SECURITIES AND EXCHANGE COMMISSION
Washington, DC
Form 10-QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended March 31, 1995 Commission File No. 0-774
DANIEL GREEN COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 15-0327010
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
DOLGEVILLE, NEW YORK 13329
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (315) 429-3131
Former name, former address and former fiscal year, if changed
since last report: None.
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 Act of 1934 during the preceding twelve months and (2)
has been subject to the filing requirements for at least the past
90 days. YES X NO
CLASS OUTSTANDING AT MARCH 31, 1995
Common Stock $2.50 par value 1,036,892
DANIEL GREEN COMPANY
INDEX
Page
Number
Index . . . . . . . . . . . . . . . . . . . . . . . 1
PART I - Financial Information
Balance Sheets, Assets
March 31, 1995 & December 31, 1994 . . . . . . . 2
Balance Sheets, Liabilities & Stockholders' Equity
March 31, 1995 & December 31, 1994 . . . . . . . 3
Statements of Operations for the three months ended
March 31, 1995 and March 31, 1994 . . . . . . . 4
Statements of Cash Flows for the three months ended
March 31, 1995 and March 31, 1994 . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . 6
Management Discussion & Analysis of Financial Conditions
and Results of Operations . . . . . . . . . . . . 7
PART II - Other Information . . . . . . . . . . . . . 9
<TABLE>
DANIEL GREEN COMPANY
Balance Sheets
ASSETS
<CAPTION> March 31 December 31
1995 1994
(Unaudited) (*)
Current Assets:
<S> <C> <C>
Cash $ 67,271 $ 23,551
Accounts Receivable, trade
less allowances for doubtful accounts
(1995 - $381,295 1994 - $375,000) 4,922,310 6,633,057
Income Tax Refund Receivable 126,877 0
Inventories, at lower of cost (FIFO) or market:
Raw Materials 3,107,264 2,974,790
Work In Process 1,058,659 1,034,896
Finished Goods 8,016,344 6,960,994
Total Inventories 12,182,267 10,970,680
Deferred Tax Asset 245,070 245,070
Other Current Assets 62,852 89,200
Total Current Assets 17,606,647 17,961,558
Property:
Real Estate and Water Power, at cost 3,273,776 3,264,776
Machinery, Equipment, & Lasts, at cost 5,160,256 4,963,060
8,434,032 8,227,836
Less: Accumulated Depreciation 6,372,594 6,279,037
Property, net 2,061,438 1,948,799
Other Assets:
Prepaid Pension Expense 2,202,397 2,179,897
Other Assets 129,755 115,524
Total Other Assets 2,332,152 2,295,421
Total Assets $ 22,000,237 $ 22,205,778
</TABLE>
(*) Derived from audited financial statements.
See notes to financial statements.
<TABLE>
DANIEL GREEN COMPANY
Balance Sheets
Liabilities & Stockholders' Equity
<CAPTION>
March 31 December 31
1995 1994
(Unaudited) (*)
Current Liabilities:
<S> <C> <C>
Notes Payable, line of credit $ 5,175,445 $ 5,107,262
Notes Payable, current 590,336 590,078
Accounts Payable, trade 1,193,219 432,886
Accrued Salaries & Commissions 100,862 186,609
Accrued Cooperative Advertising 0 180,000
Other Accrued Liabilities 174,050 147,640
Income Taxes Payable 0 402,947
Capital Lease Obligation, current 21,291 23,410
Total Current Liabilities 7,255,203 7,070,832
Capital Lease Obligations, non-current 20,505 8,107
Notes Payable, non-current 2,691,005 2,886,306
Deferred Tax Liability 1,130,813 1,130,813
Total Liabilities 11,097,526 11,096,058
Stockholder's Equity
Common Stock 2,592,230 2,592,230
Retained Earnings 8,310,481 8,517,490
Total Stockholders' Equity 10,902,711 11,109,720
Total Liabilities & Stockholders' Equity $ 22,000,237 $ 22,205,778
</TABLE>
* Derived from audited financial statements.
See notes to financial statements.
<TABLE>
DANIEL GREEN COMPANY
Statements of Operations
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31 March 31
1995 1994
<S> <C> <C>
Net Sales $ 4,015,406 $ 4,982,580
Costs and Expenses:
Cost of Goods Sold 2,868,852 4,279,067
Selling, General, & Administrative 1,290,922 1,234,766
Interest Expense 189,519 124,002
Total Costs and Expenses 4,349,293 5,637,835
Loss before credit for Income Taxes (333,887) (655,255)
Credit for Income Taxes 126,877 248,997
Net Loss ($207,010) ($406,258)
Net Loss per Share ($0.20) ($0.39)
Shares Outstanding 1,036,892 1,036,892
</TABLE>
See notes to financial statements.
<TABLE>
DANIEL GREEN COMPANY
Statements of Cash Flows
(Unaudited)
<CAPTION> For the Three Months Ended
March 31 March 31
1995 1994
<S> <C> <C>
Operating Activities:
Net Loss $ (207,010) $ (406,258)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation 93,557 83,213
Amortization 6,134 5,268
Net Pension Credit (22,500) (21,000)
Changes in assets & liabilities:
(increases) decreases in:
Accounts Receivable, trade 1,710,747 1,148,660
Income Tax Refund Receivable (126,877) (248,997)
Inventories (1,211,587) (875,449)
Other Current Assets 26,348 22,469
Other Assets (20,364) 0
increases (decreases) in:
Accounts Payable, trade 760,333 744,331
Accrued Salaries (85,747) (56,139)
Income Taxes Payable (402,947) (145,501)
Other Accrued Liabilities (153,590) (139,508)
Net Cash Provided by Operating Activities 366,497 111,089
Investing Activities:
Purchase of property & equipment (183,483) (129,758)
Net Cash Used in Investing Activities (183,483) (129,758)
Financing Activities:
Borrowings on Line of Credit 5,998,747 6,608,601
Repayments on Line of Credit (5,930,564) (6,578,050)
Borrowings of Notes Payable 0 50,000
Repayments of Notes Payable (195,043) (108,617)
Principal payments under Capital Leases (12,434) (14,374)
Net Cash Used in Financing Activities (139,294) (42,440)
Net Increase (Decrease) in Cash 43,720 (61,109)
Cash at Beginning of Period 23,551 122,278
Cash at End of Period $ 67,271 $ 61,169
</TABLE>
See notes to financial statements.
DANIEL GREEN COMPANY
Notes to Financial Statements
Note 1. In the opinion of the Company, the accompanying unaudited
financial statements contain adjustments, all of which
are of a normal and recurring nature, necessary to
present fairly the financial position as of March 31,
1995 and the results of operations and cash flows for the
three months then ended.
Note 2. The results of operations for the three months ended
March 31, 1995 are not necessarily indicative of the
results to be expected for the full year.
DANIEL GREEN COMPANY
Management Discussion & Analysis of Financial Condition
and Results of Operations
1. Liquidity and Capital Resources
For the quarter ended March 31, 1995, the Company provided
cash of $366,497 from operations. This compares with $111,089
provided in the first quarter of 1994. The reduced loss for the
quarter and a lower accounts receivable balance were major reasons
for this improvement. Receivables are $138,354 or 2.7% less than
in March of 1994, and $1,710,747, (25.8%) less than at December 31,
1994.
Fewer shipments in the first quarter caused an increase in
finished goods inventory for the first three months of 1995. Pairs
in inventory grew to 723,292 from a year end level of 586,093
pairs. In March of 1994, there were 529,650 pairs in inventory.
Due to the higher level of finished goods, production was reduced
by 11.5% in the first quarter of 1995 as compared to 1994. 374,347
pairs were produced in the first quarter of this year.
Total cash increased for the quarter despite greater
investments in plant, property, and equipment, and larger principal
repayments.
The Company currently utilizes a two year $6,000,000 line of
credit with Fleet Bank. This commitment expires April 30, 1996.
The Company was in compliance with all loan covenants as of March
31, 1995.
Management is not aware of any known demands, commitments or
events which would materially affect its liquidity. There are no
material expenditures or commitments which would affect capital
resources in a significant way. Cash generated by operations,
supplemented by short-term borrowings, should cover planned
requirements.
2. Results of Operations
Net sales for the first quarter were $967,174 less than in
1994, which is a 19.4% reduction. Pairs sold were 258,635, or
11.5% less than the first quarter of 1994. The Company believes
that this reduction is due mainly to a poor retailing period in the
fourth quarter of 1994. Many major customers have higher than
usual inventories which caused the reduction in orders to be
shipped in the first quarter of 1995. However, the Company does
not feel that this will affect its overall sales volume for the
year.
The cost of goods sold decreased by $1,410,215 or 33.0% in the
first quarter. Cost of goods sold was 71.4% of net sales as
opposed to 85.9% in 1994. This reduction was primarily a result of
lower labor costs and increased production efficiencies. Other
savings were also seen in the areas of plant maintenance and
utility expenses due to the milder winter.
Selling, general, and administrative expenses rose by $56,156
or 4.5% in the first three months of 1995. This is equivalent of
32.1% of net sales in 1995 as compared to 24.8% in 1994. Increases
were seen in co-op advertising, depreciation, and salaries.
Interest expense rose by $65,517 or 52.8%. The increase was
due to higher borrowing levels and the rise of prime interest
rates.
The Company incurred a net loss before taxes of $333,887,
which was $321,367 less than 1994. Net loss after taxes was
$207,010, or $199,248 less than in 1994.
The Company believes that these early results reflect an
improved production efficiencies. The decline in sales are due to
a poor Christmas retail season by many major customers. We are
expecting our annual sales figures to be even or slightly ahead of
1994. However, since much of the Company's business is due to the
Christmas holiday, a poor economy or consumer confidence could
dramatically reduce it's overall profitability.
DANIEL GREEN COMPANY
Part II - Other Information
1. Legal Proceedings - None.
2. Changes in Securities - None.
3. Default upon Senior Securities - None.
4. Submission of matters to a vote of security holders.
At the Annual Meeting of Stockholders held March 31, 1995,
stockholders present in person and by proxy voted upon two
proposals other than the election of Directors:
1) that the shareholders elect the firm of Deloitte & Touche
as the Company's independent auditors (Proposal II,
listed on the Proxy Statement dated February 22, 1995).
Of the total shares outstanding, 909,462 or 87.7% voted
on Proposal II as follows: 889,103 or 97.8% For
13,650 or 1.5% Against
6,709 or .7% Abstain
0 or 0.0% No Vote
2) upon a proposal to implement a Stock Incentive Plan
(Proposal III, listed on the Proxy Statement dated
February 22, 1995) for key employees which would be
administered by the Compensation Committee of the Board
of Directors. Under the Plan, the Directors would
reserve 100,000 of authorized and unissued shares of the
Company's Common Stock for issuance upon exercise of
options to be granted under the Option Plan. Of the
total shares outstanding, 909,462 or 87.7% voted on
Proposal III as follows: 528,944 or 58.2% For
145,286 or 16.0% Against
18,134 or 2.0% Abstain
217,098 or 23.95 No Vote
5. Other Information - None.
6. Exhibits and Reports on Form 8K
A) There were no reports on Form 8K filed for the three
months ended March 31, 1995.
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.
DANIEL GREEN COMPANY
Registrant
Date:_________________ ____________________________
Kevin C. Thompson, Treasurer
