PENOBSCOT SHOE COMPANY 1995 ANNUAL REPORT
14
DIRECTORS
IRVING KAGAN GERALD E. RUDMAN
Chairman of the Board Senior Partner,
Rudman & Winchell (Law firm)
JAMES L. MOODY, JR. FRANCIS J. GUTHRIE
Chairman of the Board Senior Vice President Corporate
Hannaford Bros. Co. Marketing and Communications
(Retail and wholesale Fortis Inc. (Health and life insurance and
distribution of groceries) financial services)
JOHN I. RIDDLE PAUL HANSEN
Retail Real Estate and President and
Shopping Center Developer Chief Executive Officer
OFFICERS
PAUL HANSEN WILHELM PFANDER
President and Vice President-Manufacturing
Chief Executive Officer
DAVID L. KEANE JOHN R. FRENCH
Treasurer and Vice President
Vice President Management Information Systems
Finance and Administration
WILLIAM HOSKINS GERALD E. RUDMAN
Vice President-Sales Corporate Clerk
15
February 7, 1996
TO OUR SHAREHOLDERS...
Net sales for the fiscal year ended November 24, 1995, were $12,681,000,
down 13% from $14,506,000 last year. Net income for fiscal 1995 was
$438,000, or $.30 per share, compared to $510,000, or $.34 per share in
fiscal 1994.
For the fourth quarter of fiscal 1995, net sales were $3,234,000, down 14%
from $3,761,000 a year ago. Net income for the quarter was $318,000, or
$.21 per share, up slightly from net income of $303,000, or $.20 per share
in the comparable quarter last year.
Retail sales of footwear were weak for most of 1995 as consumers remained
cautious and retail traffic was light. This was particularly true of
independent retailers, which have traditionally made up the largest segment
of TROTTERS distribution. Despite this extremely difficult marketplace,
TROTTERS expanded its presence in a significant retail channel, department
stores.
We expect the poor retail environment to continue during 1996. We are placing
increased emphasis on product development and marketing to enhance our brand
presence in 1996 and beyond.
Sincerely,
Irving Kagan Paul Hansen
Chairman of the Board President and Chief Executive Officer
16
STATEMENTS OF INCOME
For the Years Ended November 24, 1995,
November 25, 1994 and November 26, 1993
(In thousands, except for share data)
1995 1994 1993
Net Sales $ 12,681 $ 14,506 $ 14,861
Costs and operating expenses (Notes 1 and 3)
Cost of sales 8,218 9,536 9,794
Selling and administrative expenses 4,140 4,094 4,284
12,358 13,630 14,078
Operating income 323 876 783
Other income (expense), net (Note 7) 412 (44) 304
Income before taxes on income 735 832 1,087
Taxes on income (Notes 1 and 8) 297 322 424
Net income $ 438 $ 510 $ 663
Per common share:
Net income (Note 1) $ .30 $ .34 $ .45
Dividends declared $ .20 $ .20 $ .20
Weighted average share outstanding 1,482,117 1,480,548 1,475,357
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended November 24, 1995,
November 25, 1994 and November 26, 1993
(In thousands, except for share data)
Additional
Common Stock Paid-in Retained Treasury Stock
Shares Amount Capital Earnings Shares Amount
Balance, November 27, 1992 1,533,042 $ 1,533 $ 1,109 $ 6,984 63,125 $ 348
Net income for the year - - - 663 - -
Sale of treasury stock - - - (20) (6,000) (38)
Less dividends on common
stock ($.20 per share) - - - (295) - -
Balance, November 26, 1993 1,533,042 1,533 1,109 7,332 57,125 310
Net income for year - - - 510 - -
Sale of treasury stock - - - (20) (6,200) (40)
Less dividends on common
stock ($.20 per share) - - - (296) - -
Balance, November 25, 1994 1,533,042 1,533 1,109 7,526 50,925 270
Net income for year - - - 438 - -
Less dividends on common
stock ($.20 per share) - - - (297) - -
Balance, November 24, 1995 1,533,042 $ 1,533 $ 1,109 $ 7,667 50,925 $ 270
See accompanying notes to financial statements
PENOBSCOT SHOE COMPANY
17
BALANCE SHEETS
November 24, 1995 and November 25, 1994
(In thousands)
ASSETS 1995 1994
CURRENT ASSETS:
Cash and cash equivalents (Note 1) 1,301 1,308
Marketable securities (Notes 1 and 2) 3,271 2,556
Receivables (Note 8):
Trade, less allowances of $468 and $486 3,460 3,634
Refundable income taxes - 52
Other 32 56
Inventories (Notes 1 and 3) 3,054 2,469
Prepaid expenses and other (Notes 4 and 8) 341 490
TOTAL CURRENT ASSETS 11,459 10,565
PROPERTY AND EQUIPMENT (Note 1):
Land 66 66
Land improvements 4 4
Buildings and improvements 1,413 1,409
Machinery and equipment 1,546 1,524
3,029 3,003
Less accumulated depreciation and amortization 2,660 2,542
NET PROPERTY ANDEQUIPMENT 369 461
TOTAL ASSETS $11,828 $11,026
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 791 $ 530
Accruals (Notes 1, 4 and6)
Salaries, wages and commissions 44 73
Retirement plan 189 195
Income taxes 105 40
Other 84 85
Dividends payable 74 74
TOTAL CURRENT LIABILITIES 1,287 997
DEFERRED INCOME TAXES (Notes 1 and 8) 146 131
COMMITMENTS AND CONTINGENCIES
(Notes 4, 5, 6 and 9)
SHAREHOLDERS' EQUITY (Note 9):
Common stock, $1 par - shares
authorized 2,000,000; issued 1,533,042 1,533 1,533
Additional paid-in capital 1,109 1,109
Retained earnings 7,667 7,526
10,309 10,168
Unrealized gain on marketable securities
(Note 1) 356 -
Less treasury stock, at cost, 50,925 shares 270 270
TOTAL SHAREHOLDERS' EQUITY 10,395 9,898
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,828 $11,026
See accompanying notes to financial statements
PENOBSCOT SHOE COMPANY
18
STATEMENT OF CASH FLOWS
For the Years Ended November 24, 1995,
November 25, 1994 and November 26, 1993
(In thousands)
1995 1994 1993
Cash flows from operating activities:
Net income $ 438 $ 510 $ 663
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 128 133 132
Provision for losses on accounts receivable 67 44 162
Gain on sale of marketable securities (178) (65) (92)
(Gain) loss on sale property and equipment - (2) 16
Deferred income taxes (11) 67 (128)
Changes in operating assets and liabilities:
Receivables 183 227 (1,151)
Inventories (585) (260) (432)
Prepaid expenses and other (65) (70) (37)
Accounts payable 261 (303) 159
Accruals 29 (208) 366
Dividends payable - - 1
Total adjustments (171) (437) (1,004)
Net cash provided (used) by operating activities 267 73 (341)
Cash flows from investing activities:
Proceeds from sale of marketable securities 949 1,143 854
Purchase of marketable securities (890) (1,124) (703)
Proceeds from sale of property and equipment - 2 16
Capital expenditures (36) (24) (160)
Net cash provided (used) by investing activities 23 ( 3) 7
Cash flows from financing activities:
Dividends paid (297) (296) (295)
Issuance of treasury stock - 20 19
Net cash (used) by investing activities (297) (276) (276)
Net increase (decrease) in cash and cash
equivalents (7) (206) (610)
Cash and cash equivalents at beginning of year 1,308 1,514 2,124
Cash and cash equivalents at end of year $1,301 $1,308 $1,514
Supplemental Disclosure of Cash Flow Information
Payments for income taxes amounted to $284,000, $465,000 and $422,000 in
1995, 1994 and 1993, respectively. Cash paid for interest expense in 1994 was
$3,000. Unrealized gains on marketable securities were $596,000 in 1995.
See accompanying notes to financial statements
PENOBSCOT SHOE COMPANY
19
NOTES TO FINANCIAL STATEMENTS
(1) Summary of Business Operations and Significant Accounting Policies
Business Operations:
The Company is engaged in the design, manufacture, importing and sale of
women's casual, sport and leisure footwear, including fashion boots and
sandals, for the retail market.
Fiscal Year:
The Company's fiscal year ends on the last Friday in November. Fiscal
1995, 1994 and 1993 each included 52 weeks.
Marketable Securities:
Effective November 26, 1994, the Company accounts for investments in debt
and equity securities under the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" (" SFAS No. 115"). Previously, the Company accounted
for these investments at the lower of aggregate cost or market. Upon the
adoption of SFAS No. 115, the Company recorded an unrealized gain of $133,604,
net of tax, as a separate component of stockholders' equity. During fiscal 1995
the unrealized gain increased by $222,755 to a year end balance of $356,359,
net of tax. The Company classifies the debt and equity securities as
available-for-sale securities, and therefore records them at fair market value.
The cost of securities sold is based on the first-in, firstout method in the
determination of realized gains and losses. Unrealized gains and losses are
recorded as a separate component of stockholders' equity. Realized gains and
losses are recognized in the results of operations.
Inventories:
Inventories are stated at cost, not in excess of market. Cost is determined
on a last-in, first-out ("LIFO") basis.
Property, Equipment and Depreciation:
Property and equipment are stated at cost. Depreciation is computed using
the straight line method over the following estimated useful lives:
Years
Land improvements 10
Buildings and improvements 10-33
Machinery and equipment 3-10
Retirement Plan:
The Company has a defined benefit retirement plan covering substantially all
employees. The Company's policy is to fund retirement cost as accrued. Plan
assets consist principally of equity securities and corporate and US Government
obligations. The plan was fully funded at November 24, 1995.
Income Per Share:
Net income per share amounts are based on the weighted average number of
common shares outstanding.
Cash Equivalents:
The Company considers all highly liquid instruments with a maturity of three
months or less when purchased to be cash equivalents.
Income Taxes:
Income taxes are based on income (loss) for financial reporting purposes and
reflect a current tax liability (asset) for the estimated taxes payable
(recoverable) in the current-year tax return and changes in deferred taxes.
Deferred tax liabilities or assets are recognized for the estimated tax
effects of temporary differences between financial reporting and taxable
income (loss) and for tax credit and loss carryforwards based on enacted tax
laws and rate.
Effect of Accounting Pronouncement Not Adopted:
The effect of adopting Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," has not been estimated.
(2) Marketable Securities
At November 24, 1995 and November 25, 1994, marketable securities consist
of the following (in thousands):
1995 1994
Fair Market
Value Cost Cost
Preferred and
common stock $ 1,018 $ 638 $ 761
U.S. Government and
U.S. Government
agency obligations 1,889 1,694 1,453
Mutual funds 53 47 47
Corporate bonds 311 295 295
Total $3,271 $2,674 $2,556
Gross unrealized gains and losses at November 24, 1995, were $597,000 and
$1,000, respectively. Gross unrealized gains and losses at November 25, 1994,
were $272,000 and $52,000, respectively.
The contractual maturity of debt securities are summarized as follows at
November 24, 1995:
Cost Fair Market
Value
Within 1 year - -
After 1 year through 5 years 486 510
After 5 years through 10 years 570 609
After 10 years 933 1,081
Total debt securities $ 1,989 $ 2,200
(3) Inventories
Inventories are summarized as follows (in thousands):
1995 1994
FIFO Cost:
Finished shoes $ 3,355 $ 2,825
Shoes in process 22 35
Raw materials 232 302
3,609 3,162
Excess of FIFO cost over
LIFO inventory value (555) (693)
$ 3,054 $ 2,469
20
The Company uses the LIFO method because it more realistically reflects
operating results by charging current costs against current revenues. Certain
companies in the same industry use the first-in, first-out ("FIFO") method. Had
the Company's inventory been stated using the FIFO method, the inventory
would be greater by approximately $555,000 and $693,000 at November 24, 1995
and November 25, 1994, respectively. Reported net income would have been
lower by approximately $84,000 ($.06 per share), $125,000 ($.08 per share)
and $237,000 ($.16 per share) in 1995, 1994 and 1993, respectively.
During 1995, 1994 and 1993, cost of sales included charges for goods carried
at prior years' LIFO values which were less than the cost of current purchases.
This result was to increase net income by approximately $182,000 ($.12 per
share), $82,000 ($.06 per share) and $251,000 ($.17 per share) in 1995, 1994
and 1993, respectively.
(4) Retirement Plan
The Company has a retirement plan covering substantially all of its employees.
The following table sets forth the plan's funded status at November 24, 1995
and November 25, 1994 (in thousands):
Actuarial present value of 1995 1994
benefit obligation:
Accumulated benefit obligation,
including vested benefits of
$2,778 and $2,742 $ (2,824) $ (2,837)
Projected benefit obligation $ (3,017) $ (3,031)
Unrecognized net gain from
past experience difference from
that assumed (1,184) (910)
Plan assets at fair market value 4,604 4,324
Prior service cost not yet recognized
in net periodic pension cost 10 1 )
Unrecognized transition assets being
amortized over 15 years (231) (264)
Prepaid pension cost $ 182 $ 120
Net periodic pension expense (credit) in 1995, 1994 and 1993 included the
following (in thousands):
1995 1994 1993
Service cost $ 33 $ 37 $ 47
Interest cost 218 216 206
Return on plan assets (278) (297) (277)
Net amortization
and deferral (35) (30) (28)
Net periodic pension
expense (credit) $ (62) $ (74) $ (52)
The discount rate and rate of increase in future compensation levels used in
determining the actuarial present value of the projected benefit obligation
were 7.5% and 6%, respectively. The expected long-range rate of return on
assets was 7.5%.
5) Short-term Borrowings
At November 24, 1995, the Company had a line of credit of $3,750,000 for
letters of credit and short-term borrowings. Borrowings under this arrangement
are unsecured and bear interest at the bank's "base rate." There were no
short-term borrowings during fiscal 1995 and 1993. During fiscal 1994, the
maximum amount of short-term borrowings under these arrangements was $400,000
and the interest rate paid was 7.75%. At November 24, 1995, commitments
against letters of credit were approximately $700,000.
(6) Commitments and Contingencies
Supplemental retirement benefit:
The Company provides retirement benefits to its former chief executive officer
in accordance with a supplemental retirement plan approved by the Board of
Directors. The present value of the estimated future payments under this
benefit program of $189,000 in 1995 and $195,000 in 1994 are reflected in the
accompanying financial statements as accrued retirement plan. Retirement
payments under this program amounted to $20,000 and $18,000 in 1995 and 1994,
respectively.
Employment death benefit:
The Board of Directors has voted to make payments to spouses and minor
children of certain officers in the aggregate amount of approximately $351,000
in the event of officers' deaths while employed.
Litigation:
In September 1987, the Company and numerous other parties entered into two
Administrative Orders by Consent issued by the U.S. Environmental Protection
Agency and the Maine Department of Environmental Protection regarding the
removal of hazardous wastes from two locations in Maine. The Company
initially established a loss contingency of $75,000 to cover anticipated
liabilities in these two proceedings. Costs totaling $13,000 have been incurred
to date.
(7) Other Income (Expense), Net
Other income (expense), net, consists of the following (in thousands):
1995 1994 1993
Interest income $ 218 $ 173 $ 178
Dividend income 25 25 25
Gain on sale
of securities 178 65 92
Interest expense - (3) -
Litigation settlement - (300) -
Other, net (9) (4) 9
$ 412 $ (44) $ 304
During 1994, the Company settled litigation. The settlement of $300,000 has
been reported in other income (expense).
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(8) Taxes on Income (Credit)
The provision (credit) for income taxes is comprised of
the following (in thousands):
Fiscal Year Current Deferred Total
1995:
Federal $ 296 $ (8) $ 288
State 12 (3) 9
$ 308 $ (11) $ 297
1994:
Federal $ 204 $ 51 $ 255
State 51 16 67
255 67 322
1993:
Federal $ 432 $ (96) $ 336
State 120 (32) 88
$ 552 $ (128) $ 424
Deferred tax assets (liabilities) are comprised of the following
(in thousands)
1995 1994
Deferred tax asset:
Accounts receivable reserves $ 188 $ 196
Inventory valuation 31 18
Deferral related to
marketable securities (240) -
Basis difference of accrued
liabilities 134 114
$ 113 $ 328
Deferred tax liability:
Depreciation (146) (82)
Pension - (49)
$(146) $(131)
A reconciliation on income at the United States statutory rate to
the effective rate follows:
1995 1994 1993
Taxes on income
computed at the
United States
statutory rate 34.0% 34.3% 34.0%
State and local
taxes, net of
federal benefit 5.5 5.1 5.3
Dividends
received
deduction (.8) (.7) (.6)
Other - net 1.7 1.7 1.7
Effective tax rate 40.4% 40.4% 40.4%
(9) Stock Options Plan
The Company has a nonqualified stock option plan (the "Plan") designed to
reward key employees of the Company. Options are available for the purchase
of shares of the Company's common stock at an exercise price as determined by
the Board of Directors, but at a price not less than the fair market value of
the common stock at the time the option in granted. Stock option activity is
shown below.
1995 1994 1993
Outstanding at
beginning of year 29,800 31,000 37,000
Granted (price of $5.00
per share) - 5,000 -
Exercised (price of
$3.125 per share) - (6,200) (6,000)
Outstanding at end of
year (prices range
from $3.125 to $5.00
per share) 29,800 29,800 31,000
Available for grant
at end of year 33,000 33,000 38,000
(10) Summarized Quarterly Results of Operations
(unaudited)
(In thousands except
per share data)
1995 1994
First quarter
Revenue $3,120 $2,989
Gross profit 1,054 1,034
Net income 14 78
Net income
per common share .01 .05
Second quarter
Revenue $2,455 $3,667
Gross profit 827 1,071
Net income (loss) (27) 13
Net income (loss)
per common share (.02) .01
Third quarter
Revenue $3,872 $4,090
Gross profit 1,285 1,519
Net income 133 115
Net income
per common share .09 .08
Fourth quarter
Revenue $3,234 $3,761
Gross profit 1,297 1,346
Net income 318 303
Net income
per common share .21 .20
22
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Penobscot Shoe Company
Old Town, Maine
We have audited the accompanying balance sheets of Penobscot
Shoe Company as of November 24, 1995 and November 25, 1994, and the
related statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended November 24, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Penobscot Shoe
Company at November 24, 1995 and November 25, 1994, and the results of its
operations and its cash flows for each of the three year in the period ended
November 24, 1995, in conformity with generally accepted accounting principles.
As discussed in Notes 1 and 2 to the financial statements, the Company
changed its method of accounting for investments in debt and equity securities
in fiscal 1995.
Boston, Massachusetts
January 12, 1996
BDO Seidman, LLP
SELECTED FINANCIAL DATA
(In thousands, except per share amounts)
1995 1994 1993 1992 1991
Selected Financial Data
Net Sales $ 12,681 $ 14,506 $ 14,861 $ 14,170 $13,331
Income (Loss) Before Taxes $ 735 $ 832 $ 1,087 $ 1,341 $ (368)
Net Income (Loss) $ 438 $ 510 $ 663 $ 879 $ (243)
Net Income (Loss) per Share $ .30 $ .34 $ .45 $ .60 $ (.17)
Cash Dividends Declared per
Common Share $ .20 $ .20 $ .20 $ .20 $ .20
At year-end:
Total Assets $ 11,828 $ 11,026 $ 11,290 $ 10,388 $ 9,752
Working Capital $ 10,172 $ 9,568 $ 9,212 $ 8,832 $ 8,199
Shareholders' Equity $ 10,395 $ 9,898 $ 9,664 $ 9,278 $ 8,693
Book Value per Common Share
Outstanding at Year End $ 7.01 $ 6.68 $ 6.55 $ 6.31 $ 5.91
23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources:
Penobscot Shoe Company's net working capital increased by $604,000 during
1995, compared to an increase of $356,000 and $380,000 in 1994 and 1993,
respectively. Working capital at the end of 1995 was $10,172,000, compared
to $9,568,000 at the end of 1994 and $9,212,000 at the end of 1993. The
current ratio for each of the last three years was 8.9 to 1, 10.6 to 1 and 7.1
to 1, respectively.
The Statement of Cash Flows for the year ended November 24, 1995, shows a
decrease in cash and cash equivalents of $7,000. The Company's operations
provided $267,000 during 1995. The payment of the Company's quarterly dividend
amounted to $297,000 during 1995.
During 1995, the total value of the Company's inventory which included both
domestically assembled and imported footwear increased by $585,000. In 1994,
the inventory had increased by $260,000 from 1993. In both 1995 and 1994,
the portion of inventory comprised of domestically assembled footwear
decreased, reducing the amount of inventory carried at prior years' LIFO
values. As a result, in each of the last two years cost of sales was charged
for goods carried at prior years' LIFO values which were significantly less
than the cost of current purchases. The effect of these LIFO liquidations
was to increase earnings by $182,000, or $.12 per share, and $82,000, or $.06
per share, in 1995 and 1994, respectively.
The increase in marketable securities was primarily due to the adoption of
Statement of Accounting Standards No. 115 "Accounting for Certain Investments
in Debt and Equity Securities" on November 26, 1994. The adoption of this
accounting standard resulted in an increase of $596,000 in marketable
securities and a deferred tax liability of $240,000 which was recorded on the
balance sheet as an offset to prepaid expenses and other. The increase in
inventory in fiscal 1995 was due to larger purchases of cold weather boots,
many of which were scheduled for shipment to customers in fiscal 1996. The
increases in accounts payable and accruals, and the decrease in accounts
receivable were a result of timing.
Management believes that Penobscot Shoe Company remains financially well
structured to consider a variety of financing options should the need arise
and will make choices depending on economic conditions at the time. Options
available include conversion of marketable securities held by the Company into
cash and cash equivalents. The Company also has an established line of credit
of $3,750,000 with a major bank available at the bank's base rate should the
need arise. The company had no material commitments for capital expenditures
as of November 24, 1995.
Results of Operations:
Net sales for 1995 decreased 13% from the preceding year which had decreased
by 2% from 1993. Total pairs of footwear shipped decreased by approximately
18% from 1994. This drop was partially offset by an increase of approximately
6% in the average selling price. Most of the increase in the average selling
price per pair was a result of the product mix rather than price increases.
The Company's business is characterized by two major selling seasons, one for
the Fall retail season and the other for the Spring retail season. Sales for
the Fall season generally account for slightly more than half of a year's
sales, while the Spring sales account for the balance.
Cost of sales was 65% of net sales in 1995 and 66% of net sales in both 1994
and 1993. The gross profit percentage in 1995 was 35% and in both 1994 and
1993 it was 34%.
Selling and administrative costs increased by approximately $46,000, or 1%,
from 1994. In 1994, these expenses had decreased by approximately 4% from
1993. Included in the 1993 costs was a non-recurring charge of $200,000,
pre-tax to establish a supplemental employee retirement plan.
In the fiscal year 1995, other income amounted to $412,000, pre-tax, including
$178,000 in gains from the sales of securities and interest income of
$218,000. In 1994 gains from the sales of securities amounted to $65,000,
pre-tax, and interest income amounted to $173,000. In 1994, other income was
offset by a non-recurring charge of $300,000 related to the settlement of
litigation.
During fiscal 1995, the Company's effective income tax rate was 40%.
During both 1994 and 1993 the effective rate was 39%. In all three years
the effective income tax rate consisted of State and Federal income taxes.
Retail sales of footwear were weak for most of 1995 as consumers remained
cautious and retail traffic was light. This was particularly true of
independent retailers, which have traditionally made up the largest segment
of TROTTERS distribution. Despite this extremely difficult marketplace,
TROTTERS expanded its presence in a significant retail channel, department
stores.
We expect the poor retail environment to continue during 1996. We are
placing increased emphasis on product development and marketing to enhance
our brand presence in 1996 and beyond.
24
MARKET FOR THE COMPANY'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Principal Market, Transfer Agent and Registrar
The principal market on which the Company's Common Stock is traded is the
American Stock Exchange. The Transfer Agent and Registrar for the Company's
Common Stock is Chemical Mellon Shareholder Services, 111 Founders Plaza,
E. Hartford, CT 06108. As of November 24, 1995, there were 270 holders of
record of the Company's Common Stock.
Stock Price and Dividend Information
The table presents the high and low sales prices as reported by the American
Stock Exchange, and dividend information for the Company's Common Stock
for each quarterly period during the past two years.
First Second Third Fourth
Quarter Quarter Quarter Quarter
1995
High 4 3/4 5 4 3/4 4 3/4
Low 4 4 3/8 4 3/8 4 3/16
Dividends $.05 $.05 $.05 $.05
1994
High 5 7/8 6 5 3/8 5 1/2
Low 4 7/8 4 7/8 4 1/8 4 3/4
Dividends $.05 $.05 $.05 $.05
PENOBSCOT SHOE COMPANY
P.O. BOX 545, OLD TOWN, MAINE 04468
TROTTERS
25