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 January 21, 1996
[ ] 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)
540-980-7330
(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:
2,860,079 shares of common stock outstanding as of February 29, 1996
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
January 21, 1996 and October 29, 1995 . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended January 21, 1996
and January 22, 1995 . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
Three 4-week periods ended January 21, 1996
and January 22, 1995 . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Condensed Financial Statements . . . . . . 5
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income . . . . . . . . . . . 6
Exhibit 3 - Computation of Earnings per Share . . . . . . . . . . 7
PART II: Other Information and Signatures . . . . . . . . . . . . . . 8
Pulaski Furniture Corporation
Consolidated Condensed Balance Sheets
(in thousands)
January 21, October 29,
1996 1995
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 461 $ 1,722
Short-term investments 11 15
Accounts receivable, net 28,568 35,674
---------- ----------
29,040 37,411
Inventories:
Raw materials 16,675 16,984
Work-in-process 6,057 6,048
Finished goods 33,232 32,229
---------- ----------
55,964 55,261
Less LIFO reserve (15,101) (14,852)
---------- ----------
40,863 40,409
Prepaid expenses 446 407
Deferred income tax 579 579
---------- -----------
Total current assets 70,928 78,806
Property, plant and equipment, net 37,995 38,894
Cash surrender value of life insurance 982 976
---------- ----------
Total assets $ 109,905 $ 118,676
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 5,833 $ 9,764
Notes payable 8,000 12,000
Wages and commissions 775 2,214
Taxes withheld from employees 702 734
---------- ----------
15,310 24,712
Federal and state income taxes 720 257
Current portion of long-term debt 2,000 2,048
---------- ----------
Total current liabilities 18,030 27,017
Long-term notes payable 28,891 29,355
Deferred income taxes 4,072 4,094
Deferred compensation 2,263 2,269
Shareholders' equity
Common stock 6,356 5,827
Retained earnings 50,753 50,297
Unamortized restricted stock (460) (183)
---------- ----------
Total shareholders' equity 56,649 55,941
---------- ----------
Total liabilities and shareholders' equity $ 109,905 $ 118,676
========== ==========
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
Jan. 21, Jan. 22, Incr
1996 1995 (Decr) %
--------- --------- -------- ----
Net sales $ 36,585 $ 41,270 $(4,685) (11.4)%
Costs and expenses
Cost of sales 29,471 33,032 (3,561) (10.8)
Selling & administrative 5,178 5,569 (391) (7.0)
---------- ---------- --------
Operating income 1,936 2,669 (733) (27.5)
Other income and expenses
Interest expense 584 593 (9) (1.5)
Interest income (3) (6) 3 50.0
---------- ---------- --------
Total 581 587 (6) (1.0)
Income before income taxes 1,355 2,082 (727) (34.9)
Provision for taxes on income 441 709 (268) (37.8)
---------- ---------- --------
Net income 914 1,373 (459) (33.4)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,856,087 2,863,258
Assuming full dilution 2,856,590 2,863,258
Earnings per share:
Primary $0.32 $0.48
Assuming full dilution $0.32 $0.48
Cash dividends per share: $0.16 $0.15
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Three 4-week periods ended
January 21, January 22,
1996 1995
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OPERATING ACTIVITIES
Net income $ 913,995 $ 1,373,023
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation/amortization 1,113,331 1,136,693
Provision for deferred income taxes (22,500) (22,500)
Provision for deferred compensation (5,188) 45,239
Proportionate share in loss of
investee company 14,130
Changes in operating assets and liabilities:
Decrease in trade receivables 7,106,528 1,169,792
(Increase) decrease in inventories (454,888) 851,031
(Increase) decrease in prepaid expenses (38,479) 23,613
Decrease in accounts payable and
accrued expenses (5,401,882) (1,803,848)
Increase in federal and state
income taxes payable 462,174 261,262
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NET CASH PROVIDED BY OPERATING ACTIVITIES 3,673,091 3,048,435
INVESTING ACTIVITIES
Purchase of property, plant and equipment (156,005) (200,989)
Sale of investments 3,600
Increase in cash surrender value (5,934)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (158,339) (200,989)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 423,471 405,632
Repurchase of common stock (229,250) (516,000)
Payment of dividends (457,613) (430,362)
Decrease in notes payable (4,000,000) (3,000,000)
Payments on long-term debt (511,904) (166,666)
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NET CASH USED IN FINANCING ACTIVITIES (4,775,296) (3,707,396)
------------ ------------
Decrease in cash and cash equivalents (1,260,544) (859,950)
Cash and cash equivalents at beginning of period 1,721,546 1,088,322
------------ ------------
Cash and cash equivalents at end of period $ 461,002 $ 228,372
============ ============
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 29, 1995, for information concerning accounting policies,
long-term debt, stock options and other financial matters. There have been
no material changes in financial matters since October 29, 1995.
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
January 21, 1996 and October 29, 1995, and the results of operations and
cash flows for the three 4-week periods ended January 21, 1996 and January
22, 1995.
The results of operations for the three 4-week periods ended January 21,
1996 and January 22, 1995 are not necessarily indicative of the results to
be expected for the full year.
The Corporation's outlook for the second quarter of 1996 is cautious as there
continues to be softness in the retail of household furniture. Most of our
facilities are operating at reduced schedules.
Pulaski Furniture Corporation
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income
Comparison of First Quarter 1996 to First Quarter 1995 (See page 3 for
dollar and percent changes.)
- ----------------------------------------------------------------------------
The lower sales in the first quarter of 1996 as compared to the first quarter
of 1995 was due primarily to decreased demand caused by weak retail sales in
household furniture and a slowing economy.
The higher percentage of cost of sales and the higher percentage of selling
and administrative expenses to sales is directly related to the lower sales
volume.
The decrease in net income was due primarily to lower production levels and
shipments related to the weakness in retail furniture sales.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $2,000,000 for the quarter ended
January 21, 1996 compared to $2,547,000 for the quarter ended January 22,
1995. Net working capital increased by $1,109,000 during the first quarter
of 1996 compared with an increase of $1,644,000 in the first quarter of 1995.
During the first quarter of 1996, the Corporation's average amount of
outstanding indebtedness for borrowed money was $41,539,328. The weighted
average rate of interest on such indebtedness was approximately 6.0% per
annum.
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
January 21, January 22,
1996 1995
------------ ------------
PRIMARY:
Average shares outstanding 2,846,432 2,854,659
Dilutive stock options - based
on treasury stock method
using average market price 6,187 5,324
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 3,468 3,275
------------ ------------
TOTAL 2,856,087 2,863,258
Net Income $ 913,995 $ 1,373,023
------------ ------------
Net Income per Share $ 0.32 $ 0.48
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FULLY DILUTED:
Average shares outstanding 2,846,432 2,854,659
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 6,690 5,324
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 3,468 3,275
------------ ------------
TOTAL 2,856,590 2,863,258
Net Income per Share $ 0.32 $ 0.48
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Pulaski Furniture Corporation
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On February 9, 1996, the Corporation held its annual meeting of
shareholders, at which the following business was transacted:
Bernard C. Wampler, Harry H. Warner and Harry J. G. van Beek were
elected to serve as Class III directors of the Corporation, each
for a term of three years.
The votes for the election of the Class II directors were as follows:
FOR AGAINST ABSTAIN
---------- ---------- ----------
Mr. Wampler 2,512,234 0 12,517
Mr. Warner 2,512,134 0 12,617
Mr. van Beek 2,510,743 0 14,008
The terms of the following directors continued beyond the 1996 annual
meeting: John G. Wampler, John D. Munford, John W. Stanley, and
Hugh V. White, Jr.
Item 5. Other Information
All other information called for by other items of Part II of the Form 10-Q
is either inapplicable or the response to the items would be negative.
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: February 29, 1996 /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, CFO
(Principal Accounting Officer)