<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 November 30, 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 NOVEMBER 30, 1996 - 3,056,212
<PAGE>
INDEX
PAGE
Part I. Financial Information
Consolidated Balance Sheets - November 30, 1996
and August 31, 1996 3, 4
Consolidated Statements of Operations - Three Months
Ended November 30, 1996 and December 2, 1995 5
Consolidated Statements of Cash Flows - Three Months
Ended November 30, 1996 and December 2, 1995 6, 7
Notes to Consolidated Financial Statements 8-11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 12-14
Part II. Other Information 15-18
Index to Exhibits
11. Calculations of Earnings Per Share 19
27. Financial Data Schedule 20
<PAGE>
PART I. FINANCIAL INFORMATION
DMIFURNITURE INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
ASSETS Nov. 30, Aug. 31,
------ 1996 1996
------ ------
Current assets:
Cash $30 $97
Restricted cash for debt payments 1,107 1,061
Accounts receivable - net 10,114 7,459
Inventories (Note 4) 10,846 9,853
Other current assets 350 259
Current portion of deferred income taxes (Note 2) 300 782
------ ------
Total current assets 22,747 19,511
Property, plant and equipment - at cost (Note 1) 19,853 19,757
Less accumulated depreciation 9,107 8,844
------ ------
Net property, plant and equipment 10,746 10,913
Other assets:
Intangible pension asset 380 380
Other 164 374
------ ------
544 754
------ ------
$34,037 $31,178
------- -------
------- -------
See accompanying notes.
3
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
(Amounts in thousands)
Nov. 30, Aug. 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996
- - ------------------------------------ ------ ------
Current liabilities:
Trade accounts payable $3,411 $3,165
Accrued liabilities (Note 7) 2,201 1,990
Accrued dividends on preferred
stock (Note 6) 185 0
Long-term debt due within one year 2,025 2,030
------ ------
Total current liabilities 7,822 7,185
Long-term liabilities:
Long-term debt 13,227 11,632
Accrued pension costs 762 817
Deferred compensation 361 376
Deferred income taxes (Note 2) 114 114
------ ------
14,464 12,939
Stockholders' equity:
Series C convertible preferred stock,
$2 par value, 1,995,050 authorized
and outstanding 3,990 3,990
Common stock 306 305
Additional paid-in capital 15,205 15,185
Retained deficit (7,726) (8,402)
Minimum pension liability (24) (24)
------ ------
Total stockholders' equity 11,751 11,054
------ ------
$34,037 $31,178
------- -------
------- -------
See accompanying notes.
4
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DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands)
(Unaudited)
THREE MONTHS ENDED
--------------------
Nov. 30, Dec. 2,
1996 1995
------ ------
Net sales $15,789 $17,729
Cost of sales 12,011 14,506
------ ------
Gross profit 3,778 3,223
Selling, general and
administrative expenses 2,216 2,073
Plant closing reserve (Note 7) (118) 995
------ ------
Operating profit 1,680 155
Interest expense (net) (292) (420)
------ ------
Income (loss) before benefit (provision) for income taxes 1,388 (265)
Benefit (provision) for income taxes (Note 2) (527) 81
------ ------
Net income (loss) (Note 7) $861 ($184)
------ ------
------ ------
Earnings (loss) per common share (Notes 3 and 7) $.15 $(.06)
------ ------
------ ------
See accompanying notes.
5
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
THREE MONTHS ENDED
-----------------------------------
Nov. 30, Dec. 2,
1996 1995
--------------- ---------------
Cash flows from operating activities:
Net income (loss) (Note 7) $861 ($184)
Adjustments to reconcile net income to
net cash provided (used) by
operating activities:
Depreciation and amortization 263 263
Deferred income taxes (Note 2) 482 (110)
Pension costs (55) (9)
Deferred compensation (15) (15)
Changes in assets and liabilities:
Accounts receivable (2,655) 1,356
Inventories (993) 1,729
Other assets 150 (58)
Trade accounts payable 246 532
Accrued liabilities (Note 7) 108 1,205
---------- ----------
Total adjustments (2,469) 4,893
---------- ----------
Net cash provided (used) by
operating activities (1,608) 4,709
---------- ----------
Cash flows provided (used) by
investing activities:
Capital expenditures (96) (54)
Proceeds from the disposal of property,
plant and equipment 124 -
---------- ----------
Cash provided (used) by investing
activities 28 (54)
---------- ----------
See accompanying notes.
6
<PAGE>
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
(Amounts in thousands)
(Unaudited)
THREE MONTHS ENDED
-----------------------------------
Nov. 30, Dec. 2,
1996 1995
--------------- ---------------
Cash flows provided (used) by
financing activities:
Borrowings from line of credit $4,950 $4,750
Payments on line of credit (2,800) (8,850)
Payments on long term debt (560) (419)
Cash dividends on preferred stock (Note 6) - (177)
---------- ----------
Cash provided (used) by
financing activities 1,590 (4,696)
---------- ----------
Increase (Decrease) in cash 10 (41)
Cash - beginning of period 97 295
---------- ----------
Cash - end of period $107 $254
---------- ----------
---------- ----------
Cash paid for:
Interest $287 $461
---------- ----------
---------- ----------
Income taxes $69 -
---------- ----------
---------- ----------
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 November 30, 1996 and for the three months ended
November 30, 1996 and December 2, 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 1997 fiscal year.
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 (benefit) consisted of the following (in thousands):
Three Months Ended
Nov. 30, Dec. 2,
1996 1995
---- ----
Current $45 $29
Deferred 482 (110)
---- -----
Total $527 $(81)
---- -----
8
<PAGE>
The provision for income taxes differs from that computed at the federal
statutory corporate tax rate as follows (in thousands):
Three Months Ended
Nov. 30, Dec. 2,
1996 1995
---- ----
Tax at 34% statutory
rate $472 $(90)
State income taxes 55 9
---- ----
Income Taxes $527 $(81)
---- ----
---- ----
(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
three month period December 2, 1995, 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. See Exhibit 11 for more information.
(4) INVENTORIES
Inventories were comprised of the following at November 30, 1996 and August
31, 1996:
November 30, 1996 August 31, 1996
----------------- ---------------
Finished Products 5,634,000 $4,794,000
Work in Process 521,000 521,000
Raw Materials 4,691,000 4,538,000
--------- ---------
$10,846,000 $9,853,000
----------- ----------
----------- ----------
(5) OTHER MATTERS
The Company has been identified as a potentially responsible party ("PRP")
by the Environmental Protection Agency ("EPA") or state agencies, or has had
claims asserted against it by other parties, in proceedings relating to six
waste disposal facilities which may be subject to remedial action under
Superfund or similar state statutes. These proceedings are based on
allegations that the Company had hazardous substances disposed of at these
sites. At each site, many other parties have been named as 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
agreed to settle claims against it made by PRPs at two sites. With respect to
these sites, the total amount paid by the Company to date or subject to possible
settlement is approximately $52,000. 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.
As of November 30,
9
<PAGE>
1996 the Company has accrued approximately $113,000 for these potential
environmental liabilities. 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 effect on the Company's financial condition, results of operations or
cash flows. Expenses during the first quarter of fiscal 1997 were not material.
See "Item 3. Legal Proceedings".
(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 included 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 expected 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. 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 November 30, 1996 are immaterial to the financial
position of the Company. The carrying amount of net long-term assets to be
disposed of as of November 30, 1996 are approximately $10,000.
During the first quarter of fiscal 1997 the Company sold the Gettysburg,
Pennsylvania warehouse and realized gross proceeds of approximately $130,000.
Based upon this transaction approximately $118,000 of the book provision related
to the initial recording of property, plant and equipment was not needed.
10
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(8) LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121).
This standard establishes accounting standards for evaluating the potential
impairment of long-lived assets, certain identifiable intangibles and goodwill.
The Company adopted the provisions of SFAS No. 121 in the first quarter of
fiscal 1997 and that adoption did not have a material impact on its financial
position or results of operations.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue - Net sales for the first quarter of fiscal 1997 decreased $1,940,000 or
11% from the first quarter of fiscal 1996. This decrease was primarily the
result of decreased sales of residential desks, bedroom furniture, and wood
parts to trade customers, partially offset by an increase in office furniture
sales. Office furniture sales increased 12%; sales to outside trade customers
of lumber and fabricated wood parts by the Company's sawmill/dimension parts
plant decreased 23%; sales of residential desks decreased 51%; and bedroom
furniture sales decreased 6%. The decreases were primarily the result of a
weak retail furniture environment and because in last year's first quarter a
larger drop ship import order was shipped for a major customer than in the
current year.
Gross Margin - The Company's gross margin in the first quarter of fiscal 1997
was 23.9% compared to 18.2% in the first quarter of fiscal 1996. This increase
in gross margin was primarily the result of: higher margin product sales mix;
lower overall production and warehousing overhead expenses as a result of the
success of the Company's asset consolidation program; lower material costs; and
improved operations at the Company's fabrication plant.
Selling, General and Administrative (S,G&A) Expense - For the first quarter of
fiscal 1997, S,G&A expense amounted to $2,216,000 or 14.0% of sales compared to
$2,073,000 or 11.7% of sales for the first fiscal quarter of 1996. This
increase as a percentage of sales is primarily the result of the 11% sales
decrease mentioned above and the semi-fixed nature of many S,G&A expenses.
Interest Expense - For the first quarter of fiscal 1997, net interest was
$292,000 compared to $420,000 for the first quarter of fiscal 1996. This
decrease was the result of lower bank debt balances than in the previous year
due to the success of the Company's asset consolidation program.
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 has resulted 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 which included a book provision of $160,000 related to the recording of
property, plant, and equipment at net realizable value. (See Note 7)
Net current assets and liabilities associated with the Gettysburg,
Pennsylvania facilities as of November 30, 1996 are immaterial to the financial
position of the Company. The carrying amount of net long-term assets to be
disposed of as of November 30, 1996 are approximately $10,000.
During the first quarter of fiscal 1997 the Company sold the Gettysburg,
Pennsylvania warehouse and realized gross proceeds of approximately $130,000.
Based upon this transaction approximately $118,000 of the book provision related
to the initial recording of property, plant and equipment was not needed.
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 58 days for the first
three months of fiscal 1997 compared to 48 days for the three months of fiscal
1996. The
12
<PAGE>
increase is primarily due to seasonal drop shipments to a major customer whose
account should be paid by the end of December, 1996. The Company's average days
of inventory on hand averaged 81 days for the first three months of fiscal 1997
compared to 72 days for the first three months of fiscal 1996. This increase is
primarily due to a temporary build-up of new import furniture and new office
groups. The Company's order backlog at November 30, 1996 was approximately
$7,266,000, a 7% increase from approximately $6,816,000 at the same time last
year.
Key elements of the Consolidated Statements of Cash Flows:
Three Months
1997 1996
---- ----
Net cash provided (used) by operating activities $(1,608,000) $4,709,000
Cash provided (used) for investing activities 28,000 (54,000)
----------- -----------
Net cash flows from operating and investing activities (1,580,000) 4,655,000
Cash provided (used) by financing activities 1,590,000 (4,696,000)
----------- -----------
Net change in cash and cash equivalents $10,000 $(41,000)
----------- -----------
----------- -----------
During the first three months of fiscal 1997 the Company used cash flows
for operating activities of $1,608,000 primarily to finance significant import
drop shipments in October, 1996 and to finance inventory of new import
furniture and office groups, as compared to cash flows provided of $4,709,000
the previous year from the success of the Company's asset consolidation program.
Investing activities provided $28,000 during the first three months of fiscal
1997 from the sale of the Gettysburg, Pennsylvania warehouse partially offset by
capital expenditures, and used $54,000 during the first three months of fiscal
1996 primarily for capital expenditures. Financing activities provided
$1,590,000 during the first three months of fiscal 1997 primarily in funding by
debt compared to funds used of $4,696,000 the same three month period of the
previous year to primarily pay down debt.
The Company has been identified as a potentially responsible party ("PRP")
by the Environmental Protection Agency ("EPA") or state agencies, or has had
claims asserted against it by other parties, in proceedings relating to six
waste disposal facilities which may be subject to remedial action under
Superfund or similar state statutes. These proceedings are based on
allegations that the Company had hazardous substances disposed of at these
sites. At each site, many other parties have been named as 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
agreed to settle claims against it made by PRPs at two sites. With respect to
these sites, the total amount paid by the Company to date or subject to possible
settlement is approximately $52,000. The Company has recorded a reserve of
approximately $113,000 against potential environmental liabilities. 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 effect on the Company's
financial
13
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condition, results of operations or cash flows. Expenses for the year to date
were not material. 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.
14
<PAGE>
PART II. OTHER INFORMATION
Item 3. Legal Proceedings
The Company has been identified as a potentially responsible party ("PRP")
by the Environmental Protection Agency ("EPA") or state agencies, or has had
claims asserted against it by other parties, in proceedings relating to six
waste disposal facilities which may be subject to remedial action under
Superfund or similar state statutes, including the action described in the
following paragraph. These proceedings are based on allegations that the
Company had hazardous substances disposed of at these sites. At each site,
many other parties have been named as 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 agreed to
settle claims against it made by PRPs at two sites. With respect to these
sites, the total amount paid by the Company to date or subject to possible
settlement is approximately $52,000. The Company has recorded a reserve of
approximately $113,000 against potential environmental liabilities, including
potential liabilities in connection with the site described below. 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 effect on the Company's
financial condition, results of operations or cash flows. Expenses for the year
to date were not material.
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, which was estimated to cost $9,156,950.
The parties have estimated that total site costs will be $17 million. On
August 11, 1994, the Company was named, along with over 250 PRPs, as a
third-party defendant by the original PRP defendants. Based on a
court-directed production of information, the Company was assessed a preliminary
allocation of liability among generators of waste of approximately 1.35% by a
consultant. The Company has not paid any amount toward the cost of
investigation or remediation at the Keystone site. The Company is participating
with other third-party defendants in settlement negotiations and in filing a
fourth-party complaint joining over 500 additional parties in the litigation.
The Company 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 the Company requires any remediation. The Company
believes it is likely that a significant
15
<PAGE>
share of the liability will be assigned to the former owners and operators who
have considerable assets. In addition, the federal court has held that a
national waste management company that acquired the Keystone business is liable
as a successor to the former owners and operators.
The Company is a defendant in various lawsuits arising in the normal course
of business including the environmental matters noted above, and which in
management's opinion, are not material to the results of operations or
financial position of the Company, or are adequately covered by insurance.
16
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Company held a special meeting of Series C Preferred Stockholders on
September 11, 1996 to elect two Class II directors of the Company.
Results of the voting were as follows:
For % Against % Abstain
--- - ------- - -------
Mary F. Glasscock 1,588,621 100
Mark E. Pulliam 1,588,621 100
There were 1,588,621 shares of Preferred Stock represented present in
person or by proxy at the meeting constituting 80% of the 1,995,050 shares of
Preferred Stock outstanding, therefore a quorum was present at the meeting.
The Company held its annual meeting of security holders on December 20,
1996 at which security holders; (a) elected eight directors of the Company for
the ensuing year, and, (b) ratified the appointment of Arthur Andersen LLP as
auditors for the year 1997.
Results of the voting in connection with these items were as follows:
ELECTION OF DIRECTORS
For % Against % Abstain
--- - ------- - -------
CLASS I
Donald D. Dreher 2,389,856 99 22,374 1 0
Joseph G. Hill 2,389,809 99 22,421 1 0
Joseph L. Ponce 2,389,856 99 22,374 1 0
Alexander N. Rubin, Jr. 2,390,802 99 21,428 1 0
Thomas M. Levine 2,390,856 99 21,374 1 0
Thomas A. Dieruf 2,390,882 99 21,348 1 0
CLASS II
Mary F. Glasscock 1,788,541 100
Mark E. Pulliam 1,788,541 100
RATIFICATION OF ACCOUNTANTS
Broker Nominee
For % Against % Abstain % Unvoted
--- - ------- - ------- - -------
2,402,410 99 8,199 1 1,621 0 0
There were 2,412,230 shares of Common Stock and 1,788,541 shares of
Preferred Stock represented present in person or by proxy at the meeting
constituting 79% of the 3,052,212 shares of Common Stock outstanding and 90% of
the 1,995,050 shares of Preferred Stock outstanding, therefore a quorum was
present at the meeting.
17
<PAGE>
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
Form 8-K filed on September 19, 1996 with respect to the election
of two Class II Directors is incorporated herein by reference.
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: January 10, 1997 /s/Joseph G. Hill
------------------------
Joseph G. Hill
Vice President-Finance,
Chief Financial Officer,
Secretary & Treasurer
18
<PAGE>
EXHIBIT 11.
DMI FURNITURE, INC.
CALCULATIONS OF EARNINGS PER SHARE
THREE MONTHS ENDED
------------------------
Nov. 30, Dec. 2,
1996 1995
----------- -----------
Net income (loss) (Note 7) $861,000 ($184,000)
----------- -----------
----------- -----------
Average shares of common stock
and common equivalents
outstanding:
Average common shares
outstanding 3,056,212 2,977,137
Common stock equivalents--
dilutive options and convertible
preferred stock (a) 2,799,868 -
----------- -----------
Average shares of common
stock and common stock
equivalents outstanding 5,856,080 2,977,137
----------- -----------
----------- -----------
Earnings (loss) per common share (Notes 3 and 7) $0.15 $(.06)
----- -----
----- -----
(a) For the period ended December 2, 1995, 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.
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-30-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> NOV-30-1996
<CASH> 1138
<SECURITIES> 0
<RECEIVABLES> 10266
<ALLOWANCES> 152
<INVENTORY> 10846
<CURRENT-ASSETS> 22747
<PP&E> 19853
<DEPRECIATION> 9107
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<BONDS> 13228
0
3990
<COMMON> 306
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<SALES> 15620
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<CGS> 11956
<TOTAL-COSTS> 12011
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<INCOME-TAX> 527
<INCOME-CONTINUING> 861
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 861
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
