Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
AASL > SEC Filings for AASL > Form 10-Q on 7-Nov-2012All Recent SEC Filings

Show all filings for AMERICA'S SUPPLIERS, INC.

Form 10-Q for AMERICA'S SUPPLIERS, INC.


7-Nov-2012

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information that management believes is relevant for an assessment and understanding of our results of operations and financial condition. The following selected financial information is derived from our historical consolidated financial statements and should be read in conjunction with such consolidated financial statements and notes thereto set forth elsewhere herein and the "Forward-Looking Statements" explanation included herein. This information should also be read in conjunction with our audited historical consolidated financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission on March 14, 2012.

Overview

We develop software programs that allow us to provide general merchandise for resale to businesses through our website at www.DollarDays.com. We have been recognized as a leader in the Internet wholesale market of discounted merchandise by a leading business periodical and trade associations. Our objective is to provide a one-stop discount shopping destination for general merchandise for smaller distributors, retailers and non-profits nationwide seeking single and small cased-sized lots at bulk prices. We launched our first website in October 2001. The site offers customers an opportunity to shop for bargains conveniently, while offering our suppliers an alternative sales channel. We believe our website offers a unique benefit to smaller businesses in that they are able to purchase goods from wholesalers and importers in single and small case lots, with no minimum purchase requirements at discounted prices. We believe the prevailing reason our business has been able to obtain bulk pricing for single case lots is our ability to reach smaller distributors, retailers and non-profits that most general merchandise suppliers cannot economically reach. We provide all the logistics and customer support to serve this sales channel and grow our customer base.

We continually add new, limited inventory products to our website in order to create an atmosphere that encourages customers to visit frequently and purchase products before the inventory sells out. Through our Internet catalog, we offer approximately 225,000 products, including up to 35,000 closeout items at further discounted prices. Closeout merchandise is typically available in inconsistent quantities and prices.

We accept orders, either online or via telephone sales staff, collect payment in the form of credit or debit card, PayPal or similar means, and coordinate with manufacturers, importers and close-out specialists regarding delivery particulars. PayPal refers to the online payment platform located at www.paypal.com and its localized counterparts. Our proprietary software and service procedures allow us to sell merchandise to a single customer, and bill as a singer order, items purchased and delivered from multiple suppliers. We do not take possession of inventory, but we are responsible for processing customer claims and returns.

Our website has a registered base of approximately 230,000 small businesses and receives approximately 3 million monthly page views. We receive an average of approximately 5,000 orders per month. Our target audience is smaller businesses and not-for-profit companies.

During 2010, we established a majority-owned subsidiary, WowMyUniverse.com to develop a retail online business to sell directly to consumers. On October 1, 2010, this subsidiary became wholly owned as we acquired the non-controlling interest in exchange for our interest in an unconsolidated subsidiary. While we experienced limited sales through test marketing in early 2011, we began full operations in the second half of 2011. Net losses from WowMyUniverse.com were $7,663 and $4,881 for the three months ended September 30, 2012 and 2011, respectively, and $55,332 and $46,853 for the nine months ended September 30, 2012 and 2011, respectively.

Results of Operations



Net Revenues



                                                                              Change from       Percent Change
              Net Revenues                     2012             2011          Prior Year       from Prior Year
Three months ended September 30,           $  4,864,729     $  4,916,984     $     (52,255 )               (1.1 )%
Nine months ended September 30,            $ 12,164,665     $ 12,337,610     $    (172,945 )               (1.4 )%

Net revenues decreased for the three and nine months ended September 30, 2012, as compared to the three and nine months ended September 30, 2011 as a result of a coupon promotion in April 2011, and smaller average order sizes. This coupon promotion had negative unintended consequences and was subsequently terminated. Our smaller average order size in 2012 is believed to be correlated to the state of the economy. Factors that influence future revenue growth include general economic conditions, our ability to attract vendors that offer compelling products and the impact of our marketing activities.

Advertising Revenues



                                                                        Change from       Percent Change
          Advertising Revenues               2012          2011         Prior Year        from Prior Year
Three months ended September 30,             161,262        43,355     $     117,907                 272.0 %
Nine months ended September 30,              464,540       152,932     $     311,608                 203.8 %

Advertising revenues increased during the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011 due primarily to the hiring of an advertising specialist who is aggressively pursuing advertisers.

Cost of Goods Sold



                                                                            Change from       Percent Change
           Cost of Goods Sold                 2012            2011          Prior Year       from Prior Year
Three months ended September 30,           $ 3,243,426     $ 3,308,138     $     (64,712 )               (2.0 )%
Nine months ended September 30,            $ 8,015,157     $ 8,350,988     $    (335,831 )               (4.0 )%

Cost of goods sold decreased during the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011 due primarily to the decrease in net revenues as discussed above, as well as a one-time increase in shipping costs during April 2011 related to coupon promotion. Gross margins as a percentage of total revenue were 35.5% and 36.5% for the three and nine months ended September 30, 2012 as compared to 33.3% and 33.1% for the three and nine months ended September 30, 2011. Factors which may influence the cost of goods sold include our general sales volumes, negotiated terms with vendors and general economic conditions.

Sales and Marketing



                                                                            Change from       Percent Change
          Sales and Marketing                 2012            2011          Prior Year       from Prior Year
Three months ended September 30,           $ 1,044,964     $   921,898     $     123,066                 13.3 %
Nine months ended September 30,            $ 2,692,209     $ 2,587,581     $     104,628                  4.0 %

Sales and marketing expenses include fees for attracting users to our site, including search engine optimization, telemarketing and other marketing efforts as well as promotional activities to increase sales by end users. Sales and marketing expenses increased in the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011 due to an increase in sales salaries, offset by a decrease in marketing promotion costs.

Factors influencing sales and marketing expenses include strategic decisions with respect to the cost-effectiveness of each of our marketing activities.

General and Administrative



                                                                             Change from       Percent Change
       General and Administrative              2012            2011          Prior Year       from Prior Year
Three months ended September 30,            $   568,870     $   515,589     $      53,281                 10.3 %
Nine months ended September 30,             $ 1,703,087     $ 1,682,740     $      20,347                  1.2 %

General and administrative expenses increased in the three and nine months ended September 30, 2012, as compared to the three and nine months ended September 30, 2011, due primarily to an increase in labor related expense, offset by a decrease in rent expense due to a successful renegotiation of our existing lease for our business headquarters.

Factors that influence the amount of general and administrative expenses include the amount and extent by which we compensate our consultants, executives and directors with stock-based or other compensation, the rate of growth of our business and the extent to which we outsource or bring certain activities in-house.

Other Income (Expense)



                                                                        Change from       Percent Change
         Other Income (Expense)              2012          2011         Prior Year        from Prior Year
Three months ended September 30,           $     833     $   1,708     $        (875 )               (51.2 )%
Nine months ended September 30,            $   2,815     $   4,697     $      (1,882 )               (40.1 )%

Other income (expense) for the three and nine months ended September 30, 2012 consisted of interest income on cash balances, short-term investments, notes receivable and other miscellaneous income.

Net Income (Loss)



                                                                         Change from       Percent Change
           Net Income (Loss)                 2012           2011         Prior Year        from Prior Year
Three months ended September 30,           $ 169,564     $  215,728     $     (46,164 )               (21.4 )%
Nine months ended September 30,            $ 221,567     $ (131,809 )   $     353,376                 268.1 %

We earned a profit for the three and nine months ended September 30, 2012, as compared to our net profit and net loss for the three and nine months ended September 30, 2011, respectively, primarily due an improvement in gross margins, and changes in sales and marketing expense and general and administrative expense, each of which is described above.

Liquidity and Capital Resources

Our operating cash inflows were $117,045 for the nine months ended September 30, 2012 as compared to outflows of $130,614 for the nine months ended September 30, 2011 constituting a decrease in cash used by operations of $247,659. The change in net operating cash outflows is attributable an increase in net income of $353,376, partially offset by an increase in prepaid expenses of $154,214 and other minor changes in non-cash charges and net working capital.

Investing cash inflows for the nine months ended September 30, 2012 consisted of $165,008 of cash received from the maturities of certificates of deposit, partially offset by $123,000 of investments in equipment and website development costs to support our business operations and expansion into the consumer marketplace. Investing cash inflows for the nine months ended September 30, 2011 consisted of $100,000 of cash received from the maturities of certificates of deposit, partially offset by $30,000 of loans to Business Calcium and $25,445 of investments in equipment and website development costs.

We intend to generate operating cash flows through the growth of our existing business, the improvement of operating margins and by growth through acquisitions. Although there can be no assurance, management believes such measures will provide enough liquidity to operate our current business and continue as a going concern.

Off-balance sheet arrangements

We did not have any off-balance sheet arrangements at September 30, 2012.

  Add AASL to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for AASL - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.