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Previous: ZAPATA CORP, SC 13E4, 1997-01-14 |
Next: RPM INC/OH/, 424B4, 1997-01-14 |
<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 1, 1996.
------------------
( ) 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 1, 1996: 1,617,096 par value $0.03
--------------------------------
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Glassmaster Company
Consolidated Comparative Balance Sheet
(Thousands)
<TABLE>
<CAPTION>
December 1, 1996 August 31, 1996
---------------- ---------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 80 $ 129
Accounts Receivable (Net of Reserve) 3,027 2,725
Other Current Receivables 199 176
Inventories:
Raw Materials $ 1,769 $ 1,617
Work in Process 652 652
Finished Products 812 3,233 631 2,900
Prepaid Expenses and Other Current Assets ------- 247 ------- 82
------ ------
Total Current Assets 6,786 6,012
Fixed Assets (Net of Dep'n)
Property and Equipment (at cost) 5,783 5,876
Other Assets
CSV Life Insurance and Other Unamortized Assets 337 339
------- -------
Total Assets $12,906 $12,227
======= =======
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts Payable $ 1,984 $ 1,268
Accrued Expenses 190 195
Accrued Income Taxes 15 2
Notes & Mortgages Payable 3,219 3,050
------- -------
Total Current Liabilities 5,408 4,515
Long Term Liabilities
Notes & Mtges, Due After One Year $ 3,502 $ 3,669
Deferred Income Taxes 514 4,016 514 4,183
------- ------- ------- ------
Total Liabilities 9,424 8,698
Stockholders' Equity
Capital Stock (Authorized 5,000,00 Shares $0.03
Par - 1,617,096 (1997), 1,617,096 (1996)
Shares Issued and Outstanding $ 49 $ 49
Paid-In Capital 1,341 1,341
Donated Capital 124 124
Retained Earnings 1,968 3,482 2,015 3,529
------- ------- ------ -------
Total Liabilities and Equity $12,906 $12,227
======= =======
</TABLE>
2
<PAGE> 3
Glassmaster Company
Consolidated Comparative Income Statement
(In thousands except per share amounts)(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 1, 1996 December 3, 1995
---------------- ----------------
<S> <C> <C>
Net Sales $ 4,776 $ 5,796
Cost of Sales 4,015 4,825
------- -------
Gross Profit 761 971
Costs and Expenses:
Selling 235 255
General and Administrative 257 285
Other Income and Expense - Net 196 228
------- -------
Total Expenses 688 768
Income From Operations 73 203
Interest Expense 151 152
------- -------
Income Before Income Taxes (78) 51
Income Taxes (31) 16
------- -------
Net Income $ (47) $ 35
======= =======
Earnings Per Share (1,617,096 Shares) $ (0.03)
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 1, 1996 December 3, 1995
---------------- ----------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ (47) $ 35
Adjustments to Reconcile Net Income to Net Cash
Provided (Used) by Operating Activities:
Depreciation 187 154
Amortization 2 3
Changes in Operating Assets & Liabilities:
Decrease (Increase) in Receivables (324) (123)
Decrease (Increase) in Inventories (335) (416)
Decrease (Increase) in Prepaid Expenses &
Other Current Assets (164) (29)
Increase (Decrease) in Accounts Payable 732 884
Increase (Decrease) in Accrued Expenses (9) (44)
------- -------
Net Cash Provided (Used) By Operating Activities 42 464
------- -------
Cash Flows From Investing Activities
Additional Investment in Fixed Assets 93 267
Disposal of Fixed Assets - Net Book Value 0 0
Increase (Decrease) in CSV Life Insurance 0 0
Additional Investment in Other Assets 0 6
------- -------
Net Cash Used By Investing Activities 93 273
------- -------
Cash Flows From Financing Activities
Proceeds from Exercise of Stock Options 0 2
Proceeds from Short-Term Borrowings 0 117
Repayment of Short-Term Borrowings (81) (71)
Proceeds from Long-Term Obligations 0 1,419
Repayment of Long-Term Obligations (167) (1,335)
Net Increase (Decrease) in Short-Term Revolving
Line of Credit 250 (368)
------- -------
Net Cash Provided (Used) By Financing Activities 2 (236)
------- -------
Net Increase (Decrease) In Cash (49) (45)
Cash At Beginning of Period 129 162
------- -------
Cash At End of Period $ 80 $ 117
======= =======
Supplemental Disclosures of Cash Flow Information
Cash Paid For:
Interest (Net of Amount Capitalized) $ 153 $ 154
Income Taxes 2 0
</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 1, 1996 are not necessarily indicative of the results
that may be expected for the year ended August 31, 1997. 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, 1996. Certain prior year amounts may have been
reclassified to conform with the 1997 presentation.
Item 2. Management's Discussion and Analysis
RESULT OF OPERATIONS
Consolidated sales for the first quarter ended December 1, 1996
(fiscal 1997) were $4,776,220, a decrease of 17.6% when compared to sales of
the first quarter of the 1996 fiscal year. The decrease in first quarter sales
is due to a 21.7% decline in sales reported by Glassmaster Controls Company
("Controls"). Shipments by this division continue to be impacted by a slowdown
in the medium and heavy duty truck manufacturing business that is expected to
continue well into 1997. Sales by the Monofilament Division were 18.4% lower
than the prior year first quarter due primarily to a decrease in shipments of
nylon weed trimmer line and Nybrad abrasive monofilaments. First quarter sales
by the Composites Division increased 2% compared to last year.
Gross profit margins realized during the first quarter were 15.9% of
sales compared to 16.8% of sales in the prior year quarter. The decrease in
profit margins is due to reduced production levels at Controls that were
adjusted in response to the lower sales volume.
Selling, G&A, and Other expenses totalled $687,679 during the first
quarter, a decrease of 11.5% when compared to the first quarter of the 1996
fiscal year though as a percent of sales, these expenses increased from 13.2%
last year to 14.4% this year. Interest Expense was $151,402 this year compared
with $152,142 during the prior year first quarter. Interest Expense increased
from 2.6% of sales last year to 3.2% of sales this year due to this year's
lower quarterly sales.
Net Consolidated Income (Loss) during the current year first quarter
was ($47,319) compared with $34,611 last year. This year's first quarter
includes an income tax benefit of $30,465 due to the pre-tax loss and the
availability of the net operating loss carry-back whereas last year's first
quarter Net Income included a provision for income tax expense of $16,426.
5
<PAGE> 6
LIQUIDITY AND CAPITAL RESOURCES
The working capital of the company decreased by approximately $119,000
during the first quarter primarily due to the repayment of long-term debt
($167,000) coinciding with the net operating loss. Capital additions were
modest ($93,000) during the quarter and no significant capital expenditures are
currently planned.
The net operating assets and liabilities of the company increased by
approximately $100,000 due primarily to increases in accounts receivable
($324,000) and inventories ($335,000). The increased operating capital
requirement was funded by supplier trade credit and by borrowings under
short-term credit facilities secured by receivables and inventories. These
financing agreements provide for total revolving credit up to $4.5 million. As
of December 1, 1996, borrowings outstanding under the credit lines were
approximately $2.2 million.
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.
PART II - OTHER INFORMATION
Item 5. Other Information - None.
6
<PAGE> 7
Glassmaster Company
Lexington SC
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits.
Exhibit No. Description
----------- -----------
27 December 1, 1996 Financial Data Schedule
(for SEC use only.)
b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the quarter
ended December 1, 1996.
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 10, 1997 /s/ Raymond M. Trewhella
--------------------------- -------------------------------------
Raymond M. Trewhella
(President and
Principal Executive Officer)
Date January 10, 1997 /s/ Steven R. Menchinger
--------------------------- -------------------------------------
Steven R. Menchinger
(Treasurer, Controller, and Principal
Financial Officer)
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
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 PERIOD ENDED DECEMBER 1, 1996
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-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> DEC-01-1996
<CASH> 80
<SECURITIES> 0
<RECEIVABLES> 3,287
<ALLOWANCES> 61
<INVENTORY> 3,233
<CURRENT-ASSETS> 6,786
<PP&E> 10,527
<DEPRECIATION> 4,744
<TOTAL-ASSETS> 12,906
<CURRENT-LIABILITIES> 5,408
<BONDS> 3,502
0
0
<COMMON> 49
<OTHER-SE> 3,433
<TOTAL-LIABILITY-AND-EQUITY> 12,906
<SALES> 4,776
<TOTAL-REVENUES> 4,776
<CGS> 4,015
<TOTAL-COSTS> 4,015
<OTHER-EXPENSES> 688
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 151
<INCOME-PRETAX> (78)
<INCOME-TAX> (31)
<INCOME-CONTINUING> (47)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
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