FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: April 1, 1995
COMMISSION FILE NUMBER: 1-5555
WELLCO ENTERPRISES, INC.
(Exact name of registrant as specified in charter)
NORTH CAROLINA 56-0769274
(State of Incorporation) (I.R.S. Employer Identification No.)
Georgia Ave. & Pine St., P.O. Box 188, Waynesville, NC 28786
(Address of Principal Executive Office)
Registrant's telephone number, including area code 704-456-3545
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 .
884,806 shares of $1 par value common stock were outstanding on May 12,
1995.
<PAGE>
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WELLCO ENTERPRISES, INC.
CONSOLIDATED FINANCIAL STATEMENTS FILED WITH FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 1, 1995
The attached unaudited financial statements reflect all adjustments which are,
in the opinion of management, necessary to reflect a fair statement of the
financial position, results of operations, and cash flows for the interim
periods presented. All significant adjustments are of a normal recurring nature.
<PAGE>
2
WELLCO ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
APRIL 1, 1995 AND JULY 2, 1994
(in thousands)
ASSETS
<TABLE>
<CAPTION>
(unaudited)
APRIL 1, JULY 2,
1995 1994
--------- ---------
<S> <C> <C>
CURRENT ASSETS: ......................................
Cash ............................................. $ 2,050 $ 2,528
Marketable Securities,current
(Notes 1 and 2) ............................... 2,204 2,894
Receivables ...................................... 2,886 4,400
Inventories-
Finished goods ................................... 1,071 734
Work in process .................................. 1,488 1,183
Raw materials .................................... 1,345 1,605
--------- ---------
Total ......................................... 3,904 3,522
Deferred taxes and prepaid ....................... 404 354
expenses ....................................... --------- ---------
Total ............................................ 11,448 13,698
--------- ---------
MARKETABLE SECURITIES,non-current
(Notes 1 and 3) .................................. 3,554 4,794
INVESTMENT IN AFFILIATE (Note 4) ..................... 5,488
MACHINERY LEASED TO LICENSEES
(less accumulated
depreciation of
$1,394 and $1,337) ............................... 125 182
PROPERTY, PLANT AND EQUIPMENT:
Land ............................................. 107 107
Buildings ........................................ 774 774
Machinery and equipment .......................... 2,325 2,190
Furniture and automobiles ........................ 392 337
Leasehold Improvements ........................... 63 63
Total cost ....................................... 3,661 3,471
--------- ---------
Less accumulated depreciation
and
amortization .................................. (2,634) (2,474)
--------- ---------
Net .............................................. 1,027 997
INTANGIBLE ASSETS:
Excess of cost over net
assets of
subsidiary at acquisition ..................... 228 228
Intangible pension asset ......................... 575 575
--------- ---------
Total ............................................ 803 803
DEFERRED TAXES ....................................... 350 521
--------- ---------
TOTAL ................................................ $ 22,795 $ 20,995
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
3
WELLCO ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
APRIL 1, 1995 AND JULY 2, 1994
(in thousands)
LIABILITIES AND EQUITY
<TABLE>
<CAPTION>
(unaudited)
APRIL 1, JULY 2,
1995 1994
<S> <C> <C>
CURRENT LIABILITIES:
Short-term borrowing from bank .................... $ 20 $ 20
Accounts payable .................................. 2,086 1,825
Accrued compensation .............................. 743 810
Accrued pension ................................... 95 120
Accrued income taxes .............................. 6 353
Other liabilities ................................. 225 218
-------- --------
Total ......................................... 3,175 3,346
-------- --------
LONG-TERM LIABILITIES:
Pension obligation ................................ 1,672 1,647
STOCKHOLDERS' EQUITY :
Common stock, $1.00 par value ..................... 885 885
Additional paid-in capital ........................ 1,745 759
(Note 4)
Retained earnings ................................. 15,292 14,664
Pension liability adjustment ...................... (306) (306)
Unrealized gain on marketable
securities (Notes 1 and 3) .................... 332
-------- --------
Total ......................................... 17,948 16,002
-------- --------
TOTAL .................................................. $ 22,795 $ 20,995
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
4
(UNAUDITED)
WELLCO ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL NINE MONTHS ENDED
APRIL 1, 1995 AND APRIL 2, 1994
(in thousands except per share and number of shares)
<TABLE>
<CAPTION>
APRIL 1, APRIL 2,
1995 1994
-------- --------
<S> <C> <C>
REVENUES ................................................. $ 14,208 $ 12,318
-------- --------
COSTS AND EXPENSES:
Cost of sales and services .......................... 11,996 10,396
General and administrative .......................... 1,541 1,479
expenses
-------- --------
Total ............................................... 13,537 11,875
-------- --------
DIVIDEND AND INTEREST INCOME ............................. 350 380
NET INVESTMENT INCOME .................................... 20 387
INCOME BEFORE EQUITY IN EARNINGS
OF AFFILIATE ........................................ 1,041 1,210
EQUITY IN EARNINGS OF AFFILIATE .......................... 28
-------- --------
INCOME BEFORE INCOME TAXES ............................... 1,069 1,210
PROVISION FOR INCOME TAXES ............................... 330 360
-------- --------
NET INCOME ............................................... $ 739 $ 850
======== ========
PER SHARE OF COMMON STOCK (based on
weighted average number of
shares outstanding) ................................. $ 0.84 $ 0.97
-------- --------
Weighted average number of
shares
outstanding ......................................... 884,806 880,089
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
5
WELLCO ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL THREE MONTHS ENDED
APRIL 1, 1995 AND APRIL 2, 1994
(in thousands except per share and number of shares)
<TABLE>
<CAPTION>
APRIL 1, APRIL 2,
1995 1994
--------- ---------
<S> <C> <C>
REVENUES ............................................... $ 4,255 $ 4,396
--------- ---------
COSTS AND EXPENSES:
Cost of sales and services ........................ 3,775 3,523
General and administrative ........................ 465 512
expenses
--------- ---------
Total ............................................. 4,240 4,035
--------- ---------
DIVIDEND AND INTEREST INCOME ........................... 125 119
NET INVESTMENT INCOME .................................. 21 46
--------- ---------
INCOME BEFORE EQUITY IN EARNINGS
OF AFFILIATE ...................................... 161 526
EQUITY IN EARNINGS OF AFFILIATE ........................ 28
--------- ---------
INCOME BEFORE INCOME TAXES ............................. 189 526
PROVISION FOR INCOME TAXES ............................. 50 150
NET INCOME ............................................. $ 139 $ 376
========= =========
PER SHARE OF COMMON STOCK (based on
weighted average number of
shares outstanding) ............................... $ 0.16 $ 0.42
--------- ---------
Weighted average number of
shares
outstanding ....................................... 884,806 884,806
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
6
(UNAUDITED)
WELLCO ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL NINE MONTHS ENDED
APRIL 1, 1995 AND APRIL 2, 1994
(in thousands)
<TABLE>
<CAPTION>
APRIL 1, APRIL 2,
1995 1994
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income ........................................... $ 739 $ 850
------- -------
Adjustments to reconcile net
income to
net cash provided (used) by
operating
activities:
Depreciationandamorization ......................... 256 267
Net investment (income) ............................ (20) (387)
(Increase) decrease in-
Accounts receivable ............................. 2,544 1,133
Inventories ..................................... (382) (1,457)
Other current assets ............................ (50) (50)
Increase (decrease)in-
Accounts payable ................................ 261 181
Accrued liabilities ............................. (85) (161)
Accrued income taxes ............................ (347) (311)
Pension obligation .............................. 25 34
------- -------
Total adjustments .................................... 2,202 (751)
------- -------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES ................................. 2,941 99
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in affiliate .............................. (4,502)
Net sales (purchases) of current
marketable securities .............................. 1,899 3,724
Purchases of noncurrent
marketable securities .............................. (2,342) (587)
Sales of noncurrent
marketable securities .............................. 1,866 834
Purchases of equipment ............................... (229) (237)
------- -------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES ................................ (3,308) 3,734
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from bank ....................................... 2,050 0
Repayment of bank loan ............................... (2,050)
Cash dividends paid .................................. (111) (5,419)
Stock option exercise ................................ 0 228
------- -------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES ................................. (111) (5,191)
------- -------
NET INCREASE (DECREASE) IN CASH .......................... (478) (1,358)
CASH AT BEGINNING OF PERIOD .............................. 2,528 3,188
------- -------
CASH AT END OF PERIOD .................................... $ 2,050 $ 1,830
======= =======
</TABLE>
(continued on next page)
<PAGE>
7
(UNAUDITED)
WELLCO ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL NINE MONTHS ENDED
APRIL 1, 1995 AND APRIL 2, 1994
(in thousands)
<TABLE>
<CAPTION>
APRIL 1, APRIL 2,
1995 1994
------- -------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for-
Interest ....................................... $ 45 $ 20
Income taxes ................................... 690 572
Noncash increase in marketable
securities to fair value ....................... 503
Noncash increase in Additional
Paid-In
Capital from investment in ..................... $986 $ 0
affiliate
==== ====
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
8
(UNAUDITED)
WELLCO ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE FISCAL NINE MONTHS ENDED
APRIL 1, 1995
(in thousands except number of shares)
<TABLE>
<CAPTION>
Common Stock Additional
Par Paid-In Retained
Shares Value Capital Earnings
<S> <C> <C> <C> <C>
BALANCE AT JULY 2, 1994 ........................... 884,806 $ 885 $ 759 $ 14,664
Net income for the
fiscal nine months
ended April 1, 1995 ........................... 739
Cash dividends declared
($.125 per share) ............................. (111)
Excess of basis over
cost of investment
in affiliate (Note 4) ......................... 986
-------- -------- -------- --------
BALANCE AT APRIL 1, 1995 .......................... 884,806 $ 885 $ 1,745 $ 15,292
======== ======== ======== ========
<CAPTION>
Pension Unrealized
Liability Investment
Adjustment Gain
<S> <C> <C>
BALANCE AT JULY 2, 1994 ..................... $ (306) $ 0
Change for the nine
months ended
April 1, 1995 ........................... 332
------ ------
BALANCE AT APRIL 1, 1995 .................... $ (306) $ 332
====== ======
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
9
WELLCO ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FISCAL NINE MONTHS ENDED APRIL 1, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Statement of Financial Accounting Standards No. 115 (FAS 115), "Accounting
for Certain Investments in Debt and Equity Securities", is effective as of the
beginning of the 1995 fiscal year. The Company invests in corporate equity and
debt securities, and also invests, for a very short period of time, in notes of
various U. S. government agencies. These investments are included in the
Marketable Securities captions of the Consolidated Balance Sheets. Under this
Standard, corporate equity and debt securities are classified as
available-for-sale and U. S. government agency notes are classified as
held-to-maturity.
2. MARKETABLE SECURITIES, CURRENT:
Marketable Securities, Current, includes at April 1, 1995, $995,000 of U.
S. government agency notes, purchased at a discount to their face value in
March, 1995 and having a maturity date in April, 1995. The difference between
the discounted purchase price and the amount realized at maturity, which is not
significant, will be recognized as interest income at the date of maturity.
These securities are shown at their cost which approximates market. This caption
also includes $1,209,000 of corporate equity and debt securities, previously
classified as Marketable Securities, Noncurrent, which were sold in May, 1995.
Information about these securities is included in Note 3.
3. MARKETABLE SECURITIES, NONCURRENT:
Applying FAS 115 to the April, 1995 Consolidated Financial Statements
resulted in Marketable Securities being stated at their fair value (an increase
of $503,000 over carrying value) and an increase in Stockholders' Equity, after
the effect of income taxes on the increase, of $332,000. Fair value is usually
current market value at the financial statement date. Restatement of previously
issued financial statements is not permitted under FAS 115. The Company's
previous method of accounting for investments was to reflect their value at cost
and only adjust cost by any declines in market value below cost that were judged
to be other than temporary.
<PAGE>
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued):
3. MARKETABLE SECURITIES, NONCURRENT (continued):
Written-down cost, gross unrealized gains and losses and the fair value of
all Marketable Securities at April 1, 1995 are as follows:
<TABLE>
<CAPTION>
(in thousands)
Written-Down Gross Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Corporate Equity
Securities $3,251 $647 $344 $3,554
Corporate Debt
Security 1,009 200 1,209
U. S. Government
Agency Note 995 995
-------- -------- -------- -------
Total $5,255 $847 $344 $5,758
======== ======== ======== =======
</TABLE>
The U. S. government Agency Note matured in April, 1995. The Corporate Debt
Security was sold in May, 1995.
Proceeds from the sale of Marketable Securities classified under FAS 115 as
available-for-sale in the fiscal nine months ended April 1, 1995 were
$1,866,000, resulting in gross realized gains of $162,000 and gross realized
losses of $142,000. Realized gains and losses are determined on a specific
identification basis.
4. INVESTMENT IN AFFILIATE:
On December 30, 1994 Wellco purchased from Coronet Insurance Company for
cash 400,000 shares of the common stock of Alba Waldensian, Inc. This represents
21.5% of total Alba common shares. Coronet owns 58.79% of the total outstanding
common stock of Wellco. Because Coronet owns more than 50% of Wellco, the
investment was initially recorded at the basis of Coronet in these Alba shares
($5,461,000), and the excess of that basis over Wellco's cost increased
Additional Paid-In Capital by $986,000. The total market value of these shares,
based on the closing price of Alba common stock on the American Stock Exchange
on March 31, 1995, was $4,050,000.
Wellco has an option to purchase up to 538,000 additional Alba shares from
Coronet. If all of this option was exercised, Wellco would own 50.4% of total
Alba common shares.
The investment in Alba is accounted for using the equity method. The excess
of Wellco's equity in the underlying net assets of Alba ($775,000) over its
basis is being amortized to income over a period of approximately 7 years.
Amortization included in Equity in Earnings of Affiliate was $22,000 in the
quarter ended April 1, 1995.
<PAGE>
11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued:
4. INVESTMENT IN AFFILIATE (continued):
Alba is a manufacturer of both men's and women's apparel products as well
as medical specialty products. Other than this investment, there are no business
relationships or transactions between Wellco and Alba.
Summarized financial information (unaudited) for Alba is as follows:
<TABLE>
<CAPTION>
Financial Position at April 2, 1995:
<S> <C>
Current assets ..................................... $29,863,000
Noncurrent assets .................................. 23,789,000
Total assets ....................................... $53,652,000
===========
Current liabilities ................................ $ 9,328,000
Noncurrent liabilities ............................. 15,194,000
Stockholders' equity ............................... 29,130,000
Total liabilities and
stockholders equity .......................... $53,652,000
Operating Results for the
Three Months Ended
April 2, 1995:
Net revenues ....................................... $14,378,000
Income before income taxes ......................... 38,000
Net income ......................................... $ 26,000
===========
</TABLE>
<PAGE>
12
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Comparing The Nine Months Ended April 1, 1995 and April 2, 1994:
Income before income taxes in the current period was $1,069,000 compared to
$1,210,000 in the prior one. The major reason for the $141,000 decrease was
investment income being $367,000 less than the prior period. During the current
period, two equity securities were sold for prices less than their carrying
value. The following events significantly reduced the effect on pretax income of
lower investment income:
1. The current period includes the shipment of combat boot manufacturing
materials and machinery to a factory in El Salvador, which did not occur in the
prior period. From time to time, Wellco supplies materials, machinery and
technical assistance to combat boot manufacturing factories in foreign
countries. These sales vary from period to period with the needs of this group
of customers.
2. The current period includes substantial machinery sales to one new
customer and to one long-time customer.
3. In the current period, the U. S. government issued certain contract
price increase adjustments, primarily for the increased cost of leather used in
manufacturing combat boots, which were $54,000 more than estimates recorded in
the 1994 fiscal year. The favorable effect of these adjustments is included in
the current period.
In November, 1994, Wellco made its first shipments against an option awarded
under its current military boot contract. Although deliveries under this option
are over a period of sixteen months, compared to twelve months for the first
award under this contract, pairs of combat boots shipped in the current nine
months decreased only 5%. Shipments of combat boots in the prior year first
quarter were somewhat low because Wellco was completing one contract and had not
yet started shipments under the current contract.
A significant increase in employee medical expenses caused health insurance
costs, for which Wellco is self-funded, to increase by more than $140,000. These
costs vary from period to period, depending on the actual amount of health costs
incurred by
<PAGE>
13
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued):
employees. Workman's compensation insurance cost increased, but the unfavorable
effect of this was more than offset by a decrease in utilities and repair and
maintenance costs. General and administrative costs increased approximately 4%.
This was primarily caused by employee salary inflation adjustments, increased
travel costs and increased commission expenses.
Income taxes have been provided in the current period at an estimated fiscal
year 1995 rate of approximately 31%. This is only slightly higher than the rate
used last year.
In the current period, Wellco adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". This resulted in the carrying value of Marketable Securities, as
shown in the Consolidated Balance Sheets, being increased by the $503,000 excess
of market value over their carrying value, and a corresponding increase, net of
the deferred tax liability, in Stockholders' Equity of $332,000.
On December 30, 1994, Wellco acquired 400,000 shares of the common stock of Alba
Waldensian, Inc. (21.5% of total shares outstanding at March 31, 1995). This
investment is being accounted for on the equity method. Included in the current
period pretax income is $28,000 representing Wellco's share of Alba's net income
for their fiscal three months ended April 2, 1995, and the amortization of the
excess of Wellco's proportionate share of Alba's net assets over Wellco's basis
in the stock.
Forward Looking Information:
In October, 1994 Wellco completed shipments against the first year of a
multi-year combat boot contract with the U. S. government. The delivery schedule
for this first year was over a twelve month period. In November, 1994 Wellco
started shipping boots against the first option award under this contract.
Because the U. S. government is reducing its inventory of combat boots, delivery
under this option will be over a sixteen month period instead of twelve months
as was anticipated when the contract was awarded in August, 1993. This extended
delivery is resulting in combat boot sales in fiscal year 1995 being less than
fiscal year 1994. For the reasons explained above, comparative boot shipments in
the nine month periods did not decrease significantly. However, the comparative
effect of lower boot shipments will be more significant in the last quarter of
fiscal year 1995.
The government may continue at this reduced level through the balance of the
current contract, at which time they should have their inventory at the desired
level. If this is the case, shipments under this contract will be completed in
the last quarter of fiscal year 1997.
In April, 1995, Wellco submitted a bid for a U. S. Government development
contract. The purpose of the resulting contract is to
<PAGE>
14
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued):
make certain improvements to the combat boot that will result in fewer lower
extremity injuries. The government's evaluation of this bid is proceeding
quickly and Wellco believes it will be awarded the contract, with the expected
award date being in late June, 1995. The government's estimates that performance
under this contract would be completed by the end of Wellco's fiscal year 1997.
In February, 1995, Wellco joined with two other U. S. government contractors in
bidding on a trial contract for the supply of all standard issue clothing items
to Air Force recruits. Negotiations with the government should start in the
fourth quarter of fiscal year 1995, and, if Wellco and its partners are the
successful bidder, the contract could be awarded in the first quarter of the
1996 fiscal year. The initial contract will be for a period of one year with two
one year government exercisable options. Wellco is not presently able to predict
the probability of it and its partners being awarded the contract.
Comparing The Three Months Ended April 1, 1995 and April 2, 1994:
Income before income taxes in the current period was $189,000 compared to
$526,000 in the prior one. The primary reasons for this decrease are:
1. Pairs of combat boots sold decreased approximately 20%. The current
period reflects delivery of combat boots to the U. S. government under the
sixteen month schedule, whereas the prior period was on a twelve month schedule
for the same total pairs. Also, the prior period included a significant sale of
combat boots to a foreign customer.
2. Health insurance and workman's compensation costs increased $104,000.
3. Service fees earned from other U. S. combat boot manufacturers, which
vary with their shipments, decreased because the extended boot delivery schedule
also reduced these customers' shipments.
4. Net investment income decreased $25,000. In addition, $21,000 of
interest cost was incurred in January, 1995 on a short term bank loan used to
acquire 400,000 shares of the common stock of Alba Waldensian, Inc.
General and administrative expenses decreased $47,000, primarily reflecting
bonuses which vary with net income.
<PAGE>
15
LIQUIDITY AND CAPITAL RESOURCES
Wellco uses cash from operations to supply most of its liquidity needs. A bank
line of credit is maintained for supplying any unforseen cash needs.
The following table summarizes at the end of the fiscal nine months and the last
fiscal year the availability of cash from the Company's most liquid assets and
from its existing borrowing capacity:
<TABLE>
<CAPTION>
(in thousands)
Fiscal Nine Month Fiscal Year
April 1, 1995 July 2, 1994
------- -------
<S> <C> <C>
Cash ...................................................$ 2,050 $ 2,528
Current marketable
securities ........................................ 2,204 2,894
Unused line of credit .............................. 1,480 1,480
------- -------
Total ................................................ $ 5,734 $ 6,902
======= =======
</TABLE>
The following table summarizes the major sources (uses) of cash in the nine
months ended April 1, 1995:
<TABLE>
<CAPTION>
(in thousands)
April 1, 1995
<S> <C>
Net income plus depreciation
less realized investment income ................................. $ 975
Net change in accounts receivable,
inventory, accounts payable and
accrued liabilities .............................................. 1,991
Other .............................................................. (25)
--------
Net cash from operations ........................................... 2,941
Cash used to purchase the Common
stock of Alba Waldensian, Inc. ................................... (4,502)
Cash from sale of marketable
securities, net of
cash used for purchases .......................................... 1,423
Cash used to purchase equipment .................................... (229)
Cash dividend paid ................................................. (111)
--------
Net decrease in cash ............................................... $ (478)
========
</TABLE>
In late December, 1994, Wellco purchased for cash approximately 400,000 shares
of the common stock of Alba Waldensian, Inc. In addition to using existing cash,
Wellco borrowed $2,050,000 from a bank, which was repaid in January, 1995 using,
in part, proceeds from the sale of a Marketable Security.
Cash resources are adequate to meet presently known operating activity needs.
The Company does not know of any demands, commitments, uncertainties, or trends
that will result in or that are reasonably likely to result in its liquidity
increasing or decreasing in any material way. The bank line of credit, which
provides for total borrowings of $1,500,000, will expire and be subject to
renewal on December 30, 1995.
<PAGE>
16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. N/A
Item 2. Changes in Securities. N/A
Item 3. Defaults Upon Senior Securities. N/A
Item 4. Submission of Matters to a Vote of Security
Holders. N/A
Item 5. Other Information. N/A
Item 6. Exhibits and Reports on Form 8-K.
a). Exhibits: Exhibit 27, Financial Data Schedule, follows page
17
b). Reports on Form 8-K: None
<PAGE>
17
SIGNATURE
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.
Wellco Enterprises, Inc.
(Registrant)
May 12, 1995 David Lutz
David Lutz, Sec./Treas.
and Principal Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS FOR THE 3RD QUARTER 10-Q, PERIOD ENDED
APRIL 1, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000105532
<NAME> WELLCO ENTERPRISES, INC.
<MULTIPLIER> 1,000
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-1-1995
<PERIOD-START> JUL-3-1994
<PERIOD-END> APR-1-1995
<EXCHANGE-RATE> 1
<CASH> 2,050
<SECURITIES> 2,204
<RECEIVABLES> 2,886
<ALLOWANCES> 0
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