SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark one)
( X ) Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarter ended October 1, 1995
Or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______________ to _______________
0-15214
(Commission File Number)
Plasti-Line, Inc.
(Exact name of registrant as specified in its charter)
Tennessee
(State or other jurisdiction of incorporation or organization)
62-1218546
(I.R.S. Employer Identification Number)
623 E. Emory Road, P.O. Box 59043, Knoxville, Tennessee 37950-9043
(Address of principal executive offices)
(423) 938-1511
(Registrant's phone number including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark 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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X
No
As of November 9, 1995 there were 3,673,907 shares of common stock
outstanding.
PART I
FINANCIAL INFORMATION
ITEM 1
PLASTI-LINE, INC.
Consolidated Condensed Balance Sheets
October 1, 1995 (1995) and January 1, 1995 (1994)
(in thousands)
Assets 1995 1994
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 10 $ 10
Marketable securities - 599
Receivables, net 15,260 16,010
Inventories 27,575 19,213
Prepaid expenses 1,532 1,679
Deferred income taxes 1,869 1,869
Total current assets 46,246 39,380
Net property and equipment 12,909 11,947
Other assets 115 123
Total Assets $ 59,270 $ 51,450
<FN>
See accompanying notes to consolidated condensed financial statements.
Liabilities and Stockholders' Equity 1995 1994
(Unaudited) (Audited)
Current liabilities:
Current installments of long-term debt $ 745 $ 745
Accounts payable 7,562 6,750
Accrued liabilities 5,463 4,078
Income taxes payable 191 (46)
Customer deposits and deferred revenue 10,366 4,504
Total current liabilities 24,327 16,031
Long-term debt, excluding current installments 11,162 12,004
Deferred income taxes 987 987
Deferred liabilities 75 75
Stockholders' equity:
Preferred stock, $.001 par value. Authorized
5,000,000 shares; issued none - -
Common stock, $.001 par value. Authorized
20,000,000 shares, 3,673,407 shares issued 1995,
3,688,061 shares issued 1994 4 4
Additional paid-in-capital 2,597 2,571
Notes receivable, common stock (70) (152)
Retained earnings 20,196 19,930
Total Stockholders' Equity 22,719 22,353
Total Liabilities and Stockholders' Equity $ 59,270 $ 51,450
<FN>
See accompanying notes to consolidated condensed financial statements.
PLASTI-LINE, INC.
Consolidated Condensed Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Oct. 1, 1995 Oct. 2, 1994 Oct. 1, 1995 Oct. 2, 1994
Net sales $ 22,402 $ 17,933 $ 64,970 $ 53,342
Cost of sales 18,560 14,472 53,604 43,720
Gross profit 3,842 3,461 11,366 9,622
Selling, general, and
administrative expenses 3,448 3,176 10,262 8,872
Operating income 394 285 1,104 750
Interest income 12 17 24 19
Interest expense 204 192 649 484
Income before income taxes 202 110 479 285
Income taxes 92 57 222 139
Net income $ 110 $ 53 $ 257 $ 146
Net income per share $ 0.03 $ 0.01 $ 0.07 $ 0.04
<FN>
See accompanying notes to consolidated condensed financial statements.
PLASTI-LINE, INC.
Consolidated Condensed Statements of Cash Flows
Nine months ended October 1, 1995 (1995) and October 2, 1994 (1994)
(Unaudited)
(in thousands)
1995 1994
Cash flows from operating activities:
Net income $ 258 $ 146
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,209 1,380
Loss on sale of investments in
marketable securities 6 3
Provision for losses on accounts receivable 53 83
Changes in assets and liabilities:
Decrease in net receivables 697 1,697
Increase in inventories (8,362) (3,253)
Decrease (increase) in prepaid expenses 147 (1,104)
Increase (decrease) in accounts payable 812 (56)
Increase (decrease) in accrued liabilities 1,385 (166)
Increase (decrease) in income taxes payable 237 (602)
Increase (decrease) in customer deposits
and deferred revenue 5,862 (685)
Net cash provided (used) by operating activities 2,304 (2,557)
Cash flows from investing activities:
Purchases of property and equipment (2,163) (1,760)
Investment in marketable securities - (499)
Proceeds from the sale and maturity of investments 593 300
Net cash used by investing activities (1,570) (1,959)
Cash flows from financing activities:
Net borrowings under line of credit (793) 4,509
Principal payments on long-term debt (49) (52)
Proceeds from sales of common stock 26 42
Payments of notes receivable - common stock 82 50
Net cash provided (used) by financing activities (734) 4,549
Net increase in cash and cash equivalents - 33
Cash and cash equivalents at beginning of year 10 10
Cash and cash equivalents at end of period $ 10 $ 43
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest 649 465
Income taxes 37 849
Noncash transactions:
Amortization of compensation from
restricted stock $ 24 $ 44
<FN>
See accompanying notes to consolidated condensed financial statements.
PLASTI-LINE, INC.
Notes to Consolidated Condensed Financial Statements
1. Condensed Consolidated Financial Statements
The consolidated condensed balance sheet as of October 1, 1995, the
consolidatedcondensed statements of operations for the three and nine months
ended October 1, 1995 and October 2, 1994, and the consolidated condensed
statements of cash flows for the nine months ended October 1, 1995 and
October 2, 1994 have been prepared by the Company, without audit.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and changes in cash flows at October 1, 1995 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated condensed
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's 1994 Annual Report to
Stockholders. The results of operations for the period ended
October 1, 1995 are not necessarily indicative of the operating results for
the full year.
2. Principles of Consolidation
The financial statements include the accounts of the Company and its wholly
owned subsidiary, American Sign & Marketing Services, Inc. All significant
intercompany accounts and transactions have been eliminated.
3. Inventories
Inventories consist of the following: October 1, 1995 January 1, 1995
(in thousands)
Finished goods $ 20,517 $ 13,625
Work-in-process 1,764 1,818
Raw materials 8,208 5,763
Less: LIFO inventory reserve (2,913) (1,993)
Total net inventory $ 27,575 $ 19,213
Inventories are stated at the lower-of-cost or market. Cost is determined
by the last-in, first-out method (LIFO).
4. Earnings Per Share
Net income per common share is based on the weighted average number of
common and common equivalent shares outstanding in each period. For
purposes of computing common equivalent shares outstanding, shares relating
to options have been calculated using the treasury stock method for the
portion of each period for which the options were outstanding and using the
fair value of the Company's stock for each of the respective periods.
The weighted average number of common and common stock equivalent shares
outstanding at October 1, 1995 were 3,679,510.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
A. Consolidated results of operations for the three months ended
October 1, 1995 (1995 Quarter) compared to the consolidated results of
operations for the three months ended October 2, 1994 (1994 Quarter):
The Company's sales in the current three month period increased 24.9% to
$22,402,000 from $17,933,000 for the same period last year. The sales increase
is primarily due to increased sales to automotive customers.
The Company's gross profit increased $381,000 to $3,842,000 due to increased
sales.
Selling, general and administrative expenses were $3,448,000 for the 1995
Quarter versus $3,176,000 for the 1994 Quarter. The increase is primarily the
result of the costs of a Company-wide business reengineering project and
increased sales volumes.
Operating income was $394,000 and $285,000 for the 1995 and 1994 Quarters,
respectively, a 38.2% increase. The increase was primarily due to increased
sales volumes.
Net interest expense increased to $192,000 for the 1995 Quarter from $175,000
in the 1994 Quarter. This was primarily the result of higher average debt
balances combined with higher variable interest rates in the 1995 Quarter.
B. Consolidated results of operations for the nine months ended October 1,
1995 as compared to the consolidated results of operations for the nine months
ended October 2, 1994:
Net sales were $64,970,000 for the first nine months of 1995 as compared to
$53,342,000 in the first nine months of 1994, a 21.8% increase. The increase
in sales is due to higher sales to automotive customers as well as new
business generated from the Company's Design Performance Group and Plasti-Line
West operations.
Gross profit for the first nine months of 1995 of $11,366,000 increased
$1,744,000 over the prior period due to increased sales.
Selling, general and administrative expenses for the first nine months of 1995
were $10,262,000 as compared to $8,872,000 during the same period in 1994, an
increase of $1,390,000. The increase is primarily the result of the costs
of a Company-wide business process reengineering project and increased sales
volumes.
Operating income for the first nine months of 1995 of $1,104,000 was $354,000
higher than the same period in 1994. The increase is primarily due to the
increase in sales volume.
Net interest expense increased to $625,000 for the first nine months of 1995 as
compared to $465,000 for the same period in 1994. This was primarily the
result of higher average debt balances due to increased working capital
combined with higher variable interest rates in 1995.
Liquidity and Capital Resources
The Company's cash, cash equivalents, and marketable securities decreased
$599,000 from the January 1, 1995 balance to $10,000 at October 1, 1995.
The decrease is due to the sale of investments in U.S. Government and
U.S. Governmental Agency obligations. These securities were sold in order to
reduce interest expense since the assets were earning at an interest rate lower
than the interest charged under the Company's line of credit.
The Company has working capital of $21,919,000, a decrease of $1,430,000 from
the amount of working capital at January 1, 1995 primarily due to increases in
customer deposits. Funds of $2,304,000 were provided by operating
activities. Increases in accrued liabilities and customer deposits as well
as a decrease in net receivables were the primary sources of funds.
Investing activities used $1,570,000 as a result of property and equipment
purchases offset by the sale of marketable securities. Financing activities
used $734,000 primarily as a result of decreased net borrowings under the
Company's line of credit.
The Company's future capital expenditures will relate principally to the
acquisition of new machinery and equipment and furniture and fixtures designed
to increase productivity and factory efficiency. The Company believes its
cash generated from operations and funds available under the existing line
of credit are sufficient for all planned operating and capital requirements
during 1995 and 1996.
Seasonality
The Company's sales exhibit limited seasonality, with sales in the first
quarter generally being the lowest and fourth quarter sales the highest.
First quarter sales tend to be relatively lower because of weather
constraints which slow down customer's construction schedules and their
pattern of sign purchases. Sales have normally accelerated in the second,
third, and fourth quarters corresponding with accelerating construction
schedules.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Default Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information:
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the quarter ended
October 1, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLASTI-LINE, INC.
Registrant
/s/ Mark J. Deuschle
______________________________________
Mark J. Deuschle
Vice-President of Finance
(Authorized Officer and Principal Financial Officer)
November 14, 1995