<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of The Securities
Exchange Act of 1934
FOR THE FISCAL QUARTER ENDED MARCH 2, 1996
COMMISSION FILE NUMBER 0-4173
DMI FURNITURE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-0678467
(State of incorporation) (IRS employer ID number)
ONE OXMOOR PLACE, 101 BULLITT LANE, LOUISVILLE, KENTUCKY 40222
(Address of principal executive offices)
Registrant's telephone number with area code: (502) 426-4351
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 the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the last practicable date.
CLASS - Common Stock, Par Value $.10 per Share
OUTSTANDING AT MARCH 2, 1996 - 2,998,661
<PAGE>
INDEX
Part I. Financial Information Page
----
Consolidated Balance Sheets - March 2, 1996
and September 2, 1995 3, 4
Consolidated Statements of Operations - Three and Six
Months Ended March 2, 1996 and March 4, 1995 5
Consolidated Statements of Cash Flows - Six
Months Ended March 2, 1996 and
March 4, 1995 6, 7
Notes to Consolidated Financial Statements 8-10
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-13
Part II.Other Information 14-16
Index to Exhibits
11. Calculations of Earnings Per Share 17
27. Financial Data Schedule 18
<PAGE>
PART I. FINANCIAL INFORMATION
DMI FURNITURE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
<TABLE>
ASSETS Mar. 2, Sep. 2
------- 1996 1995
-------- --------
<S> <C> <C>
Current assets:
Cash $227 $69
Restricted cash for debt payments 2 226
Accounts receivable - net 7,335 10,748
Inventories (Note 4) 10,846 13,265
Other current assets 385 338
Current portion of deferred income taxes (Note 2) 903 925
-------- --------
Total current assets 19,698 25,571
Property, plant and equipment - at cost (Note 1) 19,473 21,574
Less accumulated depreciation 8,405 9,553
-------- --------
Net property, plant and equipment 11,068 12,021
Other assets:
Assets held for disposition (Note 7) 437 -
Intangible pension asset 558 558
Other 332 362
Deferred income taxes (Note 2) 200 -
-------- --------
1,527 920
-------- --------
$32,293 $38,512
======= =======
</TABLE>
3
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
(Amounts in thousands)
<TABLE>
Mar.2, Sep. 2
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
- - ------------------------------------ --------- --------
<S> <C> <C>
Current liabilities:
Trade accounts payable $3,035 $3,135
Accrued liabilities (Note 7) 2,281 1,883
Accrued dividends on preferred
stock (Note 6) 228 389
Long-term debt due within one year 1,017 1,007
-------- --------
Total current liabilities 6,561 6,414
Long-term liabilities:
Long-term debt 13,877 20,031
Accrued pension costs 1,046 905
Deferred compensation 408 434
Deferred income taxes (Note 2) 71 71
-------- --------
15,402 21,441
Stockholders' equity:
Series C convertible preferred stock,
$2 par value, 2,020,000 authorized
and outstanding 4,040 4,040
Common stock 299 297
Additional paid-in capital 15,129 15,107
Retained deficit (9,114) (8,763)
Minimum pension liability (24) (24)
-------- --------
Total stockholders' equity 10,330 10,657
-------- --------
$32,293 $38,512
======= =======
</TABLE>
4
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------- ----------------------------
Mar. 2, Mar. 4, Mar. 2, Mar. 4,
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $12,502 $17,451 $30,231 $36,174
Cost of sales 10,478 14,509 24,984 29,666
------- ------- ------- -------
Gross profit 2,024 2,942 5,247 6,508
Selling, general and
administrative expenses 1,891 2,212 3,964 4,474
Plant closing reserve (Note 7) - - 995 -
------- ------- ------- -------
Operating profit 133 730 288 2,034
Interest expense (net) (348) (469) (768) (937)
------- ------- ------- -------
Income (loss) before provision for income taxes (215) 261 (480) 1,097
Benefit (provision) for income taxes (Note 2) 64 (108) 145 (406)
------- ------- ------- -------
Net income (loss) (Note 7) ($151) $153 ($335) $691
====== ====== ====== ======
Earnings (loss) per common share (Notes 3 and 7) ($.05) $.03 ($.11) $.12
====== ====== ====== ======
</TABLE>
See accompanying notes.
5
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------
Mar. 2, Mar. 4,
1996 1995
---------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (Note 7) ($335) $691
Adjustments to reconcile net income to
net cash provided (used) by
operating activities:
Depreciation and amortization 513 500
Deferred income taxes (Note 2) (178) 372
Pension costs 141 (46)
Deferred compensation (26) (40)
Changes in assets and liabilities:
Accounts receivable 3,413 480
Inventories 2,419 83
Other assets 167 53
Trade accounts payable (100) (1,325)
Accrued liabilities (Note 7) 398 (406)
--------- ----------
Total adjustments 6,747 (329)
--------- ----------
Net cash provided by
operating activities 6,412 362
--------- ----------
Cash flows provided (used) by
investing activities:
Capital expenditures (157) (280)
Payments received on notes receivable - 107
--------- ----------
Cash used by investing
activities (157) (173)
--------- ----------
</TABLE>
See accompanying notes.
6
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
(Amounts in thousands)
(Unaudited)
<TABLE>
SIX MONTHS ENDED
-----------------------
Mar. 2, Mar. 4,
1996 1995
-----------------------
<S> <C> <C>
Cash flows provided (used) by
financing activities:
Borrowings from line of credit $8,798 $13,350
Payments on line of credit (14,350) (13,000)
Payments on long term debt (592) (517)
Cash dividends on preferred stock (177) (303)
Proceeds from stock options exercised - 90
--------- ----------
Cash used by
financing activities (6,321) (380)
--------- ----------
Decrease in cash (66) (191)
Cash- beginning of period 295 446
--------- ----------
Cash- end of period $229 $255
====== ======
Cash paid for:
Interest $818 $917
====== ======
Income taxes $33 $50
====== ======
</TABLE>
See accompanying notes.
7
<PAGE>
DMI FURNITURE, INC.
Notes to Consolidated Financial Statements
(1) FINANCIAL STATEMENTS AND ORGANIZATION
The consolidated financial statements include DMI Furniture, Inc. and
its wholly owned subsidiary, DMI Management, Inc. ("Company"). The financial
statements included herein at March 2, 1996 and for the three and six months
ended March 2, 1996 and March 4, 1995 are unaudited but include all adjustments
which are, in the opinion of management, necessary to a fair presentation of the
results of operations and financial position for the periods covered herein.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's latest annual report on
Form 10-K.
The results of operations for the interim periods are not necessarily an
indication of the results to be expected for the full 1996 fiscal year. The
three month period ended March 4, 1995 included fourteen weeks as compared to
thirteen weeks for the period ended March 2, 1996 and the six month period ended
March 4, 1995 included 27 weeks as compared to 26 weeks for the period ended
March 2, 1996.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The specific useful lives of property, plant, and equipment are as
follows:
Building and Leasehold Improvements 8 - 35 yrs.
Machinery and Equipment 3 - 13 yrs.
(2) INCOME TAXES
Income tax expense consisted of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Mar. 2, Mar. 4, Mar. 2, Mar. 4,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Current $4 $10 $33 $34
Deferred (68) 98 (178) 372
---- -- ---- ---
Total $(64) $108 $(145) $406
---- --- ----- ----
---- --- ----- ----
</TABLE>
<PAGE>
The provision for income taxes differs from that computed at the federal
statutory corporate tax rate as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Mar. 2, Mar. 4, Mar. 2, Mar. 4,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Tax at 34% statutory
rate $(73) $89 $(163) $373
State income taxes 9 19 18 33
---- --- --- ---
Income Taxes $(64) $108 $(145) $406
---- ---- ----- ----
---- ---- ----- ----
</TABLE>
(3) EARNINGS PER COMMON SHARE
Earnings per common share are based on the weighted average number of
common and common equivalent shares outstanding during the period, and assumes
the conversion of the Series C Preferred Stock into common stock. For the first
quarter and six months of fiscal 1996, since the effect of the assumption of the
conversion of the Series C Preferred Stock into common stock would be
anti-dilutive, those common equivalent shares were not included in the
calculation of earnings per common share.
(4) INVENTORIES
Inventories were comprised of the following at March 2, 1996 and
September 2, 1995:
<TABLE>
<CAPTION>
March 2, 1996 September 2,1995
------------- ----------------
<S> <C> <C>
Finished Products $5,414,000 $7,115,000
Work in Process 506,000 785,000
Raw Materials 4,926,000 5,365,000
--------- ---------
$10,845,000 $13,265,000
----------- -----------
----------- -----------
</TABLE>
(5) OTHER MATTERS
The Company is subject to proceedings relating to six facilities
identified for remedial action under federal and state environmental statutes.
The proceedings are based on allegations that hazardous substances generated by
the Company and several hundred other waste generators were disposed of at the
facilities and seek to allocate or recover costs associated with site
investigation and cleanup, which costs could be substantial. The Company has
established a reserve reflecting its estimate of probable environmental
liabilities in connection with the proceedings based on presently available
information provided by steering committees of participants or regulatory
authorities with respect to each site. The reserve does not include any
potential insurance recoveries. As of March 2, 1996 the Company has accrued
approximately $148,000 for these potential environmental liabilities. The
ultimate costs of the Company's
9
<PAGE>
environmental liabilities cannot be estimated with certainty, primarily due to
several uncertain factors at one of the sites subject to legal proceedings.
These factors principally are the level of contamination, the selection of
remedial methods, the stage of investigation at the site, and the determination
of the Company's liability in proportion to owner/operators of the site and
other responsible parties. Due to the limited nature of the Company's
involvement in these proceedings, the availability of certain defenses, and the
involvement of many other parties with substantial financial resources in the
proceedings, the Company does not anticipate, based on currently available
information, that potential environmental liabilities arising from these
proceedings are likely to exceed the amount of the Company's reserve by an
amount that would have a material adverse effect on the Company's financial
condition, results of operations or cash flows. Expenses for the year to date
were not material.
(6) DIVIDENDS
The dividends on Series C Preferred Stock accrued in a fiscal year are
not payable until the following fiscal year.
(7) PLANT CLOSING
On September 29, 1995 the Company announced its plan to permanently
close its Gettysburg, Pennsylvania manufacturing plant and consolidate the
production of that plant into its Huntingburg, Indiana facilities by December
31, 1995, and close its Gettysburg warehouse during 1996. Consolidation of
production in the Indiana facilities should result in lower manufacturing
overhead and plant administrative costs in future periods. The Company recorded
a pre-tax charge of approximately $995,000 in the first quarter of fiscal 1996
related to this closing. The charge includes book provisions of: $160,000
related to the recording of property, plant, and equipment at net realizable
value; $100,000 for recording certain inventory items at net realizable value;
$145,000 for a pension curtailment loss; $125,000 for severance pay; and
approximately $465,000 for costs to be incurred after operations cease and that
are associated with the closing as well as expected future occupancy related
costs. The severance pay accrual related to the termination of certain salaried
and support staff personnel based upon the terms of a pre-existing
post-employment severance plan. None of the above referenced costs relate to
the relocation or consolidation of production into the Company's Huntingburg,
Indiana facility.
Net current assets and liabilities associated with the Gettysburg,
Pennsylvania facilities as of March 2, 1996 are immaterial to the financial
position of the Company. The carrying amount of net long-term assets to be
disposed of as of March 2, 1996 are approximately $437,000 and management's
expectations are that such assets should be disposed of within the next 36
months. Most severance related payments have been made as of March 2, 1996.
Other amounts included in accrued liabilities associated with the plant closing
as of March 2, 1996 total approximately $418,000.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue - Net sales for the second quarter of fiscal 1996 decreased $4,949,000
or 28% over the second quarter of fiscal 1995. This decrease was the result of
decreased sales of all of the Company's product lines. Office furniture sales
decreased 8%; sales of residential desks, computer desks, accent furniture and
chairs decreased 45%; bedroom furniture sales decreased 28%; and sales to
outside trade customers of lumber and fabricated wood parts by the Company's
sawmill/dimension parts plant decreased 32%. These decreases were primarily
the result of a weak retail furniture environment, and because the second
quarter of fiscal 1995 included 14 weeks as compared to 13 weeks during the
current year.
Net sales for the first six months of fiscal 1996 decreased $5,943,000
or 16% over the first six months of fiscal 1995. This decrease was the result
of decreased sales of all of the Company's product lines. Office furniture
sales decreased 4%; sales of residential desks, computer desks, accent furniture
and chairs decreased 17%; bedroom furniture sales decreased 25%; and sales to
outside trade customers of lumber and fabricated wood parts by the Company's
sawmill/dimension parts plant decreased 9%.. These decreases were primarily the
result of a weak retail furniture environment, and because the first six
months of fiscal 1995 included 27 weeks as compared to 26 weeks during the
current year period.
Gross Margin - The Company's gross margin in the second quarter of fiscal 1996
was 16.2% compared to 16.9% in the second quarter of fiscal 1995. This
decrease in gross margin was primarily the result of lower production levels
than the previous year due to decreased demand for the Company's products.
The Company's gross margin in the first six months of fiscal 1996 was
17.4% compared to 18.0 % in the first six months of fiscal 1995. This decrease
in gross margin was primarily the result of lower production levels than the
previous year due to decreased demand for the Company's products.
Selling, General and Administrative (S,G&A) Expense - For the second quarter of
fiscal 1996, S,G&A expense amounted to $1,891,000 or 15.1% of sales compared to
$2,212,000 or 12.7% of sales for the second fiscal quarter of 1995. This
increase as a percentage of sales is the result of the 28% sales decrease
mentioned above and the semi-fixed nature of many S,G&A expenses.
For the first six months of fiscal 1996, S,G&A expense amounted to
$3,964,000 or 13.1% of sales compared to $4,474,000 or 12.4% of sales for the
first six months of fiscal 1995. This increase as a percentage of sales is the
result of the 28% sales decrease mentioned above and the semi-fixed nature of
many S,G&A expenses.
11
<PAGE>
Interest Expense - For the second quarter of fiscal 1996, net interest was
$348,000 compared to $469,000 for the second quarter of fiscal 1995. This
decrease was the result of a lower interest rate spread charged by the bank as
well as lower bank debt balances than in the previous year.
For the first six months of fiscal 1996, net interest was $768,000
compared to $937,000 for the first six months of fiscal 1995. This decrease
was the result of a lower interest rate spread charged by the bank as well as
lower bank debt balances than in the previous year.
On September 29, 1995 the Company announced its plan to permanently
close its Gettysburg, Pennsylvania manufacturing plant and consolidate the
production of that plant into its Huntingburg, Indiana facilities by December
31, 1995, and close its Gettysburg warehouse during 1996. Consolidation of
production in the Indiana facilities should result in lower manufacturing
overhead and plant administrative costs in future periods. The Company recorded
a pre-tax charge of approximately $995,000 in the first quarter of fiscal 1996
related to this closing. The charge includes book provisions of: $160,000
related to the recording of property, plant, and equipment at net realizable
value; $100,000 for recording certain inventory items at net realizable value;
$145,000 for a pension curtailment loss; $125,000 for severance pay; and
approximately $465,000 for costs to be incurred after operations cease and that
are associated with the closing as well as expected future occupancy related
costs. The severance pay accrual related to the termination of certain salaried
and support staff personnel based upon the terms of a pre-existing
post-employment severance plan. None of the above referenced costs relate to
the relocation or consolidation of production into the Company's Huntingburg,
Indiana facility.
Net current assets and liabilities associated with the Gettysburg,
Pennsylvania facilities as of March 2, 1996 are immaterial to the financial
position of the Company. The carrying amount of net long-term assets to be
disposed of as of March 2, 1996 are approximately $437,000 and management's
expectations are that such assets should be disposed of within the next 36
months. Most severance related payments have been made as of March 2, 1996.
Other amounts included in accrued liabilities associated with the plant closing
as of March 2, 1996 total approximately $418,000.
Liquidity and Capital Resources - Demands for funds relate to payments
for raw materials and other operating costs, debt obligations, accrued
preferred stock dividends and capital expenditures. The Company's ability to
generate cash adequate to meet short and long term needs is dependent on the
collection of accounts receivable and from its ability to borrow funds. The
Company's days of sales outstanding of accounts receivable averaged 50 days for
the first six months of fiscal 1996 compared to 53 days for the six months of
fiscal 1995. This improvement in the collection period is primarily the result
of increased business with and more timely payments by a major customer. The
Company's average days of inventory on hand averaged 81 days for the first six
months of fiscal 1996 compared to 90 days for the first six months of fiscal
1995. This decrease is due to the success of the inventory reduction program
initiated in the fourth quarter of fiscal 1995. The program instituted changes
to the Company's production and procurement procedures intended to shorten
production runs, and reduce delivery lead times and safety stock levels and
thereby enable the Company to reduce inventories of raw materials,
work-in-process, and finished goods. The Company's order backlog at March 2,
1996 was approximately $4,951,000, a 25% decrease from approximately $6,632,000
at the same time last year.
12
<PAGE>
Key elements of the Consolidated Statements of Cash Flows:
<TABLE>
<CAPTION>
Six Months
1996 1995
---- ----
<S> <C> <C>
Net cash provided by operating activities $6,412,000 $362,000
Cash used for investing activities (157,000) (173,000)
--------- --------
Net cash flows from operating and investing activities 6,255,000 189,000
Cash used by financing activities (6,321,000) (380,000)
--------- -------
Net change in cash and cash equivalents $(66,000) $(191,000)
--------- ---------
--------- ---------
</TABLE>
During the first six months of fiscal 1996 , the Company provided cash
flows from operating activities of $6,412,000 compared to cash flows provided of
$362,000 the previous year primarily due to the success of the Company's
inventory reduction program and improved accounts receivable collection cycle
and lower sales levels. Investing activities required $157,000 during the first
six months of fiscal 1996 and $173,000 during the first six months of fiscal
1995 primarily for capital expenditures. Financing activities used $6,321,000
during the first six months of fiscal 1996 primarily in reduction of debt
compared to funds used of $380,000 the same six month period of the previous
year.
The Company is subject to proceedings relating to six facilities
identified for remedial action under federal and state environmental statutes.
At each site, several hundred parties have been named as potentially responsible
parties ("PRPs") or identified as potentially responsible for remediation, and
the group of PRPs undertaking remediation includes many companies, including
"Fortune 500" companies, believed to have substantial financial resources. The
Company has paid a portion of the costs of preliminary investigation and
remediation at three sites, and has settled claims against it made by PRPs at
two sites. The Company has established a reserve reflecting its estimate of
probable environmental liabilities based on presently available information
provided by steering committees of participants or regulatory authorities with
respect to each site. The amount of the reserve currently totals approximately
$148,000 and does not include any potential insurance recoveries. The
ultimate costs of the Company's environmental liabilities cannot be estimated
with certainty, primarily due to several uncertain factors at one of the sites
subject to legal proceedings. These factors principally are the level of
contamination, the selection of remedial methods, the stage of investigation at
the site, and the determination of the Company's liability in proportion to
owner/operators of the site and other responsible parties. Due to the limited
nature of the Company's involvement in these proceedings, the availability of
certain defenses, and the involvement of many other parties with substantial
financial resources in the proceedings, the Company does not anticipate, based
on currently available information, that potential environmental liabilities
arising from these proceedings are likely to exceed the amount of the Company's
reserve by an amount that would have a material adverse effect on the Company's
financial condition, results of operations or cash flows. For further
information regarding the Company's involvement in environmental proceedings,
see Item 3 Legal Proceedings.
The Company does not believe any events are probable which would
materially change its present liquidity position, which is adequate to satisfy
known demands for funds for operations and to pay bank and other debt.
13
<PAGE>
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
The Company is subject to proceedings relating six facilities
identified for remedial action under federal and state environmental statutes.
At each site, several hundred parties have been named as potentially responsible
parties ("PRPs") or identified as potentially responsible for remediation, and
the group of PRPs undertaking remediation includes many companies, including
"Fortune 500" companies, believed to have substantial financial resources. The
Company has paid a portion of the costs of preliminary investigation and
remediation at three sites, has settled claims against it made by PRPs at two
sites, and has established a reserve for future liabilities associated with the
proceedings.
In 1988 the Company was named out of over one thousand customers at the
Keystone Sanitation Company landfill (the "Keystone Site") in Union Township,
Pennsylvania, as one of 31 PRPs potentially responsible for remediation of this
site. After the Company provided the EPA with information concerning the
nature of the substances allegedly contributed by the Company, which the Company
believes did not include the principal hazardous substances of concern at the
site identified in the remedial investigation, the EPA did not name the Company
in an Administrative Order issued on June 28, 1991, requiring twelve other PRPs
to undertake remedial action at the Keystone Site. On September 27, 1993, the
United States filed a lawsuit in federal court for the Middle District of
Pennsylvania against eleven PRPs, who are challenging the EPA's proposal for
remedial action at the Keystone Site. On August 11, 1994, the Company was
named, along with over 250 PRPs, as a third-party defendant by the original PRP
defendants. The Company is participating with other third-party defendants in
settlement negotiations and in filing a fourth-party complaint joining 589
additional parties in the litigation. Based on a court-directed production of
information, the Company was assessed a preliminary allocation of liability of
approximately 1.35% by a consultant. The EPA has estimated the cost of its
preferred remediation alternative for the Keystone Site to be $9.2 million. The
parties have estimated that the total site costs will be approximately $14
million, including $3 million for off-site contamination which EPA believes may
require remediation, even though the anticipated cost has not been determined.
DMI believes it has a reasonable basis upon which to dispute, and has disputed,
both the volume of material attributed to it, and the allegation that material
contributed by DMI requires any remediation. In addition, DMI believes that a
significant share of the liability at the site can be expected to be assigned to
the owners and operators of the site, which would reduce DMI's share of the
potential liability. Several million dollars in assets of the original
owner/operator of the site and related parties are currently frozen pursuant to
a court order, and successor liability claims are pending against a national
waste management company that acquired the site from the owner/operators.
In addition to the environmental proceedings noted above, the
Company is a defendant in various other lawsuits arising in the normal course of
business that, in management's opinion, are not material to the results of
operations or financial position of the Company or are adequately covered by
insurance.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of security holders on February 21,
1996 at which security holders; (a) elected five directors of the Company for
the ensuing year, and, (b) ratified the appointment of Arthur Andersen LLP as
auditors for the year 1996.
Results of the voting in connection with these items were as follows:
ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
For % Against % Abstain
--- - ------- - -------
<S> <C> <C> <C> <C> <C>
Donald D. Dreher 2,405,642 99 26,047 1 0
Joseph G. Hill 2,405,738 99 25,951 1 0
Joseph L. Ponce 2,404,438 99 27,251 1 0
Alexander N. Rubin, Jr. 2,405,738 99 25,951 1 0
Thomas M. Levine 2,405,738 99 25,951 1 0
</TABLE>
RATIFICATION OF ACCOUNTANTS
<TABLE>
<CAPTION>
Broker Nominee
For % Against % Abstain % Unvoted
--- - ------- - ------- - -------
<S> <C> <C> <C> <C> <C> <C>
2,415,701 99 8,886 1 7,052 0 50
</TABLE>
There were 2,431,689 shares of Common Stock represented present in
person at the meeting constituting 81% of the 2,991,358 shares of Common Stock
outstanding, therefore a quorum was present at the meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
11. Calculations of earnings per share.
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
None.
<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 the
undersigned thereunto duly authorized.
DMI FURNITURE, INC.
(Registrant)
Date: April 9, 1996 /s/Joseph G. Hill
-----------------
Joseph G. Hill
Vice President-Finance,
Chief Financial Officer,
Secretary & Treasurer
16
<PAGE>
EXHIBIT 11.
DMI FURNITURE, INC.
CALCULATIONS OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------ -----------------------
Mar. 2, Mar. 4, Mar. 2, Mar. 4,
1996 1995 1996 1995
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Net income (loss) (Note 7) ($151,000) $153,000 ($335,000) $691,000
========= ========= ========= =========
Average shares of common stock
and common equivalents
outstanding:
Average common shares
outstanding 2,998,661 2,970,026 2,987,899 2,937,297
Common stock equivalents--
dilutive options and convertible
preferred stock - 2,724,169 - 2,850,266
---------- --------- ---------- ---------
Average shares of common
stock and common stock
equivalents outstanding 2,998,661 5,694,195 2,987,899 5,787,563
========= ========= ========= =========
Earnings (loss) per common share (Notes 3 and 7) ($.05) $.03 ($.11) $.12
===== ===== ===== =====
</TABLE>
17
<TABLE> <S> <C>
<PAGE>
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0
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