|
|
|
|
|
|
|
|
|
|
|
|
|
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended December 3, 1995.
-----------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number 0-2331
--------------
GLASSMASTER COMPANY
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0283724
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
Incorporation of organization Identification No.)
PO Box 788, Lexington SC 29071
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number, including area code: 803-359-2594
---------------------------------
No Change
- --------------------------------------------------------------------------------
(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
YES X NO
----- -----
(2) Has been subject to such filing requirements for the past 90 days
YES X NO
----- -----
Common shares outstanding December 3, 1995: 1,601,829 par value $0.03
-------------------------------------
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Glassmaster Company
Consolidated Comparative Balance Sheet
(Thousands)
<TABLE>
<CAPTION>
December 3, 1995 August 31, 1995
---------------- ---------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
------
Current Assets:
- ---------------
Cash $ 117 $ 162
Accounts Receivable (Net of Reserve) 3,697 3,580
Other Current Receivables 28 22
Inventories:
Raw Materials $ 1,919 $ 1,643
Work in Process 506 489
Finished Products 740 3,165 618 2,750
------- -------
Prepaid Expenses and Other Current Assets 103 141
-------- -------
Total Current Assets 7,110 6,655
Fixed Assets (Net of Dep'n)
- ------------
Property and Equipment (at cost) 5,793 5,679
Other Assets
- ------------
CSV Life Insurance and Other Unamortized Assets 255 253
-------- -------
Total Assets $13,158 $12,587
- ------------ ======== =======
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
Current Liabilities:
- --------------------
Accounts Payable $ 2,517 $ 1,656
Accrued Expenses 214 250
Accrued Income Taxes (52) -0-
Stockholder Dividend Payable 48 -0-
Notes & Mortgages Payable 3,131 3,453
-------- -----
Total Current Liabilities 5,858 5,359
Long Term Liabilities
- ---------------------
Notes & Mtges, Due After One Year $ 3,431 $ 3,347
Deferred Income Taxes 453 3,884 453 3,800
------- -------- ------- ------
Total Liabilities 9,742 9,159
- -----------------
Stockholders' Equity
- --------------------
Capital Stock (Authorized 5,000,00 Shares $0.03
Par - 1,601,829 (1996), 1,601,029 (1995)
Shares Issued and Outstanding $ 48 $ 48
Paid-In Capital 1,325 1,323
Donated Capital 124 124
Retained Earnings 1,919 3,416 1,933 3,428
------- -------- ------- -------
Total Liabilities and Equity $13,158 $12,587
- ---------------------------- ======== =======
</TABLE>
2
<PAGE> 3
Glassmaster Company
Consolidated Comparative Income Statement
(In thousands except per share amounts)(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 3, 1995 December 4, 1994
---------------- ----------------
<S> <C> <C>
Net Sales $ 5,796 $ 5,406
Cost of Sales 4,825 4,434
------ ------
Gross Profit 971 972
Costs and Expenses:
Selling 255 270
General and Administrative 285 277
Other Income and Expense - Net 228 221
------- -------
Total Expenses 768 768
Income From Operations 203 204
Interest Expense 152 109
------- -------
Income Before Income Taxes 51 95
Income Taxes 16 35
------- -------
Net Income $ 35 $ 60
======= =======
Earnings Per Share (1,599,588 Shares) $ 0.04
Earnings Per Share (1,601,829 Shares) 0.02
Dividends Paid Per Share $ 0.00 $ 0.00
======= =======
</TABLE>
3
<PAGE> 4
Glassmaster Company
Consolidated Statement of Cash Flows
(Thousands)(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 3, 1995 December 4, 1994
---------------- ----------------
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Net Income $ 35 $ 60
Adjustments to Reconcile Net Income to Net Cash
Provided (Used) by Operating Activities:
Depreciation 154 168
Amortization 3 2
Loss on Disposal of Assets 0 15
Changes in Operating Assets & Liabilities:
Decrease (Increase) in Receivables (123) (415)
Decrease (Increase) in Inventories (416) (575)
Decrease (Increase) in Prepaid Expenses &
Other Current Assets (29) 10
Increase (Decrease) in Accounts Payable 884 829
Increase (Decrease) in Accrued Expenses (44) (435)
------ -------
Net Cash Provided (Used) By Operating Activities 464 (341)
------ -------
Cash Flows From Investing Activities
- ------------------------------------
Additional Investment in Fixed Assets 267 806
Disposal of Fixed Assets - Net Book Value 0 0
Increase (Decrease) in CSV Life Insurance 0 (8)
Additional Investment in Other Assets 6 0
------- -------
Net Cash Used By Investing Activities 273 798
------- -------
Cash Flows From Financing Activities
- ------------------------------------
Proceeds from Exercise of Stock Options 2 8
Proceeds from Conversion of Debentures to Common Stock 0 47
Proceeds from Short-Term Borrowings 117 192
Repayment of Short-Term Borrowings (71) (248)
Proceeds from Long-Term Obligations 1,419 200
Repayment of Long-Term Obligations (1,335) (174)
Net Increase (Decrease) in Short-Term Revolving
Line of Credit (368) 1,109
------- -------
Net Cash Provided (Used) By Financing Activities (236) 1,134
------- -------
Net Increase (Decrease) In Cash (45) (5)
Cash At Beginning of Period 162 91
------- -------
Cash At End of Period $ 117 $ 86
====== =======
Supplemental Disclosures of Cash Flow Information
Cash Paid For:
Interest (Net of Amount Capitalized) $ 154 $ 149
Income Taxes 0 142
</TABLE>
4
<PAGE> 5
Glassmaster Company
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three-month
period ended December 3, 1995 are not necessarily indicative of the results
that may be expected for the year ended August 31, 1996. For further
information, refer to the Consolidated Financial Statements and Notes to
Financial Statements included in the Company's Annual Report on Form 10-KSB for
the year ended August 31, 1995. Certain prior year amounts may have been
reclassified to conform with the 1996 presentation.
Item 2. Management's Discussion and Analysis
RESULT OF OPERATIONS
Consolidated sales for the first quarter ended December 3, 1995
(fiscal 1996) were $5,796,310, an increase of 7.2% when compared to the first
quarter of the 1995 fiscal year primarily due to a 33% increase in sales
reported by Glassmaster Controls Company. Monofilament Division first quarter
sales were relatively unchanged when compared to the prior year first quarter.
Current year first quarter sales were affected by a general selling price
increase on most Monofilament product lines that was effective in August, 1995.
Prior year first quarter sales were hindered due to the effects of the August,
1994 tornado, which shut down a portion of Monofilament production for the
first five weeks of last year's first quarter. Pounds sold by this division in
the first quarter were down approximately 5% when compared to last year. The
company's Industrial Products Division reported first quarter sales were
approximately 9% higher than last year's comparable period. This increase in
sales revenue is attributed to a general price increase on this division's
marine antennas that was effective in October, 1995. Unit sales of marine & CB
antennas were unchanged from the prior year. Current year first quarter sales
were somewhat restrained due to this division announcing the introduction of a
new line of commercial and recreational marine antennas and a corresponding
delay in customer orders and shipments awaiting the availability of the new
products. Glassmaster Controls Company ("Controls") reported first quarter
sales that were 33% higher than the prior year quarter. Prior year first
quarter shipments by Controls were inhibited by the relocation of its
operations from a leased facility to a larger manufacturing plant (purchased by
the Company in June, 1994). When the current year first quarter is compared to
the immediately preceding quarter (1995 fiscal fourth quarter) sales improved
by approximately 6.5%.
Gross profit margins on a consolidated basis declined from 18% of
sales during last year's first quarter to 16.8% during the current year
quarter. The reduction in gross margins has occurred primarily at Monofilament
where selling price increases have not completely offset higher raw material
costs. While material costs appear to be stabilizing, restrained demand and
competitive pricing pressures will continue to impact profit margins
5
<PAGE> 6
at Monofilament during the 1996 fiscal year. Profit margins at Controls and
Industrial Products show signs of gradual improvement due to an improved
operating environment resulting from the relocation by Controls and higher
average selling prices and reduced operating costs at Industrial Products.
Selling, General and Administrative, and Other expenses during the
first quarter were unchanged when compared to the prior year quarter. Interest
expense increased by approximately $43,000 (39%) this year versus last year due
to higher debt levels incurred to acquire additional plant and equipment during
1995.
First quarter pre-tax income was $51,038 versus $94,539 last year.
The Provision for Income Taxes decreased from $34,501 last year to $16,426 this
year. Net Income for the first quarter of the 1996 fiscal year was $34,612
compared to $60,038 last year.
LIQUIDITY AND CAPITAL RESOURCES
The working capital of the company decreased by approximately $44,000
during the first quarter primarily due to the purchase of additional equipment
and tooling at Controls. The company also declared a cash dividend of $0.03
per common share to shareholders of record on January 9, 1996 and payable on or
about January 30, 1996, which reduced working capital by $48,155.
Net Cash Provided by Operating Activities of $464,000 (see
Consolidated Statement of Cash Flows) and the restructuring of the company's
long-term mortgage debt upon completion of the Monofilament plant addition
allowed the company to reduce borrowings against a short-term revolving credit
facility secured by inventories and receivables. In South Carolina, the
Receivables and Inventory Financing Agreement provides for a revolving line of
credit up to $4.0 million. As of December 3, 1995, borrowings outstanding
against this credit line were $1.94 million. In Michigan, Glassmaster Controls
Company has in place a similar revolving credit line, providing credit for up
to 70% of outstanding eligible accounts receivable. As of December 3, 1995,
borrowings outstanding against this line of credit were $245,000 and the
maximum available for borrowings was approximately $600,000.
The Company currently anticipates that its cash requirements during
the remainder of this fiscal year will be provided by operating activities and
from existing and committed credit facilities.
Item 5. Other Information
On January 3, 1996 the Company was notified that a customer of its
Monofilament Division had filed a petition for protection under Chapter 11 of
the bankruptcy code. The company has granted unsecured trade credit to this
customer in the normal course of business, and as of January 3, 1996 was owed
approximately $260,000.00. During the fiscal year ended August 31, 1995, the
company recognized sales to this one customer that totaled $1.1 million.
Company representatives and its counsel plan to attend the meeting of creditors
of the debtor and will have additional information as it becomes available.
6
<PAGE> 7
Glassmaster Company
Lexington SC
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits.
<TABLE>
<S> <C>
Exhibit No. Description
----------- -----------
27 Financial Data Schedule (for SEC use only)
</TABLE>
b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the quarter
ended December 3, 1995.
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.
GLASSMASTER COMPANY
Date January 12, 1996 /s/ Raymond M. Trewhella
-------------------------- -----------------------------------
Raymond M. Trewhella
(President and
Principal Executive Officer)
Date January 12, 1996 /s/ Steven R. Menchinger
-------------------------- -----------------------------------
Steven R. Menchinger
(Treasurer, Controller, and
Principal Financial Officer)
7
<PAGE> 8
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
27 Financial Data Schedule (for SEC use only)
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR THE THREE MONTHS ENDED DECEMBER 3,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1995
<PERIOD-END> DEC-03-1995
<CASH> 117
<SECURITIES> 0
<RECEIVABLES> 3,718
<ALLOWANCES> 71
<INVENTORY> 3,165
<CURRENT-ASSETS> 7,110
<PP&E> 9,843
<DEPRECIATION> 4,050
<TOTAL-ASSETS> 13,158
<CURRENT-LIABILITIES> 5,858
<BONDS> 3,431
0
0
<COMMON> 48
<OTHER-SE> 3,368
<TOTAL-LIABILITY-AND-EQUITY> 13,158
<SALES> 5,796
<TOTAL-REVENUES> 5,796
<CGS> 4,825
<TOTAL-COSTS> 4,825
<OTHER-EXPENSES> 768
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 152
<INCOME-PRETAX> 51
<INCOME-TAX> 16
<INCOME-CONTINUING> 35
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
|
|