SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-7753
DECORATOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1001433
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10011 Pines Blvd., Suite 201, Pembroke Pines, FL 33024
(Address of principal executive offices) (zip code)
954-436-8909
(Registrant's telephone number, including area code)
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 .
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT MAY 6, 1996
- ----- --------------------------
Common Stock, $.20 par value 1,738,955 shares*
*Includes 23,413 shares issuable upon surrender of the outstanding $.10 par
common stock.
PART 1 - FINANCIAL INFORMATION
DECORATOR INDUSTRIES, INC.
BALANCE SHEET
March 30, 1996 December 30, 1995
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(UNAUDITED) (UNAUDITED)
ASSETS
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CURRENT ASSETS:
Cash and Cash Equivalents $ 2,175,834 $ 5,269,772
Short-term Investments 2,409,314 14,607
Accounts Receivable 3,652,311 2,776,039
Note Receivable 80,000 80,000
Inventories 2,923,511 3,005,383
Prepaid Expenses 151,545 126,373
Prepaid and Deferred Income Taxes 159,000 159,000
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Total Current Assets 11,551,515 11,431,174
PROPERTY & EQUIPMENT 5,076,688 5,076,864
Less: Accumulated Depreciation
and Amortization 1,998,151 1,988,557
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Net Value of Property and Equipment 3,078,537 3,088,307
EXCESS OF COST OVER NET ASSETS ACQUIRED 1,446,908 1,461,605
NOTE RECEIVABLE 120,000 140,000
OTHER ASSETS 563,220 294,573
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TOTAL ASSETS $16,760,180 $16,415,659
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LIABILITIES & STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts Payable $ 3,325,685 $ 2,751,329
Accrued Expenses - Income Taxes 373,401 60,873
- Compensation 601,774 1,072,321
- Other 721,545 580,267
Current Maturities of Long-term Debt 41,193 41,032
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Total Current Liabilities 5,063,598 4,505,822
LONG-TERM DEBT 578,219 587,083
DEFERRED INCOME TAXES 175,000 175,000
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Total Liabilities 5,816,817 5,267,905
STOCKHOLDERS' EQUITY:
Common Stock 532,573 528,973
Additional Capital 1,730,585 1,692,185
Retained Earnings 12,731,310 12,228,865
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14,994,468 14,450,023
Less: Treasury Stock, at Cost 4,051,105 3,302,269
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Total Stockholders' Equity 10,943,363 11,147,754
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $16,760,180 $16,415,659
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The accompanying notes are an integral part of the financial statements.
1.
DECORATOR INDUSTRIES, INC.
STATEMENT OF INCOME (UNAUDITED)
FOR 13 WEEKS ENDED:
March 30, 1996 April 1, 1995
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NET SALES $9,439,498 $8,275,431
Costs and expenses:
Cost of products sold 7,102,934 6,043,328
Selling and administrative 1,390,875 1,268,275
Interest & Investment Income (57,787) (134,250)
Interest Expense 11,750 15,633
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TOTAL COST AND EXPENSES 8,447,772 7,192,986
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Income before income taxes 991,726 1,082,445
Income Taxes 369,000 402,000
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NET INCOME $ 622,726 $ 680,445
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-------------------------------
PRIMARY EARNINGS
PER SHARE $0.36 $0.34
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FULLY DILUTED EARNINGS
PER SHARE $0.33 $0.31
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Average number of
shares outstanding:
Primary 1,730,918 1,995,324
Fully diluted 1,861,678 2,172,891
The accompanying notes are an integral part of the financial statements.
2.
DECORATOR INDUSTRIES, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
For 13 Weeks Ended:
MARCH 30,1996 APRIL 1,1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $622,726 $680,446
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 99,276 92,297
Provision for losses on accounts receivable 12,500 8,500
(Gain) loss on disposal of assets 1,951 1,117
Increase (decrease) from changes in:
Accounts receivable (888,772) (337,878)
Inventory 81,872 (75,391)
Short-term investments (2,394,707) (88,311)
Prepaid expenses (25,172) (152,314)
Other assets (268,647) 116
Accounts payable 574,356 387,567
Accrued expenses (16,741) (426,338)
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Net cash provided by (used in) operating activities (2,201,358) 89,811
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (77,620) (70,236)
Proceeds from property dispositions 860 1,600
Note receivable 20,000 20,000
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Net cash used in investing activities (56,760) (48,636)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long term debt payments (8,703) (20,533)
Dividend payments (120,280) (117,228)
Proceeds from exercise of stock options 42,000 24,188
Purchase of common stock for treasury (748,837) (532,181)
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Net cash provided by financing activities (835,820) (645,754)
Net increase in cash and cash equivalents (3,093,938) (604,579)
Cash and cash equivalents at beginning of year 5,269,772 4,026,035
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Cash and cash equivalents at end of period $2,175,834 $3,421,456
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Supplemental disclosures of cash flow information:
MARCH 30,1996 APRIL 1,1995
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Interest $8,787 $6,465
Income taxes $56,472 $68,656
The accompanying notes are an integral part of the financial statements.
3.
DECORATOR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED MARCH 30, 1996 AND APRIL 1, 1995
(UNAUDITED)
NOTE 1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present
fairly the Company's financial position as of March 30, 1996, the
changes therein for the thirteen week period then ended and the
results of operations for the thirteen week periods ended March 30,
1996 and April 1, 1995.
NOTE 2. The consolidated financial statements included in the Form 10-Q are
presented in accordance with the requirements of the form and do not
include all of the disclosures required by generally accepted
accounting principles. For additional information, reference is made to
the Company's annual report on Form 10-K for the year ended December 30,
1995. The results of operations for the thirteen week periods ended
March 30, 1996 and April 1, 1995 are not necessarily indicative of
operating results for the full year.
NOTE 3. INVENTORIES
Inventories at March 30, 1996 and December 30, 1995 consisted of the
following:
March 30, 1996 December 30, 1995
(Unaudited)
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Raw material and
Supplies $2,740,980 $2,814,309
In process and
Finished Goods 182,531 191,075
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$2,923,511 $3,005,383
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NOTE 4. EARNINGS PER SHARE
The excess of s hares assumed to be issued under the stock option
plans over shares that could be purchased with the proceeds based on
the higher average or period ending market prices, was sufficient to
cause fully diluted earnings per share to be different from primary
earnings per share as shown in the consolidated statement of income.
4.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's financial condition as measured by the following ratios remains
strong during the First Quarter.
March 30, 1996 December 30, 1995
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Current Ratio 2:28 2:54
Quick Ratio 1:70 1:87
LT Debt to Total Capital 5.01% 5.14%
Working Capital $6,487,917 $6,925,352
These ratios were maintained despite the use of $748,847 of cash to
repurchase common stock.
Cash and Short-Term Investments total $4,585,148. These cash balances and
borrowing capacity keep the company well-positioned to take advantage of
internal growth or acquisition opportunities that might arise.
RESULTS OF OPERATIONS:
The following table shows the percentage relationship to net sales of certain
items in the Company's Statement of Income:
First First
Quarter Quarter
1996 1995
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Net Sales 100.0% 100.0%
Cost of products sold 75.2 73.0
Selling and administrative 14.7 15.3
Interest and investment income (.6) (1.6)
Interest expense .1 .2
Income taxes 3.9 4.9
Net income 6.6 8.2
Thirteen-Week Period Ended March 30, 1996,(First Quarter 1996) compared to
Thirteen-Week Period Ended April 1, 1995,(First Quarter 1995)
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Net sales increased by 14% for the First Quarter 1996 versus the First
Quarter 1995. The $9,439,498 in net sales represented the highest sales ever
achieved in one quarter.
Net income for the First Quarter 1996 was 8% lower than a year ago, $622,726
compared to $680,455 in 1995. The most recent industry reports show that the
Manufactured Housing Market remains strong, with a 9% increase in shipments
during January and February over a year ago. While the Recreational Vehicle
Industry, for the same period, reported that shipments were down 6% from the
prior year, industry analysts project improving conditions in the months
ahead.
5.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
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None
(b) No reports on form 8-K were filed by the Company during the
fiscal quarter ended March 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DECORATOR INDUSTRIES, INC.
(Registrant)
By: \s\ William Bassett
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William Bassett, President
By: \s\ Michael K. Solomon
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Date: May 10, 1996 Michael K. Solomon, Treasurer
6.