ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The statements contained in this report that are not historical are forward-looking statements, including statements regarding our expectations, intentions, beliefs or strategies regarding the future. Forward-looking
statements include our statements regarding liquidity, anticipated cash needs, and availability and anticipated expense levels. All forward-looking statements included in this report are based on information available to us on this date, and we
assume no obligation to update any such forward-looking statement. It is important to note that our actual results could differ materially from those in such forward-looking statements. The following discussion and analysis should be read in
conjunction with the financial statements and accompanying notes appearing elsewhere in this report.
Overview
Historically our principal business has been printing for the textile and gift wrap paper industry using a computerized laser printing system. We have experienced significant price competition from low-cost printing
operations in other countries, particularly China. In response to this competitive pressure we diversified our customer base to national retail chain stores, and broadened our product line into different types of packaging and gift wrap products. We
currently purchase our products from the domestic USA markets, China and other countries. We have in house design, creative and prepress departments and also use outside sources for these services. Generally, we have had no trouble finding domestic
or overseas suppliers. We are experiencing price increases due to the exchange rate of the US dollar versus foreign currencies and the general cost increase of raw materials, energy and labor.
Three months ended February 28, 2009 compared to three months ended February 28, 2008.
Revenues were $1,900,004 for the three months ended February 28, 2009 compared to $3,860,439 for the three months ended February 28, 2008. Revenue decreased approximately 50.78% for the quarter ended February 28,
2009 due to a general slowdown in retail sales and our customers having inventory overstock. Our gross margin for the three months ended February 28. 2009 was 17% compared to 22% for the three months ended February 29, 2008. The gross margin for the
period ending February 29, 2008 decreased due to selling old inventory at lower margins. . Selling expenses for the three months ended February 28, 2009 remained the same as a percentage of revenue from $129,083 (7% of revenue) for the three
months ended February 29, 2008 to $277,060 (7% of revenue) for the three months ended February 28, 2009. General and administrative expenses for the three months ended February 28, 2009 decreased to $820,011 (43% of revenue) from
$927,051 (24% of revenue) as for the three months ended February 29, 2008.
Interest expense was approximately the same for the three months ended February 28, 2009 as for the three months ended February 29, 2008.
Liquidity and Capital Resources.
For the three months ended February 28, 2009 the Company had cash flow from operations of $143,084.
Liquidity is sustained principally through funds provided from operations and the factoring facility.
Inventories are up as a percentage of our current assets as of the close of the quarter (approximately 56.14% as of February 28, 2009 versus approximately 30.32% as of November 30, 2008), and accounts receivable are down as
a percentage of current assets as of that date (approximately 13.77% as of February 28, 2009 versus approximately 41.75% as of November 30, 2008), due to our seasonal sales which increase our accounts receivable in the fourth quarter.
Cash plus accounts receivable exceeded our current liabilities. We believe we will be able to meet our cash requirements for the next 12 months without additional financing based on current projected sales.
The Company has arranged for a factoring facility of up to $5,000,000. The Company agreed to offer for sale to the factor certain of its accounts. The factor has the absolute right in its sole discretion to reject any
or all offered accounts. The factor
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may advance up to 85% of the face value of the invoices. The remaining 15% of balance is received when the customer pays the invoice to the factor.
Each account is purchased by the factor without recourse against the Company. All losses incurred by the factor from the financial inability of the applicable account debtor to pay such account over and above any and all
residual payments and reserve amounts offset shall be borne solely by the factor.
As of November 30, 2008 and February 28, 2009, the factor charges the Company 1% of the invoice amount if the customer repays the invoice within 60 days and 1.25% for up to 90 days.
The factor has a security interest in all of our accounts receivable, inventory, deposit accounts, and general intangibles. We find that this arrangement is a convenient and cost efficient way to turn our accounts
receivable into cash on an as needed basis.
Critical Accounting Policies and Estimates
Use of Estimates.
In preparing our financial statements, we must make a number of estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and
expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances. Actual results could differ from these estimates under different assumptions or conditions, and these differences may be material. We believe the following critical accounting policies affect our more significant judgments and
estimates used in preparing our financial statements.
Allowance for Doubtful Account
s –We reserve for bad debts and create our allowance by identifying specific accounts receivable by customer based upon age and collectibility. When
we determined that an account is uncollectible, we remove it from the accounts receivable and reduce the related allowance. Our estimates of collectibility are based on a number of subjective factors including our appraisal of the particular
customer's history with us into any identifiable factors that may particularly affect that customer's segment of the market. If our estimates as to collectibility are incorrect the amount of our reserve may be too small, resulting in greater future
charges to income if and when the uncollectibility of that account becomes clear. If we were to apply another method of determining our allowance for doubtful accounts, such as applying historical percentages to the aggregate dollar amount of
accounts outstanding, the result in any particular period could be very different.
Inventories
– Inventories which consist of mostly finished goods are stated at the lower of cost or market, with cost being determined by the weighted average first-in, first-out
method. The effect of this policy is to reduce the cost of goods sold when cost of inventory are rising as compared to the cost of goods sold that would apply if we were to determine cost on a last in first-out basis. Conversely, our policy would
result in a reduction in the cost of goods sold during periods of falling inventory prices.
Property and Equipment
–We compute depreciation of property and equipment by the straight-line method at rates calculated to amortize cost over the estimated useful lives which
approximate 39 years for buildings and building improvements and 5 to 10 years for machinery and equipment, computer equipment and furniture and fixtures. We charge maintenance and repairs to operations as incurred, while we capitalize the cost of
betterments and improvements. The cost and related accumulated depreciation of assets sold or otherwise disposed of are eliminated from the accounts and any resulting gain or loss is reflected in operations. If we were to apply shorter useful lives
in estimating the applicable depreciation, depreciation expense would be higher. In addition, we must apply judgment in determining whether particular work should properly be regarded as maintenance and repairers, and not a long-term increase in the
value of the underlying asset. To the extent that we classify work on an asset as a cost of that asset rather than an expense to be deducted currently, our stated earnings for the applicable period would be increased.
Long-Lived Assets
–We follow Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.
This statement requires us to review certain long-lived assets and identifiable intangibles for impairment or disposal whenever events or changes in circumstances indicated the carrying
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amount may not be recoverable. We address recoverability based upon estimated non-discounted cash flow forecasts. Technological changes and other changes in the marketplace may result in a particular asset's becoming recoverable in a shorter period of time than we have estimated. If that were to occur, our earnings would be reduced at
such time as we determined that our initial estimate was too long. We have determined that we do not need to recognize an impairment loss for applicable assets through February 28, 2009 and 2008.
Revenue Recognition –
We recognize revenues in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB
104”). Under SAB 104, we record revenues from merchandise sales when all four of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the Company’s price to the
buyer is fixed or determinable; and collectibility is reasonably assured. We report our sales levels on a net revenue basis, with net revenues being computed by deducting from gross revenues the amount of actual sales returns and discounts. The
determination of whether collectibility is reasonably assured is in substantial part subjective. If we are too optimistic in estimating collectibility, revenues would be overstated for the period prior to our becoming aware that an account has
become uncollectible.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our Chairman, Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this quarterly report, and based on their evaluation, our Executive Chairman, Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls
and procedures are effective.
Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded,
processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our Executive Chairman, Chief Executive Officer and Chief Financial Officer, as appropriate,
to allow timely decisions regarding required disclosure.
(b) Changes in internal controls.
There were no significant changes in our internal controls or in other factors that could significantly affect our internal control over financial reporting.
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PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provided the information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The exhibits required by this Item are set forth in the Exhibit Index attached hereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
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LASER MASTER INTERNATIONAL, INC.
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Date: April 17, 2009
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By:
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/s/ Mendel Klein
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Name:
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Mendel Klein
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Title:
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Chief Executive
Officer and
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Chief Financial
Officer
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EXHIBIT INDEX
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Exhibit
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No.
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Description
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31.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rules 13a-14 and 15d-14
under the Securities Exchange Act of 1934, as amended.
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32.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
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Laser Master (CE) (USOTC:LMTI)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Laser Master (CE) (USOTC:LMTI)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
