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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 1995
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number 0-10946
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BOBBIE BROOKS, INCORPORATED
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(Exact name of registrant as specified in its charter)
Delaware 34-0662362
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(State of Incorporation) (I.R.S. Employer Identification No.)
3830 Kelley Avenue, Cleveland, Ohio 44114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 881-5300
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NA
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(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 (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
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Number of Common Shares Outstanding as of May 1, 1995: 4,932,400
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<TABLE>
BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
<CAPTION>
Page Number
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<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of
March 31, 1995 and December 31, 1994 . . . . . . . . 3
Consolidated Statements of Operations
for the Three Months Ended March 31,
1995 and 1994. . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
for the Three Months Ended March 31,
1995 and 1994. . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote
of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
2.
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<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)--Note A.
BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
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($ in 000's except share amounts)
<CAPTION>
March 31 December 31
1995 1994
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 7,045 $ 12,502
Marketable securities and
other short-term investments 5,467 -
Trade receivables (less allowances
of $1,058 in 1995 and $1,250 in 1994) 5,841 5,808
Inventories -- Note B 8,023 7,258
Prepaid expenses and other current assets 513 553
Due from parent 1,408 1,167
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TOTAL CURRENT ASSETS 28,297 27,288
PROPERTY AND EQUIPMENT (at cost
less accumulated depreciation,
amortization, and allowance to reduce
fixed assets to net realizable value
of $11,418 in 1995 and $11,403 in 1994) 8,303 8,728
INTANGIBLE ASSETS
(at cost less accumulated amortization
of $366 in 1995 and $324 in 1994) 751 793
EQUITY INVESTMENT 2,659 2,689
OTHER ASSETS 1,977 1,992
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TOTAL ASSETS $ 41,987 $ 41,490
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<FN>
See notes to consolidated financial statements.
</TABLE>
3.
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<TABLE>
BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets--Continued
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($ in 000's except share amounts)
<CAPTION>
March 31 December 31
1995 1994
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<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,798 $ 6,507
Accrued liabilities 6,624 8,478
Loans payable - related party 1,911 1,911
Income taxes payable 246 246
Current portion of long-term debt 1,434 1,680
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TOTAL CURRENT LIABILITIES 18,013 18,822
LONG-TERM DEBT 94 124
DEFERRED CREDITS AND NONCURRENT LIABILITIES 3,300 3,336
MINORITY INTEREST 683 630
STOCKHOLDERS' EQUITY
Preferred Stock - Series A: $.001 par value;
authorized 2,000,000 shares, issued and
outstanding 907,250 Series A shares
(aggregate liquidation preference and
unpaid dividend is $27,750 in 1995
and $27,239 in 1994) 1 1
Preferred Stock - Series B: $.001 par value;
authorized 300,000 shares, issued and
outstanding 194,600 Series B shares
(aggregate liquidation preference and
unpaid dividend is $21,095 in 1995
and $20,706 in 1994) - -
Common Stock - $.001 par value; authorized
50,000,000 shares, 4,932,400 issued and
outstanding in 1995 and 1994 5 5
Capital in excess of par value 52,824 53,042
Retained (deficit) (32,933) (34,470)
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TOTAL STOCKHOLDERS' EQUITY 19,897 18,578
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 41,987 $ 41,490
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<FN>
See notes to consolidated financial statements.
</TABLE>
4.
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<TABLE>
BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
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($ in 000's except share amounts)
<CAPTION>
Three Months Ended
March 31
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1995 1994
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<S> <C> <C>
Net sales $ 13,459 $ 12,256
Cost of sales 9,887 8,739
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GROSS PROFIT 3,572 3,517
Cost and expenses:
Selling, general and
administrative expenses 2,048 2,084
Depreciation and amortization expenses 305 290
Interest expense 71 145
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2,424 2,519
Other income, net 451 560
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INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND MINORITY INTEREST 1,599 1,558
Provision for income taxes 9 1
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INCOME FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST 1,590 1,557
Minority Interest (53) (29)
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INCOME FROM CONTINUING OPERATIONS 1,537 1,528
(Loss) from discontinued operations,
net of taxes - (1,736)
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NET INCOME (LOSS) 1,537 (208)
Preferred stock dividend requirements 1,118 940
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NET INCOME (LOSS) APPLICABLE
TO COMMON STOCKHOLDERS $ 419 $ (1,148)
======== ========
Earnings (loss) per share:
CONTINUING OPERATIONS (NET OF PREFERRED
STOCK DIVIDEND REQUIREMENTS) $ .08 $ .12
DISCONTINUED OPERATIONS - (.35)
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NET INCOME (LOSS) PER COMMON SHARE $ .08 $ (.23)
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Weighted average number of
common shares outstanding 4,932,400 4,932,400
========= =========
<FN>
See notes to consolidated financial statements.
</TABLE>
5.
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<TABLE>
BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
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($ in 000's except share amounts)
<CAPTION>
Three Months Ended
March 31
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1995 1994
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<S> <C> <C>
OPERATING ACTIVITIES
Net income from continuing operations $ 1,537 $ 1,528
Adjustments to reconcile net income to
net cash provided by operating activities:
Loss from discontinued operations - (1,736)
Depreciation 293 494
Amortization 42 76
Net loss on disposal of fixed assets - 30
Minority interest 53 29
Changes in operating assets and liabilities:
Trade receivables (33) 1,445
Inventories (765) (1,633)
Other assets (156) 264
Accounts payable 1,291 2,510
Other current liabilities (1,908) (2,053)
Deferred credits and noncurrent liabilities (36) (265)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 318 689
INVESTING ACTIVITIES
Purchase of investments (5,467) -
Purchases of fixed assets (102) (314)
Proceeds from the sale of fixed assets 288 15
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NET CASH (USED IN) INVESTING ACTIVITIES (5,281) (299)
FINANCING ACTIVITIES
Net borrowings on loans payable - (973)
Proceeds from long-term debt 6,206 9,684
Principal payments on long-term debt (6,482) (9,485)
Dividends paid (218) (175)
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NET CASH (USED IN) FINANCING ACTIVITIES (494) (949)
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(DECREASE) IN CASH AND CASH EQUIVALENTS (5,457) (559)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,502 1,100
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,045 $ 541
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<FN>
See notes to consolidated financial statements.
</TABLE>
6.
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BOBBIE BROOKS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in 000's except share amounts)
March 31, 1995
NOTE A -- Basis Of Presentation
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The financial information presented herein should be read in conjunction with
the consolidated financial statements and footnotes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994. The
consolidated balance sheet as of December 31, 1994 has been derived from the
audited financial statements of that date.
The Company's parent is Pubco Corporation ("Pubco"), which owns approximately
91% of the Common Stock and all of the Preferred Stock of the Company.
At September 30, 1994, the Company discontinued the operations of its retail
and apparel manufacturing segments. As a result of such discontinuance, the
consolidated financial statements for the periods presented have been restated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. 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 considered
necessary for a fair presentation have been included, all of which are of a
normal recurring nature.
Net income (loss) per common share has been computed by dividing net income
(loss) after preferred dividend requirements by the weighted average number of
shares of Common Stock outstanding during the periods. The Preferred Stock
dividend requirement is an annual variable dividend, currently $2.25 per share
for Series A and $12.50 per share for Series B.
<TABLE>
NOTE B -- Inventories
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The components of inventories consist of the following:
<CAPTION>
March 31 December 31
1995 1994
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<S> <C> <C>
Raw materials and supplies $ 4,961 $ 4,912
Work in process 985 622
Finished goods 2,077 1,724
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$ 8,023 $ 7,258
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7.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 1995 and 1994
- ------------------------------------------------------------
The Company has completed its transformation from a company with predominantly
retail and apparel operations into a company which manufactures and distributes
business to business products.
During 1994, the Company closed its retail department store chain and
discontinued its apparel manufacturing operations. These actions have been
accounted for as discontinued operations. The Company's continuing operations
primarily consist of Buckeye Business Products, Inc. ("Buckeye") and Allied
Construction Products, Inc. ("Allied"). Each of these operations is located at
the Company's manufacturing facility in Cleveland, Ohio.
As a result of the discontinuance of the Company's retail and apparel
businesses in 1994, the consolidated statement of operations for the 1994
period has been restated to reflect these operations as discontinued. The loss
from discontinued operations net of taxes in the three months ended March 31,
1994, represents the operating results from these discontinued segments for the
three months ended March 31, 1994.
Sales increased in the three months ended March 31, 1995, from the three months
ended March 31, 1994, primarily as the result of an increase in sales at
Allied.
The increase in cost of sales as a percentage of sales and the corresponding
decrease in gross profit percentage, from the 1994 period to the 1995 period,
is primarily attributable to increased component and part costs experienced by
Allied because of the lower value of the Dollar versus the Deutsche Mark in
1995, compared to the 1994 period.
8.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has over $12,000,000 of cash, cash equivalents, marketable
securities and other short-term investments, and under $100,000 of long-term
debt, at March 31, 1995.
The increases in inventories and accounts payable from December 31, 1994 to
March 31, 1995 reflect Allied's normal seasonal build-up of inventories.
Accrued liabilities decreased from December 31, 1994 to March 31, 1995
primarily as the result of the payment of certain expenses related to the
closing of the retail department store chain.
The Company is evaluating the advantages of a possible merger or other
combination with Pubco and Aspen Imaging International, Inc., approximately 41%
of which is owned by the Company.
Although there was stockholders' equity of $19,897,000 at March 31, 1995, the
Preferred Stock is entitled to a liquidation preference equal to its
$37,605,000 face value and $10,514,000 of unpaid cumulative Preferred Stock
dividends.
9.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS. None
Item 2. CHANGES IN SECURITIES. None
Item 3. DEFAULTS UPON SENIOR SECURITIES. None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS. None
Item 5. OTHER INFORMATION. None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Financial Data Schedule
(b) Reports on Form 8-K
None
10.
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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.
BOBBIE BROOKS, INCORPORATED
/s/ Robert H. Kanner
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Robert H. Kanner
Chairman of the Board, President,
Chief Executive Officer and
Chief Financial Officer
Dated: May 11, 1995
11.
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EXHIBIT INDEX
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1995 AND CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE 3 MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 7,045
<SECURITIES> 5,467
<RECEIVABLES> 6,899
<ALLOWANCES> 1,058
<INVENTORY> 8,023
<CURRENT-ASSETS> 28,297
<PP&E> 19,721
<DEPRECIATION> 11,418
<TOTAL-ASSETS> 41,987
<CURRENT-LIABILITIES> 18,013
<BONDS> 94
<COMMON> 5
0
1
<OTHER-SE> 19,891
<TOTAL-LIABILITY-AND-EQUITY> 41,987
<SALES> 13,459
<TOTAL-REVENUES> 13,459
<CGS> 9,887
<TOTAL-COSTS> 9,887
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71
<INCOME-PRETAX> 1,599
<INCOME-TAX> 9
<INCOME-CONTINUING> 1,537
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,537
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
