SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JULY 31, 1996
Commission file number 1-13026
BLYTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2984916
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
100 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
(203) 661-1926
(Registrant's telephone 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 (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 registrant's classes of
common stock, as of the latest practicable date.
30,741,927 COMMON SHARES AS OF AUGUST 30, 1996.
PAGE 1 OF 15
BLYTH INDUSTRIES, INC.
INDEX
PAGE
----
Form 10-Q Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Form 10-Q Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Part I. Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets. . . . . . . . . . . . . . 3
Consolidated Statements of Earnings. . . . . . . . . . 4,5
Consolidated Statements of Stockholders' Equity. . . . 6
Consolidated Statements of Cash Flows. . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . .9-12
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 13
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .13,14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PAGE 2 OF 15
Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
- ----------------------------------------------------------------------------------------------
JULY 31, JANUARY 31,
(In thousands, except share data) 1996 1996
- ----------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 16,084 $ 46,509
Accounts receivable, less allowance for doubtful receivables
of $695 and $570, respectively 28,846 24,889
Inventories (Note 3) 102,951 73,176
Prepaid expenses 204 288
Deferred income taxes 600 600
- --------------------------------------------------------------------------------------------
Total current assets 148,685 145,462
PROPERTY, PLANT AND EQUIPMENT
Less accumulated depreciation ($24,627 and $21,030 respectively) 71,045 58,159
OTHER ASSETS
Investments 6,605 6,586
Excess of cost over fair value of assets acquired, net of
accumulated amortization of $635 and $207 respectively 10,893 3,925
Deposits 512 590
- --------------------------------------------------------------------------------------------
$ 237,740 $ 214,722
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 526 $ 514
Accounts payable 23,969 18,856
Accrued expenses 22,160 18,961
Income taxes 579 93
- --------------------------------------------------------------------------------------------
Total current liabilities 47,234 38,424
DEFERRED INCOME TAXES 3,500 3,000
LONG-TERM DEBT, less current maturities 27,232 27,504
EXCESS OF FAIR VALUE OVER COST OF ASSETS ACQUIRED, net of
accumulated amortization of $511 and $451 respectively 893 953
MINORITY INTEREST 1,221 1,487
STOCKHOLDERS' EQUITY:
Preferred stock, authorized 10,000,000 shares of $0.01
par value; no shares issued and outstanding - -
Common stock, authorized 100,000,000 shares of $0.02
par value; issued and outstanding, 30,741,927 and
30,707,220, respectively 615 614
Additional contributed capital 87,150 86,701
Retained earnings 69,895 56,039
- --------------------------------------------------------------------------------------------
157,660 143,354
- --------------------------------------------------------------------------------------------
$ 237,740 $ 214,722
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- --------------------------------------------------------------------------------------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 3 OF 15
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
- ---------------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31 (In thousands, except per share data)
1996 1995
- ---------------------------------------------------------------------------------------
Net sales $ 206,828 $ 135,896
Cost of goods sold 92,669 66,276
- ---------------------------------------------------------------------------------------
Gross profit 114,159 69,620
Selling and Shipping 70,528 44,975
Administrative 20,107 11,686
- ---------------------------------------------------------------------------------------
90,635 56,661
- ---------------------------------------------------------------------------------------
Operating profit 23,524 12,959
Other expense (income)
Interest expense 1,063 394
Interest income (698) (154)
Equity in earnings of investees (107) (90)
- ---------------------------------------------------------------------------------------
258 150
- ---------------------------------------------------------------------------------------
Earnings before income tax expense and minority interest 23,266 12,809
Income tax expense 9,380 5,059
- ---------------------------------------------------------------------------------------
Earnings before minority interest 13,886 7,750
Minority interest 30 35
- ---------------------------------------------------------------------------------------
NET EARNINGS $ 13,856 $ 7,715
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Net earnings per common and common
equivalent share $ 0.45 $ 0.27
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Weighted average number of shares outstanding 31,048 28,394
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 4 OF 15
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
- ------------------------------------------------------------------------------------
THREE MONTHS ENDED JULY 31 (In thousands, except per share data)
1996 1995
- ------------------------------------------------------------------------------------
Net sales $ 100,490 $ 66,994
Cost of goods sold 44,806 33,539
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Gross profit 55,684 33,455
Selling and Shipping 34,198 21,380
Administrative 10,154 5,799
- ------------------------------------------------------------------------------------
44,352 27,179
- ------------------------------------------------------------------------------------
Operating profit 11,332 6,276
Other expense (income)
Interest expense 529 329
Interest income (290) (41)
Equity in earnings of investees (26) (23)
- ------------------------------------------------------------------------------------
213 265
- ------------------------------------------------------------------------------------
Earnings before income tax expense and minority interest 11,119 6,011
Income tax expense 4,483 2,367
- ------------------------------------------------------------------------------------
Earnings before minority interest 6,636 3,644
Minority interest 28 35
- ------------------------------------------------------------------------------------
NET EARNINGS $ 6,608 $ 3,609
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Net earnings per common and common
equivalent share $ 0.21 $ 0.13
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Weighted average number of shares outstanding 31,072 28,468
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 5 OF 15
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------
JULY 31, (In thousands, except share data)
ADDITIONAL TOTAL
COMMON STOCK CONTRIBUTED RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
- ---------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31, 1995:
Balance, February 1, 1995 28,191,412 $ 282 $ 31,218 $ 32,322 $ 63,822
Net earnings for the period - - - 7,715 7,715
Common stock issued in connection with
investment in European candle manufacturer 99,808 1 1,405 - 1,406
Common stock issued in connection with
exercise of stock options 11,200 - 92 - 92
---------------------------------------------------------
Balance, July 31, 1995 28,302,420 $ 283 $ 32,715 $ 40,037 $ 73,035
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31, 1996:
Balance, February 1, 1996 30,707,220 $ 614 $ 86,701 $ 56,039 $ 143,354
Net earnings for the period - - - 13,856 13,856
Common stock issued in connection with
exercise of stock options and other 34,707 1 449 - 450
---------------------------------------------------------
Balance, July 31, 1996 30,741,927 $ 615 $ 87,150 $ 69,895 $ 157,660
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 6 OF 15
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31 (In thousands) 1996 1995
- --------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 13,856 $ 7,715
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 4,112 2,264
Deferred income taxes 500 200
Equity in earnings of investees (107) (90)
Minority interest 30 35
Changes in operating assets and liabilities, net of
effect of business acquisition:
Accounts receivable (3,957) (162)
Inventories (29,774) (22,916)
Prepaid expenses 83 (31)
Other assets 78 (278)
Accounts payable 5,100 3,822
Accrued expenses 3,199 1,665
Income taxes 486 (293)
- --------------------------------------------------------------------------------------------
Total adjustments (20,250) (15,784)
- --------------------------------------------------------------------------------------------
Net cash used in operating activities (6,394) (8,069)
Cash flows from investing activities:
Purchases of property, plant, and equipment (15,233) (11,341)
Investments in investees - (2,898)
Purchase of businesses net of cash acquired (8,893) (7,116)
- --------------------------------------------------------------------------------------------
Net cash used in investing activities (24,126) (21,355)
- --------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 351 92
Borrowings from bank line of credit 4,600 13,160
Repayments on bank line of credit (4,600) (13,160)
Proceeds from issuance of long-term debt - 25,000
Payments on long-term debt (256) (215)
- --------------------------------------------------------------------------------------------
Net cash provided by financing activities 95 24,877
- --------------------------------------------------------------------------------------------
Net decrease in cash (30,425) (4,547)
Cash and cash equivalents at beginning of period 46,509 9,081
- --------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 16,084 $ 4,534
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 7 OF 15
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiaries and their subsidiaries. All significant
inter-company accounts and transactions have been eliminated. In the
opinion of the Management, the accompanying unaudited consolidated
financial statements include all accruals (consisting only of normal
recurring accruals) necessary for fair presentation of the Company's
consolidated financial position at July 31, 1996 and the consolidated
results of its operations and cash flows for the three and six month
periods ended July 31, 1996 and 1995. In December 1995, the Company
effected a two-for-one stock split in the form of a stock dividend. All
share quantities, per share amounts and options data have been
retroactively restated to reflect the stock split. These interim
statements should be read in conjunction with the Company's consolidated
financial statements for the year ended January 31, 1996, as set forth in
the Company's Form 10-K Annual Report. Operating results for the six
months ended July 31, 1996 are not necessarily indicative of the results
that may be expected for the year ending January 31, 1997.
2. BUSINESS ACQUISITIONS
On February 13, 1996, the Company purchased from Hallmark Cards,
Incorporated the Canterbury candle product line and related candle
manufacturing equipment for approximately $8,400,000. Under the terms of
the purchase agreement, the Company will work jointly with Hallmark as a
preferred vendor in the merchandising and distribution of the Company's
candles and candle accessories through various outlets which carry Hallmark
candles. While the Company began shipping Colonial Candle of Cape Cod and
Mrs. Baker brands to Hallmark Gold Crown stores in July 1996, these
shipments had no material impact on second quarter results.
3. INVENTORIES
The components of inventory consist of the following (in thousands):
July 31, 1996 January 31, 1996
------------------------------------
FINISHED GOODS $88,258 $60,940
WORK IN PROGRESS 1,939 1,803
RAW MATERIALS 12,754 10,433
----------------------------------
$102,951 $73,176
PAGE 8 OF 15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Net Sales
Net sales increased $70.9 million, or 52.2%, from $135.9 million in the
first six months of fiscal 1996 to $206.8 million in the first six months
of fiscal 1997. Net sales increased $33.5 million, or 50.0%, from $67.0
million in the quarter ended July 31, 1995 to $100.5 million in the quarter
ended July 31, 1996. Virtually all of these increases were attributable to
unit growth in sales of the Company's consumer everyday products,
particularly scented candles and accessories, and seasonal outdoor
products. In particular, three product areas were among those which
experienced the highest growth rate for the six months ended July 31, 1996:
Ambria, our new brand of coordinated home fragrance and decorative lighting
products; PartyLite Gifts, our party plan direct seller in the United
States; and International, particularly Europe and Canada. Several factors
contributed to the increase in unit sales. Sales to new customers
continued to represent at least 50% of the net sales increase. The
increase in sales to new domestic customers was attributable to improved
penetration of existing channels of distribution and to geographic
expansion in the United States, particularly by the Company's direct
selling activities. In addition, the Company was able to increase sales to
existing customers, particularly mass merchandisers and specialty chains.
International sales, including sales in Canada, grew at a faster rate than
the Company as a whole, and accounted for approximately 18% of the net
sales increase. International sales accounted for approximately 12% of
total net sales for the six months ended July 31, 1996.
Sales of scented candles, which are typically higher gross profit margin
products, also continued to grow at a substantially faster rate than
unscented products. Consumable products (which consist of candles,
citronella candles and potpourri) accounted for approximately 70% of the
Company's net sales for the six months ended July 31, 1996. Candle
accessories continued to account for the balance of net sales.
Gross Profit
Gross profit increased $44.6 million, or 64.0%, from $69.6 million in the
first six months of fiscal 1996 to $114.2 million in the first six months
of fiscal 1997. Gross profit margin increased from 51.2% for the first six
months of fiscal 1996 to 55.2% for the first six months of fiscal 1997.
Gross profit increased $22.2 million, or 66.3%. from $33.5 million in the
quarter ended July 31, 1995 to $55.7 million in the quarter ended July 31,
1996. Gross profit margin increased from 49.9% for the quarter ended July
31, 1995 to 55.4% for the quarter ended July 31, 1996. Such increases were
due, in substantial part, to the continued increased sales of the Company's
products to the consumer market, which products generally carry higher
gross profit margins than other of the Company's products, as well as to a
continued shift in the mix of the Company's products for the consumer
market to a greater percentage of higher gross profit margin products, such
as scented candles and candle accessories. As in fiscal 1996,
manufacturing efficiencies due to higher unit volume and process technology
improvements continued to have a favorable impact on gross profit margins.
Selling and Shipping Expense
Selling and shipping expense increased $25.5 million, or 56.7%, from $45.0
million in the first six months of fiscal 1996 (33.1% of net sales), to
$70.5 million in the first six months of fiscal 1997 (34.1% of net sales).
Selling and shipping expense increased $12.8 million, or 59.8%, from $21.4
million in the quarter ended July 31, 1995 (31.9% of net sales), to $34.2
million in the quarter ended July 31, 1996 (34.0% of net sales). The
increases were primarily attributable to increased sales through the
Company's consumer market, particularly sales through the Company's home
party plan direct selling activities, in which sales expenses, as a
percentage of sales, are relatively higher. In addition, the Company's
consumer products generally require a higher level of product development
and sales and marketing expense than the Company's food service and
religious products.
PAGE 9 OF 15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Administrative Expense
Administrative expense increased $8.4 million, or 71.8%, from $11.7 million
in the first six months of fiscal 1996 (8.6% of net sales) to $20.1 million
in the first six months of fiscal 1997 (9.7% of net sales). Administrative
expense increased $4.4 million, or 75.9%, from $5.8 million in the quarter
ended July 31, 1995 (8.7% of net sales) to $10.2 million in the quarter
ended July 31, 1996 (10.1% of net sales). Such increases were a result of
increases in personnel (from approximately 206 administrative employees at
July 31, 1995 to approximately 347 administrative employees at July 31,
1996), substantially improved information and data processing capabilities,
increases in leased and owned office space and increased research and
development costs. In connection with anticipated growth in its consumer
product sales, which generally require somewhat greater administrative
expenditures, the Company expects further increases in administrative
expenses due to expected increases in the number of employees. The Company
also expects additional infrastructure spending associated with
improvements in information and administrative support systems.
Interest Expense
Interest expense increased $0.7 million, or 175.0%, from $0.4 million in
the first six months of fiscal 1996 to $1.1 million in the first six months
of fiscal 1997. Interest expense increased $0.2 million, or 66.7%, from
$0.3 million in the quarter ended July 31, 1995 to $0.5 in the quarter
ended July 31, 1996. Interest expense was higher due to the issuance by
certain of the Company's subsidiaries of $25.0 million aggregate principal
amount of senior notes which were issued July 7, 1995 and therefore did not
result in substantial interest expense in the first six months of fiscal
1996.
Income Tax Expense
Income tax expense increased $4.3 million, or 84.3%, from $5.1 million in
the first six months of fiscal 1996 to $9.4 million in the first six months
of fiscal 1997. Income tax expense increased $2.1 million, or 87.5%, from
$2.4 million in the quarter ended July 31, 1995 to $4.5 million in the
quarter ended July 31, 1996. The effective income tax rate was
approximately 40.0% for the first six months of fiscal 1997 and fiscal
1996.
Net Earnings
As a result of the foregoing, net earnings increased $6.2 million, or
80.5%, from $7.7 million in the first six months of fiscal 1996 to $13.9
million in the first six months of fiscal 1997. Net earnings increased
$3.0 million, or 83.3%, from $3.6 million in the quarter ended July 31,
1995 to $6.6 million in the quarter ended July 31, 1996.
Earnings per share based upon the weighted average number of shares
outstanding for the six months ended July 31, 1996 were $0.45 compared to
$0.27 for the same period last year. Earnings per share for the quarter
ended July 31, 1996 were $0.21 compared to $0.13 for the quarter ended July
31, 1995. Earnings per share have been restated for a 2 for 1 stock split
effected as a stock dividend in December 1995.
PAGE 10 OF 15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Operating assets and liabilities increased from January 31, 1996 to July
31, 1996 due to the Company's internally generated growth. To meet
increases in current and anticipated demand during the first six months of
fiscal 1997, the Company increased its inventory at a greater rate than in
the past. Inventory increased from $73.2 million at January 31, 1996 to
$103.0 million at July 31, 1996. Measured in terms of number of days'
worth of cost of goods sold, inventory increased from 169 days worth of
inventory at the end of fiscal 1996 to 200 days' worth of inventory at July
31, 1996. This increase was primarily due to the build up of inventory for
the rollout of Colonial Candle of Cape Cod and Mrs. Baker brand candles to
Hallmark stores and the introduction of our new Ambria brand. After giving
effect to this recent increase, the Company expects to manage its inventory
in the ordinary course to meet increased demand and to improve customer
service. Accounts receivable increased $3.9 million, or 15.7%, from $24.9
million at the end of fiscal 1996 to $28.8 million at July 31, 1996 due to
sales growth. Accounts payable and accrued expenses increased $8.3
million, or 22.0%, from $37.8 million at the end of fiscal 1996 to $46.1
million at July 31, 1996. The increase in accounts payable and accrued
expenses is attributable to the increases in operating assets and the
Company's overall growth.
Capital expenditures for property, plant and equipment were $15.2 million
in the first six months of fiscal 1997. Capital expenditures were
primarily investments in new plant and equipment and improvements to
existing plant and equipment. The Company anticipates total capital
spending of approximately $50.0 million for fiscal 1997, of which
approximately $18.0 million will be used for a new distribution facility in
Elkin, North Carolina, approximately $25.0 million will be used for
machinery and equipment, including machinery and equipment for the new
facilities and upgrades to machinery and equipment in existing facilities,
and approximately $7.0 million will be used for information systems and
office expansion. In fiscal 1998, the Company expects that it will be
required to make further substantial capital expenditures for increased
manufacturing and distribution capacity.
The Company has grown in part through acquisitions and, as part of its
growth strategy, the Company expects to continue from time to time in the
ordinary course of its business to evaluate and pursue opportunities to
acquire other companies, assets and product lines that either complement or
expand its existing business. The Company expects to effect one or more
such acquisitions in the next twelve months, although the Company currently
has no arrangements, agreements or understandings with respect to any such
acquisitions. In the first six months of fiscal 1997, the Company expended
an aggregate of $8.9 million in connection with the purchase of the
Canterbury Candle product line and related candle manufacturing equipment
from Hallmark Cards, Incorporated and the slight increase of its ownership
of the capital stock of Jeanmarie Creations, Inc.
The Company's primary capital requirements are for working capital to fund
the increased inventory and accounts receivable to sustain the Company's
sales growth and for capital expenditures (including capital expenditures
related to planned facilities expansion). The Company is building its
inventory to meet increased demand. The Company believes that cash on
hand, cash from operations and available borrowings under the Credit
Facility described below, will be sufficient to fund its operating
requirements, capital expenditures and all other obligations for the next
twelve months. However, the Company anticipates that it will finance up to
$20.0 million for the construction and equipment for the new Elkin, North
Carolina distribution facility in the form of a term loan.
PAGE 11 OF 15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources (continued)
In July 1996, the Company extended and improved the terms of it's credit
facility (the "Credit Facility") with Harris Trust and Savings Bank
("Harris") and the Bank of America Illinois (together with Harris, the
"Banks") through July 21, 1998. Pursuant to the Credit Facility the Banks
have agreed, subject to certain conditions, to provide an unsecured
revolving credit facility to the Company in an aggregate amount of up to
$21.0 million to fund ongoing working capital requirements, letter of
credit requirements and general corporate purposes of the Company. Amounts
which may be outstanding under the Credit Facility bear interest, at the
Company's option, at Harris' prime rate (8.25% at July 31, 1996) or at
LIBOR plus 0.40%. In connection with the Credit Facility, the Company pays
a commitment fee of 0.125% per annum on the unused portion of the revolving
credit facility. The Credit Facility contains standard covenants,
including maintenance of certain financial ratios and limitations on
certain restricted payments, including dividends. The Company does not
believe that such covenants will have a material adverse effect on its
operations.
Net cash used in operating activities amounted to $6.4 million in the first
six months of fiscal 1997 compared to $8.1 million in the first six months
of fiscal 1996. At July 31, 1996, no indebtedness was outstanding under
the Credit Facility and approximately $3.1 million face amount of letters
of credit were outstanding under the Credit Facility as of July 31, 1996.
PAGE 12 OF 15
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were voted upon at the Annual Meeting of
Stockholders held on June 6, 1996, and received the votes set forth
below:
1. Each of the following persons nominated was elected to serve as
director and received the number of votes set opposite his name:
For Against Withheld
-------------------------------------
John W. Burkhart 29,379,957 0 8,137
John E. Preschlack 29,379,960 0 8,134
Frederick H. Stephens, Jr. 29,379,957 0 8,137
2. A proposal to ratify the appointment of Grant Thornton LLP as
independent certified public accountants received 29,382,173
votes for, 406 votes against, and 5,515 votes withheld.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
4.1 Amended and Restated 1994 Employee Stock Option Plan of
the Company.
4.2 Form of Nontransferable Incentive Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company.
4.3 Form of Nontransferable Non-Qualified Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company.
4.4 Form of Stock Option Agreement under the 1994 Stock
Option Plan for Non-Employee Directors of the Company.
PAGE 13 OF 15
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K (continued)
10.1 Fourth Amendment, dated as of July 18, 1996, to the Amended
and Restated Credit Agreement dated January 31, 1994, as
amended, between Candle Corporation Worldwide, Inc. and
Harris Trust and Savings Bank, individually and as agent,
and the Bank of America Illinois.
11. Statement regarding computation of per share earnings.
27.1 Financial data schedule as of and for the period ended July
31, 1996.
27.2 Amended financial data schedule as of and for the period
ended April 30, 1996.
b) Reports on Form 8-K
There were no reports on Form 8-K filed by the Company
during the fiscal quarter ended July 31, 1996.
PAGE 14 OF 15
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.
BLYTH INDUSTRIES, INC.
Date: September 12, 1996 By: /s/ Robert B. Goergen
-------------------- ------------------------
Robert B. Goergen
Chief Executive Officer
Date: September 12, 1996 By: /s/ Howard E. Rose
-------------------- ------------------------
Howard E. Rose
Chief Financial Officer
PAGE 15 OF 15
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
- ------- ----------- --------
4.1 Amended and Restated 1994 Employee Stock Option
Plan of the Company. 18
4.2 Form of Nontransferable Incentive Stock Option Agreement
under the Amended and Restated 1994 Employee Stock
Option Plan of the Company. 32
4.3 Form of Nontransferable Non-Qualified Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company. 42
4.4 Form of Stock Option Agreement under the 1994 Stock
Option Plan for Non-Employee Directors of the Company. 51
10.1 Fourth Amendment, dated as of July 18, 1996, to the
Amended and Restated Credit Agreement dated
January 31, 1994, as amended, between Candle
Corporation Worldwide, Inc. and Harris Trust and
Savings Bank, individually and as agent, and the
Bank of America Illinois. 59
11. Statement regarding computations of per share earnings. 65
27.1 Financial data schedule as of and for the period ended
July 31, 1996. 66
27.2 Amended financial data schedule as of and for the period
ended April 30, 1996. 67