SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- EXCHANGE ACT OF 1934
For the quarterly period ended December 29, 2001
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 0-17038
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Concord Camera Corp.
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(Exact name of registrant as specified in its charter)
New Jersey 13-3152196
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Hollywood Blvd. 6th Floor, North Tower, Hollywood, Florida 33021
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(Address of principal executive offices) (Zip Code)
954/331-4200
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, no par value -27,440,708 shares as of February 6, 2002
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Index
Concord Camera Corp. and Subsidiaries
Page No.
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Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets as of December 29, 2001 and June 30, 2001 2
Condensed consolidated statements of operations for the three and 3
six months ended December 29, 2001 and December 30, 2000
Condensed consolidated statements of cash flows for the six months ended 4
December 29, 2001 and December 30, 2000
Notes to condensed consolidated financial statements 5
Item 2. Management's Discussion and Analysis of Financial Condition 9
and Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk 17
Part II. Other Information
Item 1. Legal Proceedings 18
Item 6. Exhibits and Reports on Form 8-K 18
1
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
December 29, 2001 June 30, 2001
-------------------- --------------------
(Unaudited) (Note 1)
Assets
Current Assets:
Cash and cash equivalents $ 113,327,368 $ 57,474,828
Short-term investments -- 49,869,567
Accounts receivable, net 22,757,259 25,253,614
Inventories 30,860,301 30,766,198
Prepaid expenses and other current assets 3,585,148 4,128,858
-------------------- --------------------
Total current assets 170,530,076 167,493,065
Property, plant and equipment, net 22,199,604 24,396,407
Goodwill, net 3,720,528 3,720,528
Other assets 18,614,929 18,055,713
-------------------- --------------------
Total assets $ 215,065,137 $ 213,665,713
==================== ====================
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 16,564,768 $ 17,991,337
Accrued expenses 15,592,271 15,447,170
Short-term debt 3,778,483 --
Current portion of obligations under capital leases 115,360 503,547
Other current liabilities 2,608,238 2,547,719
-------------------- --------------------
Total current liabilities 38,659,120 36,489,773
Senior notes 14,923,216 14,912,501
Other long-term liabilities 8,582,359 7,926,290
-------------------- --------------------
Total liabilities 62,164,695 59,328,564
Commitments and contingencies
Stockholders' equity:
Blank check preferred stock, no par value
1,000,000 shares authorized, none issued -- --
Common stock, no par value, 100,000,000 shares
authorized; 28,975,734 and 28,911,734 shares issued as
of December 29, 2001 and June 30, 2001, respectively 140,412,165 140,255,065
Paid-in capital 5,834,832 4,321,856
Deferred stock-based compensation (298,408) --
Retained earnings 11,091,596 13,914,908
Notes receivable arising from common stock purchase
agreements (2,605) (17,542)
-------------------- --------------------
157,037,580 158,474,287
Less: treasury stock, at cost, 1,542,526 shares (4,137,138) (4,137,138)
-------------------- --------------------
Total stockholders' equity 152,900,442 154,337,149
-------------------- --------------------
Total liabilities and stockholders' equity $ 215,065,137 $ 213,665,713
==================== ====================
See accompanying notes.
2
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
For the three months ended For the six months ended
---------------------------------------- ----------------------------------------
December 29, 2001 December 30, 2000 December 29, 2001 December 30, 2000
------------------ ------------------ ------------------ ------------------
Net sales $ 39,266,238 $ 58,125,547 $ 72,152,959 $ 119,408,895
Cost of products sold 31,938,549 45,512,670 59,081,360 92,504,335
------------------ ------------------ ------------------ ------------------
Gross profit 7,327,689 12,612,877 13,071,599 26,904,560
Selling expenses 1,499,282 2,605,206 3,153,921 4,577,433
General and administrative expenses 6,717,393 4,344,956 12,181,350 8,763,086
Variable stock-based compensation expenses 1,655,582 -- 1,655,582 --
Terminated acquisition costs -- -- -- 800,207
Interest expense 633,428 591,779 1,295,129 1,243,390
Other income, net 1,763,883 2,203,914 2,363,185 2,518,347
------------------ ------------------ ------------------ ------------------
Income (loss) before income taxes (1,414,113) 7,274,850 (2,851,198) 14,038,791
Provision (benefit) for income taxes 140,481 487,499 (27,887) 1,045,731
------------------ ------------------ ------------------ ------------------
Net income (loss) $ (1,554,594) $ 6,787,351 $ (2,823,311) $ 12,993,060
================== ================== ================== ==================
Basic earnings (loss) per share $ (.06) $ .25 $ (.10) $ .52
================== ================== ================== ==================
Diluted earnings (loss) per share $ (.06) $ .23 $ (.10) $ .47
================== ================== ================== ==================
Weighted average
common shares outstanding-basic 27,421,023 26,954,034 27,416,897 24,995,736
Dilutive effect of stock options -- 2,935,042 -- 2,838,724
------------------ ------------------ ------------------ ------------------
Weighted average
common shares outstanding-diluted 27,421,023 29,889,076 27,416,897 27,834,460
================== ================== ================== ==================
See accompanying notes.
3
Concord Camera Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the six months ended
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December 29, 2001 December 30, 2000
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Cash flows from operating activties:
Net income (loss) $ (2,823,311) $ 12,993,060
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 2,988,819 2,689,648
Non-cash compensation expense 1,655,582 256,169
Provision on inventory 1,761,274 --
Provision on accounts receivable 2,570,871 --
Changes in operating assets and liabilities:
Accounts receivable (74,521) (92,159)
Inventories (1,855,377) (3,966,558)
Prepaid expenses and other current assets 543,711 1,159,885
Other assets (1,000,230) (1,933,184)
Accounts payable (1,426,565) (243,405)
Accrued expenses 145,098 (2,206,056)
Other current liabilities 58,881 (300,274)
Other long-term liabilities 655,909 93,327
-------------------- --------------------
Net cash provided by operating activities 3,200,141 8,450,453
-------------------- --------------------
Cash flows from investing activities:
Proceeds from short-term investments 49,869,567 --
Purchases of property, plant and equipment (775,296) (4,393,996)
-------------------- --------------------
Net cash provided by (used in) investing activities 49,094,271 (4,393,996)
-------------------- --------------------
Cash flows from financing activities:
Net (repayments) borrowings under short-term debt
agreements 3,780,120 (2,304,098)
Principal repayments under capital lease obligations (388,184) (1,569,461)
Net proceeds from issuance of common stock 166,192 97,467,488
-------------------- --------------------
Net cash provided by financing activities 3,558,128 93,593,929
-------------------- --------------------
Net increase in cash and cash equivalents 55,852,540 97,650,386
Cash and cash equivalents at beginning of period 57,474,828 24,390,294
-------------------- --------------------
Cash and cash equivalents at end of period $ 113,327,368 $ 122,040,680
==================== ====================
See accompanying notes.
4
CONCORD CAMERA CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2001
(Unaudited)
Note 1 - General
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States 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 accounting principles generally
accepted in the United States 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. Operating
results for the six-month period ended December 29, 2001 ("First Half Fiscal
2002") are not necessarily indicative of the results that may be expected for
the fiscal year ending June 29, 2002 ("Fiscal 2002"). The balance sheet at June
30, 2001 has been derived from the audited financial statements at that date,
but does not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. Certain amounts have been reclassified to conform to the current
presentation. See Note 7 - Recent Accounting Pronouncements. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 2001.
Concord Camera Corp. (the "Company") operates on a worldwide basis and its
results may be adversely or positively affected by fluctuations of various
foreign currencies against the U.S. Dollar, specifically, the Canadian Dollar,
German Mark, British Pound Sterling, French Franc and Japanese Yen. The majority
of the Company's foreign subsidiaries' sales and inventory purchases are made or
denominated in U.S. Dollars. Accordingly, the U.S. Dollar is the functional
currency. However, certain sales to customers and purchases of certain
components and services needed to manufacture cameras are made in local
currency, thereby creating exposure to fluctuations in foreign currency exchange
rates. The impact of foreign currency exchange transactions is reflected in the
statement of operations. The Company continues to analyze the benefits and costs
associated with hedging against foreign currency fluctuations. As of December
29, 2001, the Company was not engaged in any hedging activities and there were
no forward exchange contracts outstanding.
Note 2 - Cash
The Company has a cash management program that provides for the investment of
excess cash balances into cash equivalents, which are highly liquid investments
with a maturity of three months or less that are readily convertible into known
amounts of cash. These investments consist primarily of U.S. treasury bills,
money market funds, and U.S. federal agency securities.
Note 3 - Inventories
Inventories are comprised of the following:
December 29, 2001 June 30, 2001
-------------------- --------------------
Raw materials and components $ 14,309,274 $ 23,987,935
Finished goods 16,551,027 6,778,263
-------------------- --------------------
$ 30,860,301 $ 30,766,198
==================== ====================
5
Note 4 - Supplemental Disclosures of Cash Flow Information:
For the six months ended
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December 29, 2001 December 30, 2000
-------------------- --------------------
Cash paid for interest $ 879,000 $ 997,353
==================== ====================
Cash paid for income taxes $ 495,000 $ 1,405,219
==================== ====================
Note 5 - Restructuring Initiatives and Other Charges
During the fourth quarter of the fiscal year ended June 30, 2001 ("Fiscal
2001"), the Company announced a restructuring and cost containment initiative
("Restructuring Initiative") to improve its competitiveness and operating
efficiency and to reduce its cost structure. The Restructuring Initiative, which
is expected to be fully implemented by the end of Fiscal 2002, consists of
facilities consolidation, the shut down of the Company's single use camera short
run labeling facility in the United States, and the reduction of the worldwide
workforce (outside of the People's Republic of China) by approximately 71
employees primarily employed in manufacturing, engineering, sales and marketing
and administration functions. The Company has also reduced its manufacturing
workforce in the PRC by approximately 2,000 workers. Costs accrued for the
Restructuring Initiative were approximately $1,400,000, which was comprised of
approximately $400,000 related to the shut down of facilities and approximately
$1,000,000 related to personnel termination costs. During the First Half Fiscal
2002, the Company implemented elements of its Restructuring Initiative and
incurred approximately $604,000 in payments related to personnel redundancy
costs and facilities consolidation. The balance of the restructuring accrual of
approximately $796,000 was included under the caption accrued expenses in the
accompanying condensed consolidated balance sheet at December 29, 2001. The
table below summarizes the balance of the accrued Restructuring Initiative
expenses and the movement in that accrual as of and for the First Half Fiscal
2002:
Accrued Balance First Quarter Second Quarter Accrued Balance
June 30, 2001 Payments Payments December 29, 2001
------------------ ------------------ ------------------ ------------------
Personnel redundancy $ 1,000,000 $ 298,000 $ 116,000 $ 586,000
Facilities consolidation 400,000 4,000 186,000 210,000
------------------ ------------------ ------------------ ------------------
$ 1,400,000 $ 302,000 $ 302,000 $ 796,000
================== ================== ================== ==================
During the first quarter of Fiscal 2002, the Company recognized a provision
related to accounts receivable of approximately $1,611,000, and a provision
related to inventory of approximately $1,761,000. Both of these provisions
related to Polaroid Corporation ("Polaroid"), which filed for protection under
Chapter 11 of the U.S. Bankruptcy Code on October 12, 2001, and were included in
general and administrative expenses and cost of sales, respectively, in the
accompanying condensed consolidated statement of operations for Fiscal 2002. The
Company does not anticipate that the loss of the previously budgeted sales to
Polaroid for the remaining two quarters of Fiscal 2002, will materially affect
its results of operations for those periods.
During the second quarter of Fiscal 2002, the Company recognized a provision
related to accounts receivable of $960,000 associated with Kmart Corporation
("Kmart"), which filed for protection under Chapter 11 of the U.S. Bankruptcy
Code on January 22, 2002. The provision was included in general and
administrative expenses in the accompanying condensed consolidated statements of
operations for the quarter and six months ended December 29, 2001. See Note 10-
Subsequent Event.
6
Note 6 - Litigation
All of the Company's litigation and arbitration proceedings with its former
chief executive officer, Jack C. Benun ("Benun"), have been concluded. In early
October 2001, the Company realized the award of $1,133,246 plus $45,175 of post
award interest for a total of $1,178,421 and a total of $202,740 was remitted to
Benun in payment of a loan previously made by Benun to the Company. The award
was recorded as other income and included under the caption other income, net in
the accompanying condensed consolidated statements of operations for the quarter
and six months ended December 29, 2001. As a result of the foregoing, the New
Jersey action instituted by Benun was dismissed with prejudice.
The Company is involved from time to time in routine legal matters incidental to
its business. In the opinion of the Company's management, the resolution of such
matters will not have a material adverse effect on its financial position or
results of operations.
Note 7 - Recent Accounting Pronouncements
Emerging Issues Task Force ("EITF") Issue No. 00-25, Vendor Income Statement
Characterization of Consideration from a Vendor to a Retailer, addresses the
operating statement classification of consideration between a vendor and a
retailer. By adopting EITF 00-25, lower sales, lower gross margins and lower
selling expenses are reported as certain variable selling expenses which have
been historically classified as operating expenses are reclassified as a
reduction of net sales. The Company adopted EITF 00-25 in its second quarter of
Fiscal 2002 which resulted in approximately $960,000 and $820,000 of variable
selling expenses, consisting principally of promotional allowances, being
reclassified as a reduction of net sales, and a corresponding reduction of gross
profit for the quarters ended December 29, 2001 and December 30, 2000,
respectively. The Company also reclassified approximately $1,663,000 and
$2,259,000 of variable selling expenses, consisting principally of promotional
allowances, for the six months ended December 29, 2001 and December 30, 2000,
respectively, as a reduction of net sales.
On June 29, 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 applies to all
business combinations with a closing date after June 30, 2001, eliminates the
pooling-of-interests method of accounting and further clarifies the criteria for
recognition of intangible assets separately from goodwill. SFAS No. 142
eliminates the amortization of indefinite-lived intangible assets and goodwill,
and initiates an annual review of these assets for impairment. Identifiable
intangible assets with determinable, useful lives will continue to be amortized.
In accordance with SFAS No. 142, effective July 1, 2001, the Company ceased
amortization of its remaining net goodwill balances. Intangible assets that have
finite useful lives will continue to be amortized over their useful lives. The
Company is required to perform an impairment test of its existing goodwill based
on a fair value concept within the first six months following adoption of SFAS
No. 142. The Company completed step one of the impairment test under SFAS No.
142, and it is management's assessment that goodwill impairment does not exist.
The accounting standard requires that a reconciliation of previously reported
net income and earnings per share to the amounts adjusted for the exclusion of
the goodwill amortization net of related tax effect be presented. Because the
goodwill amortization is immaterial, no reconciliation is presented.
Note 8 - Exchange Offer
On August 28, 2001, the Company launched an offer to exchange outstanding stock
options with an exercise price of more than $7.00 per share for new options to
purchase 75% of the shares subject to the outstanding options at an exercise
price of $5.97 per share (the closing price of the Common Stock as reported on
the NASDAQ National Market on the date the Board of Directors approved the
exchange offer.) The exchange offer expired on October 16, 2001. Options to
purchase 1,375,876 shares of Common Stock were tendered in the exchange offer
and accepted by the Company for cancellation and new options to purchase
1,031,908 shares of Common Stock were issued in exchange therefor. As a result
of the exchange offer, the Company is required to apply variable accounting for
these stock option grants until the options are exercised, cancelled or expired.
Accordingly, for the quarter ended December 29, 2001, the Company incurred
approximately $1,656,000 principally related to non-cash stock option
compensation expense which was included as variable stock-based compensation
expenses in the accompanying condensed consolidated statements of
operations for the three and six months ended December 29, 2001, with a
corresponding offset to Paid-in capital in the accompanying condensed
consolidated balance sheet as of December 29, 2001.
7
Note 9 - Commitment
On October 8, 2001, the Company committed $1,000,000 as a charitable
contribution to relief efforts for victims of the September 11 Attack on America
as well as an additional $63,000 to match contributions made by members of its
Board of Directors and its employees for a total commitment of $1,063,000 which
was included in general and administrative expenses for the three and six months
ended December 29, 2001 in the accompanying condensed consolidated statements of
operations. The Company expects to fund its commitment by the end of Fiscal
2002.
Note 10 - Subsequent Event
On January 22, 2002, Kmart filed for protection under Chapter 11 of the United
States Bankruptcy Code. Accordingly, the Company recorded a $960,000 provision
for its pre-petition financial exposure associated with its accounts receivable
from Kmart at December 29, 2001. See Note 5 - Restructuring Initiatives and
Other Charges.
8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Effective with its second quarter of the fiscal year ended June 29, 2002
("Fiscal 2002"), the Company adopted Emerging Issues Task Force ("EITF") Issue
No. 00-25, Vendor Income Statement Characterization of Consideration from a
Vendor to a Retailer, which addresses the operating statement classification of
consideration between a vendor and a retailer. Consequently, for all historical
periods presented and for all future periods, the Company will report lower
sales, lower gross margins and lower selling expenses as certain variable
selling expenses which have been historically classified as operating expenses
are reclassified as a reduction of net sales. Accordingly, the Company
reclassified approximately $960,000 and $820,000 of variable selling expenses,
consisting principally of promotional allowances, as a reduction of net
revenues, and a corresponding reduction of gross profit for the second quarter
of Fiscal 2002 and the second quarter of the fiscal year ended June 30, 2001
("Fiscal 2001"), respectively. The Company also reclassified approximately
$1,663,000 and $2,259,000 of variable selling expenses, consisting principally
of promotional allowances, for the first two quarters of Fiscal 2002 and Fiscal
2001, respectively, as a reduction of net sales.
Quarter ended December 29, 2001 compared to the quarter ended December 30, 2000
Revenues
Revenues for the second quarter of Fiscal 2002 were approximately $39,266,000, a
decrease of approximately $18,860,000, or 32.4%, as compared to revenues for the
second quarter of Fiscal 2001. The decrease in sales resulted principally from
decreases in sales to original equipment manufacture ("OEM") customers partially
offset by increases in sales to new and existing retail sales and distribution
("RSD") customers. The increase in RSD sales was primarily due to increased
sales to new and existing RSD customers of single-use and digital camera
products. RSD customer sales for the second quarter of Fiscal 2002 were
approximately $29,585,000, an increase of approximately $2,552,000, or 9.4%, as
compared to the second quarter of Fiscal 2001. OEM sales for the second quarter
of Fiscal 2002 were approximately $9,681,000, a decrease of approximately
$21,412,000, or 68.9%, as compared to the second quarter of Fiscal 2001.
Sales of the Company's operations in Asia ("Concord Asia") for the second
quarter of Fiscal 2002, excluding FOB Hong Kong sales to its customers in the
Americas and Europe of approximately $12,611,000, were approximately
$10,142,000, a decrease of approximately $20,991,000, or 67.4%, as compared to
the second quarter of Fiscal 2001. The decrease was primarily due to the loss in
Fiscal 2002 of an OEM customer that purchased digital product from the Company
in the second quarter of Fiscal 2001, partially offset by increases in sales to
new and existing OEM customers.
Sales of the Company's operations in the United States, Latin America and Canada
("Concord Americas"), which were all RSD sales, for the second quarter of Fiscal
2002, including FOB Hong Kong sales to customers in the Americas, were
approximately $22,115,000, an increase of approximately $1,751,000, or 8.6%, as
compared to the second quarter of Fiscal 2001. The increase was primarily due to
successful implementation of new programs with new and existing customers,
increased market share from existing customers and the positive sell through of
certain new and existing products.
Sales of the Company's operations in Europe ("Concord Europe"), which were all
RSD sales, for the second quarter of Fiscal 2002, including FOB Hong Kong sales
to customers in Europe, were approximately $7,009,000, an increase of
approximately $380,000, or 5.7%, as compared to the second quarter of Fiscal
2001. This increase was primarily attributable to higher sales of single-use and
digital cameras.
9
Gross Profit
Gross profit for the second quarter of Fiscal 2002 was approximately $7,327,000,
a decrease of approximately $5,286,000, or 41.9% as compared to the second
quarter of Fiscal 2001. Gross profit, expressed as a percentage of sales,
decreased to 18.7% for the second quarter of Fiscal 2002 as compared to 21.7%
for the second quarter of Fiscal 2001. The decrease in gross profit was
attributable to changes in product mix, pricing pressures and unfavorable labor
and overhead absorption. Product development costs for the second quarter of
Fiscal 2002 and Fiscal 2001 were approximately $1,939,000 and $1,712,000,
respectively.
The Company's product mix, which historically consisted entirely of reloadable
and single use cameras, is expected to continue changing with the introduction
of more digital products in the future. Digital products are sold at
significantly higher unit prices, but generate lower gross margins as a
percentage of sales, than the reloadable and single use cameras the Company has
historically sold. Digital products however generate a greater gross profit per
unit than reloadable and single use cameras. As a result, as the percentage of
digital products in the Company's sales mix increases, gross margins as a
percentage of sales can be expected to decrease and average revenue and gross
profit per unit can be expected to increase. In addition, as the proportion of
the Company's manufacturing product mix represented by digital products
increases, the risk of gross profit fluctuations due to digital component
availability and related costs will increase. Since component availability can
fluctuate and is subject to possible procurement delays and other constraints,
it could possibly limit net profit growth and might have a negative impact on
sales and gross margins. Additionally, the Company's customer revenue mix
between its OEM and RSD customers may fluctuate significantly in the future
compared to historical customer revenue mix.
Operating Expenses
Operating expenses, consisting of selling expense, general and administrative
expense, variable stock-based compensation expense and interest expense
increased by approximately $2,963,000, to $10,505,000 for the second quarter of
Fiscal 2002 from approximately $7,542,000 for the second quarter of Fiscal 2001.
Included in general and administrative expenses in the second quarter of Fiscal
2002 were certain charges aggregating to $2,023,000 comprised of (i) a provision
related to an accounts receivable of $960,000 associated with Kmart Corporation
("Kmart Provision"), which filed for protection under Chapter 11 of the U.S.
Bankruptcy Code ("Filing") on January 22, 2002; and (ii) a $1,063,000 charitable
contribution charge ("Charitable Contribution Charge") related to the Company's
charitable commitment for victims of the September 11 terrorist attack. Variable
stock-based compensation expense was $1,656,000 ("Stock Option Expense") for the
second quarter of Fiscal 2002 and related principally to variable accounting
treatment accorded certain of the Company's repriced stock options as a
consequence of the Company's exchange offer that expired October 16, 2001. As a
percentage of sales, operating expenses increased to 26.8% for the second
quarter of Fiscal 2002 from 13.0% for the second quarter of Fiscal 2001.
Excluding the charges described in the second preceding sentence aggregating
$2,023,000 and the Stock Option Expense in the second quarter of Fiscal 2002,
operating expenses as a percentage of sales would have been 17.4% for the second
quarter of Fiscal 2002 compared to 13.0% for the second quarter of Fiscal 2001.
Selling expenses decreased by approximately $1,106,000, or 42.5%, to
approximately $1,499,000 for the second quarter of Fiscal 2002 from
approximately $2,605,000 for the second quarter of Fiscal 2001. The decrease was
primarily due to a decrease in certain variable selling expenses. As a
percentage of sales, selling expenses decreased to 3.8% for the second quarter
of Fiscal 2002 from 4.5% for the second quarter of Fiscal 2001.
General and administrative expenses increased by approximately $2,372,000, or
54.6%, to approximately $6,717,000 for the second quarter of Fiscal 2002 from
approximately $4,345,000 for the second quarter of Fiscal 2001. Excluding the
Kmart Provision, and the Charitable Contribution Charge, general and
administrative expenses would have been approximately $4,694,000 for the second
quarter of Fiscal 2002, an increase of $349,000, or 8.0%, compared to the second
quarter of Fiscal 2001. This increase was primarily attributable to higher
professional fees and compensation expense. As a percentage of sales, general
and administrative expenses increased to 17.1% for the second quarter of Fiscal
2002 from 7.5% for the second quarter of Fiscal 2001. Excluding certain charges
aggregating $2,023,000 comprised of the Kmart Provision, and the Charitable
Contribution Charge, general and administrative expenses, as a percentage of
sales, would have been 12.0% for the second quarter of Fiscal 2002.
Variable stock-based compensation expense was $1,656,000 for the second quarter
of Fiscal 2002 and resulted principally from variable accounting treatment
accorded certain of the Company's repriced stock options as a consequence of the
Company's exchange offer that expired October 16, 2001. For further discussion,
see the paragraph Exchange Offer under the section Liquidity and Capital
Resources.
Interest expense increased to approximately $633,000 for the second quarter of
Fiscal 2002 from approximately $592,000 for the second quarter of Fiscal 2001.
Interest expense will vary based on the level of short-term borrowings the
Company incurs during the period and fluctuations in interest rates.
10
Other Income, Net
Other income, net was approximately $1,764,000 and $2,204,000 for the second
quarter of Fiscal 2002 and Fiscal 2001, respectively, a decrease of $440,000.
The decrease was primarily attributable to lower interest income earned in the
second quarter of Fiscal 2002 compared to the prior year quarter, partially
offset by an arbitration award to the Company of approximately $1,200,000 in the
second quarter of Fiscal 2002.
Income Taxes
The Company's provision for income taxes was approximately $140,000 for the
second quarter of Fiscal 2002 compared to approximately $487,000 for the second
quarter of Fiscal 2001, a decrease of $347,000. The decrease was primarily
related to taxable domestic income being partially offset by a foreign tax loss
before income taxes in the second quarter of Fiscal 2002 compared to taxable
domestic and foreign income in the second quarter of Fiscal 2001. In general,
the effective income tax rate is largely a function of the balance between
income and loss from domestic and foreign operations.
Net (Loss) Income
As a result of the matters described above, the Company had a net loss of
approximately $1,555,000, or $0.06 per share, for the second quarter of Fiscal
2002 as compared to net income of approximately $6,787,000, or $0.23 per diluted
share, for the second quarter of Fiscal 2001.
Six months ended December 29, 2001 compared to the Six months ended December 30,
2000
Revenues
Revenues for the six months ended December 29, 2001 ("First Half Fiscal 2002")
were approximately $72,153,000, a decrease of approximately $47,256,000, or
39.6%, as compared to revenues for the six months ended December 30, 2000
("First Half Fiscal 2001"). The decrease in sales resulted principally from
decreases in sales to OEM customers partially offset by increases in sales to
new and existing RSD customers. The increase in RSD sales was primarily due to
increased sales to new and existing RSD customers of single-use and digital
camera products. RSD customer sales for the First Half Fiscal 2002 were
approximately $51,352,000, an increase of approximately $4,521,000, or 9.7%, as
compared to the First Half Fiscal 2001. OEM sales for the First Half Fiscal 2002
were approximately $20,801,000, a decrease of approximately $51,777,000, or
71.3%, as compared to the First Half Fiscal 2001.
Sales of Concord Asia for the First Half Fiscal 2002, excluding FOB Hong Kong
sales to its customers in the Americas and Europe of approximately $25,968,000,
were approximately $47,520,000, a decrease of approximately $53,492,000, or
53.0%, as compared to the First Half Fiscal 2001. The decrease was primarily due
to the loss in Fiscal 2002 of an OEM customer that purchased digital product in
the First Half Fiscal 2001, partially offset by increases in sales to new and
existing OEM customers.
Sales of Concord Americas for the First Half Fiscal 2002, which were all RSD
sales, including FOB Hong Kong sales to customers in the Americas, were
approximately $36,680,000, an increase of approximately $7,316,000, or 24.9%, as
compared to the First Half Fiscal 2001. The increase was primarily due to
successful implementation of new programs with new and existing customers,
increased market share from existing customers and the positive sell through of
certain new and existing products.
Sales of Concord Europe for the First Half Fiscal 2002, which were all RSD
sales, including FOB Hong Kong sales to customers in Europe, were approximately
$13,921,000, a decrease of approximately $3,498,000, or 20.1%, as compared to
the First Half Fiscal 2001. This decrease was primarily attributable to lower
sales of single-use and reloadable cameras.
11
Gross Profit
Gross profit for the First Half Fiscal 2002 was approximately $13,073,000, a
decrease of approximately $13,832,000, or 51.4% as compared to the First Half
Fiscal 2001. Gross profit, expressed as a percentage of sales, decreased to
18.1% for the First Half Fiscal 2002 as compared to 22.5%, for the First Half
Fiscal 2001. The decrease in gross profit as a percentage of sales in First Half
Fiscal 2002 compared to the First Half Fiscal 2001 was attributable to (i) a
provision related to inventory of approximately $1,761,000 which was recorded in
the first quarter of Fiscal 2002 and was related to Polaroid Corporation
("Polaroid"), an OEM customer, and (ii) changes in product mix, pricing
pressures and unfavorable labor and overhead absorption. Product development
costs for the First Half Fiscal 2002 and the First Half Fiscal 2001 were
approximately $4,029,000 and $3,217,000, respectively.
Operating Expenses
Operating expenses, consisting of selling expense, general and administrative
expense, variable stock-based compensation expense, terminated acquisition costs
and interest expense increased by approximately $2,903,000, to $18,286,000 for
the First Half Fiscal 2002 from approximately $15,383,000 for the First Half
Fiscal 2001. Included in general and administrative expense for the First Half
Fiscal 2002 were certain charges aggregating $3,634,000 comprised of (i) the
Kmart Provision of $960,000; (ii) the Charitable Contribution Charge of
$1,063,000, and (iii) a provision related to an accounts receivable of
$1,611,000 associated with Polaroid ("Polaroid Receivable Provision"). As a
percentage of sales, operating expenses increased to 25.3% for the First Half
Fiscal 2002 from 12.9% for the First Half Fiscal 2001. Excluding the charges
described in the second preceding sentence aggregating $3,634,000, and the Stock
Option Expense of $1,656,000, in the First Half Fiscal 2002, and terminated
acquisition costs of $800,000 in the first quarter of Fiscal 2001 which related
to a proposed acquisition that was not consummated, operating expenses as a
percentage of sales would have been 18.0% for the First Half Fiscal 2002
compared to 12.2% for the First Half Fiscal 2001.
Selling expenses decreased by approximately $1,423,000, or 31.1%, to
approximately $3,154,000 for the First Half Fiscal 2002 from approximately
$4,577,000 for the First Half Fiscal 2001. The decrease was primarily due to a
decrease in certain variable selling expenses. As a percentage of sales, selling
expenses increased to 4.4% for the First Half Fiscal 2002 from 3.8% for the
First Half Fiscal 2001.
General and administrative expenses increased by approximately $3,418,000, or
39.0%, to approximately $12,181,000 for the First Half Fiscal 2002 from
approximately $8,763,000 for the First Half Fiscal 2001. Excluding the Kmart
Provision, the Charitable Contribution Charge, and the Polaroid Receivable
Provision, general and administrative expenses would have been approximately
$8,547,000 for the First Half Fiscal 2002, a decrease of $216,000, or 2.5%,
compared to the First Half of Fiscal 2001. The decrease was primarily
attributable to lower compensation expense partially offset by higher
professional fees. As a percentage of sales, general and administrative expenses
increased to 16.9% for the First Half Fiscal 2002 from 7.3% for the First Half
Fiscal 2001. Excluding the Kmart Provision, the Charitable Contribution and the
Polaroid Receivable Provision which aggregated $3,634,000, general and
administrative expenses, as a percentage of sales, would have been 11.8% for the
First Half Fiscal 2002.
Variable stock-based compensation expense was $1,656,000 for the First Half
Fiscal 2002 and resulted principally from variable accounting treatment accorded
certain of the Company's repriced stock options as a consequence of the
Company's exchange offer that expired October 16, 2001. For further discussion,
see the paragraph, Exchange Offer, under the section Liquidity and Capital
Resources.
Interest expense increased to approximately $1,295,000 for the First Half Fiscal
2002 from approximately $1,243,000 for the First Half Fiscal 2001. Interest
expense will vary as a direct result of the level of short-term borrowings the
Company incurs and fluctuations in interest rates.
Other Income, Net
Other income, net was approximately $2,363,000 and $2,518,000 for the First Half
Fiscal 2002 and the First Half Fiscal 2001, respectively, a decrease of
$155,000. The decrease was primarily attributable to lower interest income
earned in the First Half Fiscal 2002 partially offset by an arbitration award to
the Company of approximately $1,200,000 which the Company recorded as other
income in October 2001.
Income Taxes
The Company's benefit for income taxes was approximately $28,000 for the First
Half Fiscal 2002 compared to a tax provision of approximately $1,046,000 for the
First Half Fiscal 2001. The benefit was primarily related to a foreign tax loss
partially offset by domestic income before income taxes. In general, the
effective income tax rate is largely a function of the balance between income
and loss from domestic and foreign operations.
12
Net (Loss) Income
As a result of the matters described above, the Company had a net loss of
approximately $2,823,000, or $0.10 per share, for the First Half Fiscal 2002 as
compared to net income of approximately $12,993,000, or $0.47 per diluted share,
for the First Half Fiscal 2001. The Company does not anticipate that the loss of
the previously budgeted sales to Polaroid for the remaining two quarters of
Fiscal 2002, will materially affect its results of operations for those periods.
Liquidity and Capital Resources
On January 22, 2002, the Securities and Exchange Commission issued an
interpretive release on disclosures related to liquidity and capital resources.
The Company is not aware of factors that are reasonably likely to adversely
affect liquidity trends, other than the risk factors presented in other Company
filings. The Company does not have, or engage in transactions with any special
purpose entities, was not engaged in hedging activities and had no forward
exchange contracts outstanding at December 29, 2001. The Company, in the
ordinary course of business, enters into operating lease commitments, purchase
commitments and other contractual obligations. These transactions are recognized
in the Company's financial statements in accordance with U.S. generally accepted
accounting principles, and are more fully discussed below.
Operating leases- These leases are entered into in the ordinary course of
business (e.g., warehouse facilities, office space and equipment) where the
economic profile is favorable. The effects of outstanding leases are not
material to the Company by reference to both annual cash flow and total
outstanding debt. See Note 12, Commitments and Contingencies, to the
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2001.
Purchase Commitments - The Company has purchase commitments for materials,
supplies, services, and property, plant and equipment as part of the ordinary
conduct of business. In the aggregate, such commitments are not at prices in
excess of current market and typically do not exceed one year.
Other Contractual Obligations - The Company does not have any material financial
guarantees or other contractual commitments that are reasonably likely to
adversely affect liquidity. See the paragraph below, Hong Kong Credit
Facilities, for information about the financial guarantees of the Company.
The Company's only related party transaction is discussed in Note 15, Related
Party Transactions, to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2001.
This transaction does not materially affect the Company's results of operations,
cash flows or financial condition.
At December 29, 2001, the Company had working capital of approximately
$131,871,000 compared to approximately $131,003,000 at June 30, 2001. Cash
provided by operations in the First Half Fiscal 2002 was approximately
$3,200,000, which compared unfavorably to cash provided by operations of
approximately $8,450,000 for the First Half Fiscal 2001. The changes in cash
provided by operating activities for the First Half Fiscal 2002 and the First
Half Fiscal 2001 periods were primarily attributable to changes in inventories,
accounts payable and accrued expenses.
Cash provided by investing activities for the First Half Fiscal 2002 was
$49,094,000 that was primarily the result of approximately $49,870,000 in
proceeds received by the Company upon the maturity of short-term investments
made in Fiscal 2001. Capital expenditures for the First Half Fiscal 2002, were
approximately $775,000 compared to approximately $4,394,000 for the First Half
Fiscal 2001. The decrease was primarily the result of significantly reduced
expenditures on plant and equipment purchases for the Company's manufacturing
facility located in the People's Republic of China. It is expected that capital
expenditures on plant and equipment purchases on the Company's manufacturing
facility will increase substantially over the remainder of Fiscal 2002 compared
to the First Half Fiscal 2002.
13
Cash provided by financing activities was approximately $3,558,000 for the First
Half Fiscal 2002, which compared unfavorably to cash provided by financing
activities of approximately $93,594,000 for the First Half Fiscal 2001. The
decrease was attributable to the Company's public offering (described more fully
below) in September and October 2000.
Public Offering. On September 26, 2000, pursuant to an underwritten public
offering, the Company sold 3,900,000 shares of its Common Stock at a price of
$23.00 per share. Pursuant to an over-allotment option granted to the
underwriters, on October 2, 2000 the Company sold an additional 585,000 shares
of Common Stock at a price of $23.00 per share. The net proceeds to the Company
of the offering were approximately $96,881,000, after offering costs and
underwriting fees of approximately $6,274,000. The net proceeds have been used,
or are intended to be used, for the repayment of outstanding indebtedness
including capital leases, for capital expenditures and for general corporate and
strategic purposes, including working capital and investments in new
technologies, product lines and complementary businesses. The remaining net
proceeds are currently invested in cash equivalents.
Senior Notes Payable. On July 30, 1998, the Company consummated a private
placement of $15,000,000 of unsecured senior notes. The notes bear interest at
11.0%, and mature on July 15, 2005. Interest payments are due quarterly. The
indenture governing the notes contains certain restrictive covenants relating
to, among other things, incurrence of additional indebtedness and dividend and
other payment restrictions affecting the Company and its subsidiaries. If the
Company were to redeem the Senior Notes prior to their maturity, payment of an
early redemption fee, the outstanding principal amount and accrued and unpaid
interest on the Senior Notes would be required. At December 29, 2001, the early
redemption fee was 3% of the outstanding principal. The fee decreases to 1% and
0% on July 16, 2002 and July 16, 2003, respectively.
Hong Kong Credit Facilities. Concord Camera HK Limited ("Concord HK") has
various revolving credit facilities in place providing an aggregate of
approximately $23,500,000 in borrowing capacity. Certain of the revolving credit
facilities are denominated in Hong Kong dollars. Since 1983 the Hong Kong dollar
has been pegged to the United States dollar. The revolving credit facilities are
comprised of 1) an approximate $11,000,000 Import Facility, 2) an approximate
$2,600,000 Packing Credit and Export Facility, 3) an approximate $1,900,000
Foreign Exchange Facility and 4) an $8,000,000 Accounts Receivable Financing
Facility. The $8,000,000 Accounts Receivable Financing Facility is secured by
certain account receivables of Concord HK and guaranteed by the Company. The
Company also guarantees the remaining $15,500,000 of borrowing capacity.
Availability under the Accounts Receivable Financing Facility is subject to
advance formulas based on Eligible Accounts Receivable and all the credit
facilities are subject to certain financial ratios and covenants. The revolving
credit facilities bear interest at variable rates. At December 29, 2001,
approximately $3,778,000 was outstanding and related to trust receipts and
letters of credit under the Hong Kong Credit Facilities.
United Kingdom Credit Facility. In November 1999, a United Kingdom subsidiary of
the Company, obtained a $1,000,000 credit facility (the "UK Facility") in the
United Kingdom that is secured by substantially all of the assets of the
Company's United Kingdom subsidiary. The UK Facility bears interest at 1.5%
above the UK prime lending rate and was principally utilized for working capital
needs. At December 29, 2001, there were no amounts outstanding under the UK
Facility.
United States Credit Facilities. In June 2000, a Concord Camera Corp., U.S.
subsidiary entered into a credit facility (the "US Facility") with a lender to
provide up to $5,000,000 of unsecured working capital. The US Facility bears
interest at 1.75% above the London Interbank Offer Rate ("LIBOR"). No amounts
were outstanding under the US Facility at December 29, 2001.
14
Exchange Offer. On August 28, 2001, the Company launched an offer to exchange
outstanding stock options with an exercise price of more than $7.00 per share
for new options to purchase 75% of the shares subject to the outstanding options
at an exercise price of $5.97 per share (the closing price of the Common Stock
reported on the NASDAQ National Market on the date the Board of Directors
approved the exchange offer.) The exchange offer expired on October 16, 2001.
Options to purchase 1,375,876 shares of Common Stock were tendered in the
exchange offer and accepted by the Company for cancellation and new options to
purchase 1,031,908 shares of Common Stock were issued in exchange therefor. As a
result of the exchange offer, the Company was required to apply variable
accounting for these stock option grants until the options are exercised,
cancelled or expire. Accordingly, for the quarter ended December 29, 2001, the
Company incurred approximately $1,656,000 principally related to non- cash stock
option compensation expense which was included under the caption of variable
stock-based compensation expenses in the accompanying condensed consolidated
statements of operations for the three and six months ended December 29, 2001,
with a corresponding offset to Paid-in capital in the accompanying condensed
consolidated balance sheet as of December 29, 2001. Because the determination of
variable accounting expense associated with the repriced stock options is
dependent, in part, on the closing stock price of the Company at the end of each
prospective reporting period, it is not possible to determine the impact, either
favorable or unfavorable, on the Company's financial statements.
Future Cash Commitments. The Company believes that its cash and cash
equivalents, short-term investments, anticipated cash flow from operations, and
amounts available under its credit facilities will be sufficient to meet its
working capital and anticipated capital expenditure needs for the foreseeable
future.
The Company is evaluating various growth opportunities which could require
significant funding commitments. The Company has from time to time held, and
continues to hold, discussions and negotiations with (i) companies that
represent potential acquisition or investment opportunities, (ii) potential
strategic and financial investors who have expressed an interest in making an
investment in or acquiring the Company, (iii) potential joint venture partners
looking toward formation of strategic alliances that would broaden the Company's
product base or enable the Company to enter new lines of business and (iv)
potential new and existing OEM customers where the design, development and
production of new products, including certain new technologies, would enable the
Company to expand its existing business, and enter new markets outside its
traditional business including new ventures focusing on wireless connectivity
and other new communication technologies. There can be no assurance that any
definitive agreement will be reached regarding any of the foregoing.
Terrorist attacks in New York and Washington, D.C. in September of 2001 have
disrupted commerce throughout the United States and other parts of the world.
The continued threat of terrorism within the United States and abroad and the
potential for military action and heightened security measures in response to
such threat may cause significant disruption to commerce throughout the world.
To the extent that such disruptions result in delays or cancellations of
customer orders, a general decrease in consumer spending, or our inability to
effectively market and sell our products, our business and results of operations
could be materially and adversely affected. We are unable to predict whether the
threat of terrorism or the responses thereto will result in any long-term
commercial disruptions or if such activities or responses will have a long-term
material adverse effect on our business, results of operations or financial
condition.
15
Forward-Looking Statements
The statements contained in this report that are not historical facts are
"forward-looking statements" (as such term is defined in the Private Securities
Litigation Reform Act of 1995), which can be identified by the use of
forward-looking terminology such as: "estimates," "projects," "anticipates,"
"expects," "intends," "believes," "plans," or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in such forward-looking statements as a result
of certain factors. For a discussion of some of the factors that could cause
actual results to differ, see the discussion under "Risk Factors" contained in
the Company's most recent Annual Report filed with the SEC on Form 10-K for the
fiscal year ended June 30, 2001 and subsequently filed reports. Management
wishes to caution the reader that these forward-looking statements, such as
statements regarding the development of the Company's business, the Company's
anticipated capital expenditures, projected profits and other statements
contained in this report regarding matters that are not historical facts, are
only estimates or predictions. No assurance can be given that future results
will be achieved. Actual events or results may differ materially as a result of
risks facing the Company or actual results differing from the assumptions
underlying such statements. In particular, expected revenues could be adversely
affected by production difficulties or economic conditions negatively affecting
the market for the Company's products. Obtaining the results expected from the
introduction of the Company's new products will require timely completion of
development, successful ramp-up of full-scale production on a timely basis and
customer and consumer acceptance of those products. In addition, the Company's
OEM agreements require an ability to meet high quality and performance
standards, successful implementation of production at greatly increased volumes
and an ability to sustain production at greatly increased volumes, as to all of
which there can be no assurance. There also can be no assurance that products
under development will be successfully developed or that once developed such
products will be commercially successful. Any forward-looking statements
contained in this report represent the Company's estimates only as of the date
of this report, or as of such earlier dates as are indicated herein, and should
not be relied upon as representing its estimates as of any subsequent date.
While the Company may elect to update forward-looking statements at some point
in the future, it specifically disclaims any obligation to do so, even if its
estimates change.
16
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a result of its global operating and financial activities, the Company is
exposed to changes in interest rates and foreign currency exchange rates which
may adversely affect its results of operations and financial position. In
seeking to minimize the risks and/or costs associated with such activities, the
Company manages exposures to changes in interest rates and foreign currency
exchange rates through its regular operating and financing activities.
The Company's exposure to changes in interest rates results from its borrowing
activities used to meet its liquidity needs. Its borrowing activities include
the use of fixed and variable rate financial instruments which allows the
Company flexibility regarding the timing of the short and long term maturities
of such financial instruments. Long-term debt is generally used to finance
long-term investments, while short-term debt is used to meet working capital
requirements. The Company's current debt structure consists principally of
borrowings of a long-term nature with a fixed rate of interest. The remainder of
the borrowings are of a short-term nature typically subject to variable interest
rates based on a prime rate or LIBOR plus or minus a margin. Since the
significant outstanding borrowings of the Company are of a fixed rate nature,
the Company does not deem interest rate risk to be significant or material to
its financial position or results of operations. Derivative instruments are not
presently used to adjust the Company's interest rate risk profile. The Company
does not utilize financial instruments for trading or speculative purposes, nor
does it utilize leveraged financial instruments. The Company continues to
monitor its capital structure and interest rate risk exposure, and believes it
mitigates such risk principally through its strong working capital position.
Each of the Company's foreign subsidiaries purchases its inventories in U.S.
Dollars and sells them in local currency, thereby creating an exposure to
fluctuations in foreign currency exchange rates. Certain components needed to
manufacture cameras are purchased in Japanese Yen. The impact of foreign
exchange transactions is reflected in the statement of operations. As of
December 29, 2001, the Company was not engaged in any hedging activities and
there were no forward exchange contracts outstanding. The Company continues to
analyze the benefits and costs associated with hedging against foreign currency
fluctuations.
17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 6 to the Condensed Consolidated Financial Statements regarding the
matter between the Company and Jack C. Benun.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
No. Description Method of Filing
----------- ----------------
3.1 Certificate of Incorporation, Incorporated by reference to the
as amended through May 9, 2000 Company's annual report on Form 10-K
for the year ended July 1, 2000.
3.2 Restated By-Laws, as amended Incorporated by reference to the
through December 21, 2000 Company's quarterly report on Form
10-Q for the quarter ended December
30, 2000.
(b) Reports on Form 8-K
The registrant did not file any reports on Form 8-K during the quarter ended
December 29, 2001.
18
S I G N A T U R E
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.
CONCORD CAMERA CORP.
--------------------
(Registrant)
BY: /s/ Harlan I. Press
-------------------
(Signature)
Harlan I. Press
Vice President and Treasurer
DULY AUTHORIZED AND CHIEF ACCOUNTING OFFICER
DATE: February 12, 2002
19