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 July 7, 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)
One Pulaski Square
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:
2,783,579 shares of common stock outstanding as of August 15, 1996
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
July 7, 1996 and October 29, 1995 . . . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended July 7, 1996
and July 9, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income
Nine 4-week periods ended July 7, 1996
and July 9, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows
Nine 4-week periods ended July 7, 1996
and July 9, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 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)
July 7, October 29,
1996 1995
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 1,997 $ 1,722
Short-term investments 11 15
Accounts receivable, net 25,443 35,674
---------- ----------
27,451 37,411
Inventories:
Raw materials 14,970 16,984
Work-in-process 5,717 6,048
Finished goods 36,736 32,229
---------- ----------
57,423 55,261
Less LIFO reserve (15,101) (14,852)
---------- ----------
42,322 40,409
Prepaid expenses 80 407
Deferred income tax 579 579
---------- -----------
Total current assets 70,432 78,806
Property, plant and equipment, net 37,721 38,894
Cash surrender value of life insurance 988 976
---------- ----------
Total assets $ 109,141 $ 118,676
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 7,465 $ 9,764
Notes payable 8,000 12,000
Wages and commissions 1,256 2,214
Taxes withheld from employees 665 734
---------- ----------
17,386 24,712
Federal and state income taxes 214 257
Current portion of long-term debt 2,000 2,048
---------- ----------
Total current liabilities 19,600 27,017
Long-term notes payable 27,867 29,355
Deferred income taxes 4,027 4,094
Deferred compensation 2,309 2,269
Shareholders' equity
Common stock 5,031 5,827
Retained earnings 50,639 50,297
Unamortized restricted stock (332) (183)
---------- ----------
Total shareholders' equity 55,338 55,941
---------- ----------
Total liabilities and shareholders' equity $ 109,141 $ 118,676
========== ==========
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Three 4-week periods ended
July 7, July 9, Incr
1996 1995 (Decr) %
--------- --------- -------- ----
Net sales $ 30,173 $ 30,236 $ (63) (0.2)%
Costs and expenses
Cost of sales 24,844 25,703 (859) (3.3)
Selling & administrative 4,812 4,754 58 1.2
---------- ---------- --------
Operating income (loss) 517 (221) 738 (333.9)
Other income and expenses
Interest expense 428 695 (267) (38.4)
Interest income 1 (4) 5 125.0
---------- ---------- --------
Total 429 691 (262) (37.9)
Income (loss) before income taxes 88 (912) 1,000 (109.6)
Provision for taxes on income 29 (310) 339 (109.4)
---------- ---------- --------
Net income (loss) $ 59 $ (602) $ 661 (109.8)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,807,348 2,862,050
Assuming full dilution 2,807,348 2,862,050
Earnings (loss) per share:
Primary $ 0.02 $(0.21)
Assuming full dilution $ 0.02 $(0.21)
Cash dividends per share: $0.16 $0.15
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Nine 4-week periods ended
July 7, July 9, Incr
1996 1995 (Decr) %
--------- --------- -------- ----
Net sales $106,663 $110,495 $(3,832) (3.5)%
Costs and expenses
Cost of sales 86,745 90,334 (3,589) (4.0)
Selling & administrative 15,841 15,534 307 2.0
---------- ---------- --------
Operating income 4,077 4,627 (550) (11.9)
Other income and expenses
Interest expense 1,569 1,818 (249) (13.7)
Interest income (8) (19) 11 57.9
---------- ---------- --------
Total 1,561 1,799 (238) (13.2)
Income before income taxes 2,516 2,828 (312) (11.0)
Provision for taxes on income 819 963 (144) (15.0)
---------- ---------- --------
Net income $ 1,697 $ 1,865 $ (168) (9.0)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,838,884 2,861,932
Assuming full dilution 2,838,884 2,861,932
Earnings per share:
Primary $0.59 $0.65
Assuming full dilution $0.59 $0.65
Cash dividends per share: $0.48 $0.45
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Nine 4-week periods ended
July 7, July 9,
1996 1995
------------ ------------
OPERATING ACTIVITIES
Net income $ 1,697,494 $ 1,865,043
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for depreciation and amortization 3,352,298 3,553,355
Provision for deferred income taxes (67,500) (67,500)
Provision for deferred compensation 40,508 109,435
Proportionate share in loss of
investee company 58,902
Changes in operating assets and liabilities:
Decrease in trade receivables 10,230,780 9,130,714
Increase in inventories (1,912,905) (12,875,765)
Decrease in prepaid expenses 327,320 368,832
Decrease in accounts payable and
other accrued expenses (3,326,271) (2,859,854)
Decrease in federal and state
income taxes payable (43,070) (975,021)
------------ ------------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 10,298,654 (1,691,859)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,993,583) (1,984,567)
Sale of investments 3,600 50,000
Increase in cash surrender value (11,863) (9,704)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (2,001,846) (1,944,271)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 440,722 405,632
Repurchase of common stock (1,570,812) (516,000)
Payment of dividends (1,355,290) (1,281,727)
Increase (decrease) in notes payable (4,000,000) 5,000,000
Payments on long-term debt (1,535,714) (573,824)
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (8,021,094) 3,034,081
------------ ------------
Decrease in cash and cash equivalents 275,714 (602,049)
Cash and cash equivalents at beginning of period 1,721,546 1,088,322
------------ ------------
Cash and cash equivalents at end of period $ 1,997,260 $ 486,273
============ ============
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
July 7, 1996 and October 29, 1995, and the results of operations and cash
flows for the three and nine 4-week periods ended July 7, 1996 and July 9,
1995.
The results of operations for the three and nine 4-week periods ended July
7, 1996 and July 9, 1995 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 Third Quarter 1996 to Third Quarter 1995 and Three Quarters of
1996 to Three Quarters of 1995 (See pages 3 and 4 for dollar and percent
changes.)
- ----------------------------------------------------------------------------
The decrease in sales for the three quarters of 1996 as compared to the
three quarters of 1995 is due largely to the lower demand for the Corpor-
ation's furniture, and to lower average selling prices.
The decrease in cost of sales, as a percentage of sales, for the third
quarter and three quarters of 1996 was due primarily to lower manufacturing
costs resulting from higher utilization of materials and labor.
The increase in selling and administrative expenses in the three quarters
of 1996 was due primarily to increases in advertising and promotional
expenses, employee compensation and benefits. Interest expense decreased
in the third quarter and for the three quarters of 1996 due to lower levels
of outstanding debt.
Earnings decreased in the three quarters of 1996 as compared to the three
quarters of 1995 due primarily to lower sales volume and higher selling and
administrative expenses. Earnings increased in the third quarter of 1996 as
compared with the third quarter of 1995 on approximately equal sales due
mostly to stabilized costs in the Corporation's new factory and to lower
interest expense.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $5,023,000 for the three quarters
ended July 7, 1996 compared to $5,519,000 for the three quarters ended July
9, 1995. Net working capital decreased by $957,000 during the first three
quarters of 1996 compared with an increase of $1,564,000 in the first three
quarters of 1995.
During the third quarter of 1996, the Corporation's average amount of
outstanding indebtedness for borrowed money was $37,854,284. The weighted
average rate of interest on such indebtedness was approximately 5.0% per
annum.
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
July 7, July 9,
1996 1995
------------ ------------
PRIMARY:
Average shares outstanding 2,783,579 2,837,882
Dilutive stock options - based
on treasury stock method
using average market price 4,495 8,593
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 19,274 15,575
------------ ------------
TOTAL 2,807,348 2,862,050
------------ ------------
Net income (loss) $ 59,379 $ (601,829)
============ ============
Net income (loss) per share: $ 0.02 $(0.21)
======= =======
FULLY DILUTED:
Average shares outstanding 2,783,579 2,837,882
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 4,495 8,593
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 19,274 15,575
------------ ------------
TOTAL 2,807,348 2,862 050
------------ ------------
Net income (loss) per share: $ 0.02 $(0.21)
======= =======
Pulaski Furniture Corporation
Part I - Exhibit 3 (continued)
Computation of Earnings Per Share
Nine 4-week periods ended
July 7, July 9,
1996 1995
------------ ------------
PRIMARY:
Average shares outstanding 2,822,431 2,843,474
Dilutive stock options - based
on treasury stock method
using average market price 5,141 9,322
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 11,312 9,136
------------ ------------
TOTAL 2,838,884 2,861,932
------------ ------------
Net income $ 1,697,494 $ 1,865,043
============ ============
Net income per share: $ 0.59 $ 0.65
======= =======
FULLY DILUTED:
Average shares outstanding 2,822,431 2,843,474
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 5,141 9,322
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 11,312 9,136
------------ ------------
TOTAL 2,838,884 2,861,932
------------ ------------
Net income per share: $ 0.59 $ 0.65
======= =======
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: August 15, 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, Chief Financial Officer
(Principal Accounting Officer)