Inc., and Nutra Care Corporation), all of which are currently
inactive.
In March of 1998 CCA acquired 80% of the newly organized Fragrance
Corporation of America, Ltd. which manufactures and distributes perfume
products. The Company ceased operations during fiscal 2000 and CCA
Industries took over its assets and some of its products.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the accounts of CCA and its
wholly-owned subsidiaries (collectively the "Company"). All significant
intercompany accounts and transactions have been eliminated.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates:
The consolidated financial statements include the use of estimates, which
management believes are reasonable. The process of preparing financial
statements in conformity with generally accepted accounting principles
requires the use of estimates and assumptions regarding certain types of
assets, liabilities, revenues, and expenses. Such estimates primarily relate
to unsettled transactions and events as of the date of the financial state
ments. Accordingly, upon settlement, actual results may differ from
estimated amounts.
Short-Term Investments and Marketable Securities:
Short-term investments and marketable securities consist of corporate and
government bonds and equity securities. The Company has classified its
investments as Available-for-Sale securities. Accordingly, such investments
are reported at fair market value, with the resultant unrealized gains and
losses reported as a separate component of shareholders' equity.
Statements of Cash Flows Disclosure:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an original maturity of less than
three months to be cash equivalents.
Inventories:
Inventories are stated at the lower of cost (first-in, first-out) or market.
Product returns are recorded in inventory when they are received at the lower
of their original cost or market, as appropriate. Obsolete inventory is
written off and its value is removed from inventory at the time its
obsolescence is determined.
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment and Depreciation and Amortization
Property and equipment are stated at cost. The Company charges to
expense repairs and maintenance items, while major improvements and
betterments are capitalized. When the Company sells or otherwise disposes
of property and equipment items, the cost and related accumulated
depreciation are removed from the respective accounts and any gain or loss
is included in earnings.
Depreciation and amortization are provided on the straight-line method over
the following estimated useful lives or lease terms of the assets:
Machinery and equipment 7-10 Years
Furniture and fixtures 5-7 Years
Tools, dies and masters 2-7 Years
Transportation equipment 7 Years
Leasehold improvements 7-10 Years or life
of lease, whichever is
shorter
Intangible Assets:
Intangible assets are stated at cost. Patents and trademarks are amortized
on the straight-line method over a period of 17 years. Goodwill represents
the excess of the cost over the fair value of the net assets acquired and is
amortized over 60 months.
Financial Instruments:
The carrying value of assets and liabilities considered financial instru-
ments approximate their respective fair value.
Income Taxes:
Income tax expense includes federal and state taxes currently payable and
deferred taxes arising from temporary differences between income for
financial reporting and income tax purposes.
Tax Credits:
Tax credits, when present, are accounted for using the flow-through method
as a reduction of income taxes in the years utilized.
-8-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings Per Common Share:
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share" in 1998. Basic earnings per share
is calculated using the average number of shares of common stock
outstanding during the year. Diluted earnings per share is computed on the
basis of the average number of common shares outstanding plus the effect
of outstanding stock options using the "treasury stock method" and
convertible debentures using the "if-converted" method. Common stock
equivalents consist of stock options.
Revenue Recognition:
The Company recognizes sales at the time delivery occurs. Although no
legal right of return exists between the customer and the Company, it is an
industry-wide practice to accept returns from customers. The Company,
therefore, records a reserve for returns equal to its gross profit on its
historical percentage of returns on its last five months sales.
Comprehensive Income:
The Company adopted SFAS #130, Comprehensive Income, which considers
the Company's financial performance in that it includes all changes in
equity during the period from transactions and events from non-owner
sources.
Reclassifications
Certain prior year amounts have been reclassified to conform to the 2001
presentation.
NOTE 4 - INVENTORIES
The components of inventory consist of the following:
February 28, November 30,
2001 2000
Raw materials $3,057,189 $3,667,757
Finished goods 1,904,561 2,067,670
$4,961,750 $5,735,427
At February 28, 2001 and November 30, 2000, the Company had a reserve
for obsolescence of $1,050,714, respectively.
NOTE 5 - PROPERTY AND EQUIPMENT
The components of property and equipment consisted of the following:
February 28, November 30,
2001 2000
Machinery and equipment $ 323,233 $ 323,233
Furniture and equipment 922,386 922,386
Transportation equipment 10,918 10,918
Tools, dies, and masters 1,977,030 1,972,830
Leasehold improvements 169,820 169,820
3,403,387 3,399,187
Less: Accumulated depreciation
and amortization 2,818,790 2,723,397
Property and Equipment - Net $ 584,597 $ 675,790
-9-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - PROPERTY AND EQUIPMENT (Continued)
Depreciation and amortization expense for the three months ended February
28, 2001 and February 29, 2000 amounted to $95,393 and $96,214,
respectively.
NOTE 6 - INTANGIBLE ASSETS
Intangible assets consist of the following:
February 28, November 30,
2001 2000
Patents and trademarks $738,330 $738,330
Less: Accumulated amortization 103,271 96,920
Intangible Assets - Net $635,059 $641,410
Amortization expense for the three months ended February 28, 2001 and
February 29, 2000 $6,351 and $3,250, respectively.
NOTE 7 - DEFERRED ADVERTISING
In accordance with APB 28 Interim Financial Reporting the Company
expenses its advertising and related costs proportionately over the interim
periods based on its total expected costs per its various advertising
programs. Consequently a deferral of $862,885 is accordingly reflected in
the balance sheet for the interim period. This deferral is the result of
the Company's $5,400,000 media budget for the year which contemplates
lower spending in the 4th quarter than in the other three quarters; as well
as the Company's Co-op advertising commitments which also anticipates a
lower expenditure in the 4th quarter.
The table below sets forth the calculation:
February February
2001 2000
(In Millions) (In Millions)
Media advertising budget for the fiscal year $5.40 $5.00
Pro-rata portion for three months $1.35 $1.25
Media advertising spent 2.21 2.68
Accrual (deferral) ($0.86) ($1.43)
Anticipated Co-op advertising commitments $4.00 $2.35
Pro-rata portion for three months $1.00 $ .59
Co-op advertising spent 0.89 .84
Accrual (deferral) $.011 ($ .25)
NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The following items which exceeded 5% of total current liabilities are
included in accounts payable and accrued liabilities as of:
February 28, November 30,
2001 2000
(In Thousands) (In Thousands)
a) Media advertising $2,203 $ *
b) Coop advertising 440 242
c) Accrued returns 667 983
$3,310 $1,225
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Continued)
All other liabilities were for trade payables or individually did not
exceed 5% of total current liabilities.
* Under 5%
NOTE 9 - OTHER INCOME
Other income consists of the following at February 28:
2001 2000
Interest income $69,996 $51,983
Dividend income 4,619 9,295
Miscellaneous 6,941 923
$81,556 $62,201
NOTE 10 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
Short-term investments and marketable securities, which consist of stock and
various corporate and government obligations, are stated at market value.
The Company has classified its investments as Available-for-Sale securities
and considers as current assets those investments which will mature or are
likely to be sold in the next fiscal year. The remaining investments are
considered non-current assets. The cost and market values of the invest
ments at February 28, 2001 and November 30, 2000 were as follows:
February 28, November 30,
2001 2000
Current: COST MARKET COST MARKET
Corporate obligations $ 536,000 $ 540,535 $ 536,000 $ 534,590
Government obligations
(including mortgage
backed securities) 2,043,557 2,054,981 1,998,756 2,001,754
Total 2,579,557 2,595,516 2,534,756 2,536,344
Non-Current:
Corporate obligations 592,900 589,308 - -
Government obli-
gations 150,510 150,255 150,510 146,723
Preferred stock 250,000 250,180 612,561 586,448
Other equity
investments 151,547 113,924 148,465 111,930
Total 1,144,957 1,103,667 911,536 845,101
Total $3,724,514 $3,699,183 $3,446,292 $3,381,445
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
The market value at February 28, 2001 was $3,699,183 as compared to $3,381,445 at November 30, 2000.
The cost and market values of the investments at February 28, 2001 were as follows:
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
CORPORATE OBLIGATIONS:
GMAC Smartnotes 10/15/01 6.3500% 536,000 $ 536,000 $ 540,535 $ 540,535
GMAC Smartnotes 1/15/03 5.5500 250,000 250,000 249,560 249,560
GMAC Smartnotes 2/15/03 5.7500 140,000 140,000 140,200 140,200
International Business
Machines 9/22/03 5.3700 100,000 102,040 99,862 99,862
Colgate-Palmolive Co. 10/1/03 5.2700 100,000 100,860 99,686 99,686
1,128,900 1,129,843 1,129,843
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL. D COL. E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
GOVERNMENT OBLIGATIONS:
FHLBC JD-22 6/22/01 5.6100% 250,000 $ 250,272 $ 250,548 $ 250,548
FHLMC 1628-N 12/15/23 6.5000 50,000 32,498 32,852 32,852
FNMA 93-224-D 11/25/23 6.5000 104,000 91,182 89,704 89,704
FNMA 92-2-N 1/25/24 6.5000 52,000 26,830 27,699 27,699
US Treasury Bill 4/5/01 5.7006 250,000 247,077 248,793 248,793
US Treasury Bill 5/3/01 4.7600 308,000 304,787 305,388 305,388
US Treasury Bill 3/8/01 5.9600 300,000 295,539 299,670 299,670
US Treasury Bill 4/5/01 6.0400 250,000 242,425 248,785 248,785
US Treasury Note 5/15/01 5.6250 200,000 202,075 200,312 200,312
US Treasury Note 5/31/01 5.2500 250,000 251,615 250,235 250,235
US Treasury Note 9/30/01 5.6250 250,000 249,767 251,250 251,250
2,194,067 2,205,236 2,205,236
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CCA INDUSTRIES, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES - OTHER INVESTMENTS
NOTE 10 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Market Of Equity Security
Value of Issues and Each
Stock Other Security
Name of Issuer and Maturity Dividend Number of Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Shares Stock Sheet Date Balance Sheet
EQUITY:
Preferred Stock:
Merrill Lynch Trust 9/30/08 7.2800% 6,000 $ 150,000 $ 150,180 $ 150,180
Other Equity Investments:
First Australia Prime
Series I Auct. 5.4500 100,000 100,000 100,000 100,000
Dreyfus Premier Limited
Term High Income CL B Variable 12,519 151,547 113,924 113,924
401,547 364,104 364,104
$3,724,514 $3,699,183 $3,699,183
* Estimated
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CCA INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(UNAUDITED)
For the three months ended February 28, 2001, the Company had revenues of
$10,507,925 and net income of $336,846 after a provision for taxes of
$241,517. For the three month period ended February 29, 2000, the Company had
revenues of $8,643,309 and a net loss of ($206,122) after a provision for tax
benefit of $128,378. Sales for the three month period increased approximately
$2 million due to the success of its core brands. Sales returns ran
approximately 4% of gross sales. Sales returns were 6% for the prior year's
period. Gross margins of 59.3% were up from 57%. This was primarily due to
the product mix.
Advertising, cooperative and promotional allowance expenditures were $2.4
million as compared to $1.8 million. Advertising expenditures were 23.4% of
sales compared to 21.2%. Since both co-op advertising and promotions have a
material effect on the Company's operations, the Company attempts to
anticipate its advertising and promotional commitments as a percent of gross
sales in order to control its effect on its net income. In accordance with
APB Interim Financial Reporting, the Company expenses its advertising and
related costs proportionately over the interim periods based on its total
expected costs per its various advertising programs. Consequently, a deferral
of $.9 million media expense is reflected in the balance sheet. The Company
deferred $1.4 million in the prior year. This deferral is the result of the
Company's $5.4 million media budget for the entire year which is predicated on
substantially lower spending in the third and fourth quarters. Co-op
expenditures are budgeted at $4 million for the year. Specifically, the
Company spent $2.2 million for media advertising in the three months and $.9
million in co-op advertising. The difference is deferred or accrued over the
subsequent nine month period and by the end of the year will be fully
expensed.
Selling, general and administrative expenses ("SG&A") decreased from $3.2
million to $3 million. This is partially due to the elimination of the FCA
operations.
Research and development expenses for the three months were $90,000 as
compared to $125,000 in the prior year's period.
Provision for doubtful accounts increased to $90,000 from $67,000 due to
the substantial increase in accounts receivable.
-15-
CCA INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(UNAUDITED)
The Company's interest expense increased to $40,000 as compared to $22,000
due to the increase in the prime rate and the interest due on the subordinated
debentures issued in August of 2000.
The Company's sales were primarily to drugstore chains, food chains and
mass merchandisers.
The Company's financial position as at February 28, 2001 consists of
current assets of $19,303,514 and current liabilities of $6,918,301, a ratio
of 2.8 : 1 vs. 2.25 : 1 as at February 28, 2000. The Company's cash position
decreased due to repayment of $1.5 million of debt and the significant
increase in its accounts receivable primarily as a result of the sales in the
latter month of the quarter. The Company's accounts payable increased due to
the change in the increased expenditures for media during the latter part of
the month.
During the three months, the Company generated approximately $1.5 million
in operations, used $300,000 to purchase investments from new borrowings, and
approximately $1.5 million to reduce debt. These factors contributed to a net
decrease in the Company's cash of about $350,000.
-16-
CCA INDUSTRIES, INC.
PART II OTHER INFORMATION
All information pertaining to Part II is omitted pursuant to the
instructions pertaining to that part.
The Company did not file any reports on Form 8-K during the three months
ended February 28, 2001.
-17-
PART II, ITEM 6. (Continued) EXHIBIT 11
CCA INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
Three Months Three Months
Ended Ended
February 28, February 29,
2001 2000
Item 6.
Weighted average shares outstanding - Basic 6,909,666 7,246,085
Net effect of dilutive stock
options--based on the
treasury stock method
using average market
price 79,310 *
Weighted average shares outstanding -
Diluted 6,988,976 7,246,085
Net income $ 336,846 ($ 206,122)
Per share amount
Basic $.05 ($.03)
Diluted $.05 ($.03)
* Antidilutive
-18-
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.
CCA INDUSTRIES, INC.
By:/s David Edell
David Edell, President
By:/s Ira W. Berman
Ira W. Berman, Secretary
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