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 September 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 SEPTEMBER 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
September 30, 1995 & December 31, 1994 . . . . . 2
Balance Sheets, Liabilities & Stockholders' Equity
September 30, 1995 & December 31, 1994 . . . . . 3
Statements of Operations for the three & six month
periods ended September 30, 1995 & 1994 . . . . . 4
Statements of Cash Flows for the six months ended
September 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>
Sept. 30 December 31
1995 1994
(Unaudited) (*)
Current Assets:
<S> <C> <C>
Cash $ 80,213 $ 23,551
Accounts Receivable, trade
less allowances for doubtful accounts
(1995 - $360,879 1994 - $375,000) 7,222,145 6,633,057
Income Tax Refund Receivable 171,296 0
Inventories, at lower of cost (FIFO) or market:
Raw Materials 3,517,559 2,974,790
Work In Process 1,337,619 1,034,896
Finished Goods 9,093,562 6,960,994
Total Inventories 13,948,740 10,970,680
Deferred Tax Asset 245,070 245,070
Other Current Assets 11,529 89,200
Total Current Assets 21,678,994 17,961,558
Property:
Real Estate and Water Power, at cost 3,273,776 3,264,776
Machinery, Equipment, & Lasts, at cost 5,359,232 4,963,060
8,633,008 8,227,836
Less: Accumulated Depreciation 6,560,444 6,279,037
Property, net 2,072,564 1,948,799
Other Assets:
Prepaid Pension Expense 2,247,397 2,179,897
Other Assets 147,094 115,524
Total Other Assets 2,394,491 2,295,421
Total Assets
</TABLE> $ 26,146,048 $ 22,205,778
(*) Derived from Audited Financial Statements.
<TABLE>
DANIEL GREEN COMPANY
Balance Sheets
Liabilities & Stockholders' Equity
<CAPTION>
Sept. 30 December 31
1995 1994
(Unaudited) (*)
Current Liabilities:
<S> <C> <C>
Notes Payable, line of credit $ 9,341,423 $ 5,107,262
Notes Payable, current 590,861 590,078
Accounts Payable, trade 1,587,391 432,886
Accrued Salaries & Commissions 108,031 186,609
Accrued Cooperative Advertising 0 180,000
Other Accrued Liabilities 130,145 147,640
Income Taxes Payable 0 402,947
Capital Lease Obligation, current 18,857 23,410
Total Current Liabilities 11,776,709 7,070,832
Capital Lease Obligations, non-current 12,847 8,107
Notes Payable, non-current 2,395,442 2,886,306
Deferred Tax Liability 1,130,813 1,130,813
Total Liabilities 15,315,811 11,096,058
Stockholder's Equity
Common Stock 2,592,230 2,592,230
Retained Earnings 8,238,007 8,517,490
Total Stockholders' Equity 10,830,237 11,109,720
Total Liabilities & Stockholders' Equity $ 26,146,048 $ 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 Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $ 6,612,108 $ 5,556,668 $15,239,187 $14,893,316
Costs and Expenses:
Cost of Goods Sold 4,627,187 4,065,861 10,907,906 11,898,482
Selling, General,
& Administrative 1,481,883 1,232,764 4,082,562 3,511,656
Interest Expense 278,380 202,729 699,499 491,675
Total Costs and Expenses 6,387,450 5,501,354 15,689,967 15,901,813
Income (Loss) before
credit for Income Taxes 224,658 55,314 (450,780) (1,008,497)
(Provision) Credit
for Income Taxes (85,979) (21,019) 171,296 383,229
Net Income (Loss) $138,679 $ 34,295 ($279,483) ($625,268)
Net Income (Loss) per Share $0.13 $0.03 ($0.27) ($0.60)
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 Nine Months Ended
Sept. 30 Sept. 30
1995 1994
<S> <C> <C>
Operating Activities:
Net Loss $ (279,483) $ (625,268)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation 281,407 245,210
Amortization 18,402 (51,411)
Net Pension Credit (67,500) (63,000)
Changes in assets & liabilities:
(increases) decreases in:
Accounts Receivable, trade (589,088) 416,357
Income Tax Refund Receivable (171,296) (383,229)
Inventories (2,978,059) (1,766,152)
Deferred Tax Asset 0 0
Other Current Assets 27,701 39,113
increases (decreases) in:
Accounts Payable, trade 1,154,505 500,736
Accrued Salaries (78,578) (55,510)
Accrued Interest 0 0
Income Taxes Payable (402,947) (145,501)
Other Accrued Liabilities (197,495) (170,888)
Deferred Tax Liability 0 0
Net Cash Used by Operating Activities: (3,282,431) (2,059,543)
Investing Activities:
Purchase of property & equipment (382,460) (256,414)
Net Cash Used in Investing Activities: (382,460) (256,414)
Financing Activities:
Borrowings on Line of Credit 19,981,530 2,638,718
Repayments on Line of Credit (15,747,370) (2,200,000)
Borrowings of Notes Payable 0 2,300,000
Repayments of Notes Payable (490,081) (438,158)
Principal payments under capital leases (22,526) (44,416)
Net Cash Provided by Financing Activities 3,721,553 2,256,144
Net Increase (Decrease) in Cash 56,662 (59,813)
Cash at Beginning of Period 23,551 122,278
Cash at End of Period $ 80,213 $ 62,465
</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 September 30, 1995 and the
results of operations and cash flows for the three and
nine months then ended.
Note 2. The results of operations for the three and nine months
ended September 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 nine months ended September 30, 1995, the Company used
cash of $3,282,431 from operations as opposed to usage of
$2,059,543 for the first nine months of 1994. Inventory increases
of $2,978,059 caused the increased usage of cash. Finished goods
have increased by $2,132,468 or 30.6% from 12/31/94 levels and
$1,093,562 or 27.4% from 9/30/94 levels. Finished goods inventory
now stands at 814,061 pairs, an increase of 227,968 pairs (38.9%)
from 12/31/94 and 114,072 pairs (16.3%) from 9/30/94. Raw
materials and work in process have also shown increases (18.2% and
29.3% respectively) from year end figures and 12.3% and 29.7%
respectively from September 1994 figures. Increased sales and
orders in the third quarter caused a 5.7% increase in production in
the third quarter as compared to the third quarter of 1994. For
the year to date, production has been cut by 5.8% to 1,161,076
pairs. Management plans to reduce inventory levels to normal
quantities by year end through less production and a larger backlog
of orders than in 1994.
A lower loss 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
$3,721,553 of cash to be provided by financing through the first
nine months of 1995. This compares to $2,256,144 provided by
financing through the first nine months of 1994.
The Company's current line of credit was revised twice in the
third 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 $9.5 million and set an
overadvance allowance of $500,000. The second revision raised the
overadvance amount to $1,250,000 through the third quarter 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. Cash generated by operations,
supplemented by short-term borrowings, should cover planned
requirements.
2. Results of Operations
Net sales for the third quarter of 1995 increased by 19.0% to
$6,612,108 over the third quarter of 1994. Pairs shipped increased
by 101,538 (27.2%) to 475,367 for the third quarter of this year as
compared with last. For the year to date, net sales have increased
by $345,871 or 2.3% on 82,978 (8.5%) more pairs shipped. Total net
shipments through the first nine months of 1995 equal 1,063,783
pairs. The third 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 acceptance of
our new styles. Orders for the Daniel Green Slipper line have shown
significant growth in 1995, but a poor retailing year thus far is
a cause for concern for the remaining quarter.
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 70.0% for the third quarter of 1995 and ended at 71.6% through
the first nine months of the year. That compares with 73.2% and
79.9% for those respective periods of 1994. Savings were found in
labor, insurance, maintenance, and utility areas. An increased
emphasis on imported products and uppers have helped to improve the
margins. They are relieving production bottlenecks while enabling
other areas to be more fully utilized, thus improving productive
efficiencies.
Selling, general and administrative expenses rose by $249,119
(20.2%) for the quarter and $570,906 (16.3%) for the year to date
from those periods of 1994. The major areas of increase were co-op
advertising and salaries. Interest expense increased by 37.3% for
the third quarter and 42.3% for the nine months ended September 30,
1995 as opposed to 1994 levels.
The Company generated net income before taxes of $224,658 in
the third quarter of 1995. This shows an improvement of $169,344
or 306.2% over that period of 1994. The net income after taxes of
$138,679 equates to $.13 per share as opposed to $.03 per share in
1994.
Through the first three quarters of 1995, the Company lost
$450,780 before credit for taxes, an improvement of $557,717 or
55.3% over 1994. The net loss after taxes of $279,483 equates to
a $.27 loss per share in 1995 as opposed to a $.60 loss per share
through the first nine months of 1994.
The Company's efforts through the remainder of the year will
be to continue the improvement in net sales and to keep the cost of
goods sold at lower 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 September 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> SEP-30-1995
<CASH> 80,213
<SECURITIES> 0
<RECEIVABLES> 7,222,145
<ALLOWANCES> 360,879
<INVENTORY> 13,948,740
<CURRENT-ASSETS> 21,678,994
<PP&E> 8,633,008
<DEPRECIATION> 6,560,444
<TOTAL-ASSETS> 26,146,048
<CURRENT-LIABILITIES> 11,776,709
<BONDS> 0
<COMMON> 2,592,230
0
0
<OTHER-SE> 8,238,007
<TOTAL-LIABILITY-AND-EQUITY> 26,146,048
<SALES> 15,239,187
<TOTAL-REVENUES> 15,239,187
<CGS> 10,907,906
<TOTAL-COSTS> 10,907,906
<OTHER-EXPENSES> 4,082,562
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 699,499
<INCOME-PRETAX> (450,780)
<INCOME-TAX> 171,296
<INCOME-CONTINUING> (279,483)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (279,483)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> (.27)
