FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1994
Commission file number: 1-5731
Willcox & Gibbs, Inc.
(Exact name of registrant as
specified in its charter)
New York 13-1474527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Alhambra Circle, Coral Gables, Florida 33134
(Address of principal executive offices) (Zip Code)
(305) 446-8000
(Registrant's telephone number,
including area code)
530 Fifth Avenue, New York, New York 10036
(Former address, 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 number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
Date Class Shares Outstanding
- - ------------------- ---------------- --------------------
<S> <C> <C>
August 5, 1994 Common Stock 24,438,952
- - ------------------- ---------------- --------------------
</TABLE>
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
<CAPTION>
INDEX
Page Number
<S> <C> <C>
Part I - Financial Information
Condensed Consolidated Balance Sheets (Unaudited)
at June 30, 1994 and December 31, 1993...................... 1
Condensed Consolidated Statements of Income
(Unaudited) for the Six and Three Months Ended
June 30, 1994 and 1993...................................... 2
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Six Months Ended June 30, 1994
and 1993.................................................... 3
Notes to Unaudited Condensed Consolidated
Financial Statements........................................ 4
Report of Independent Accountants........................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 8
Part II - Other Information...................................... 12
</TABLE>
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's omitted, except for share amounts)
<CAPTION>
June 30, Dec. 31,
1994 1993
-------- --------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 16,981 $ 19,131
Accounts and Notes Receivable - Net 143,044 129,163
Inventories of Finished Goods 118,868 117,577
Income Taxes Receivable 0 1,407
Prepaid Expenses and Other Current Assets 7,571 9,002
Deferred Income Taxes 626 1,796
-------- --------
Total Current Assets 287,090 278,076
Investments and Noncurrent Receivables 1,276 2,599
Property, Plant & Equipment - Net 53,500 52,682
Other Assets 4,608 4,350
Deferred Income Taxes 401 693
Net Assets of Discontinued Operations 44,105 43,337
Cost in Excess of Net Assets of Acquired Businesses - Net 46,523 47,079
$437,503 $428,816
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Debt $ 11,610 $ 61,500
Current Installments of Long-Term Debt 16,422 9,261
Accounts and Notes Payable - Trade and Other Liabilities 157,675 136,030
Income Taxes Payable 796 0
-------- --------
Total Current Liabilities 186,503 206,791
Long-Term Debt 118,463 125,975
Other Long-Term Liabilities 3,749 3,528
Stockholders' Equity
Preferred Stock (Authorized 600,000 Shares, None Issued) 0 0
Preference Stock (Authorized 2,000,000 Shares, None Issued) 0 0
Common Stock (24,705,233 Shares Issued) 24,705 21,214
Capital Surplus 81,354 53,818
Retained Earnings 27,056 21,874
Cumulative Foreign Translation Adjustment (1,026) (1,333)
Marketable Equity Security Adjustment (875) (625)
-------- --------
Treasury Stock, at Cost (266,281 Shares) (2,426) (2,426)
-------- --------
128,788 92,522
-------- --------
$437,503 $428,816
-------- --------
</TABLE>
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except for per share amounts)
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------ ----------------
1994 1993 1994 1993
------------------ ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Sales $509,073 $238,251 $264,466 $126,427
Cost of Goods Sold 406,047 189,747 211,764 100,687
-------- -------- -------- --------
Gross Profit 103,026 48,504 52,702 25,740
Selling and Administrative Expenses 90,631 41,792 45,570 22,556
-------- -------- -------- --------
Operating Profit 12,395 6,712 7,132 3,184
-------- -------- -------- --------
Interest Expense 4,368 2,910 2,123 1,455
-------- -------- -------- --------
Other Income - Net 143 380 67 416
-------- -------- -------- --------
Income from Continuing Operations
before Income Taxes 8,170 4,182 5,076 2,145
Provision for Income Taxes 3,595 1,710 2,234 871
-------- -------- -------- --------
Income from Continuing Operations 4,575 2,472 2,842 1,274
Discontinued Operations, Net of
Income Taxes 607 1,493 375 869
-------- -------- -------- --------
Income Before Cumulative Effect of
Change in Accounting for Income Taxes 5,182 3,965 3,217 2,143
Cumulative Effect of Change in Accounting
for Income Taxes 0 660 0 0
-------- -------- -------- --------
Net Income $ 5,182 $ 4,625 $ 3,217 $ 2,143
-------- -------- -------- --------
Income per Common Share:
Income from Continuing Operations $0.20 $0.12 $0.12 $0.06
Discontinued Operations 0.02 0.07 0.01 0.04
-------- -------- -------- --------
Income before Cumulative Effect of
Change in Accounting for Income
Taxes 0.22 0.19 0.13 0.10
Cumulative Effect of Change in
Accounting for Income Taxes -- 0.03 -- --
-------- -------- -------- --------
Net Income $0.22 $0.22 $0.13 $0.10
-------- -------- -------- --------
Average Number of Common and Common
Equivalent Shares 23,315 20,949 24,440 20,951
-------- -------- -------- --------
Dividends per Common Share $0.00 $0.00 $0.00 $0.00
-------- -------- -------- --------
</TABLE>
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------- -------
1994 1993
--------- -------
(UNAUDITED)
<S> <C> <C>
Net Cash Provided By Operating Activities $23,022 $ 569
--------- -------
Cash Flows From Investing Activities:
Capital Expenditures (4,432) (3,634)
Sale of Short-Term Investments 0 12,874
Cost of Acquisitions, Net of Cash Acquired 0 (12,143)
Other Investing Activities (1,414) 489
--------- -------
Net Cash Used In Investing Activities (5,846) (2,414)
--------- -------
Cash Flows From Financing Activities:
Net Payments under Line of Credit Arrangements (49,890) 0
Sale of Common Stock to Rexel 31,027 0
Other Debt Payments and Sundry Financing Activities (463) (1,488)
--------- -------
Net Cash Used In Financing Activities (19,326) (1,488)
--------- -------
Net Decrease In Cash (2,150) (3,333)
Cash and Cash Equivalents at Beginning of Period 19,131 15,567
--------- -------
Cash and Cash Equivalents at End of Period $16,981 $12,234
--------- -------
Supplemental Information Of Business Acquired
Fair Value of Assets Acquired $ 0 $24,073
Liabilities Assumed 0 10,200
--------- -------
Cash Paid $ 0 $13,873
--------- -------
</TABLE>
SEE ACCOMPANYING REPORT OF INDEPENDENT ACCOUNTANTS AND NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying financial information should be read in conjunction with
the consolidated financial statements, including the notes thereto, for
the year ended December 31, 1993. The condensed consolidated balance
sheet as of December 31, 1993 has been summarized from the Company's
audited consolidated balance sheet as of that date.
2. Results for interim periods are not necessarily indicative of the results
to be expected for the year. The accompanying financial information
reflects all adjustments which are, in the opinion of Management,
necessary for a fair statement of the results for the periods.
3. Inventories are stated at the lower of cost (determined by either LIFO for
continuing operations or FIFO for discontinued operations) or market.
4. Income per common share is computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding during
the periods.
5. On April 12, 1993, the Company acquired Sacks Electrical Supply Co.
("Sacks"), a distributor of electrical supplies and components, for $13.9
million (including $0.3 million of acquisition costs).
On December 17, 1993, the Company acquired Summers Group, Inc.
("Summers"), a distributor of electrical supplies and components, for
$60.7 million in cash (including $0.7 million of acquisition costs) and a
$25 million three-year note issued to the seller, plus contingent
consideration to be determined based on defined profits of Summers,
subject to a maximum purchase price of $120 million.
Each of these 1993 acquisitions has been recorded as a purchase, and the
excess of the total purchase price over the fair value of the net assets
acquired ($6.9 million for Sacks and $11.5 million for Summers) is being
amortized over 40 years. Sacks' and Summers' results of operations are
included in the Company's financial statements from the respective dates
of acquisition.
The following table summarizes the effect on consolidated sales and income
from continuing operations of the Company for the six and three months
ended June 30, 1993, on an unaudited pro forma basis, assuming these
acquisitions had been consummated as of January 1, 1993 (000's omitted,
except for income per share).
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1993 June 30, 1993
---------------- -----------------
<S> <C> <C>
Sales $464,648 $237,452
-------- --------
Income from Continuing Operations $ 5,434 $ 3,052
-------- --------
Income per Share from Continuing Operations $ .26 $ .15
-------- --------
</TABLE>
The pro forma results are not necessarily indicative of what actually
would have occurred if the acquisitions had been in effect at the
beginning of the period, nor are they necessarily indicative of future
consolidated results.
6. In the fourth quarter of 1993, the Company decided to sell its apparel
parts and supplies distribution business ("Apparel") and engaged an
investment banking firm, of which a director of the Company is president,
to seek a purchaser. The sale was consummated on July 13, 1994.
Accordingly, this business is included in the Consolidated Statements of
Income as discontinued operations for all periods presented. Summarized
results of the discontinued operations are as follows (000's omitted):
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
----------------------- ---------------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales $38,841 $40,280 $20,002 $21,222
------- ------- ------- -------
Net Income $ 607 $ 1,493 $ 375 $ 869
------- ------- ------- -------
</TABLE>
Interest expense of $1,849 and $1,921 for the six months ended June 30,
1994 and 1993, respectively, and interest expense of $865 and $965 for the
three months ended June 30, 1994 and 1993, respectively, have been
allocated to apparel operating results based upon net assets of the
apparel operations.
The net assets of the apparel operations at June 30, 1994 and December 31,
1993 are included in the accompanying Condensed Consolidated Balance
Sheets as "Net Assets of Discontinued Operations." The assets and
liabilities of the apparel operation included are as follows (000's
omitted):
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
-------- ----------
<S> <C> <C>
Current Assets $42,950 $43,632
Property, Plant and Equipment - Net 2,818 2,795
Investment and Noncurrent Receivables 2,402 1,180
Other Assets 697 759
Cost in Excess of Net Assets of Acquired
Businesses - Net 1,573 1,590
-------- ----------
Total Assets 50,440 49,956
Liabilities 6,335 6,619
-------- ----------
Net Assets $44,105 $43,337
-------- ----------
</TABLE>
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
7. Effective January 1, 1993, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes." Under Statement 109, the liability method
is used in accounting for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when
the differences are expected to reverse. Prior to the adoption of
Statement 109, income tax expense was determined using the deferred
method. Deferred tax expense was based on items of income and expense
that were reported in different years in the financial statements and tax
returns and were measured at the tax rate in effect in the year the
difference originated.
The effect of the change on pretax income from continuing operations for
the six months ended June 30, 1993 was not material; however, the
cumulative effect of the change increased net income by $660,000 or $.03
per share, in the first quarter of 1993.
8. In connection with the resignation of an executive of the Company on March
18, 1994, the Company entered into an agreement with such executive which
provided, among other things, certain payments and acceleration of certain
other payments in connection with the executive's related employment
agreement. First quarter results for 1994 include charges of $1.7 million
($1.0 million net of tax) in connection with this agreement.
9. On March 1, 1994, the Company sold to Rexel, S.A. 3,491,280 newly issued
shares of Company common stock for a total cash purchase price of $31.4
million, which was used to repay short-term debt. As a result, Rexel
increased its beneficial ownership of the outstanding common stock of the
Company from 30% to 40%.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of
Willcox & Gibbs, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of
Willcox & Gibbs, Inc. (the "Company") as of June 30, 1994, and the related
condensed consolidated statements of income for three-month and six-month
periods ended June 30, 1994 and 1993 and the related condensed consolidated
statements of cash flows for the six-month periods ended June 30, 1994 and
1993. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the year then ended (not presented herein), and in our report
dated March 4, 1994, except as to the information presented in the last
paragraph of Note 11, for which the date is March 18, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
Coopers & Lybrand L.L.P.
New York, New York
August 12, 1994
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Sales for the second quarter ended June 30, 1994 were $264.5 million,
compared with $126.4 million for the same period a year ago. Second quarter
sales included a total of $120.7 million from Summers Group, which was acquired
by the Company in December 1993.
Income from continuing operations was $2.8 million, or $.12 per
share, for the second quarter of 1994, compared to $1.3 million, or $.06 per
share, in 1993. The 1994 results include after-tax charges of $0.4 million, or
$.02 per share, for severance, relocation and lease costs incurred in
connection with the Company's previously announced relocation of its corporate
headquarters to the Miami, Florida area. The relocation is expected to reduce
corporate overhead while at the same time positioning senior management in
closer proximity to the Company's core business.
Sales for the six months ended June 30, 1994 were $509.1 million,
including combined sales of $261.4 million from Summers Group and The Sacks
Group (acquired in April, 1993), compared with sales of $238.3 million for the
same period in 1993.
Income from continuing operations was $4.6 million, or $.20 per
share, for the six months ended June 30, 1994, compared to $2.5 million, or
$.12 per share, for the same period in 1993. Excluding charges in the first
quarter of 1994 associated primarily with the resignation of an officer of the
Company totalling $1.2 million, net of tax, and the $0.4 million, net of tax,
of relocation costs in the second quarter of 1994, income from continuing
operations for the first six months of 1994 was $6.2 million, or $.27 per
share.
In July 1994, the Company completed the previously announced sale of
its apparel parts and supplies distribution businesses ("Apparel") for
consideration valued at approximately $44 million, consisting of $38.6 million
in cash, approximately 325,000 shares of Willcox & Gibbs common stock and a
warrant and subordinated debt of the purchaser. The net proceeds from the sale
were approximately equal to the book value of the net assets sold. Results of
Apparel are included as discontinued operations for all periods presented.
The Company adopted Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes" ("SFAS 109") in the first quarter of 1993.
Adoption of this statement resulted in a credit to income in the first quarter
of 1993 of $0.7 million, or $.03 per share, which is reflected in results of
operations as the cumulative effect of a change in accounting principle.
In March 1994, as more fully discussed under "Liquidity; Capital
Resources", the Company sold 3.5 million newly issued shares of common stock to
Rexel, S.A. for $31.4 million. As a result of the issuance of these shares,
the average number of common and common equivalent shares has increased to 24.4
million and 23.3 million, respectively, for the second quarter and first six
months of 1994 compared to 21.0 million and 20.9 million, respectively, for the
comparable periods of the prior year.
<PAGE>
As a result, net income of the Company was $3.2 million, or $.13 per
share for the second quarter of 1994, compared to net income of $2.1 million,
or $.10 per share, for the comparable period of the prior year. For the six
months ended June 30, 1994, net income was $5.2 million, or $.22 per share,
compared to $4.6 million, or $.22 per share, for the first half of 1993.
The following table sets forth the percentages which certain income
and expense items bear to net sales:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
---------------- ------------------
<S> <C> <C> <C> <C>
1994 1993 1994 1993
------ ------- ------ ------
Net Sales 100.0% 100.0% 100.0% 100.0%
------ ------- ------ ------
Gross Margin 20.2% 20.3% 19.9% 20.3%
Selling and Administrative expenses 17.8 17.5 17.2 17.8
------ ------- ------ ------
Operating Profit 2.4 2.8 2.7 2.5
Interest Expense .8 1.2 .8 1.1
Other Income -- .2 -- .3
------ ------- ------ ------
Income From Continuing Operations Before Taxes 1.6% 1.8% 1.9% 1.7%
------ ------- ------ ------
</TABLE>
On a pro forma basis, assuming the Summers and Sacks acquisitions
were made on January 1, 1993, sales were up 9.6% for the six months ended June
30, 1994 and 11.4% for the second quarter of 1994, reflecting improvement in
construction and industrial markets. While volume is up, margins have declined
compared to prior years. This decline is primarily attributable to continuing
competitive pressures, the increased percentage of total sales comprised of
sales shipped direct from the vendor to the customer, which historically have
had lower margins than sales from inventory, and the increase in sales for
large project business and for the residential construction market, which also
yield lower margins.
Selling and administrative expenses increased $48.8 million and $23.0
million, respectively, for the six months and quarter ended June 30, 1994, as
compared to the same periods of the prior year. As a percentage of sales,
selling and administrative expenses were 17.8% and 17.2%, respectively, for the
six months and quarter ended June 30, 1994, as compared to 17.5% and 17.8%,
respectively, for the six months and quarter ended June 30, 1993. This
increase reflected the additional operations added through the above-mentioned
acquisitions, $2.1 million of pre-tax charges in the first quarter of 1994
associated primarily with the resignation of an officer and $0.7 million of pre-
tax charges in the second quarter in connection with the relocation of the
Company's corporate office to the Miami area.
The increase in interest expense reflects the borrowings in
connection with the Summers acquisition, offset to some extent by the paydown
of short-term debt with the funds received from the sale of shares to Rexel.
<PAGE>
As previously mentioned, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS 109") in the
first quarter of 1993. It is management's belief that the net deferred tax
asset as reflected on the financial statements will be realized based upon
forecasted future pretax earnings and taxable income as well as utilization of
certain carryback opportunities.
Sales of the Company's discontinued Apparel operations were down 3.6%
and 5.8%, respectively, for the six months and quarter ended June 30, 1994
compared to the comparable periods of the prior year.
During the first half of 1994, the Company largely completed its
restructuring program begun several years ago, and it is now engaged in only
one business segment: the distribution of electrical parts and supplies. In
addition, during the first half of 1994 the management of the Company
substantially changed, including the appointment of a new chief executive
officer. During the remainder of 1994, the Company intends to focus its
efforts on integrating its operations and enhancing its asset management and
customer service. In particular, the Company intends to upgrade its management
information systems and to implement programs to improve its inventory
turnover. These efforts are expected to result in certain increased costs in
the near term. In the long run, the Company expects that these programs will
improve its operating results and cash flows.
Liquidity; Capital Resources
The Company's working capital requirements continue to be met by
internally generated funds and short-term borrowings. Management believes
sufficient cash resources will be available to support its long-term growth
strategies through internally generated funds, credit arrangements and the
ability of the Company to obtain additional financing. However, no assurance
can be given that financing will continue to be available on attractive terms.
On March 1, 1994, the Company sold to Rexel 3,491,280 newly issued
shares of Company common stock for a total cash purchase price of $31.4
million, which was used to repay short-term debt and significantly strengthen
the Company's balance sheet. As a result, Rexel's beneficial ownership of
outstanding common stock of the Company increased from 30% to 40%.
At June 30, 1994 the Company had cash of $17.0 million compared to
cash at December 31, 1993 of $19.1 million. Indebtedness for borrowed money
(including current installments and short-term debt) was $146.5 million
compared to $196.7 million at December 31, 1993. As of June 30, 1994, $11.6
million was outstanding under the Company's bank credit agreement and $58.4
million was available for future borrowings. Upon consummation of the sale of
Apparel, the maximum availability under the credit agreement was reduced to $50
million.
During the first six months of 1994 the Company's operating
activities provided $23.0 million in cash compared to $1.0 million of cash
provided in the first six months of 1993. Capital expenditures were $4.4
million in 1994 compared to $3.6 million in 1993.
<PAGE>
Working capital was $100.3 million and $71.3 million at June 30, 1994
and December 31, 1993, respectively and the current ratio was 1.5 and 1.3,
respectively, at such dates.
Net worth was $128.8 million and $92.5 million at June 30, 1994 and
December 31, 1993, respectively, with the increase reflecting the sale of the
shares to Rexel. The ratio of debt to equity was 1.1 and 2.1, respectively, at
such dates.
Certain key ratios are as follows:
<TABLE>
<CAPTION>
June 30, 1994 December 31, 1993
------------- -----------------
<S> <C> <C>
Days sales outstanding1 48 50
Days inventory supply2 83 84
Trade working capital turnover3 6.7 6.2
--------------------------
<FN>
1. Number of days sales represented by accounts receivable.
2. Number of days cost of sales represented by inventory.
3. Trade working capital equals inventory (FIFO) plus trade accounts
receivable less trade accounts payable.
</FN>
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of stockholders of the Company was held on May 13,
1994. At the meeting, the following persons were elected as directors of the
Company by the votes indicated:
<TABLE>
<CAPTION>
Name For Authority Withheld
---- --- ------------------
<S> <C> <C>
R. Gary Gentles 22,114,327 51,427
Gerald E. Morris 22,121,793 43,961
Frederic de Castro 22,117,293 48,461
John B. Fraser 22,125,593 40,161
Eric J. Lomas 22,115,827 49,927
Nicolas Sokolow 22,116,327 49,427
</TABLE>
In addition, the terms as directors of Austin List, Alain Viry and
Serge Weinberg continued after the annual meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
11.1 Computation of net income per common and common
equivalent shares.
15.1 Awareness letter of independent accountants.
(b) Reports on Form 8-K
During the quarter ended June 30, 1994, the Company filed a Current
Report on Form 8-K, dated June 15, 1994, reporting under Items 5 and 7.
<PAGE>
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
undersigned thereunto duly authorized.
WILLCOX & GIBBS, INC.
Date: August 12, 1994 By:/s/ Allan Gonopolsky
----------------------
Allan Gonopolsky
Vice President and
Chief Accounting Officer
<PAGE>
Index to Exhibits
Exhibit No. Description
11.1 Computation of net income per common and common
equivalent shares.
15.1 Awareness letter of independent accountants.
<TABLE>
<CAPTION>
<S> <C>
Exhibit 11.1
WILLCOX & GIBBS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
(000's Omitted, Except Per Share Amounts)
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Income Applicable To Primary Common And
Common Equivalent Shares
Income From Continuing Operations $4,575 $2,472 $2,842 $1,274
Discontinued Operations 607 1,493 375 869
------ ------ ------ ------
Income Before Cumulative Effect Of
A Change In Accounting For Taxes 5,182 3,965 3,217 2,143
Cumulative Effect Of A Change In
Accounting For Taxes 0 660 0 0
------ ------ ------ ------
Net Income $5,182 $4,625 $3,217 $2,143
------ ------ ------ ------
Income Applicable To Fully Diluted
Common And Common Equivalent Shares
Income From Continuing Operations $4,575 $2,472 $2,842 $1,274
Interest Reduction, Net of Taxes,
Upon Conversion Of Convertible
Subordinated Debentures 980 997 490 498
------ ------ ------ ------
Income From Continuing Operations 5,555 3,469 3,332 1,772
Discontinued Operations 607 1,493 375 869
------ ------ ------ ------
Income Before Cumulative Effect Of
A Change In Accounting For Taxes 6,162 4,962 3,707 2,641
Cumulative Effect Of A Change In
Accounting For Taxes 0 660 0 0
------ ------ ------ ------
Net Income $6,162 $5,622 $3,707 $2,641
------ ------ ------ ------
Primary Shares:
Weighted Average Number Of Common
Shares And Common Share Equivalents
Outstanding During The Period:
Common (Net Of Treasury Shares) 23,275 20,948 24,439 20,948
Options 40 1 1 3
------ ------ ------ ------
Total 23,315 20,949 24,440 20,951
------ ------ ------ ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Exhibit 11.1
(continued)
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Fully Diluted Shares:
Weighted Average Number Of
Common Shares And Common
Share Equivalents Outstanding
During The Period:
Common (Net Of Treasury Shares) 23,275 20,948 24,439 20,948
Options 40 1 1 3
Conversion Of Subordinated Debentures 5,225 5,225 5,225 5,225
------ ------ ------ ------
Total 28,540 26,174 29,665 26,176
------ ------ ------ ------
Earnings Per Share
Primary
Income From Continuing
Operations $0.20 $0.12 $0.12 $0.06
Discontinued Operations 0.02 0.07 0.01 0.04
------ ------ ------ ------
Income Before Cumulative Effect Of
A Change In Accounting For Taxes 0.22 0.19 0.13 0.10
Cumulative Effect Of A Change
In Accounting For Taxes 0.00 0.03 0.00 0.00
------ ------ ------ ------
Net Income $0.22 $0.22 $0.13 $0.10
------ ------ ------ ------
Earnings Per Share
Fully Diluted
Income From Continuing
Operations $0.20 $0.13 $0.12 $0.07
Discounted Operations 0.02 0.06 0.01 0.03
------ ------ ------ ------
Income Before Cumulative Effect
Of A Change In Accounting For
Taxes 0.22 0.19 0.13 0.10
Cumulative Effect Of A Change In
Accounting For Taxes 0.00 0.03 0.00 0.00
------ ------ ------ ------
Net Income $0.22 $0.22 $0.13 $0.10
------ ------ ------ ------
</TABLE>
Exhibit 15.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: WILLCOX & GIBBS, INC. REGISTRATION ON FORM S-8
We are aware that our report dated August 12, 1994 on our review of the
condensed consolidated balance sheet of Willcox & Gibbs, Inc. as of June 30,
1994, and the related condensed consolidated statements of income for the
three-month and six-month periods ended June 30, 1994 and 1993 and the
condensed consolidated statements of cash flows for the six-month periods ended
June 30, 1994 and 1993 included in the Company's report on quarterly Form 10-Q
for the quarter ended March 31, 1994 is incorporated by reference in
Registration Nos. 2-77570, 33-4584, 33-14148, 33-32648 and 33-54440 on Form
S-8. Pursuant to Rule 436(e) under the Securities Act of 1933, this report
should not be considered a part of such registration statements prepared or
certified by us within the meaning of Sections 7 and 11 of the Act.
Coopers & Lybrand L.L.P.
New York, New York
August 12, 1994
