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. -1- 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. -2- 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. -3- 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. -4- 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. -5- 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. -6- 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. -7- 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 -10- 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 -11- 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
-12- 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
-13- 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 -14- 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 -19-