SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q
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[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended April 16, 1995
[ ] 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 0-314
Pulaski Furniture Corporation
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
54-0594965
(IRS employer identification number)
P.O. Box 1371, Pulaski, Virginia
(Address of principal executive offices)
24301
(Zip Code)
703-980-7330
(Registrant's telephone number)
Indicate by checkmark 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:
2,837,082 shares of common stock outstanding as of May 26, 1995
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
April 16, 1995 and October 30, 1994 . . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended April 16, 1995
and April 17, 1994 . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income
Six 4-week periods ended April 16, 1995
and April 17, 1994 . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows
Six 4-week periods ended April 16, 1995
and April 17, 1994 . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . . . 6
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income . . . . . . . . . . . 7
Exhibit 3 - Computation of Earnings per Share . . . . . . . . . . 8
PART II: Other Information and Signatures . . . . . . . . . . . . . 10
Pulaski Furniture Corporation
Consolidated Condensed Balance Sheets
(in thousands)
April 16, October 30,
1995 1994
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 493 $ 1,088
Short-term investments 65 65
Accounts receivable, net 27,131 33,428
---------- ----------
27,689 34,581
Inventories:
Raw materials 15,741 14,651
Work-in-process 6,534 6,049
Finished goods 34,018 27,020
---------- ----------
56,293 47,720
Less LIFO reserve (15,392) (13,777)
---------- ----------
40,901 33,943
Prepaid expenses 597 465
Deferred income tax 493 493
---------- -----------
Total current assets 69,680 69,482
Investments and other assets 1,194 1,235
Property, plant and equipment, net 39,954 41,069
Cash surrender value of life insurance 973 964
---------- ----------
Total assets $ 111,801 $ 112,750
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 11,431 $ 8,544
Notes payable 4,000 8,000
Wages and commissions 851 2,396
Taxes withheld from employees 739 579
---------- ----------
17,021 19,519
Federal and state income taxes 1,023 757
Current portion of long-term debt 2,000 2,004
---------- ----------
Total current liabilities 20,044 22,280
Long-term notes payable 31,074 31,398
Deferred income taxes 3,826 3,871
Deferred compensation 2,016 1,938
Shareholders' equity
Common stock 5,974 6,084
Retained earnings 49,140 47,529
Unamortized restricted stock (273) (350)
---------- ----------
Total shareholders' equity 54,841 53,263
---------- ----------
Total liabilities and shareholders' equity $ 111,801 $ 112,750
========== ==========
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Three 4-week periods ended
Apr. 16, Apr. 17, Incr
1995 1994 (Decr) %
--------- --------- -------- ----
Net sales $ 38,989 $ 32,901 $ 6,088 18.5%
Costs and expenses
Cost of sales 31,599 26,216 5,383 20.5
Selling & administrative 5,211 4,994 217 4.3
---------- ---------- --------
Operating income 2,179 1,691 488 28.9
Other income and expenses
Interest expense 530 355 175 49.3
Interest income (9) (27) 18 66.7
---------- ---------- --------
Total 521 328 193 58.8
Income before income taxes 1,658 1,363 295 21.6
Provision for taxes on income 564 486 78 16.0
---------- ---------- --------
Net income $ 1,094 $ 877 $ 217 24.7
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,861,519 2,901,461
Assuming full dilution 2,861,519 2,901,461
Earnings per share:
Primary $0.38 $0.30
Assuming full dilution $0.38 $0.30
Cash dividends per share: $0.15 $0.14
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Six 4-week periods ended
Apr. 16, Apr. 17, Incr
1995 1994 (Decr) %
--------- --------- -------- ----
Net sales $ 80,259 $ 65,051 $15,208 23.4%
Costs and expenses
Cost of sales 64,631 51,956 12,675 24.4
Selling & administrative 10,780 9,940 840 8.5
---------- ---------- --------
Operating income 4,848 3,155 1,693 53.7
Other income and expenses
Interest expense 1,123 691 432 62.5
Interest income (15) (33) 18 54.5
---------- ---------- --------
Total 1,108 658 450 68.4
Income before income taxes
and cumulative effect of
accounting change 3,740 2,497 1,243 49.8
Provision for taxes on income 1,273 891 382 42.9
---------- ---------- --------
Income before cumulative
effect of accounting change 2,467 1,606 861 53.6
Cumulative effect of change
in accounting for income taxes 396
---------- ---------- --------
Net income $ 2,467 $ 2,002 $ 465 23.2
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,861,868 2,890,921
Assuming full dilution 2,865,616 2,890,921
Earnings per share before cumulative
effect of accounting change:
Primary $0.86 $0.55
Assuming full dilution $0.86 $0.55
Earnings per share of cumulative
effect of accounting change:
Primary $0.14
Assuming full dilution $0.14
Earnings per share after cumulative
effect of accounting change:
Primary $0.86 $0.69
Assuming full dilution $0.86 $0.69
Cash dividends per share: $0.30 $0.28
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Six 4-week periods ended
April 16, April 17,
1995 1994
------------ ------------
OPERATING ACTIVITIES
Net income $ 2,466,872 $ 2,001,693
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation 2,249,938 1,597,646
Provision for deferred income taxes (45,000) (441,092)
Provision for deferred compensation 77,610 140,935
Proportionate share in loss of
investee company 41,515 48,788
Changes in operating assets and liabilities:
Decrease in trade receivables 6,297,182 6,243,440
(Increase) in inventories (6,958,773) (1,800,765)
(Increase) in prepaid expenses (131,490) (299,602)
Increase (decrease) in accounts payable
and other accrued expenses 1,503,040 (1,298,567)
Increase (decrease) in federal and state
income taxes payable 266,064 (1,205,555)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,766,958 4,986,921
INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,134,692) (6,212,944)
Sale of investments 0 142,000
(Increase) in cash surrender value (9,704) (119,587)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (1,144,396) (6,190,531)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 0 80,424
Repurchase of common stock (33,495) 0
Payment of dividends (856,045) (800,053)
Decrease in notes payable (4,000,000) 0
Payments on long-term debt (328,278) (409,306)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (5,217,818) (1,128,935)
------------ ------------
(Decrease) in cash and cash equivalents (595,256) (2,332,545)
Cash and cash equivalents at beginning of period 1,088,322 2,697,707
------------ ------------
Cash and cash equivalents at end of period $ 493,066 $ 365,162
============ ============
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Notes to Consolidated Condensed Financial Statements
See notes to financial statements included in the Corporation's 10-K for the
year ended October 30, 1994, for information concerning accounting policies,
long-term debt, stock options and other financial matters.
On February 11, 1992, the Financial Accounting Standards Board issued
Statement No. 109, "Accounting for Income Taxes." Under the new rules,
deferred taxes are recognized using the liability method, whereby tax rates
are applied to cumulative temporary differences based on when and how they
are expected to affect the tax return. Deferred tax assets and liabilities
are adjusted for tax rate changes. The Corporation adopted the new method
in the quarter ending January 23, 1994, and has shown the initial application
as a cumulative effect of a change in accounting principle. The Corporation
has determined that adoption of Statement 109 decreased the deferred tax
liability by approximately $396,000 but had no cash impact. There have been
no material changes in financial matters since October 30, 1994.
In the opinion of the Corporation, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal accruals) necessary to present fairly the financial position as of
April 16, 1995 and October 30, 1994, and the results of operations and
cash flows for the three and six 4-week periods ended April 16, 1995 and
April 17, 1994.
The results of operations for the three and six 4-week periods ended April
16, 1995 and April 17, 1994 are not necessarily indicative of the results
to be expected for the full year.
Pulaski Furniture Corporation
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income
Comparison of Second Quarter 1995 to Second Quarter 1994 and Two Quarters of
1995 to Two Quarters of 1994 (See pages 3 and 4 for dollar and percent
changes.)
- ----------------------------------------------------------------------------
The higher sales in the 1995 quarter and the two quarters (24 weeks) ended
April 16, 1995 were due to increased demand for the Corporation's furniture,
and to the additional volume produced by the new factory.
The decrease in selling and administrative expenses as a percentage of sales
is due mainly to the higher sales.
Interest expense increased due to a higher level of outstanding debt and to
the higher average interest rates.
The increase in net income is due primarily to the increase in sales.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $4,791,000 for the two quarters
ended April 16, 1995 compared to $3,348,000 for the two quarters ended April
17, 1994. Net working capital increased by $2,434,000 during the first two
quarters of 1995 compared with a decrease of $4,208,000 in the first two
quarters of 1994.
During the second quarter of 1995, the Corporation's average amount of
outstanding indebtedness for borrowed money was $38,532,160. The weighted
average rate of interest on such indebtedness was approximately 6.2% per
annum.
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
April 16, April 17,
1995 1994
------------ ------------
PRIMARY:
Average shares outstanding 2,837,882 2,863,170
Dilutive stock options - based
on treasury stock method
using average market price 15,078 31,118
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 8,559 7,173
------------ ------------
TOTAL 2,861,519 2,901,461
------------ ------------
Net Income $ 1,093,849 $ 876,675
============ ============
Net Income per Share: $ 0.38 $ 0.30
======= =======
FULLY DILUTED:
Average shares outstanding 2,837,882 2,863,170
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 15,078 31,118
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 8,559 7,173
------------ ------------
TOTAL 2,861,519 2,901,461
------------ ------------
Net Income per Share: $ 0.38 $ 0.30
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Pulaski Furniture Corporation
Part I - Exhibit 3 (continued)
Computation of Earnings Per Share
Six 4-week periods ended
April 16, April 17,
1995 1994
------------ ------------
PRIMARY:
Average shares outstanding 2,846,270 2,856,595
Dilutive stock options - based
on treasury stock method
using average market price 9,681 29,673
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 5,917 4,653
------------ ------------
TOTAL 2,861,868 2,890,921
------------ ------------
Net Income before cumulative effect
of accounting change $ 2,466,872 $ 1,605,601
Cumulative effect of accounting change 396,092
------------ ------------
Net Income after cumulative effect
of accounting change $ 2,466,872 $ 2,001,693
============ ============
Net Income per Share:
Before cumulative effect of accounting change $ 0.86 $ 0.55
Cumulative effect of accounting change 0.14
------- -------
After cumulative effect of accounting change $ 0.86 $ 0.69
======= =======
FULLY DILUTED:
Average shares outstanding 2,846,270 2,856,595
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 13,429 29,673
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 5,917 4,653
------------ ------------
TOTAL 2,865,616 2,890,921
------------ ------------
Net Income per Share:
Before cumulative effect of accounting change $ 0.86 $ 0.55
Cumulative effect of accounting change 0.14
------- -------
After cumulative effect of accounting change $ 0.86 $ 0.69
======= =======
Pulaski Furniture Corporation
Part II - Other Information
SIGNATURES
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.
PULASKI FURNITURE CORPORATION
Date: May 26, 1995 /s/ John G. Wampler
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John G. Wampler
(President and Chief Operating Officer)
/s/ Jason A. Gibbs
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Jason A. Gibbs, Controller
(Principal Accounting Officer)