<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal quarter ended February 26, 2000
----------------------------------------------
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 Ext. 227
-----------------------
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 February 26, 2000 - 4,130,255
1
<PAGE> 2
INDEX
Part I. Financial Information Page
----
Consolidated Balance Sheets - February 26, 2000
and August 28, 1999 3, 4
Consolidated Statements of Income - Three and Six Months
Ended February 26, 2000 and February 27, 1999 5
Consolidated Statements of Cash Flows - Six Months Ended
February 26, 2000 and February 27, 1999 6, 7
Notes to Consolidated Financial Statements 8-11
Management's Discussion and Analysis of Financial Condition
and Results of Operations 12-15
Part II. Other Information 16-17
Index to Exhibits
27. Financial Data Schedule 18
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
DMI FURNITURE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Feb. 26, Aug. 28,
ASSETS 2000 1999
- ------ ---- ----
<S> <C> <C>
Current assets:
Cash $ 1,251 $ 785
Accounts receivable - net 16,820 12,686
Inventories (Note 4) 17,642 18,905
Other current assets 904 471
Current portion of deferred income taxes 1,014 1,103
------- -------
Total current assets 37,631 33,950
Property, plant and equipment - at cost (Note 1) 20,132 22,750
Less accumulated depreciation 10,089 11,871
------- -------
Net property, plant and equipment 10,043 10,879
Other assets 602 450
------- -------
Total Assets $48,276 $45,279
======= =======
</TABLE>
See accompanying notes.
3
<PAGE> 4
DMI FURNITURE, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
(Amounts in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Feb. 26, Aug. 28,
LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999
- ------------------------------------ ---- ----
<S> <C> <C>
Current liabilities:
Trade accounts payable $ 3,266 $ 2,527
Accrued liabilities 3,239 2,665
Long-term debt due within one year 1,500 1,509
------- -------
Total current liabilities 8,005 6,701
Long-term liabilities:
Long-term debt 25,526 25,425
Accrued pension costs 713 636
Deferred compensation 213 228
Deferred income taxes 549 549
------- -------
27,001 26,838
Stockholders' equity:
Common stock 413 405
Additional paid-in capital 16,750 16,551
Retained deficit (3,642) (4,965)
Minimum pension liability (251) (251)
------- -------
Total stockholders' equity 13,270 11,740
------- -------
Total liabilities and stockholders' equity $48,276 $45,279
======= =======
</TABLE>
See accompanying notes.
4
<PAGE> 5
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Feb. 26, Feb. 27, Feb. 26, Feb. 27,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $24,020 $20,287 $52,398 $43,290
Cost of sales 19,659 16,342 42,393 34,617
------- ------- ------- -------
Gross profit 4,361 3,945 10,005 8,673
Selling, general and
administrative expenses 3,210 2,988 6,933 5,970
Plant closing reserve (Note 7) (125) 0 (125) 0
Operating profit 1,276 957 3,197 2,703
Other income (expense):
Interest expense (net) (548) (441) (1,051) (894)
Gain on disposal of property, plant & equipment 15 0 15 0
------- ------- ------- -------
(533) (441) (1,036) (894)
------- ------- ------- -------
Income before income taxes 743 516 2,161 1,809
Provision for income taxes (Note 2) (299) (196) (838) (684)
------- ------- ------- -------
Net income $ 444 $ 320 $ 1,323 $ 1,125
======= ======= ======= =======
Earnings per common share (Note 3):
Basic 0.11 $ 0.08 $ 0.32 $ 0.29
======= ======= ======= =======
Diluted 0.10 $ 0.07 $ 0.31 $ 0.26
======= ======= ======= =======
</TABLE>
See accompanying notes.
5
<PAGE> 6
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
Feb. 26, Feb. 27,
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,323 $ 1,125
Adjustments to reconcile net income to
net cash provided (used) by
operating activities:
Gain on sale of assets (15) --
Depreciation and amortization 540 633
Deferred income taxes (Note 2) 89 77
Pension costs 77 (72)
Deferred compensation (15) (15)
Changes in assets and liabilities:
Accounts receivable (4,134) (2,467)
Inventories 1,263 485
Other assets (37) (69)
Trade accounts payable 739 (546)
Accrued liabilities 429 (641)
------ ------
Total adjustments (1,064) (2,615)
------ ------
Net cash provided (used) by operating activities 259 (1,490)
------ ------
Cash flows used by investing activities:
Capital expenditures (208) (178)
Proceeds from sale of property, plant & equipment (Note 7) 115 0
------ ------
Cash used by investing activities (93) (178)
------ ------
</TABLE>
See accompanying notes.
6
<PAGE> 7
DMI FURNITURE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
Feb. 26, Feb. 27,
2000 1999
---- ----
<S> <C> <C>
Cash flows provided by financing activities:
Borrowings from line of credit 17,200 17,267
Payments on line of credit (16,350) (15,550)
Payments on long term debt (758) (642)
Proceeds from stock options exercised 208 78
-------- --------
Cash provided by financing activities 300 1,153
Increase (decrease) in cash 466 (515)
Cash - beginning of period 785 1,092
-------- --------
Cash - end of period $ 1,251 $ 577
-------- --------
Cash paid for:
Interest $ 1,033 $ 895
======== ========
Income taxes $ 487 $ 1,034
======== ========
</TABLE>
See accompanying notes.
7
<PAGE> 8
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 February 26, 2000 and for the three and six months
ended February 26, 2000 and February 27, 1999 are unaudited but include all
adjustments which are, in the opinion of management, necessary for 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 2000 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.
For the periods ending February 26, 2000 and February 27, 1999,
comprehensive income and net income are equal.
(2) Income Taxes
Income tax expense consisted of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Feb. 26, Feb. 27, Feb. 26, Feb. 27,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Current $264 $173 $749 $607
Deferred 35 23 89 77
---- ---- ---- ----
Total $299 $196 $838 $684
==== ==== ==== ====
</TABLE>
8
<PAGE> 9
The provision for income taxes differs from that computed at the
federal statutory corporate tax rate as follows (in thousands):
Three Months Ended Six Months Ended
Feb. 26, Feb. 27, Feb. 26, Feb. 27,
2000 1999 2000 1999
---- ---- ---- ----
Tax at 34% statutory rate $253 $175 $735 $615
State income taxes 46 21 103 69
---- ---- ---- ----
Income Taxes $299 $196 $838 $684
==== ==== ==== ====
(3) Earnings Per Common Share
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
No. 128"). This standard modifies disclosure requirements for companies required
to report earnings per share ("EPS") to include presentations of Basic EPS
(which includes no dilution of common stock equivalents) and, if applicable,
Diluted EPS (which reflects the potential dilution of common stock equivalents).
The standard was effective for the Company with the completion of its fiscal
1998 second quarter.
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Three Months Ended Six Months Ended
Feb. 26, Feb. 27, Feb. 26, Feb. 27,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $444 $320 $1,323 $1,125
===== ===== ====== ======
Average common shares outstanding 4,104 3,977 4,075 3,940
Common stock equivalents-dilutive
Options 143 506 129 460
----- ----- ------ ------
Average shares of common stock
and equivalents outstanding 4,247 4,483 4,204 4,400
===== ===== ====== ======
Basic earnings per share $.11 $.08 $.32 $.29
===== ===== ====== ======
(Net income applicable to common stock
divided by average common shares
outstanding)
Diluted earnings per share $.10 $.07 $.31 $.26
===== ===== ====== ======
(Net income divided by average shares
of common stock and equivalents
outstanding)
</TABLE>
9
<PAGE> 10
(4) Inventories
Inventories were comprised of the following at February 26, 2000 and
August 28, 1999:
<TABLE>
<CAPTION>
Feb. 26, 2000 Aug. 28,1999
------------- ------------
<S> <C> <C>
Finished Products $12,676,000 $13,415,000
Work in Process 525,000 525,000
Raw Materials 4,441,000 4,965,000
----------- -----------
$17,642,000 $18,905,000
=========== ===========
</TABLE>
(5) Other matters
The Company is currently subject to claims under federal and state
environmental laws based on allegations that the Company had hazardous
substances disposed of at three waste disposal sites. After depositing $57,000
in a trust fund under the terms of a tentative settlement of claims arising from
one site and paying its portion of preliminary investigation and remediation
costs at the other two sites, the Company retains a reserve of approximately
$41,000 against potential environmental liabilities. Due to the limited nature
of the Company's involvement in these environmental 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.
(6) Major customers and sources of supply
The Company's customers include large furniture chain store retailers,
wholesale clubs, catalog retailers, mass merchandisers, and independent
distributors, as well as numerous smaller retailers. The Company's four largest
customers accounted for approximately 46% and 45% of the Company's total sales
for the three and six months ended February 26, 2000 respectively. One customer,
Sam's Club, a division of Wal-Mart Stores, Inc., accounted for more than 10% of
the Company's total net sales for the three and six months ended February 26,
2000. The loss of more than one of these customers at the same time or one of
the largest four could have a material adverse effect on the business of the
Company. As of February 26, 2000, one customer accounted for approximately 39%
of total accounts receivable, attributable in part to significant sales to this
customer during the month of February.
Approximately 62% of the Company's total sales are of imported product
for the first six months of fiscal 2000, as compared to 53% of sales for the
first six months of fiscal 1999. The
10
<PAGE> 11
Company sources these products from various factories in Asia and Mexico, both
through agents and direct, based primarily on Company developed designs. The
Company maintains a showroom, production office, and quality control
organization in China and Thailand. An unanticipated interruption in the flow of
products from one or more of these factories could have a short-term material
adverse effect on the Company's results of operations.
(7) Plant closing
During the fourth quarter of fiscal 1999 management committed to
permanently close its Ferdinand, Indiana furniture manufacturing plant during
fiscal 2000. This closing will reduce the underutilized manufacturing capacity
of the Company. The Company recorded a pre-tax charge of approximately $600,000
in the fourth quarter of fiscal 1999 related to this closing. The charge
included book provisions of approximately: $125,000 related to the recording of
property, plant, and equipment at net realizable value; $215,000 for recording
certain inventory items at net realizable value; $85,000 for a pension
curtailment loss; $105,000 for severance pay; and approximately $70,000 for
costs to be incurred after operations cease that are associated with the closing
as well as future occupancy related costs. The severance pay, which is called
for by Company policy, is related to the termination of certain salaried and
support staff personnel. During the quarter ended February 26, 2000, the Company
entered into a contract to sell property, plant, and equipment related to this
closed plant. Subsequent to the end of the second fiscal quarter, the
transaction was completed resulting in a $144,000 gain on sale of assets which
will be reflected in the fiscal 2000 third quarter results of operations. The
Company recorded a $125,000 plant closing reserve credit in the second fiscal
quarter as certain plant closing costs became known. The balance in the plant
closing reserve as of February 26, 2000 is $69,000.
11
<PAGE> 12
Forward-Looking Statements
The information set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and in the other portions of this report
includes forward-looking statements about the Corporation and its business. For
this purpose, the use of words such as "believes," "anticipates," "plans,"
"expects," and similar expressions are intended to identify forward-looking
statements. Factors that realistically could cause results to differ materially
from those projected in the forward-looking statements include the cyclical and
seasonal nature of the furniture market; the availability and cost of raw
materials and labor; availability, terms and deployment of capital; events that
disrupt the flow of goods from off-shore manufacturing sources; merchandising
decisions by one or more of the Company's major customers that adversely affect
their purchases of the Company's furniture products; changes in fashion or
tastes that adversely affect consumer perception of the Company's furniture
products; general conditions in the capital markets or in the general economy;
demographic changes that affect consumer purchases of furniture; competition;
and other factors identified in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" below, in "Item 1. Business" of
the Company's 1999 Annual Report on Form 10-K, and in the Company's other
filings with the Securities and Exchange Commission.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Revenue - Net sales for the second quarter of fiscal 2000 increased $3,733,000
or approximately 18% from the second quarter of fiscal 1999. This increase was
primarily the result of increased sales by the Company's Wynwood and Homestyles
divisions, and by DMI Desk Company (small office/home office). Sales by Wynwood
increased approximately 60%; sales by DMI Desk Company increased approximately
21%; and sales by Homestyles were approximately 7% of total sales while last
year they were beginning shipments. Sales by Dolly Madison were approximately
24% less than the previous year, and sales by DMI Office Furniture were
approximately the same as last year.
Net sales for the six months of fiscal 2000 increased $9,108,000 or
approximately 21% from the six months of fiscal 1999. This increase was
primarily the result of increased sales by the Company's Wynwood and Homestyles
divisions, and by DMI Desk Company (small office/home office), and DMI Office
Furniture. Sales by Wynwood increased approximately 98%; sales by DMI Desk
Company increased approximately 8%; sales by DMI Office Furniture increased by
approximately 6%; and sales by Homestyles were approximately 9% of total sales
12
<PAGE> 13
while last year they were beginning shipments. Sales by Dolly Madison were
approximately 11% less than the previous year.
Gross Margin - The Company's gross margin in the second quarter of fiscal 2000
was 18.2% compared to 19.4% in the second quarter of fiscal 1999. This decrease
in gross margin was primarily the result of: lower profits from the furniture
plant which was in the process of permanently closing; lower profits from the
Company's largest plant due to start-up inefficiencies as it manufactures office
furniture for the first time; and lower profits from the Company's vertically
integrated plants due to lower production levels and higher material costs. The
Company anticipates increased manufacturing efficiencies in future periods as
the largest furniture plant adjusts to manufacturing office furniture along with
bedroom furniture.
The Company's gross margin for six months of fiscal 2000 was 19.1%
compared to 20% for the six months of fiscal 1999. This decrease in gross margin
was primarily the result of the reasons mentioned in the preceding paragraph.
Selling, General and Administrative (S,G&A) Expense - For the second quarter of
fiscal 2000, S,G&A expense amounted to $3,210,000 or 13.4% of sales compared to
$2,988,000 or 14.7% of sales for the second quarter of fiscal 1999. The primary
reason for the decline as a percent of sales is the fixed nature of the majority
of these expenses as compared to the substantial increase in sales.
For the first six months of fiscal 2000, S,G&A expense amounted to
$6,933,000 or 13.2% of sales compared to $5,970,000 or 13.8% of sales for the
first six months of fiscal 1999. The primary reason for the decline as a percent
of sales is the reason mentioned above.
Plant Closing Reserve - During the second quarter of fiscal 2000, the Company
sold the property, plant & equipment of the closed plant, and the proceeds were
greater than the net book value thereby creating both the plant closing reserve
credit of $125,000 and the gain on sale of assets of $144,000. (See Note 7)
Operating Profit - For the second quarter of fiscal 2000, operating profit was
$1,276,000 or 5.3% of sales, including a $125,000 plant closing reserve credit.
For the second quarter of fiscal 1999, operating profit was $957,000 or 4.7% of
sales. The primary reason for the increase in the operating profit margin is the
plant closing reserve credit. For the six months ended February 26, 2000,
operating profit was $3,197,000 or 6.1% of sales including the $125,000 plant
closing reserve credit, as compared to $2,703,000 or 6.2% of sales for the first
six months of the previous year. This decrease as a percent of sales was
primarily a result of the reasons mentioned above for the change in gross
margin.
Interest Expense - For the second quarter of fiscal 2000, net interest was
$548,000 compared to $441,000 for the second quarter of fiscal 1999. For the
first six months of fiscal 2000, net interest expense was $1,051,000 compared to
$894,000 for the previous year. These increases were primarily the result of
borrowings to finance higher levels of accounts receivable and
13
<PAGE> 14
inventory to support the sales growth, and higher interest rates. During the
first quarter of fiscal 1999, the Company implemented the use of interest rate
swaps as a cash flow hedge to effectively fix the interest rate on part of its
variable rate debt. As of February 26, 2000, $8 million of the Company's
variable rate debt was subject to interest rate swaps.
During the fourth quarter of fiscal 1999 management committed to
permanently close its Ferdinand, Indiana furniture manufacturing plant during
fiscal 2000. This closing will reduce the underutilized manufacturing capacity
of the Company. The Company recorded a pre-tax charge of approximately $600,000
in the fourth quarter of fiscal 1999 related to this closing. The charge
included book provisions of approximately: $125,000 related to the recording of
property, plant, and equipment at net realizable value; $215,000 for recording
certain inventory items at net realizable value; $85,000 for a pension
curtailment loss; $105,000 for severance pay; and approximately $70,000 for
costs to be incurred after operations cease that are associated with the closing
as well as future occupancy related costs. The severance pay, which is called
for by Company policy, is related to the termination of certain salaried and
support staff personnel. During the quarter ended February 26, 2000, the Company
entered into a contract to sell property, plant, and equipment related to this
closed plant. Subsequent to the end of the second fiscal quarter, the
transaction was completed resulting in a $144,000 gain on sale of assets which
will be reflected in the fiscal 2000 third quarter results of operations. The
Company recorded a $125,000 plant closing reserve credit in the second fiscal
quarter as certain plant closing costs became known. The balance in the plant
closing reserve as of February 26, 2000 is $69,000.
Approximately 62% of the Company's total sales are of imported product.
The Company sources these products from various factories in Asia and Mexico,
both through agents and direct, based primarily on Company developed designs.
The Company maintains a showroom, production office, and quality control
organization in China and Thailand. An unanticipated interruption in the flow of
products from one or more of these factories could have a short-term material
adverse effect on the Company's results of operations.
Liquidity and Capital Resources - Demands for funds relate to payments
for raw materials and other operating costs, debt obligations, 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 59 days for the first six months of fiscal 2000 and 56 days
for the first six months of fiscal 1999. This increase was primarily the result
of slower payments by several import customers. The Company's average days of
inventory on hand averaged 81 days for the first six months of fiscal 2000
compared to 89 days for the first six months of fiscal 1999. This decrease is
primarily the result of a 21% sales increase and a 12% increase in inventories.
14
<PAGE> 15
Key elements of the Consolidated Statements of Cash Flows:
<TABLE>
<CAPTION>
Six Months
2000 1999
---- ----
<S> <C> <C>
Net cash provided (used) by operating activities $259,000 $(1,490,000)
Cash used for investing activities (93,000) (178,000)
-------- ------------
Net cash flows from operating and investing activities 166,000 (1,668,000)
Cash provided by financing activities 300,000 1,153,000
-------- ------------
Net change in cash and cash equivalents $466,000 $ (515,000)
======== ============
</TABLE>
During the first six months of fiscal 2000, the Company provided cash
flows from operating activities of $259,000 compared to cash flows used of
$1,490,000 for the six months period in fiscal 1999. The operating cash flows
provided in the current year are greater than funds used the previous year
primarily due to the decreased inventory, and higher accounts payable and
accrued expenses, partially offset by higher accounts receivable. Investing
activities used approximately $93,000 during the first six months of fiscal 2000
for routine capital expenditures partially offset by proceeds from the sales of
property, plant, and equipment. Investing activities used $178,000 during the
first six months of fiscal 1999 for routine capital expenditures. Financing
activities provided $300,000 and $1,153,000 during the first six months of
fiscal 2000 and fiscal 1999 respectively, which came primarily from net
borrowings on the revolving line of credit.
The Company is currently subject to claims under federal and state
environmental laws based on allegations that the Company had hazardous
substances disposed of at three waste disposal sites. Due to the limited nature
of the Company's involvement in these environmental 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.
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.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's primary market risk exposure with regard to financial
instruments is changes in interest rates. At February 26, 2000, a hypothetical
100 basis points increase in short term interest rates would result in a
reduction of approximately $106,000 in annual pretax earnings. This estimate
assumes no change in the volume or composition of debt at February 26, 2000. The
Company has effectively fixed the interest on approximately $8 million of its
long-
15
<PAGE> 16
term debt through the use of interest rate swaps, and the above estimated
earnings reduction takes these swaps into account. The fair market value of
these swaps is immaterial.
PART II. OTHER INFORMATION
Item 3. Legal Proceedings
The Company is a defendant in various lawsuits arising in the normal
course of business, including several environmental matters. The Company
presently retains a reserve of approximately $41,000 against potential
environmental liabilities. In management's opinion, these lawsuits are not
material to the results of operations or financial position of the Company, or
are adequately covered by insurance.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of security holders on February 15,
2000 at which security holders; (a) elected five directors of the Company for
the ensuing year, (b) approved an amendment to the 1993 Long-Term Incentive
Stock Plan For Employees, and, (c) ratified the appointment of Arthur Andersen
LLP as auditors for the 2000 fiscal year.
Results of the voting in connection with these items were as follows:
Election of Directors
- ---------------------
For % Against %
--- - ------- -
Donald D. Dreher 3,299,263 81 14,154 0
Joseph G. Hill 3,299,220 81 14,197 0
Joseph L. Ponce 3,299,317 81 14,100 0
Thomas M. Levine 3,299,317 81 14,100 0
David M. Martin 3,299,317 81 14,100 0
Amendment of Incentive Stock Plan
- ---------------------------------
For % Against %
--- - ------- -
2,896,427 72 412,394 10
Ratification of Accountants
- ---------------------------
For % Against %
--- - ------- -
3,300,544 81 12,136 0
There were 3,313,417 shares of Common Stock represented present in
person at the meeting constituting 82% of the 4,050,214 shares of Common Stock
outstanding, therefore a quorum was present at the meeting.
16
<PAGE> 17
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
None.
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 13, 2000 /s/Joseph G. Hill
-----------------
Joseph G. Hill
Vice President-Finance,
Chief Financial Officer,
Secretary & Treasurer
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-02-2000
<PERIOD-START> AUG-29-2000
<PERIOD-END> FEB-26-2000
<CASH> 1,251
<SECURITIES> 0
<RECEIVABLES> 17,081
<ALLOWANCES> 261
<INVENTORY> 17,642
<CURRENT-ASSETS> 37,631
<PP&E> 20,132
<DEPRECIATION> 10,089
<TOTAL-ASSETS> 48,276
<CURRENT-LIABILITIES> 8,005
<BONDS> 25,526
0
0
<COMMON> 413
<OTHER-SE> 12,857
<TOTAL-LIABILITY-AND-EQUITY> 48,276
<SALES> 52,272
<TOTAL-REVENUES> 52,398
<CGS> 42,207
<TOTAL-COSTS> 42,393
<OTHER-EXPENSES> 6,793
<LOSS-PROVISION> 83
<INTEREST-EXPENSE> 1,051
<INCOME-PRETAX> 2,161
<INCOME-TAX> 838
<INCOME-CONTINUING> 1,323
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,323
<EPS-BASIC> .32
<EPS-DILUTED> .31
</TABLE>
