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 Quarterly Period Ended April 30, 1996
Commission File Number: 1-6339
UNIFLEX, INC.
(Exact Name of Registrant As Specified In Its Charter)
Delaware 11-2008652
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
383 West John Street, Hicksville, New York 11802
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 516 - 932 - 2000
Indicate by check mark whether the registrant (1) has filed all report required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during 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: 2,809,584 shares of the
Company's common stock - $.10 par value - were outstanding as of June 1, 1996.
<PAGE>
UNIFLEX, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Consolidated condensed balance sheets -
April 30, 1996 (unaudited) and January 31, 1996 1
Consolidated condensed statements of income (unaudited) -
For the three months ended April 30, 1996 and 1995 2
Consolidated statements of changes in stockholders' equity
(unaudited) for the three months ended April 30, 1996 and 1995 3
Consolidated condensed statements of cash flows (unaudited)
for the three months ended April 30, 1996 and 1995 4
Notes to consolidated condensed financial statements (unaudited) 5
Item 2. Management's discussion and analysis of financial
condition and results of operations 6 - 7
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K 8
SIGNATURES 9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIFLEX, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, January 31,
1996 1996
--------------- -----------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 1,236,608 $ 1,196,593
Accounts receivable 4,248,909 3,364,989
Inventory 2,626,042 2,699,948
Prepaid income taxes 468,253 898,610
Prepaid expenses and other current assets 643,163 606,943
Deferred tax asset 296,700 269,900
----------- -----------
Total Current Assets 9,519,675 9,036,983
Property and Equipment 6,406,022 6,427,427
Intangible Assets 188,189 156,404
Other Assets 652,191 661,798
---------- ----------
Total Assets $16,766,077 $16,282,612
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Current maturities of long-term debt $ 154,000 $ 151,646
Accounts payable 1,405,581 1,234,487
Accrued liabilities 808,314 952,018
----------- -----------
Total Liabilities 2,367,895 2,338,151
----------- -----------
Long-Term Debt 1,530,849 2,169,506
Deferred Compensation and Postretirement Medical Benefits 1,242,953 1,215,124
Deferred rent 129,996 122,496
---------- ----------
Total Liabilities 5,271,693 5,845,277
---------- ----------
Minority Interest 192,500 192,500
----------- -----------
Stockholders' Equity
Common stock - par value $.10 per share 10,000,000 shares
authorized, 2,809,584 shares issued and outstanding 280,438 266,638
Additional paid-in capital 2,368,272 1,854,723
Retained earnings 8,701,977 8,179,402
----------- -----------
11,350,687 10,300,763
Less note receivable - stock purchase (48,803) (55,928)
------------ -----------
Total Stockholders' Equity 11,301,884 10,244,835
----------- -----------
Total Liabilities and Stockholders' Equity $16,766,077 $16,282,612
=========== ===========
</TABLE>
The consolidated condensed balance sheet at January 31, 1996 has been derived
from the audited financial statements at that date.
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-1-
<PAGE>
UNIFLEX, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
-----------------------------------
1996 1995
---- ----
<S> <C> <C>
Net sales $8,554,965 $7,960,409
Cost of sales 5,322,572 5,026,669
---------- ----------
Gross Profit 3,232,393 2,933,740
---------- ----------
Shipping and selling expenses 1,558,505 1,486,626
General and administrative expenses 736,013 706,665
---------- ----------
2,294,518 2,193,291
---------- ----------
Income before other expenses 937,875 740,449
---------- ----------
Interest expense - net 66,303 121,820
---------- ----------
Income before provision for income taxes 871,572 618,629
---------- ----------
Provision for income taxes:
Current 390,500 280,000
Deferred (41,500) (36,000)
----------- ----------
349,000 244,000
---------- ----------
Net income $ 522,572 $ 374,629
========== ==========
Earnings per share $ .18 $ .14
========== ==========
Weighted average number of common shares and common share
equivalents outstanding $2,938,333 $2,707,935
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-2-
<PAGE>
UNIFLEX, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED APRIL 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
---------------------------- Paid-In Retained Note Receivable
Shares Amount Capital Earnings Stock Purchase Total
------ ------ ------- -------- -------------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at February 1, 1995 2,240,332 $ 224,033 $ 424,695 $ 6,720,821 $ (84,428) $ 7,285,121
Amortization of note receivable -- -- -- -- 7,125 7,125
Net income -- -- -- 374,629 -- 374,629
----------- ----------- ----------- ----------- ----------- -----------
Balance at April 30, 1995 2,240,332 $ 224,033 $ 424,695 $ 7,095,450 $ (77,303) $ 7,666,875
=========== =========== =========== =========== =========== ===========
Balance at February 1, 1996 2,666,384 $ 266,638 $ 1,854,722 $ 8,179,405 $ (55,928) $10,244,837
Exercise of stock options 138,000 13,800 153,550 -- -- 167,350
Tax benefit from exercise of stock
options -- -- 360,000 -- -- 360,000
Amortization of note receivable -- -- -- -- 7,125 7,125
Net income -- -- -- 522,572 -- 522,572
----------- ----------- ----------- ----------- ----------- -----------
Balance at April 30, 1996 2,804,384 $ 280,438 $ 2,368,272 $ 8,701,977 $ (48,803) $11,301,884
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE>
UNIFLEX, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
Three Months Ended
April 30,
---------------------------------------
1996 1995
---- ----
<S> <C> <C>
No cash provided by operating activities $ 734,591 $ 259,910
Cash flows from investing activities:
Purchase of property and equipment (176,884) (279,949)
Purchase of intangibles (48,739) (56,261)
----------- -----------
Net cash used in investing activities (225,623) (336,210)
----------- -----------
Cash flows from financing activities:
Proceeds from exercise of stock options 167,350 --
Minority interest contribution -- 27,500
Proceeds from long-term debt -- 624,900
Payment of long-term debt (636,303) (33,555)
Net cash (used in) provided by financing activities (468,953) 618,845
----------- -----------
Net increase in cash 40,015 542,545
Cash - beginning of period 1,196,593 572,725
----------- -----------
Cash - end of period $ 1,236,608 $ 1,070,270
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE>
UNIFLEX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION:
In the opinion of management of the Company, the accompanying unaudited
consolidated condensed financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the financial
position of the Company as of April 30, 1996 and the results of operations and
cash flows for the three months ended April 30, 1996 and 1995, and have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the audited financial statements and
notes thereto included in the Company's annual report on Form 10-K for the year
ended January 31, 1996.
The results of operations for the three months ended April 30, 1996 are not
necessarily indicative of the operating results for the full year.
NOTE 2. INVENTORY:
A summary of inventory follows:
April 30, January 31,
1996 1996
---- ----
(Unaudited)
Raw materials and supplies $1,764,339 $1,755,374
Work in process 198,670 227,715
Finished products 663,033 716,859
---------- -----------
$2,626,042 $2,699,948
========== ==========
-5-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES:
Net sales for the quarter ended April 30, 1996, as compared to the quarter ended
April 30, 1995, increased $595,000, or 7.5%, to $8,555,000 from $7,960,000. The
increase in net sales for the quarter ended April 30, 1996, was largely
attributable to increased net sales of approximately $333,000 in the
Registrant's Medical Packaging Division and approximately $223,000 in the
Registrant's Cycle Plastics Division.
Net sales for the quarter ended April 30, 1996, as compared to the immediately
preceding quarter ended January 31, 1996, increased $1,327,000, or 18.4%. The
increase in net sales was largely attributable to increased net sales of
approximately $332,000 in the Registrant's Medical Packaging Division,
approximately $362,000 in the Registrant's Specialty Advertising Division,
approximately $130,000 in the Registrant's Cycle Plastics Division, and
approximately $48,000 in the Registrant's newly-formed Safelink Division.
COST OF SALES AND EXPENSES:
Cost of sales for the quarter ended April 30, 1996, as compared to the quarter
ended April 30, 1995, increased $296,000, or 5.9%, to $5,323,000 from
$5,027,000. Cost of sales, as a percentage of net sales for the quarter ended
April 30, 1996, as compared to the same quarter in the prior year, decreased to
62.2% from 63.2%. This decrease was primarily attributable to lower costs for
certain raw materials.
Cost of sales for the quarter ended April 30, 1996, as compared to the
immediately preceding quarter ended January 31, 1996, increased $538,000, or
11.2%, to $5,323,000 from $4,785,000. Cost of sales, as of a percentage of net
sales for the quarter ended April 30, 1996, compared to the immediately
preceding quarter ended January 31, 1996, decreased to 62.2% from 66.2%. This
decreased was primarily attributable to continued manufacturing efficiencies and
lower costs for certain raw materials.
Shipping, selling, general and administrative expenses for the quarter ended
April 30, 1996, as compared to the quarter ended April 30, 1995, increased
$102,000, or 4.6%, from $2,193,000 to $2,295,000. This increase was primarily
attributable to increased expenses resulting from increased net sales. Shipping,
selling, general and administrative expenses as a percentage of net sales for
the quarter ended April 30, 1996, as compared to the same quarter in the prior
year, decreased to 26.8% from 27.6%.
INTEREST EXPENSE:
Interest expense for the quarter ended April 30, 1996, as compared to the
quarter ended April 30, 1995, decreased $56,000, or 45.5%, to $66,000 from
$122,000. This decrease was attributable to the Registrant periodically reducing
its debt. On February 13, 1996 the Registrant repaid its working capital bank
debt in full.
-6-
<PAGE>
WORKING CAPITAL AND LIQUIDITY:
Working capital increased to $7,152,000 at April 30, 1996, as compared to
$6,801,000 at April 30, 1995, an increase of $351,000, or 5.2%, resulting in a
working capital ratio of 4 to 1 at April 30, 1996. This was a direct result of
the profitability of the Registrant during the quarter. The Registrant believes
it has sufficient working capital and unused lines of credit to meet its
expected liquidity and capital reserve requirements for the foreseeable future.
Certain matters discussed in this Report are forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected.
-7-
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27; Financial Data Schedule
Report on Form 8-K - The Registrant filed Form 8-K dated April 9, 1996
relating to a change in the Registrant's certifying accountant.
-8-
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
UNIFLEX, INC.
(Registrant)
/s/ Herbert Barry
-------------------------------------
Herbert Barry (Chairman Of The Board)
/s/ Robert Gugliotta
-----------------------------
Robert Gugliotta (VP Finance)
Date: June 10, 1996
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-Q for the quarter ended April 30, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> APR-30-1996
<CASH> $ 1,236,608
<SECURITIES> 0
<RECEIVABLES> 4,248,909
<ALLOWANCES> 164,534
<INVENTORY> 2,626,042
<CURRENT-ASSETS> 9,519,675
<PP&E> 6,406,022
<DEPRECIATION> 7,894,702
<TOTAL-ASSETS> 16,766,077
<CURRENT-LIABILITIES> 2,367,895
<BONDS> 0
0
0
<COMMON> 280,438
<OTHER-SE> 11,021,446
<TOTAL-LIABILITY-AND-EQUITY> 16,766,077
<SALES> 8,554,965
<TOTAL-REVENUES> 8,554,965
<CGS> 5,322,572
<TOTAL-COSTS> 7,617,090
<OTHER-EXPENSES> 66,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 66,303
<INCOME-PRETAX> 871,572
<INCOME-TAX> 349,000
<INCOME-CONTINUING> 522,572
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 522,572
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
