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Microcap & Penny Stocks : AREE - Formerly TVSI -- Ignore unavailable to you. Want to Upgrade?

To: REDDY who wrote (5255)	5/25/1999 6:59:00 PM
From: Milk	Respond to of 6528

May 25, 1999 ARETE INDUSTRIES INC (ARIN) Quarterly Report (SEC form 10QSB) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Arete Industries, Inc. (the "Company") was organized as a Colorado corporation on June 21, 1987 under the name Travis Investments, Inc. The Company is in the business of printing advertising materials and coupons and mailing them to its customers. During 1995, the Company filed a plan of reorganization which was approved by the United States Bankruptcy Court. The Company emerged from its Chapter 11 bankruptcy with its coop coupon franchise business intact along with a small captive coupon printing and mailing operation located in Council Bluffs, Iowa. During the current period, the Company closed its Council Bluffs operations and moved them to Denver, Colorado in a space leased from SourceOne Worldwide, LLC. pursuant to a Joint Venture Agreement between the Company and SourceOne. The Company now outsources all its printing and mailing services to SourceOne, which outsourcing is contemplated to be transferred to a jointly owned company contemplated to be formed in the near future. The Company generated operating revenues of approximately $257,484 with cost of goods sold of $226,151 (or 88% of sales) during the quarter ended March 31, 1999. This is compared to operating revenues of $276,706 and cost of goods sold of approximately $215,948 (or 78% of sales) during the quarter ended March 31, 1998. These increases are mainly attributable to the transitional expenses incurred during the move to SourceOne including severance and incentive pay to operating employees, moving expenses and start-up costs. Operating expenses of approximately $152,366 (or 59% of sales) were incurred during the quarter ended March 31, 1999, compared to $309,038 (or 112% of sales) in the quarter ended March 31, 1998. The Company had a net loss of $82,037 (or 32% of sales) during the quarter ended March 31, 1999. With respect to the loss, when adjusting for certain non-recurring items, the loss is $122,680 (or 48% of sales) as compared to a net loss of $254,108 (or 92% of sales) during the 3 month period ending March 31, 1998. Management anticipates that for the next several months the significant amount of operating losses eliminated by the outsourcing agreement will be diminished in part by losses incurred in adjusting to the new operating environment and because for the time being, SourceOne is operating with less efficient equipment than was used in Council Bluffs. Otherwise, management believes that this move will greatly enhance efficiencies and improve cash flow as well as allow the Company to accumulate working capital to fund growth of its current business and expand into other more profitable lines of business. The Company had liabilities in excess of assets at March 31, 1999 of $282,439. At March 31, 1999, the Company had no material commitments for capital expenditures. ---------------------------------------------------------------------- More filings: edgar-online.com