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 June 30, 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 JUNE 30, 1995
Common Stock $2.50 par value 1,036,892 Shares
DANIEL GREEN COMPANY
INDEX
Page
Number
Index . . . . . . . . . . . . . . . . . . . . . . . 1
PART I - Financial Statements
Balance Sheets, Assets
June 30, 1995 & December 31, 1994 . . . . . . . 2
Balance Sheets, Liabilities & Stockholders' Equity
June 30, 1995 & December 31, 1994 . . . . . . . 3
Statements of Operations for the three & six month
periods ended June 30, 1995 & 1994 . . . . . . . 4
Statements of Cash Flows for the six months ended
June 30, 1995 & 1994 . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . 6
Management Discussion & Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . 7
PART II - Other Information . . . . . . . . . . . . . 9
<TABLE>
DANIEL GREEN COMPANY
Balance Sheets
ASSETS
<CAPTION>
June 30 December 31
1995 1994
(Unaudited) (*)
Current Assets:
<S> <C> <C>
Cash $ 68,309 $ 23,551
Accounts Receivable, trade
less allowances for doubtful accounts
(1995 - $359,032 1994 - $375,000) 4,773,385 6,633,057
Income Tax Refund Receivable 257,275 0
Inventories, at lower of cost (FIFO) or market:
Raw Materials 3,560,573 2,974,790
Work In Process 1,260,056 1,034,896
Finished Goods 9,377,348 6,960,994
Total Inventories 14,197,977 10,970,680
Deferred Tax Asset 245,070 245,070
Other Current Assets 56,655 89,200
Total Current Assets 19,598,671 17,961,558
Property:
Real Estate and Water Power, at cost 3,273,776 3,264,776
Machinery, Equipment, & Lasts, at cost 5,297,281 4,963,060
8,571,057 8,227,836
Less: Accumulated Depreciation 6,466,540 6,279,037
Property, net 2,104,517 1,948,799
Other Assets:
Prepaid Pension Expense 2,224,897 2,179,897
Other Assets 155,874 115,524
Total Other Assets 2,380,771 2,295,421
Total Assets $ 24,083,959 $ 22,205,778
</TABLE>
(*) Derived from Audited Financial Statements.
<TABLE>
DANIEL GREEN COMPANY
Balance Sheets
Liabilities & Stockholders' Equity
<CAPTION>
June 30 December 31
1995 1994
(Unaudited) (*)
Current Liabilities:
<S> <C> <C>
Notes Payable, line of credit $ 7,765,479 $ 5,107,262
Notes Payable, current 590,596 590,078
Accounts Payable, trade 982,282 432,886
Accrued Salaries & Commissions 101,139 186,609
Accrued Cooperative Advertising 0 180,000
Other Accrued Liabilities 243,366 147,640
Income Taxes Payable 0 402,947
Capital Lease Obligation, current 22,409 23,410
Total Current Liabilities 9,705,271 7,070,832
Capital Lease Obligations, non-current 14,661 8,107
Notes Payable, non-current 2,543,257 2,886,306
Deferred Tax Liability 1,130,813 1,130,813
Total Liabilities 13,394,002 11,096,058
Stockholder's Equity
Common Stock 2,592,230 2,592,230
Retained Earnings 8,097,727 8,517,490
Total Stockholders' Equity 10,689,957 11,109,720
Total Liabilities & Stockholders' Equity $ 24,083,959 $ 22,205,778
</TABLE>
(*) Derived from Audited Financial Statements.
<TABLE>
DANIEL GREEN COMPANY
Statements of Operations
(Unaudited)
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $ 4,610,074 $ 4,354,068 $ 8,625,480 $ 9,336,648
Costs and Expenses:
Cost of Goods Sold 3,411,868 3,553,554 6,280,720 7,832,621
Selling, General,
& Administrative 1,309,757 1,044,126 2,600,679 2,278,892
Interest Expense 231,600 164,944 421,119 288,946
Total Costs and Expenses 4,953,225 4,762,624 9,302,518 10,400,459
Income (Loss) before
credit for Income Taxes (343,151) (408,556) (677,038) (1,063,811)
Credit for Income Taxes 130,398 155,251 257,275 404,248
Net Income (Loss) ($212,753) ($253,305) ($419,763) ($659,563)
Net Income (Loss) per Share ($0.20) ($0.25) ($0.40) ($0.64)
Shares Outstanding 1,036,892 1,036,892 1,036,892 1,036,892
</TABLE>
<TABLE>
DANIEL GREEN COMPANY
Statements of Cash Flows
(Unaudited)
<CAPTION>
For the Six Months Ended
June 30 June 30
1995 1994
<S> <C> <C>
Operating Activities:
Net Loss $ (419,763) $ (659,563)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation 187,502 161,998
Amortization 12,268 (77,732)
Net Pension Credit (45,000) (42,000)
Changes in assets & liabilities:
(increases) decreases in:
Accounts Receivable, trade 1,859,672 1,768,360
Income Tax Refund Receivable (257,275) (404,248)
Inventories (3,227,297) (1,898,543)
Deferred Tax Asset 0 0
Other Current Assets (20,073) 32,995
increases (decreases) in:
Accounts Payable, trade 549,396 120,746
Accrued Salaries (85,470) (84,849)
Accrued Interest 0 0
Income Taxes Payable (402,947) (145,501)
Other Accrued Liabilities (84,274) (189,446)
Deferred Tax Liability 0 0
Net Cash Used by Operating Activities: (1,933,261) (1,417,783)
Investing Activities:
Purchase of property & equipment (321,990) (164,503)
Net Cash Used in Investing Activities: (321,990) (164,503)
Financing Activities:
Borrowings on Line of Credit 13,809,257 1,705,044
Repayments on Line of Credit (11,151,040) (2,200,000)
Borrowings of Notes Payable 0 2,300,000
Repayments of Notes Payable (342,531) (255,144)
Principal payments under capital leases (15,677) (29,175)
Net Cash Provided by Financing Activities 2,300,009 1,520,725
Net Increase (Decrease) in Cash 44,758 (61,561)
Cash at Beginning of Period 23,551 122,278
Cash at End of Period $ 68,309 $ 60,717
</TABLE>
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 recurring nature, necessary to present
fairly the financial position as of June 30, 1995 and the
results of operations and cash flows for the three and
six months then ended.
Note 2. The results of operations for the three and six months
ended June 30, 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 six months ended June 30, 1995, the Company used cash
of $1,933,261 from operations as opposed to usage of $1,417,783 for
the first six months of 1994. Inventory increases of $3,227,297
caused the increased usage of cash. Finished goods have increased
by $2,416,354 or 34.7% from 12/31/94 levels and $2,092,166 or 28.7%
from 6/30/94 levels. Finished goods inventory now stands at
851,120 pairs, an increase of 265,027 pair (45.2%) from 12/31/94
and 143,629 pairs (20.3%) from 6/30/94. Raw materials and work in
process have also shown increases (19.7% and 21.8% respectively)
from year end figures and 9.2% and 41.6% respectively from June
1994 figures. Due to the higher finished goods inventory levels,
production was cut in the second quarter of 1995 by 9.5% from the
second quarter of 1994. This follows a 11.5% reduction in the
first quarter of the year resulting in an overall reduction of
10.5% or 91,926 pairs. Management feels confident that the
inventory levels will be reduced to normal quantities by year end
due to increase year to date orders for future shipments.
A lesser loss, lower accounts receivables, and higher accounts
payable levels helped to offset the cash used to build the
inventories. Increased cash used by operations and investing
activities led to a reliance upon $2,321,239 of cash to be provided
by financing through the first six months of 1995. This compares
to $1,520,725 provided by financing through the first six months of
1994.
The Company's current line of credit was revised twice in the
second quarter of 1995. Initially, Fleet Bank financed a two year
$6,000,000 line of credit which expires on April 30, 1996. The
first revision raised the line to $6.5 million with the second
revision raising the line to $8.5 million through the remainder of
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. As a result of negotiations
with the lending institute, our line of credit has been approved.
Cash generated by operations, supplemented by short-term
borrowings, should cover planned requirements.
2. Results of Operations
Net sales for the second quarter of 1995 increased by 5.9% to
$4,610,074 over the second quarter of 1994. Pairs shipped
increased by 35,059 (11.9%) to 329,781 for the second quarter of
this year as compared with last. However, the year to date sales
figures continue to lag behind 1994 by $711,168 or 7.6% on 18,560
(3.1%) fewer pairs shipped. Total net shipments through the first
six months of 1995 equal 588,416 pairs. The second quarter
improvement is due to large shipments of slippers to some major
accounts. Our increased level of orders for future shipments
indicate a high level of customer satisfaction with our new styles
as well as our carryover lines. Orders for the Daniel Green
Slipper line have shown significant growth in 1995, and bode well
for a successful year. However, to date, only a small portion of
orders for the holiday season have been received, and a poor
economy or consumer confidence level would reduce the Company's
profitability for the remainder of the year.
Improved production efficiencies and a concerted effort to
control costs have led to lower overall costs and increased gross
margins. The cost of goods sold (as a percentage of net sales)
was 74.0% for the second quarter of 1995 and ended at 72.8% through
the first six months of the year. That compares with 81.6% and
83.9% for those respective periods of 1994. Savings were found in
labor, insurance, maintenance, and utility areas.
Selling, general and administrative expenses rose by $265,631
(25.4%) for the quarter and $321,787 (14.1%) for the year to date
from those periods of 1994. The major areas of increase were co-op
advertising, legal services, and salaries. Interest expense
increased by 40.4% for the second quarter and 45.7% for the six
months ended June 30, 1995 as opposed to 1994 levels.
The Company incurred a net loss before taxes of $343,151 in
the second quarter of 1995. This shows an improvement of $65,405
or 16.0% over that period of 1994. The net loss after taxes of
$212,753 equates to $.20 per share as opposed to a $.25 loss per
share in 1994.
Through the first six months of 1995, the Company lost
$677,038 before credit for taxes, an improvement of $386,773 or
36.4% over 1994. The net loss after taxes of $419,763 equates to
a $.40 loss per share in 1995 as opposed to a $.64 loss per share
through the first six months of 1994.
The Company's efforts through the remainder of the year will
be to improve its sales, not only by matching 1994 levels but by
improving upon them. Efforts have already been made, and will
continue, to keep the cost of goods sold at more profitable levels
to increase the overall profitability of the Company.
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 - None.
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 June 30, 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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 68,309
<SECURITIES> 0
<RECEIVABLES> 4,773,385
<ALLOWANCES> 359,032
<INVENTORY> 14,197,977
<CURRENT-ASSETS> 19,598,671
<PP&E> 8,571,057
<DEPRECIATION> 6,466,540
<TOTAL-ASSETS> 24,083,959
<CURRENT-LIABILITIES> 9,705,271
<BONDS> 0
<COMMON> 2,592,230
0
0
<OTHER-SE> 8,097,727
<TOTAL-LIABILITY-AND-EQUITY> 24,083,959
<SALES> 8,625,480
<TOTAL-REVENUES> 8,625,480
<CGS> 6,280,720
<TOTAL-COSTS> 6,280,720
<OTHER-EXPENSES> 2,600,679
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 421,119
<INCOME-PRETAX> (677,038)
<INCOME-TAX> 257,275
<INCOME-CONTINUING> (419,763)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (419,763)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
