<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended April 1, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-7753
DECORATOR INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1001433
- -------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10011 Pines Blvd., Suite 201, Pembroke Pines, FL 33024
- -------------------------------------------------------------- ----------------
(Address of principal executive offices) (zip code)
305-436-8909
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(Registrant's telephone number, including area code)
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 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 issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT MAY 5, 1995
- -------------------------------------- --------------------------------------
Common Stock, $.20 par value 1,961,079 shares*
*Includes 23,698 shares issuable upon surrender of the outstanding $.10 par
common stock.
<PAGE>
PART 1 - FINANCIAL INFORMATION
DECORATOR INDUSTRIES, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS April 1, 1995 December 31,1994
- ------ ------------- ----------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,421,456 $ 4,026,035
Short-term Investments 2,234,643 2,146,332
Accounts Receivable 2,895,441 2,566,063
Note Receivable 80,000 80,000
Inventories 2,715,041 2,639,650
Prepaid Expenses 250,584 98,270
Prepaid and Deferred Income Taxes 201,000 201,000
----------- -----------
Total Current Assets 11,798,165 11,757,350
PROPERTY & EQUIPMENT 4,639,484 4,577,845
Less: Accumulated Depreciation and
Amortization 1,852,443 1,779,706
----------- -----------
Net Value of Property and Equipment 2,787,041 2,798,139
EXCESS OF COST OVER NET ASSETS ACQUIRED 1,341,841 1,355,522
NOTE RECEIVABLE 200,000 220,000
OTHER ASSETS 275,543 275,659
----------- -----------
TOTAL ASSETS $16,402,590 $16,406,670
----------- -----------
----------- -----------
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Accounts Payable $2,664,085 $2,276,518
Accrued Expenses - Income Taxes 473,746 140,402
- Compensation 633,953 1,361,386
- Other 415,214 447,463
Current Maturities of Long-term Debt 43,769 52,405
----------- -----------
Total Current Liabilities 4,230,767 4,278,174
LONG-TERM DEBT 617,553 629,450
DEFERRED INCOME TAXES 177,000 177,000
----------- -----------
Total Liabilities 5,025,320 5,084,624
STOCKHOLDERS' EQUITY:
Common Stock 522,717 522,717
Additional Capital 1,623,160 1,619,828
Retained Earnings 10,895,828 10,332,610
----------- -----------
13,041,705 12,475,155
Less: Treasury Stock, at Cost 1,664,435 1,153,109
----------- -----------
Total Stockholders' Equity 11,377,270 11,322,046
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $16,402,590 $16,406,670
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1.
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DECORATOR INDUSTRIES, INC.
STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
FOR 13 WEEKS ENDED:
April 1, 1995 April 2, 1994
-----------------------------
<S> <C> <C>
NET SALES $8,275,431 $7,858,806
Costs and expenses:
Cost of products sold 6,043,328 5,582,321
Selling and administrative 1,268,275 1,240,288
Interest & Investment Income (134,250) (57,698)
Interest Expense 15,633 14,743
-----------------------------
TOTAL COST AND EXPENSES 7,192,986 6,779,654
-----------------------------
Income before income taxes 1,082,445 1,079,152
Income Taxes 402,000 409,000
-----------------------------
NET INCOME $ 680,445 $ 670,152
-----------------------------
-----------------------------
PRIMARY EARNINGS
PER SHARE $ 0.34 $ 0.35
-----------------------------
-----------------------------
FULLY DILUTED EARNINGS
PER SHARE $ 0.31 $ 0.31
-----------------------------
-----------------------------
Average number of shares outstanding:
Primary 1,995,324 1,916,212
Fully diluted 2,172,891 2,171,453
</TABLE>
The accompanying notes are an integral part of the financial statements.
2.
<PAGE>
DECORATOR INDUSTRIES, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For Quarter Ended:
APRIL 1, 1995 APRIL 2, 1994
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 680,446 $ 670,152
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 92,297 80,519
Provision for losses on accounts receivable 8,500 6,000
(Gain) loss on disposal of assets 1,117 0
Increase (decrease) from changes in:
Accounts receivable (337,878) (234,493)
Inventory (75,391) (143,576)
Short-term investments (88,311) (1,031,122)
Prepaid expenses (152,314) 13,991
Other assets 116 (6,872)
Accounts payable 387,567 420,578
Accrued expenses (426,338) (317,528)
---------- ----------
Net cash provided by (used in) operating activities 89,811 (542,351)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (70,236) (382,829)
Proceeds from property dispositions 1,600 0
Note receivable 20,000 45,000
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Net cash used in investing activities (48,636) (337,829)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long term debt payments (20,533) (28,053)
Proceeds from debt on new building 0 269,046
Dividend payments (117,228) (95,961)
Proceeds from exercise of stock options 24,188 21,400
Stock option tax benefit 0 29,000
Purchase of common stock for treasury (532,181) 0
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Net cash provided by financing activities (645,754) 195,432
Net increase in cash and cash equivalents (604,579) (684,748)
Cash and cash equivalents at beginning of year 4,026,035 2,685,377
---------- ----------
Cash and cash equivalents at end of period $3,421,456 $2,000,629
---------- ----------
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Supplemental disclosures of cash flow information:
APRIL 1, 1995 APRIL 2, 1994
------------- -------------
Interest $ 6,465 $ 10,149
Income taxes $ 68,656 $ 118,174
</TABLE>
The accompanying notes are an integral part of the financial statements.
3.
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED APRIL 1, 1995 AND APRIL 2, 1994
(UNAUDITED)
NOTE 1. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary to
present fairly the Company's financial position as of April 1, 1995,
the changes therein for the thirteen week period then ended and the
results of thirteen week periods ended April 1, 1995 and April 2, 1994.
NOTE 2. The consolidated financial statements included in the Form 10-Q are
presented in accordance with the requirements of the form and do not
include all of the disclosures required by generally accepted
accounting principles. For additional information, reference is made
to the Company's annual report on Form 10-K for the year ended
December 31, 1994. The results of operations for the thirteen week
periods ended April 1, 1995 and April 2, 1994 are not necessarily
indicative of operating results for the full year.
NOTE 3. INVENTORIES
Inventories at April 1, 1995 and April 2, 1994 consisted of the
following:
<TABLE>
<CAPTION>
April 1, 1995 April 2, 1994
------------- -------------
<S> <C> <C>
Raw material and Supplies $2,569,078 $2,277,031
In process and Finished Goods 145,963 131,996
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$2,715,041 $2,409,027
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</TABLE>
NOTE 4. EARNINGS PER SHARE
The excess of shares assumed to be issued under the stock option
plans over shares that could be purchased with the proceeds based on
the higher average or period ending market prices, was sufficient to
cause fully diluted earnings per share to be different from primary
earnings per share as shown in the consolidated statement of income.
4.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's financial condition as measured by the following ratios was
virtually unchanged during the First Quarter.
<TABLE>
<CAPTION>
April 2, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Current Ratio 2:79 2:75
Quick Ratio 2:15 2:13
LT Debt to Total Capital 5.23% 5.35%
Working Capital $7,567,398 $7,479,176
</TABLE>
These ratios were maintained despite the use of $532,181 of cash to
repurchase common stock.
Cash and Short-Term Investments total $5,656,099. These cash balances and
borrowing capacity keep the company well-positioned to take advantage of
internal growth or acquisition opportunities that might arise.
RESULTS OF OPERATIONS:
The following table shows the percentage relationship to net sales of
certain items in the Company's Statement of Income:
<TABLE>
<CAPTION>
First First
Quarter Quarter
1995 1994
------- -------
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of products sold 73.0 71.0
Selling and administrative 15.3 15.8
Interest and investment income (1.6) (.7)
Interest expense .2 .2
Income taxes 4.9 5.2
Net income 8.2 8.5
</TABLE>
THIRTEEN-WEEK PERIOD ENDED APRIL 1, 1995, (FIRST QUARTER 1995) COMPARED TO
THIRTEEN-WEEK PERIOD ENDED APRIL 2, 1994, (FIRST QUARTER 1994)
Net sales increased by 5% for the First Quarter 1995 versus the First Quarter
1994. Increases were experienced in all markets served by the Company.
Cost of goods sold as a percentage of sales was 73.0% in the First Quarter
1995 compared to 71.0% in the First Quarter 1994. This increase is
attributable to both higher material costs and higher labor costs. Management
will concentrate on improving these factors over the balance of the year.
5.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
None
(b) No reports on form 8-K were filed by the Company during the
fiscal quarter ended April 1, 1995.
SIGNATURES
Pursuant to the requirements of the Securities exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DECORATOR INDUSTRIES, INC.
(Registrant)
By: /s/ William Bassett
-------------------------------------
William Bassett, President
By: /s/ Michael K. Solomon
-------------------------------------
Date: May 10, 1995 Michael K. Solomon, Treasurer
6.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF INCOME FOUND ON PAGES 1 AND 2 OF THE COMPANY'S FORM 10-Q
FOR THE YEAR-TO-DATE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-01-1995
<CASH> 5,656,099
<SECURITIES> 0
<RECEIVABLES> 2,895,441
<ALLOWANCES> 0
<INVENTORY> 2,715,041
<CURRENT-ASSETS> 11,798,165
<PP&E> 4,639,485
<DEPRECIATION> 1,852,443
<TOTAL-ASSETS> 16,402,590
<CURRENT-LIABILITIES> 4,230,767
<BONDS> 0
<COMMON> 522,717
0
0
<OTHER-SE> 10,854,553
<TOTAL-LIABILITY-AND-EQUITY> 16,402,590
<SALES> 8,275,431
<TOTAL-REVENUES> 8,275,431
<CGS> 6,043,328
<TOTAL-COSTS> 7,192,986
<OTHER-EXPENSES> 402,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,633
<INCOME-PRETAX> 1,082,445
<INCOME-TAX> 402,000
<INCOME-CONTINUING> 680,445
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 680,445
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.31
</TABLE>
