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 26, 1997
[ ] 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:
2,795,552 shares of common stock outstanding as of February 28, 1997
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
January 26, 1997 and November 3, 1996 . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended January 26, 1997
and January 21, 1996 . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
Three 4-week periods ended January 26, 1997
and January 21, 1996 . . . . . . . . . . . . . . . . . . . . . . 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 26, November 3,
1997 1996
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 276 $ 2,397
Short-term investments 11 11
Accounts receivable, net 27,827 39,473
---------- ----------
28,114 41,881
Inventories:
Raw materials 15,771 16,323
Work-in-process 7,234 6,635
Finished goods 36,771 33,874
---------- ----------
59,776 56,832
Less LIFO reserve (16,442) (15,054)
---------- ----------
43,334 41,778
Prepaid expenses 877 655
Deferred income tax 600 600
---------- -----------
Total current assets 72,925 84,914
Property, plant and equipment, net 38,065 38,340
Cash surrender value of life insurance 1,089 1,082
---------- ----------
Total assets $ 112,079 $ 124,336
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 8,253 $ 9,380
Notes payable 10,000 16,000
Wages and commissions 949 2,731
Taxes withheld from employees 935 683
---------- ----------
20,137 28,794
Federal and state income taxes 930 1,349
Current portion of long-term debt 2,000 2,000
---------- ----------
Total current liabilities 23,067 32,143
Long-term notes payable 24,343 27,851
Deferred income taxes 4,122 4,145
Deferred compensation 2,512 2,519
Shareholders' equity
Common stock 5,493 5,031
Retained earnings 52,986 52,804
Unamortized restricted stock (444) (157)
---------- ----------
Total shareholders' equity 58,035 57,678
---------- ----------
Total liabilities and shareholders' equity $ 112,079 $ 124,336
========== ==========
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. 26, Jan. 21, Incr
1997 1996 (Decr) %
--------- --------- -------- ----
Net sales $ 35,422 $ 36,585 $(1,163) (3.2)%
Costs and expenses
Cost of sales 28,487 29,471 (984) (3.3)
Selling & administrative 5,315 5,309 6 0.1
---------- ---------- --------
Operating income 1,620 1,805 (185) (10.2)
Other income and expenses
Interest expense 585 584 1 0.2
Interest income (4) (3) (1) (33.3)
Gain on sale of investments (131) 131 100.0
---------- ---------- --------
Total 581 450 131 29.1
Income before income taxes 1,039 1,355 (316) (23.3)
Provision for taxes on income 375 441 (66) (15.0)
---------- ---------- --------
Net income $ 664 $ 914 $ (250) (27.4)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,828,349 2,856,087
Assuming full dilution 2,831,618 2,856,590
Earnings per share:
Primary $0.23 $0.32
Assuming full dilution $0.23 $0.32
Cash dividends per share: $0.17 $0.16
See accompanying notes to financial statements.
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Three 4-week periods ended
January 26, January 21,
1997 1996
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OPERATING ACTIVITIES
Net income $ 663,841 $ 913,995
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation/amortization 1,229,252 1,113,331
Provision for deferred income taxes (22,500) (22,500)
Provision for deferred compensation (6,692) (5,188)
Changes in operating assets and liabilities:
Decrease in trade receivables 11,646,045 7,106,528
Increase in inventories (1,556,105) (454,888)
Increase in prepaid expenses (221,808) (38,479)
Decrease in accounts payable and
accrued expenses (2,656,558) (5,401,882)
Increase (decrease) in federal and state
income taxes payable (419,044) 462,174
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,656,431 3,673,091
INVESTING ACTIVITIES
Purchase of property, plant and equipment (848,351) (156,005)
Sale of investments 3,600
Increase in cash surrender value (7,095) (5,934)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (855,446) (158,339)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 469,210 423,471
Repurchase of common stock (400,000) (229,250)
Payment of dividends (482,383) (457,613)
Decrease in notes payable (6,000,000) (4,000,000)
Payments on long-term debt (3,508,458) (511,904)
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NET CASH USED IN FINANCING ACTIVITIES (9,921,631) (4,775,296)
------------ ------------
Decrease in cash and cash equivalents (2,120,646) (1,260,544)
Cash and cash equivalents at beginning of period 2,396,850 1,721,546
------------ ------------
Cash and cash equivalents at end of period $ 276,204 $ 461,002
============ ============
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 November 3, 1996, for information concerning accounting policies,
long-term debt, stock options and other financial matters. There have been
no material changes in financial matters since November 3, 1996.
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 26, 1997 and November 3, 1996, and the results of operations and
cash flows for the three 4-week periods ended January 26, 1997 and January
21, 1996.
The results of operations for the three 4-week periods ended January 26,
1997 and January 21, 1996 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 First Quarter 1997 to First Quarter 1996 (See page 3 for
dollar and percent changes.)
- ----------------------------------------------------------------------------
The lower sales in the first quarter of 1997 as compared to the first quarter
of 1996 was due primarily to decreased demand for the Corporation's furniture.
Fewer units were shipped in the 1997 quarter, at higher average selling prices.
The decrease in net income was due primarily to the lower shipments.
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 higher effective income tax rate in the 1997 quarter was due to fewer tax
credits in 1997.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $1,864,000 for the quarter ended
January 26, 1997 compared to $2,000,000 for the quarter ended January 21,
1996. Net working capital decreased by $2,913,000 during the first quarter
of 1997 compared with an increase of $1,109,000 in the first quarter of 1996.
During the first quarter of 1997, the Corporation's average amount of
outstanding indebtedness for borrowed money was $42,687,265. The weighted
average rate of interest on such indebtedness was approximately 5.86% per
annum.
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
January 26, January 21,
1997 1996
------------ ------------
PRIMARY:
Average shares outstanding 2,820,855 2,846,432
Dilutive stock options - based
on treasury stock method
using average market price 3,421 6,187
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 4,073 3,468
------------ ------------
TOTAL 2,828,349 2,856,087
Net Income $ 663,841 $ 913,995
------------ ------------
Net Income per Share $ 0.23 $ 0.32
======= =======
FULLY DILUTED:
Average shares outstanding 2,820,855 2,846,432
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 6,690 6,690
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 4,073 3,468
------------ ------------
TOTAL 2,831,618 2,856,590
Net Income per Share $ 0.23 $ 0.32
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Pulaski Furniture Corporation
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On February 14, 1997, the Corporation held its annual meeting of
shareholders, at which the following business was transacted:
John W. Stanley and Hugh V. White, Jr., were elected to serve as
Class I directors of the Corporation, each for a term of three years.
A resolution to amend the Salaried Employees' Stock Purchase Plan
was approved.
The votes for the election of the Class I directors and for the approval
of the resolution were as follows:
FOR AGAINST ABSTAIN
---------- ---------- ----------
Mr. Stanley 2,566,572 0 13,497
Mr. White 2,569,071 0 10,998
To amend the Salaried
Employees' Stock
Purchase Plan 2,245,708 284,571 49,790
The terms of the following directors continued beyond the 1997 annual
meeting: Bernard C. Wampler, Harry H. Warner, Harry J.G. van Beek, John
G. Wampler, and John D. Munford.
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 28, 1997 /s/ John G. Wampler
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John G. Wampler
(President and Chief Executive Officer)
/s/ Jason A. Gibbs
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Jason A. Gibbs, Chief Financial Officer
(Principal Accounting Officer)