<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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 1-6252
CARTER DAY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1884908
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 73rd Avenue N.E., Minneapolis, Minnesota 55432
(Address of principal executive offices) (Zip Code)
(612)571-1000
(Registrant's telephone number, including area code)
Not Applicable
(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 ___
The number of shares outstanding of registrant's common stock, par value $.01,
at August 1, 1995 are: 19,279,589 voting shares and 668,594 non-voting shares.
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<PAGE>
INDEX
Part I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements Number
Consolidated Statements of Income-
Three Months Ended June 30, 1995 and 1994 3
Consolidated Balance Sheets-June 30, 1995 and
March 31, 1995 4
Consolidated Statements of Cash Flows-
Three Months Ended June 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security
Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CARTER DAY INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30
--------------------
1995 1994
-------- --------
<S> <C> <C>
Revenues $ 4,279 $ 3,760
Cost of goods sold 2,610 2,288
-------- --------
Gross Profit 1,669 1,472
Gross Margin 39.0% 39.1%
Selling and engineering expenses 911 916
General and administrative expenses 467 399
-------- --------
Operating income 291 157
Interest income 6 2
Interest expense (58) (54)
Other income (expense), net - (24)
-------- --------
Income from continuing operations before
income taxes 239 81
Provision for income taxes (Note 3) 81 27
-------- --------
Income from continuing operations before 158 54
Minority Interest
Apportionment of Income to Minority Interest 31 2
-------- --------
Net income $ 127 $ 52
======== ========
Net income per common share (Note 4) $ .01 $ -
======== ========
Weighted average number of common
shares outstanding (in thousands) 19,948 19,948
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
CARTER DAY INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30 March 31
1995 1995
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 170 $ 223
Receivables:
Trade, less allowance for doubtful
accounts of $123 and $120 2,100 1,828
Inventories (Note 2) 2,333 2,395
Other current assets 244 326
-------- --------
Total current assets 4,847 4,772
Property, plant and equipment less
accumulated depreciation and amortization
of $2,998 and $2,943 675 678
Other assets 37 -
-------- --------
Total assets $ 5,559 $ 5,450
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Advances from secured lender $ 740 $ 702
Current portion of long-term debt 134 134
Trade accounts payable 611 556
Accrued and other current liabilities 1,083 1,304
-------- --------
Total current liabilities 2,568 2,696
Long-term debt 317 351
Other liabilities 151 114
Minority interest in consolidated subsidiaries 486 439
-------- --------
Total liabilities 3,522 3,600
Shareholders' equity:
Series B preferred stock, no par value;
63,236 shares authorized, issued and
outstanding (liquidation value $20,868) 190 190
Common stock; authorized 45,000,000
voting shares and 1,000,000 non-voting
shares at $.01 par value; 19,279,589
shares issued and outstanding, and 668,594
non-voting shares issued and outstanding 200 200
Capital surplus 1,559 1,499
Retained earnings (deficit) subsequent
to March 31, 1989, date of quasi
reorganization (total deficit
eliminated $106,963) 88 (39)
-------- --------
Total shareholders' equity 2,037 1,850
-------- --------
Total liabilities and
shareholders' equity $ 5,559 $ 5,450
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
CARTER DAY INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30
--------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 127 $ 52
Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 58 51
Imputed income taxes 60 27
Decrease (increase) in receivables (272) (306)
Decrease (increase) in inventories 62 65
Decrease (increase) in other assets 45 33
(Decrease) increase in accounts payable and
other liabilities (129) (232)
(Decrease) increase in minority interest in
consolidated subsidiaries 47 2
-------- --------
Net cash flow provided (used) by
operating activities (2) (308)
-------- --------
INVESTING ACTIVITIES
Capital expenditures (60) (101)
Proceeds from disposal of machines and equipment 5 -
-------- --------
Net cash flow provided (used)
by investing activities (55) (101)
-------- --------
FINANCING ACTIVITIES
Net Advances from (payments to) secured lender 38 304
Payments on long-term debt (34) (29)
Proceeds from long-term debt financing - 120
-------- --------
Net cash flow provided (used) by financing
activities 4 395
-------- --------
Net decrease in cash and cash equivalent (53) (14)
Beginning cash and cash equivalents 223 44
-------- --------
Ending cash and cash equivalents $ 170 $ 30
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The accompanying interim consolidated financial statements are unaudited and
include the accounts of Carter Day Industries, Inc. (the "Parent" company) and
its subsidiaries (collectively the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) have been made which are necessary to present fairly the financial
position of the Company in the accompanying interim consolidated financial
statements. Interim results are not necessarily indicative of the results for
the entire year.
Certain financial information which is normally included in financial statements
prepared in accordance with generally accepted accounting principles, which is
not required for interim reporting purposes, has been condensed or omitted. The
accompanying consolidated financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's annual
report on Form 10-K for the year ended March 31, 1995.
2. INVENTORIES
Inventories consisted of (dollars in thousands):
<TABLE>
<CAPTION>
June 30 March 31
1995 1995
------- -------
<S> <C> <C>
Raw material and component parts $ 1,187 $ 1,151
Work-in-process 255 208
Finished goods 891 1,036
------- -------
Total $ 2,333 $ 2,395
======= =======
</TABLE>
3. INCOME TAXES
$76,000 of the $81,000 provision for income taxes for the quarter ended June
30,1995, and all of the $27,000 provision for the quarter ended June 30, 1994,
is imputed (not a direct obligation) and accompanied by a corresponding credit
to Capital Surplus and Minority Interest in Consolidated Subsidiaries, in
accordance with the accounting policies governing the Company's 1989 quasi
reorganization and the presence of available net operating loss carryforwards.
The interim period provision is based upon the Company's estimate of the
effective tax rate for the year.
4. PER SHARE DATA
Per share data was computed using the weighted average number of common shares
outstanding during the period.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
Revenue for the quarter ended June 30, 1995 was $4,279,000, up $519,000 from the
comparable period of the previous year. The Company's backlog of unfilled
orders was $2,285,000 as of June 30, 1995, up from $1,793,000 at June 30, 1994.
The increases reflect an increase in demand for processing equipment by the
plastics industry worldwide. Gross Margin remained flat at 39%. Because of its
opening backlog, the Company has not realized the full impact of price increases
implemented at the beginning of the fiscal year. This lag in offset of cost
increases was mitigated by favorable volume and product mix.
Operating income was $291,000 for the quarter ended June 30, 1995, up from the
operating income of $157,000 reported for the first quarter of the prior year.
This improvement is principally due to the higher sales volume. The quarter
ended June 30, 1995 had an abnormally low proportion of commissionable sales,
while general and administrative expenses increased due to higher salary and
benefit costs.
Interest expense was higher at $58,000 for the current quarter, compared to
$54,000 in quarter ended June 30, 1994 due to the higher U.S. prime rate
applicable to our borrowings.
The increase in apportionment of Income to Minority Interest resulted from the
increase of minority interest in the Company's principal operating subsidiaries,
from 3.00% to 19.97% in February 1995, along with the higher earnings.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, the Company had working capital of $2,279,000, net worth of
$2,037,000, and $739,000 available for additional advances against its asset-
based line of credit. The Company has a $1,500,000 minimum borrowing
obligation under its line of credit. Excess cash is invested in a bank money
market fund.
An improved cash flow from operations, using $2,000 of cash for the quarter
ended June 30, 1995 versus using $308,000 of cash for the same quarter of the
previous year, is primarily due to increased income from operations.
-7-
<PAGE>
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) Listing of Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
-8-
<PAGE>
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.
CARTER DAY INDUSTRIES, INC.
Registrant
Date: August 9, 1995 /s/ Paul W. Ernst
-------------------------------
Paul W. Ernst
Director, President, Treasurer
and Chief Executive Officer
Date: August 9, 1995 /s/ Kent R. Turner
-------------------------------
Kent R. Turner
Vice President, Controller and
Principal Accounting Officer
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<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
EXHIBIT METHOD OF FILING
--------- ----------------------
<S> <C>
27 Financial Data Schedule Filed herewith electronically
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets and Consolidated Statements of Income found on page
3 and 4 of the Company's Form 10-Q for the year-to-date, 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> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 170
<SECURITIES> 0
<RECEIVABLES> 2223
<ALLOWANCES> 123
<INVENTORY> 2333
<CURRENT-ASSETS> 4847
<PP&E> 3673
<DEPRECIATION> 2998
<TOTAL-ASSETS> 5559
<CURRENT-LIABILITIES> 2568
<BONDS> 317
<COMMON> 200
0
190
<OTHER-SE> 1647
<TOTAL-LIABILITY-AND-EQUITY> 5559
<SALES> 4279
<TOTAL-REVENUES> 4279
<CGS> 2610
<TOTAL-COSTS> 2610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58
<INCOME-PRETAX> 239
<INCOME-TAX> 81
<INCOME-CONTINUING> 127
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127
<EPS-PRIMARY> .01
<EPS-DILUTED> 0
</TABLE>
