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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1995
[ ] TRANSITION REPORT UNDER 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., Pembroke Pines, Florida 33024
-------------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954)436-8909
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, Par Value
$.20 Per Share American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: 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 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[X]
Aggregate market value at March 15, 1996 of outstanding shares of Common Stock
other than shares held by officers, directors and their respective associates:
$14,923,988*
Number of shares outstanding at March 15, 1996: 1,717,884*
DOCUMENTS INCORPORATED BY REFERENCE
None
* Includes 23,413 shares issuable upon surrender of the outstanding $.10 par
Common Stock.
The Exhibit Index is on sequentially numbered page 30.
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2
NOTE:In this report, unless the context otherwise requires, Registrant or
Company means Decorator Industries, Inc. and its subsidiaries, herein sometimes
also called "Decorator Industries". References to a particular year or the
captions "For the Year" and "At Year End" refer to the fiscal periods as
follows:
1995 - 52 weeks ended December 30, 1995
1994 - 52 weeks ended December 31, 1994
1993 - 52 weeks ended January 1, 1994
1992 - 53 weeks ended January 2, 1993
1991 - 52 weeks ended December 28, 1991
PART I
ITEM 1. BUSINESS.
The Company, through its divisions and subsidiaries, is engaged in the
production and sale of draperies, bedspreads and complementary products. The
Haleyville Division manufactures draperies, bedspreads and complementary
products for sale to original equipment manufactured home builders and
recreational vehicle manufacturers. The Liberia Division manufactures draperies
and bedspreads for sale to hotels, motels and other installations nationwide as
well as original equipment manufactured home builders.
The Company has one industry segment and one class of products. The
business in which the Company is engaged is a competitive environment, and it
competes with manufacturers located throughout the country. However, no
reliable information is available to enable the Company to determine its
relative position among its competitors. The principal methods of competition
are price, design and service.
On August 7, 1995 the Company purchased the business and assets of
Paragon Interiors, a manufacturer of draperies and bedspreads for the
manufactured housing and recreational vehicle markets, located in Goshen,
Indiana. The total purchase price was $595,483, including the assumption of
liabilities. This purchase was funded from working capital.
During 1995 one customer, Fleetwood Enterprises, accounted for
approximately 25% of the Company's total sales. In the event of the loss of
that customer, there would be a material adverse effect on the Company. That
customer operates in two industries, the manufactured housing industry and the
recreational vehicle industry. Further, purchasing decisions are made at each
individual plant of that customer. The Company services many of these plants
and considers each of these plants to be an independent customer.
The Company's backlog of orders at any given time is not material in
amount and is not significant in the business. No material portion of the
Company's sales or income is derived from customers in foreign countries.
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3
The chief raw materials used by the Company are fabrics made from both
natural and man-made fibers. The raw materials are obtained primarily from
converters and mills. The Company is not dependent upon one or a very few
suppliers. Most of its suppliers are large firms with whom, in the opinion of
management, the Company enjoys good relationships. The Company has never
experienced any significant shortage in its supply of raw materials.
The Company has no significant patents, licenses, franchises or
concessions. It owns certain trademarks and copyrights. Although the Company
believes the trademarks aid in identifying its products, it is unable to
evaluate the importance of the trademarks to its business. Expenditures for
research and development during 1995 and 1994 were not significant.
Compliance with federal, state and local environmental protection
provisions will have no material effect upon the capital expenditures, earnings
or competitive position of the Company.
The Company employs approximately 570 sales, production, warehouse and
administrative employees and also uses the services of independent sales
representatives.
ITEM 2. PROPERTIES.
The Haleyville Division produces draperies and bedspreads from plants
located in Haleyville, Alabama; Salisbury, North Carolina; Lakeland, Florida;
and Bloomsburg, Pennsylvania. The Haleyville plant is a one story building
owned by the Company, which contains approximately 56,000 square feet of
manufacturing, warehouse and office space. The Salisbury plant is a one story
building of approximately 22,500 square feet of manufacturing, warehouse and
office space which is leased by the Company under a lease including renewal
options through the year 2000. The Lakeland plant, a one story building of
approximately 7,500 square feet, is leased by the Company for a term ending in
December 1996, with a renewal option for two additional years. The Bloomsburg
plant is a one story building of approximately 42,000 square feet which is owned
by the Company. This facility secures industrial development bonds in the
original principal amount of $450,000 which were issued by the Pennsylvania
Economic Development Financing Authority for the benefit of the Company, and
mature in the year 2008, and a loan in the original principal amount of $260,000
from the Pennsylvania Industrial Development Authority.
The Liberia Division manufactures draperies and bedspreads in facilities
located in Bossier City, Louisiana and Abbotsford, Wisconsin. The Bossier City
plant, which contains approximately 20,000 square feet of manufacturing,
warehouse and office space, is owned by the Company. The Abbotsford plant,
which contains approximately 19,300 square feet of manufacturing and warehouse
space, is leased for a term expiring May 31, 1998, with a renewal option for an
additional five years.
The Paragon Interiors Division, located in Goshen, Indiana, produces
draperies and bedspreads in a two-story building containing approximately 35,000
square feet of manufacturing, warehouse and office space. The building is
leased for a term ending August 31, 1998.
The Company considers that its offices, plants, machinery and equipment
are well maintained, adequately insured and suitable for their purposes and that
its plants are adequate for the presently anticipated needs of the business.
2
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4
The Company owns a one story building of approximately 12,800 square
feet in Thomasville, Georgia. This building was formerly used as a production
facility by the Haleyville Division and is currently vacant and available for
sale.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is listed and traded on the American Stock
Exchange, AMEX symbol DII.
Common Stock price information is set forth in the table below.
<TABLE>
<CAPTION>
1995 SALES PRICES 1994 SALES PRICES
------------------- -------------------
HIGH LOW HIGH LOW
---- --- ---- ----
<S> <C> <C> <C> <C>
First Quarter 9-1/2 7-1/8 10-7/8 8-1/4
Second Quarter 10-1/8 8-3/8 11 8-5/8
Third Quarter 9-7/8 8-7/8 12-3/8 10-5/8
Fourth Quarter 9 8 11-3/8 7-1/8
</TABLE>
As of March 15, 1996, the Company had 629 shareholders of record of its
Common Stock. Of this total, 459 were holders of the $.20 par value stock and
170 were holders of the old $.10 par value stock who had not yet exchanged their
stock for the $.20 par value stock in connection with the one-for-two reverse
stock split in July 1982.
During 1995, the Company increased its quarterly cash dividend to $.07
per share from $.06 per share. Total cash dividend payments were $.27 per share
in 1995 and $.23 per share in 1994.
3
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DECORATOR INDUSTRIES, INC.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Continuing Operations:
Net Sales $34,207,259 $33,246,590 $28,964,223 $23,605,290 $18,072,368
Net Income 2,414,678 2,823,770 2,370,232 1,528,787 133,609
Discontinued Operations:
Net (Loss) on Disposal 0.00 0.00 0.00 0.00 (259,160)
Net Income (Loss) 2,414,678 2,823,770 2,370,232 1,528,787 (125,551)
------------------------------------------------------------------------
AT YEAR-END
Total Assets 16,415,659 16,406,670 13,188,452 11,236,785 8,112,422
Long-term Obligations 587,084 629,450 431,260 68,475 929,964
Long-term Debt Ratio 5.14% 5.30% 4.70% 1.10% 15.60%
Working Capital 6,925,352 7,479,176 5,322,279 3,214,756 3,000,005
Working Capital Ratio 2.54 2.75 2.39 1.68 2.39
Stockholders' Equity 11,147,754 11,322,046 8,741,511 6,417,134 5,025,213
------------------------------------------------------------------------
PER SHARE
Net Income (Loss)
Continuing Operations 1.25 1.43 1.25 0.84 0.06
Discontinued Operations -- -- -- -- (0.12)
Primary 1.25 1.43 1.25 0.84 (0.06)
Fully Diluted 1.15 1.30 1.09 0.75 (0.06)
Book Value $6.22 $5.65 $4.58 $3.45 $2.61
Cash Dividends Paid $0.27 $0.23 $0.15 -- --
</TABLE>
NOTE: PER SHARE AMOUNTS HAVE BEEN ADJUSTED FOR A TWO-FOR-ONE STOCK SPLIT IN
APRIL 1993.
4
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6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
LIQUIDITY AND FINANCIAL RESOURCES:
The Company's financial condition continues to be strong, as evidenced
by the following statistical measures:
1) Working capital at December 30, 1995 was $6,925,352 compared to
$7,479,176 at December 31, 1994.
2) The current ratio was 2.54:1 at year-end 1995 compared to 2.75:1
at year-end 1994.
3) The liquid ratio changed from 2.1:1 at year-end 1994 to 1.9:1 at
year-end 1995.
4) The long-term debt ratio continued to be minimal, at 5.1% as of
December 30, 1995 compared to 5.3% a year earlier.
Accounts receivable and inventories increased by a combined 11% with the
Paragon Interiors acquisition, or 6% on a same operations comparison. These
assets continue to be well managed.
Capital expenditures for 1995 were $646,704, which included $184,000
from the acquisition of Paragon Interiors. Management projects that capital
expenditures in 1996 will approximate the amount spent in 1995.
Management does not foresee any events which will adversely affect its
liquidity during 1996 and, further, the Company's financial condition is more
than adequate to finance internal growth and acquisitions of profitable, growing
businesses.
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>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . 100.0% 100.0% 100.0%
Cost of products sold . . . . . . . 75.3 71.8 73.2
Selling and administrative expenses 14.5 15.2 15.7
Gain on sale of property. . . . . . -- -- (1.3)
Interest and investment income. . . (1.2) (.4) (.5)
Interest expense. . . . . . . . . . .1 .2 .2
Income taxes. . . . . . . . . . . . 4.2 4.7 4.6
Net income. . . . . . . . . . . . . 7.1 8.5 8.2
</TABLE>
5
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7
1995 VS 1994
Net sales in 1995 increased to $34,207,259 from $33,246,590, an increase
of 3%. The Company's growth rate was negatively affected by a decline in the
recreational vehicle market and a slowing in the growth rate in the manufactured
housing market.
Cost of goods sold as a percentage of sales increased to 75.3% in 1995
from 71.8% in 1994. This increase is attributable to the tightening of margins
in certain markets caused by competitive pricing pressures.
Selling and administrative expenses decreased by $88,343 due to lower
accruals for performance and incentive bonuses.
The decrease in net income to $2,414,678 in 1995 from $2,823,770 in 1994
is attributed almost entirely to the increase in cost of goods sold.
1994 VS. 1993
Net sales increased by 15% in 1994, which was largely attributable to
continued strong growth in the manufactured housing and recreational vehicle
markets and an increase in the Company's market share in the recreational
vehicle market. During the second half of 1994, the Company's growth slowed
primarily due to some moderation of the growth rates in those industries, the
loss of some Fleetwood business, and a decline in the Company's sales to the
hospitality market.
Cost of products sold as a percentage of sales decreased due primarily
to the spreading of the fixed portion of these costs over greater volumes.
Selling and administrative expenses increased by $515,928 due primarily
to the increase in performance and incentive bonuses which resulted from the
Company's overall improvement in net income. The decrease as a percentage of
sales is again due primarily to the spreading of the fixed portion of these
costs over greater volumes.
Interest and investment income decreased by $12,867. This decrease is
net of an unrealized holding loss of $91,420 from a decline in the market value
of the Company's short-term investments. Without recognition of the market
loss, interest and investment income would have increased by $78,553.
Income taxes were 35.6% and 35.9% of income before taxes in 1994 and
1993, respectively. The Company expects these rates to be somewhat higher in
1995.
For 1994, net income was a record $2,823,770, an increase of 19% when
compared to 1993's net income of $2,370,232. Eliminating the one-time gain of
$235,461 from the sale of property in 1993, the increase in comparable net
income from operations was 32%.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and reports of independent certified public
accountants listed in Item 14(a) of this report are filed under this Item 8.
6
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8
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning the directors and executive officers of the
Company is set forth below.
WILLIAM A. BASSETT, age 59, has been President and a director of the
Company since 1980, Chief Executive Officer since February 1993 and Chairman of
the Board since January 1994.
MICHAEL K. SOLOMON, age 46, has been Vice President of the Company since
November 1994, Treasurer and Chief Financial Officer of the Company since 1985
and a director of the Company since 1987.
JEROME B. LIEBER, age 75, has been Secretary and a director of the
Company since 1961. He is Senior Counsel to the law firm of Klett Lieber Rooney
& Schorling, a Professional Corporation, Pittsburgh, Pennsylvania, which serves
as general counsel to the Company. Mr. Lieber previously had been a senior
partner in that firm.
EARL RAPPAPORT, age 78, has been a director and employee of the Company
since 1954. He served as Chief Executive Officer of the Company from 1954 until
February 1993 and as Chairman of the Board from 1954 until January 1994.
HERBERT WALKER, age 82, has been a director of the Company since 1980.
He has been a management consultant since 1980 and served as a registered
representative of Harvest Financial Corp., a broker-dealer, since 1982.
JOSEPH N. ELLIS, age 67, has been a director of the Company since 1993.
He founded LaSalle-Deitch Co., Inc., a distributor of products for the
manufactured housing and recreational vehicle industries, in 1963 and served as
its President, Chief Executive Officer and Chairman from 1971 until his
retirement in 1992. Mr. Ellis is currently a management consultant.
WILLIAM H. ALLEN, JR., age 60, was appointed to the Board of Directors
on February 28, 1995. He has been Vice Chairman of the Board of NationsBank
N.A. (South) since December 1995 and previously served as Chairman of the Board
and Chief Executive Officer of Intercontinental Bank. Mr. Allen is also a
director of American Bankers Life Insurance Company and Winsloew Furniture, Inc.
The Board of Directors is divided into three classes of directors with
staggered terms. One class is elected at each annual meeting of shareholders
for a three-year term. Subject to the provisions of any employment agreements
with the Company, the term of office of all executive officers is at the
discretion of the Board of Directors.
7
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9
ITEM 11. EXECUTIVE COMPENSATION.
The following table shows the compensation of the named executive
officers of the Company for each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ------------
AWARDS
-------
NAME AND FISCAL OPTIONED ALL OTHER COM-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($)(1) SHARES (#) PENSATION($)(2)
- ---------------------- ------ ---------- -------- ----------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
William A. Bassett 1995 224,910 58,234 * ---- 34,970
Chairman of the Board, 1994 209,100 78,689 49,637 10,000 21,577
President and Chief 1993 193,423 44,250 * ---- 10,225
Executive Officer
Michael K. Solomon 1995 104,500 14,558 * ---- ----
Vice President, Treasurer 1994 99,500 19,672 14,483 4,500 ----
and Chief Financial Officer 1993 96,231 13,000 * ---- ----
</TABLE>
- --------------------
(1) Medical/dental reimbursement plan payments, country club memberships,
personal use of Company vehicles and payments, made in accordance with
Company policy, for disqualifying sales of Common Stock acquired upon
the exercise of a qualified stock option. For 1994, payments to Messrs.
Bassett and Solomon for such sales were $47,884 and $8,833,
respectively. All such sales provided a net benefit to the Company of
$94,970. An asterisk indicates that the total of other annual
compensation for that year was less than 10% of salary and bonus for
that year.
(2) Premiums paid by the Company on life and long-term disability insurance
policies.
The following table sets forth information concerning the exercise of
stock options during 1995 by the named executive officers and the value of their
unexercised, in-the-money stock options at the end of that fiscal year (December
30, 1995). All options outstanding at December 30, 1995 were exercisable at any
time prior to their respective expiration dates.
8
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10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
SHARES ACQUIRED VALUE OPTIONED SHARES OPTIONS AT
NAME ON EXERCISE REALIZED($) AT 12/30/95(#) 12/30/95($)(1)
- ------------------ --------------- ----------- --------------- --------------
<S> <C> <C> <C> <C>
William A. Bassett 15,000 105,000 95,000 541,250
Michael K. Solomon 10,000 54,375 34,500 192,500
</TABLE>
- --------------------
(1) Assumes a market value of $8.00 per share, which was the last reported
sale price on the American Stock Exchange on December 30, 1995.
Directors who are not employees of the Company are paid a fee of $8,000
per year for their services as directors.
The Company's medical and dental reimbursement plan provides
reimbursement to the corporate and certain divisional officers of the Company
and their dependents (as defined in Section 152 of the Internal Revenue Code)
for their medical and dental expenses. Benefits under the plan are limited to
10% of the participant's compensation during the plan year. The plan also
prohibits any participant from receiving "double reimbursement", i.e. if a
participant receives reimbursement from another source, he or she must remit to
the Company benefits received under the plan.
The Company's 1984 Incentive Stock Option Plan, which expired February
22, 1994, authorized the granting to key employees of options to purchase up to
500,000 shares (less the number of shares issued under the 1979 stock option
plan) of the Company's Common Stock. The purchase price of optioned shares is
the fair market value of the Common Stock on the date of grant, and the maximum
term of the options is ten years; in the case of options granted to employees
who owned more than 10% of the outstanding Common Stock, however, the purchase
price is 110% of the fair market value of the Common Stock on the date of grant
and the term of the option is five years. The number of optioned shares and the
purchase price per share are subject to adjustment for stock splits, stock
dividends, reclassifications and the like.
On April 3, 1995 the Board of Directors adopted, and on June 5, 1995 the
stockholders approved, the Company's 1995 Incentive Stock Option Plan (the "1995
Plan") which has a term of ten years. The 1995 Plan authorizes the issuance of
up to 250,000 shares of Common Stock pursuant to stock options granted to key
employees of the Company. The purchase price of optioned shares must be the
fair market value of the Common Stock on the date of grant, and the maximum term
of the options is ten years; in the case of options granted to employees who own
more than 10% of the outstanding Common Stock, however, the purchase price must
be 110% of the fair market value of the Common Stock on the date of grant and
the term of the option cannot exceed five years. The number of shares that may
be issued under the 1995 Plan, the number of optioned shares and the purchase
price per share are subject to adjustment for stock splits, stock dividends,
reclassifications and the like. No options have been granted under the 1995
Plan.
9
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11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information concerning the common stockholding at March 15, 1996 of the
directors and named executive officers of the Company, and of the directors and
executive officers as a group, is set forth in the following table. Unless
otherwise indicated, each stockholder has sole voting and investment power with
respect to the shares listed.
<TABLE>
<CAPTION>
SHARES
NAME OR GROUP BENEFICIALLY OWNED PERCENT OF CLASS (1)
- ------------- ------------------ --------------------
<S> <C> <C>
William A. Bassett 171,162 (2) 9.44%
Michael K. Solomon 48,600 (3) 2.78
Jerome B. Lieber 6,580 (4) --
Earl Rappaport 19,950 (5) 1.16
Herbert Walker 1,000 --
Joseph N. Ellis 1,200 --
William H. Allen, Jr. 1,000 --
All directors and executive
officers as a group 249,492(6) 13.55
</TABLE>
- --------------------
(1) Shares which the named stockholder has the right to acquire within 60
days are deemed outstanding for the purpose of computing that
stockholder's percentage.
(2) Includes 95,000 optioned shares which may be acquired within 60 days.
(3) Includes 28,500 optioned shares which may be acquired within 60 days.
(4) Includes 2,420 shares held in a charitable trust as to which Mr. Lieber
disclaims beneficial ownership.
(5) Includes 12,450 shares held in a charitable trust, as to which Mr.
Rappaport disclaims beneficial ownership.
(6) Includes 123,500 optioned shares which may be acquired within 60 days.
Coury Investments, Ltd., a real estate and securities investment limited
partnership organized in Florida, informed the Company in mid-1993 that it then
beneficially owned 180,000 shares of the Company's Common Stock. The Company
has no further information regarding Coury's ownership of Common Stock.
FMR Corp. of Boston, Massachusetts, has furnished the Company a copy of
its Schedule 13G in which it reported that as of December 31, 1995 Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR Corp. and a
registered investment adviser, had sole investment power with respect to 174,800
shares (10.18%) of the Company's Common Stock.
Kennedy Capital Management, Inc. of St. Louis, Missouri, a registered
investment adviser, has furnished the Company a copy of its Schedule 13G dated
February 8, 1996 in which it reported that it had shared voting and investment
power with respect to 100,100 shares (5.83%) of the Company's Common Stock.
10
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12
ZPR Investment Management Inc. of Orange City, Florida has furnished the
Company a copy of its Schedule 13G dated February 5, 1996 in which it reported
that it had sole voting power with respect to 185,400 shares (10.79%) of the
Company's Common Stock.
Laifer Capital Management, Inc. of New York, New York has furnished the
Company a copy of its Schedule 13G dated February 7, 1996 in which it reported
beneficial ownership of a total of 98,400 shares (5.73%) of the Company's Common
Stock, including sole power to vote 72,400 shares, sole power to dispose of
65,000 shares and shared power to dispose of 33,400 shares.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has employment agreements with Earl Rappaport and William A.
Bassett. Mr. Rappaport's agreement runs for his lifetime and provides for an
annual salary of not less than $100,000. Upon his death, Mr. Rappaport's widow
or designated representative will be paid $148,500 per year for a period of two
years. Mr. Bassett's agreement will expire July 1, 2004 and provides for an
annual salary of not less than $214,200.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT:
FINANCIAL STATEMENTS AND SCHEDULES
(1) Report of Independent Certified Public Accountants
(2) Consolidated Balance Sheet - December 30, 1995 and December
31, 1994
(3) Consolidated Statement of Income for the three fiscal years
ended December 30, 1995
(4) Consolidated Statement of Stockholders' Equity for the three
fiscal years ended December 30, 1995
(5) Consolidated Statement of Cash Flows for the three fiscal
years ended December 30, 1995
(6) Notes to Consolidated Financial Statements
(7) Report of Independent Certified Public Accountants on
Financial Statement Schedule
Schedule VIII - Valuation and Qualifying Accounts
All other schedules are omitted because they are not required or
are inapplicable or the information is included in the financial
statements or notes thereto.
EXHIBITS
3A Articles of Incorporation as amended to date, filed as Exhibit 3A
to Form 10-K for the fiscal year ended December 28, 1985 and
incorporated herein by reference.
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13
3B.1 By-laws as amended to date, filed as Exhibit 3B.1 to Form 10-Q for
the quarter ended July 2, 1988 and incorporated herein by
reference.
10B Employment Agreement dated November 12, 1984 between Registrant and
Earl Rappaport, filed as Exhibit 10(b)(1)(iii) to Form 10-K for the
fiscal year ended December 29, 1984 and incorporated herein by
reference.
10B.1 Amendment dated June 21, 1988 to Exhibit 10B, filed as Exhibit
10B.1 to Form 10-Q for the quarter ended July 2, 1988 and
incorporated herein by reference.
10B.2 Second Amendment dated June 6, 1994 to Exhibit 10B, filed as
Exhibit 10B.2 to Form 10-Q for the quarter ended July 2, 1994 and
incorporated herein by reference.
10E Lease dated February 9, 1984 between Registrant, as lessee, and
Leon and Eleanor Bradshaw covering property at 500 North Long
Street, Salisbury, North Carolina, filed as Exhibit 10(b)(4)(iv) to
Registration Statement No. 2-92853 and incorporated herein by
reference.
10H Lease Agreement dated December 13, 1983 covering property at 101
West Linden Street, Abbotsford, Wisconsin, and assignment thereof
to Registrant, as lessee, dated October 2, 1985, filed as Exhibit
10H to Form 10-K for the fiscal year ended December 28, 1985 and
incorporated herein by reference.
10H.1 Lease Modification Agreement dated May 20, 1988 regarding Exhibit
10H, filed as Exhibit 10H.1 to Form 10-K for the fiscal year ended
December 31, 1988 and incorporated herein by reference.
10K.1 1984 Incentive Stock Option Plan, as amended to date, filed as
Exhibit 10K.1 to Form 10-Q for the quarter ended October 3, 1987
and incorporated herein by reference.
10M.1 Medical and Dental Reimbursement Plan, as amended to date, filed as
Exhibit 10M.1 to Form 10-K for the fiscal year ended January 3,
1987 and incorporated herein by reference.
10S Revolving Credit and Term Loan Agreement, and related Security
Agreement and Addendum, dated as of April 30, 1993 with
Intercontinental Bank, filed as Exhibit 10S to Form 10-Q for the
quarter ended October 2, 1993 and incorporated herein by reference.
10T Employment Agreement dated August 2, 1994 between Registrant and
William Bassett, filed as Exhibit 10T to Form 10-Q for the quarter
ended July 2, 1994 and incorporated herein by reference.
10U 1995 Incentive Stock Option Plan, filed herewith.
11K Statement re computation of fully diluted income per share, filed
herewith.
24C Consent of Accountants, filed herewith.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the last quarter of 1995.
12
<PAGE>
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DECORATOR INDUSTRIES, INC.
(Registrant)
By: /s/ Michael K. Solomon
----------------------------------------
Michael K. Solomon
Vice President
Dated: March 18, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE SIGNATURE DATE
- ------------------ ------------------------- ------------------------------------- --------------
<S> <C> <C> <C>
William A. Bassett Chairman, President, /s/ William A. Bassett March 18, 1996
Chief Executive -------------------------------------
Officer and
Director
Michael K. Solomon Vice President, Treasurer, /s/ Michael K. Solomon March 18, 1996
Principal Financial -------------------------------------
and Accounting
Officer, and
Director
Jerome B. Lieber Director /s/ Jerome B. Lieber March 18, 1996
-------------------------------------
Herbert Walker Director /s/ Herbert Walker March 18, 1996
-------------------------------------
Joseph N. Ellis Director /s/ Joseph N. Ellis March 18, 1996
-------------------------------------
William H. Allen, Jr. Director /s/ William H. Allen, Jr. March 18, 1996
-------------------------------------
</TABLE>
13
<PAGE>
15
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Stockholders
Decorator Industries, Inc.
We have audited the accompanying consolidated balance sheets of Decorator
Industries, Inc. and subsidiaries as of December 30, 1995 and December 31, 1994
and the related consolidated statements of income and stockholders' equity and
cash flows for each of the three fiscal years in the period ended December 30,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Decorator Industries, Inc. as of December 30, 1995 and December 31, 1994, and
the results of their operations and their cash flows for each of the three
fiscal years in the period ended December 30, 1995 in conformity with generally
accepted accounting principles.
/s/ Louis Plung & Company
LOUIS PLUNG & COMPANY
Certified Public Accountants
Pittsburgh, Pennsylvania
February 10, 1996
F-1
<PAGE>
<TABLE>
<CAPTION>
DECORATOR INDUSTRIES, INC.
BALANCE SHEET
FISCAL YEAR END
------------------------
1995 1994
-------- --------
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $5,269,772 $4,026,035
Short-term Investments 14,607 2,146,332
Accounts Receivable, less allowance for
doubtful accounts ($229,722 and $199,659) 2,776,039 2,566,063
Note Receivable 80,000 80,000
Inventories 3,005,383 2,639,650
Prepaid Expenses 126,373 98,270
Prepaid and Deferred Income Taxes 159,000 201,000
---------- ----------
Total Current Assets 11,431,174 11,757,350
---------- ----------
PROPERTY & EQUIPMENT:
Land 130,408 130,408
Buildings & Improvements 2,205,800 2,177,538
Equipment 2,740,656 2,269,899
---------- ----------
5,076,864 4,577,845
Less: Accumulated Depreciation
and Amortization 1,988,557 1,779,706
---------- ----------
3,088,307 2,798,139
---------- ----------
EXCESS OF COST OVER NET ASSETS
ACQUIRED, less accumulated
amortization of $815,438 and $759,021 1,461,605 1,355,522
NOTE RECEIVABLE 140,000 220,000
OTHER ASSETS 294,573 275,659
---------- ----------
TOTAL ASSETS $16,415,659 $16,406,670
---------- ----------
---------- ----------
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
CURRENT LIABILITIES:
Accounts Payable $2,751,329 $2,276,518
Current Maturities of long-term debt 41,032 52,405
Accrued Expenses:
Income taxes 60,873 140,402
Compensation 1,072,321 1,361,386
Other 580,267 447,463
---------- ----------
Total Current Liabilities 4,505,822 4,278,174
---------- ----------
LONG-TERM DEBT 587,083 629,450
DEFERRED INCOME TAXES 175,000 177,000
---------- ----------
Total Liabilities 5,267,905 5,084,624
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock $.20 par value:
Authorized shares, 5,000,000;
Issued shares, 2,644,855 and 2,613,580 528,973 522,717
Paid-in capital 1,692,185 1,619,828
Retained Earnings 12,228,865 10,332,610
---------- ----------
14,450,023 12,475,155
Less: Treasury Stock, at cost:
853,143 and 608,158 shares 3,302,269 1,153,109
---------- ----------
Total Stockholders' Equity 11,147,754 11,322,046
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $16,415,659 $16,406,670
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
DECORATOR INDUSTRIES, INC.
STATEMENT OF INCOME
<TABLE>
<CAPTION>
FOR THE YEAR
---------------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
INCOME:
Net Sales $34,207,259 $33,246,590 $28,964,223
----------- ----------- -----------
COST AND EXPENSES:
Cost of products sold 25,760,666 23,881,370 21,197,342
Selling and administrative 4,961,007 5,049,350 4,533,422
Gain on sale of property -- -- (379,776)
Interest and dividend income (420,329) (129,668) (142,535)
Interest expense 47,237 61,768 59,538
----------- ----------- -----------
30,348,581 28,862,820 25,267,991
----------- ----------- -----------
Income before income taxes 3,858,678 4,383,770 3,696,232
Income taxes 1,444,000 1,560,000 1,326,000
----------- ----------- -----------
NET INCOME $ 2,414,678 $ 2,823,770 $ 2,370,232
----------- ----------- -----------
----------- ----------- -----------
TOTAL PRIMARY EARNINGS PER SHARE $1.25 $1.43 $1.25
----------- ----------- -----------
----------- ----------- -----------
FULLY DILUTED EARNINGS PER SHARE $1.15 $1.30 $1.09
----------- ----------- -----------
----------- ----------- -----------
Average Number of shares
Outstanding:
Primary 1,939,181 1,971,976 1,897,858
Fully diluted 2,092,638 2,170,707 2,169,202
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
DECORATOR INDUSTRIES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK TOTAL
--------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance at
January 2,
1993 $ 253,960 $ 1,412,164 $ 5,881,387 $(1,130,377) $ 6,417,134
Transactions for 1993
Net Profit 2,370,232 2,370,232
Dividends Paid (286,542) (286,542)
Issuance of
stock for
exercise of options 3,000 33,718 39,050 75,768
Stock option tax
benefit 164,919 164,919
Record stock split 255,957 (255,957) -0-
--------- ----------- ---------- ----------- -----------
Balance at
January 1, 1994 512,917 1,354,844 7,965,077 (1,091,327) 8,741,511
Transactions for 1994
Issuance of
stock for
exercise of options 9,800 115,509 (61,782) 63,527
Stock option tax
benefit 149,475 149,475
Net Profit 2,823,770 2,823,770
Dividends Paid (456,237) (456,237)
--------- ----------- ---------- ----------- -----------
Balance at
December 31, 1994 522,717 1,619,828 10,332,610 (1,153,109) 11,322,046
Transactions for 1995
Net Profit 2,414,678 2,414,678
Issuance of
stock for
exercise of options 6,256 60,903 (11,019) 56,140
Stock option tax
benefit 11,454 11,454
Purchase of common
stock for treasury (2,138,141) (2,138,141)
Dividends Paid (518,423) (518,423)
--------- ----------- ---------- ----------- -----------
Balance at
December 30, 1995 $ 528,973 $ 1,692,185 $12,228,865 $(3,302,269) $11,147,754
--------- ----------- ---------- ----------- -----------
--------- ----------- ---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
DECORATOR INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For The Year
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $2,414,678 $2,823,770 $2,370,232
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 380,100 347,100 313,360
Provision for losses on accounts receivable 72,374 45,000 15,680
Deferred Taxes 40,000 (87,000) 98,000
(Gain) loss on disposal of assets (623) 505 (384,026)
Increase (decrease) from changes in:
Accounts receivable (148,611) 107,838 (904,615)
Inventory (248,624) (374,199) (193,664)
Short-term investments 2,131,725 (1,017,642) (76,848)
Prepaid expenses (28,103) (2,729) (19,176)
Prepaid income taxes -- -- 193,574
Other assets (18,914) (54,146) (56,776)
Accounts payable 366,474 161,190 339,591
Accrued expenses (252,875) 307,554 (462,514)
---------- ---------- ----------
Net cash provided by operating activities 4,707,601 2,257,241 1,232,818
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (462,704) (1,005,241) (984,582)
Proceeds from property dispositions 33,477 8,940 195,896
Note receivable 80,000 155,000 120,000
Net cash paid for acquisition (471,926) -- --
---------- ---------- ----------
Net cash used in investing activities (821,153) (841,301) (668,686)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long term debt payments (53,740) (101,093) (866,297)
Proceeds from debt on new building -- 269,046 450,000
Dividend payments (518,423) (456,235) (286,542)
Proceeds from exercise of stock options 56,139 63,525 75,767
Stock option tax benefit 11,454 149,475 164,919
Purchase of common stock for treasury (2,138,141) -- --
---------- ---------- ----------
Net cash used in financing activities (2,642,711) (75,282) (462,153)
Net increase in cash and cash equivalents 1,243,737 1,340,658 101,979
Cash and cash equivalents at beginning of year 4,026,035 2,685,377 2,583,398
---------- ---------- ----------
Cash and cash equivalents at end of period $5,269,772 $4,026,035 $2,685,377
---------- ---------- ----------
---------- ---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest $ 43,899 $ 32,139 $ 48,676
Income Taxes $1,460,794 $1,507,575 $1,614,026
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and all subsidiary companies. All significant intercompany accounts and
transactions have been eliminated in consolidation.
FISCAL YEAR
The Company's fiscal year is a 52-53 week period ending the Saturday
nearest to December 31, which results in every sixth year containing 53
weeks. Fiscal years 1995, 1994 and 1993 were 52-week periods ending
December 30, 1995, December 31, 1994 and January 1, 1994.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
PROPERTY AND DEPRECIATION
Buildings and equipment are stated at cost, and depreciated on both
straight-line and accelerated methods over estimated useful lives.
Leasehold improvements are capitalized and amortized over the assets'
estimated useful lives or remaining terms of leases, if shorter. Equipment
is depreciated over 3-10 years, buildings over 20-30 years and leasehold
improvements over 5-10 years.
EXCESS OF COST OVER NET ASSETS ACQUIRED
The excess of investment costs over the fair value of net assets related to
the Haleyville Manufacturing division acquired in April, 1973 and the
Liberia Manufacturing division acquired in October, 1985 are being
amortized over a period of 40 years. Paragon Interiors, acquired in
August, 1995 is being amortized also over a period of 40 years.
Amortization of $56,417 was charged to income during fiscal year ended
12/30/95 and $54,724 was charged in fiscal year ended 12/31/94 and fiscal
year ended 1/1/94.
The Company evaluates the impairment of goodwill on the basis of whether
goodwill is recoverable from the projected undiscounted net income before
goodwill amortization of the related assets.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid investments with a maturity of three months or
less at the time of purchase to be cash equivalents.
Cash and cash equivalents consist of the following:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
General Funds $4,054,772 $ (188,662)
Demand Notes 1,215,000 --
Repurchase agreements -- 4,214,697
---------- ----------
$5,269,772 $4,026,035
---------- ----------
---------- ----------
</TABLE>
The demand notes are guaranteed by letters-of-credit.
F-6
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
SHORT-TERM INVESTMENTS
Short-term investments are categorized as trading securities. The
estimated fair values of the company's trading securities, which are the
amounts reflected in the balance sheet, are based on quoted market prices.
A realized gain of $125,601 is included in income for year ended December
30, 1995 compared to an unrealized holding loss of $91,715 for the year
ended December 31, 1994.
DEFERRED INCOME TAXES
The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes," which
requires the recognition of deferred tax liabilities and assets at
currently enacted tax rates for the expected future tax consequences of
events that have been included in the financial statements or tax returns.
Prior to 1993, the Company accounted for income taxes under the liability
method prescribed by SFAS 96. The change to the present method had no
effect on Income.
PER SHARE INFORMATION
Per share amounts of common stock are based on the average number of common
shares outstanding during each period.
Fully diluted earnings per share were computed based on the assumption that
the stock options were exercised. The dilutive effect of the stock options
was determined using the "treasury stock" method.
CREDIT RISK
The Company sells into three different markets, each primarily, on thirty
day terms. Within each market the Company's customers are spread over a
wide geographic area. As such the Company believes that it does not have
an abnormal concentration of credit risk within any one market or any one
geographic area.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
STOCKSPLIT
The Company declared a two-for-one stock split effective April 22, 1993.
Per share and share data have been adjusted to reflect this stock split.
(2) INVENTORIES
Inventories consisted of the following classifications:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Raw materials &
supplies $2,814,309 $2,458,934
In process &
finished goods 191,075 180,716
---------- ----------
$3,005,383 $2,639,650
---------- ----------
---------- ----------
</TABLE>
F-7
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(3) NOTES RECEIVABLE
Notes receivable consist of the following:
<TABLE>
<CAPTION>
Fiscal Year-End
------------------------
1995 1994
-------- --------
<S> <C> <C>
THE note is receivable in monthly
Installments of $6,667, plus interest
At 8%. The note is secured by the
Land and building sold during 1993. $220,000 $300,000
Less current portion 80,000 80,000
-------- --------
Long-term portion $140,000 $220,000
-------- --------
-------- --------
</TABLE>
Maturities of notes receivable are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ --------
<S> <C>
1996 80,000
1997 80,000
1998 60,000
--------
Total $220,000
--------
</TABLE>
(4) LEASES
The Company leases certain buildings and equipment used in its operations.
Building leases generally provide that the Company bear the cost of
maintenance and repairs and other operation expenses. Rent expense was
$209,958 in 1995, $229,191 in 1994, and $313,554 in 1993.
Commitments under these leases extend through January, 2001, and are as
follows:
1996 $ 214,377
1997 182,099
1998 91,710
1999 38,760
Thereafter 41,990
(5) COMMITMENTS
The company has commitments under certain employment and non-compete
agreements entered into with individuals in management positions. The
commitments under these agreements are payable $414,000, $314,000, and
$314,000, respectively, from 1996 through 1998 and $1,878,100 thereafter.
(6) SIGNIFICANT CUSTOMERS
Sales to one customer accounted for 25.1%, 31.3%, and 30.9% of Company
sales in 1995, 1994, and 1993, respectively. This customer, Fleetwood
Enterprises, operates in two industries, the Manufactured Housing Industry
and the Recreational Vehicle Industry. Further, purchasing decisions are
made at each individual plant of that customer. The Company services many
of these plants and considers each of these plants to be an independent
customer.
F-8
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(7) LONG TERM-DEBT AND CREDIT ARRANGEMENTS
Long-term debt consists of the following:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Note payable in monthly payments of
$2,088 at 4% interest. Term is 15 years.
This note is secured by the first mortgage
on the Bloomsburg, PA building. $230,137 $246,904
Bond payable in monthly installments
thru November, 2008. The interest
rate is variable and is currently less
than 4%. This bond is secured by the
Company's Bloomsburg, PA property. 397,978 422,951
Capitalized building lease payable
in variable monthly installments
through February 1995. Rate is based
on 70% of prime recalculated annually
with a minimum rate of 7%. -0- 3,637
Various capitalized equipment leases
payable in monthly installments
totalling $1,828 including interest. -0- 8,363
-------- --------
628,115 681,855
Less amount due within one year 41,032 52,405
-------- --------
$587,083 $629,450
-------- --------
-------- --------
</TABLE>
Principal payments on long-term debt for the five years subsequent to
December 30, 1995 are as follows:
1996 $ 41,000
1997 42,000
1998 42,000
1999 43,000
2000 43,000
F-9
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(8) STOCK OPTIONS
Stock options are outstanding to certain key employees of
the Company pursuant to the 1984 incentive stock option
plan approved by the shareholders on June 18, 1984. The
1979 plan was terminated in February, 1984 and the 1984
plan expired in February, 1994.
Under the 1984 stock option plan, options were granted to
purchase a maximum of 500,000 shares (less the number of
shares which were issued under the 1979 plan) of the
Company's common stock at the fair market value of the
stock at the date an option is granted. Each option will
expire no later than 10 years after date of grant. The
1984 plan allows a grantee, at the sole discretion of the
Company's Board of Directors upon the recommendation of
the Stock Option Committee, to surrender all or part of
any option and to receive the excess of the then fair
market value of the shares of common stock over the option
price, such excess to be paid in common stock of the
Company and/or cash.
The 1995 incentive stock option plan was adopted by the
Board of Directors on April 3, 1995 and approved by the
stockholders on June 5, 1995. Under that plan, up to
250,000 shares of the Company's common stock may be issued
pursuant to stock options granted to key employees. In
general, the option price must equal the fair market value
of the stock at the time of grant and the option must
expire no later than 10 years after date of grant. The
1995 plan allows a grantee, at the sole discretion of the
Board of Directors, upon the recommendation of the Stock
Option Committee, to surrender all or part of the option
and receive the excess of the then fair market value of
the shares of common stock over the option price, such
excess to be paid in common stock of the Company and/or
cash. As of December 30, 1995, no options had been
granted under the 1995 plan.
Per share amounts and shares outstanding have been
adjusted for a two-for-one stock split in April 1993.
A summary of stock option transactions follows:
<TABLE>
<CAPTION>
Stock Options
Shares Price
---------------------- -------------
1979 Plan 1984 Plan Range
--------- --------- -------------
<S> <C> <C> <C>
Outstanding
January 2, 1993 13,000 367,000 $ 1.19 - 2.88
Granted -0- -0- -0-
Exercised 13,000 35,400 1.19 - 2.38
Cancelled -0- -0- -0-
--------- --------- -------------
Outstanding
January 1, 1994 -0- 331,600 1.19 - 2.88
Granted -0- 15,500 10.50
Exercised -0- 110,600 1.19 - 2.88
Cancelled -0- -0- -0-
--------- --------- -------------
Outstanding
December 31, 1994 -0- 236,500 $1.19 - 10.50
Granted -0- -0- -0-
Exercised -0- 42,275 1.19 - 2.38
Cancelled -0- -0- -0-
--------- --------- -------------
Outstanding
December 30, 1995 -0- 194,225 $1.19 - 10.50
--------- --------- -------------
--------- --------- -------------
</TABLE>
F-10
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(9) INCOME TAXES
A summary of income taxes is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal $1,169,000 $1,400,000 $1,065,000
State 235,000 247,000 163,000
Deferred (Benefit) 40,000 (87,000) 98,000
---------- ---------- ----------
Total $1,444,000 $1,560,000 $1,326,000
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Temporary differences between the financial statement carrying amounts and tax
bases of assets and liabilities that give rise to net deferred income tax
liability relate to the following:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Property and equipment,
due to differences
in depreciation $129,000 $114,000
Installment sale of land
& building 46,000 63,000
Inventories, due to
additional cost recorded
for income tax purposes (10,000) (9,000)
Accounts receivable, due
to allowance for doubtful
accounts (87,000) (76,000)
Accrued liabilities, due to
expenses not yet deductible
for income tax purposes (62,000) (116,000)
-------- --------
Net deferred income tax (asset) liability $ 16,000 $(24,000)
-------- --------
-------- --------
</TABLE>
The net deferred income tax liability is presented in the balance sheets as
follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Current Asset $159,000 $201,000
Long-term Liability 175,000 177,000
</TABLE>
F-11
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(9) INCOME TAXES (Continued)
The effective income tax rate varied from the statutory Federal tax rate as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate 34.0% 34.0% 34.0%
State income
taxes, net of
federal income
tax benefit 4.2 3.8 2.9
Other (.8) (2.2) (1.0)
---- ---- ----
Effective income tax rate 37.4% 35.6% 35.9%
---- ---- ----
---- ---- ----
</TABLE>
(10) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1995 QUARTER QUARTER QUARTER QUARTER YEAR
- ---- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net Sales $8,275,431 $8,749,072 $8,560,400 $8,622,356 $34,207,259
Gross Profit 2,232,103 2,243,625 1,922,047 2,048,818 8,446,593
Net Income 680,445 677,283 524,753 532,197 2,414,678
Earnings per
Common share:
Primary .34 .35 .27 .29 1.25
Fully Diluted .31 .32 .25 .27 1.15
Average Common
Shares
Outstanding:
Primary 1,995,324 1,947,021 1,928,277 1,886,099 1,939,181
Fully Diluted 2,172,891 2,098,083 2,075,299 2,024,602 2,092,638
FIRST SECOND THIRD FOURTH
1994 QUARTER QUARTER QUARTER QUARTER YEAR
- ---- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net Sales $7,858,806 $9,035,652 $8,212,517 $8,139,615 $33,246,590
Gross Profit 2,276,485 2,500,562 2,311,852 2,276,321 9,365,220
Net Income 670,152 782,734 690,616 680,268 2,823,770
Earnings per
Common share:
Primary .35 .40 .34 .34 1.43
Fully Diluted .31 .36 .32 .31 1.30
Average Common
Shares
Outstanding:
Primary 1,916,212 1,961,320 2,004,937 2,005,438 1,971,976
Fully Diluted 2,171,453 2,145,706 2,185,702 2,178,087 2,170,707
</TABLE>
F-12
<PAGE>
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(11) FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments.
Cash and Cash Equivalents
The carrying amount reported in the balance sheets for cash and cash
equivalents approximates its fair value.
Short-term Investments
The fair values of short-term investments are based on quoted market
prices.
Notes Receivable
The fair value of the notes receivable is estimated using discounted cash
flow analyses.
Long-term Debt
The carrying amount of the Company's borrowings approximates fair value.
Considerable judgment enters into estimates of fair value. Accordingly,
the estimates presented may not be indicative of the amounts that the
Company could realize in a current market exchange. the carrying amounts
and fair values of the Company's financial instruments are as follows:
<TABLE>
<CAPTION>
DECEMBER 30, 1995 DECEMBER 31, 1994
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash and cash equivalents $5,269,772 $5,269,772 $4,026,035 $4,026,035
Short-term investments 14,607 14,607 2,146,332 2,146,332
Notes receivable 220,000 220,000 300,000 300,000
Long-term debt 628,115 628,115 681,855 681,855
</TABLE>
F-13
<PAGE>
28
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
The Board of Directors
and Stockholders
Decorator Industries, Inc.
The audit referred to in our opinion dated February 10, 1996 of the
financial statements as of December 30, 1995 and for each of the three fiscal
years then ended includes the related supplemental financial schedule as listed
in Item 14(a), which, when considered in relation to the basic financial
statements, presents fairly in all material respects the information shown
therein.
/s/ Louis Plung & Company
Louis Plung & Company
Certified Public Accountants
Pittsburgh, Pennsylvania
February 10, 1996
F-14
<PAGE>
DECORATOR INDUSTRIES, INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Charged to Charged to
Balance at Costs Other Balance at
Beginning and Accounts Deductions End
Description of Period Expenses Described Describe of Period
- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
DEDUCTED FROM
ASSETS TO WHICH
THEY APPLY:
ALLOWANCE FOR
DOUBTFUL
ACCOUNTS
1995 $199,659 $ 72,374 -0- $ 42,311(A) $229,722
1994 212,005 45,000 -0- 57,346(A) 199,659
1993 238,671 15,680 -0- 42,346(A) 212,005
</TABLE>
(A) Write-off bad debts
F-15
<PAGE>
30
DECORATOR INDUSTRIES, INC.
Form 10-K For Fiscal Year Ended December 30, 1995
COMMISSION FILE NO. 1-7753
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NO. DOCUMENT NUMBERED PAGE
- ----------- -------- -------------
3A Articles of Incorporation
as amended to date*
3B.1 By-laws as amended to date*
10B Employment Agreement dated
November 12, 1984 between
Registrant and Earl Rappaport*
10B.1 Amendment dated June 21, 1988
to Exhibit 10B*
10B.2 Second Amendment dated
June 6, 1994 to Exhibit 10B*
10E Lease dated February 9, 1984 between
Registrant, as lessee, and Leon and
Eleanor Bradshaw covering property
at 500 North Long Street, Salisbury,
North Carolina*
10H Lease Agreement dated
December 13, 1983 covering
property at 101 West Linden
Street, Abbotsford, Wisconsin,
and assignment thereof to
Registrant, as lessee, dated
October 2, 1985*
10H.1 Lease Modification Agreement dated
May 20, 1988 regarding Exhibit 10H*
10K.1 1984 Incentive Stock Option Plan,
as amended to date*
10M.1 Medical and Dental Reimbursement
Plan, as amended to date*
<PAGE>
31
10S Revolving Credit and Term Loan
Agreement, and related Security
Agreement and Addendum, dated
as of April 30, 1993 with
Intercontinental Bank*
10T Employment Agreement dated
August 2, 1994 between Registrant
and William Bassett*
10U 1995 Incentive Stock Option Plan 32
11K Statement re computation of fully 40
diluted income per share
24C Consent of Accountants 41
- -----------------
(*) Incorporated by reference
<PAGE>
32
EXHIBIT 10U
DECORATOR INDUSTRIES, INC.
1995 INCENTIVE STOCK OPTION PLAN
FOR
OFFICERS AND OTHER KEY EMPLOYEES
1. PURPOSE
The purpose of the 1995 Incentive Stock Option Plan (the "Plan") is to
motivate and provide additional incentive for officers and other key employees
of Decorator Industries, Inc. (the "Company") to exert their best efforts on
behalf of the Company by enabling and encouraging such individuals to acquire a
greater stock interest in the Company, thereby increasing their proprietary
interest in the business, encouraging their continued service and promoting the
interests of the Company and all its Shareholders. In addition, the Plan is
intended to permit the Company to compete with other companies offering similar
plans in attracting and retaining the services of executive personnel. All
options granted hereunder are intended to qualify as Incentive Stock Options
under Section 422A of the Internal Revenue Code of 1986, as amended (the "1986
Code").
2. DEFINITIONS
(a) "Board" - The Board of Directors of the Company.
(b) "Committee" - the committee referred to in Section 3 of the Plan.
(c) "Common Stock" - the common stock, par value $.20 per share, of
the Company.
(d) "Fair Market Value" - the "fair market value" per share of Common
Stock at a given time shall be deemed to be the last sale price for shares of
the Common Stock on the American Stock Exchange.
(e) "Financial Statements" - the financial statements of the Company.
(f) "Options" - grants of options to purchase shares of Common Stock
under the Plan.
- ----------------------
* As adopted by the Board of Directors on April 3, 1995.
<PAGE>
33
(g) "Option Right" - the right to purchase a share of Common Stock
upon exercise of an Outstanding Option.
(h) "Outstanding Option" - at any time, an option to purchase Common
Stock granted by the Company pursuant to the Plan, whether or not such stock
option is at such time exercisable, to the extent that such stock option at such
time has not been exercised and has not terminated.
(i) "Participants" - employees of the Company to whom Options have
been granted under the Plan. When appropriate and not otherwise indicated that
the incapacity or death of a Participant terminates or limits his rights under
the Plan, as used herein the term "Participant" shall also be deemed to refer,
in the event of the death or incapacity of a Participant, to his or her legal
representative.
3. ADMINISTRATION
(a) APPOINTMENT OF THE COMMITTEE. The Plan shall be administered by
a committee, to be known as the "Stock Option Committee" (the "Committee"),
consisting of two or more directors of the Company; provided, however, the Board
shall have the power to rescind or overrule any action taken by the Committee.
Members of the Committee shall be appointed by, and serve at the pleasure of,
the Board. No director shall serve as a member of the Committee unless he or she
shall be a "disinterested person" within the meaning of Rule 16b-3 of the
General Rules and Regulations, or the equivalent thereof from time to time in
effect, under the Securities Exchange Act of 1934, as amended. Notwithstanding
the foregoing, in the event there is not a sufficient number of directors who
are "disinterested persons" within the meaning of Rule 16b-3, or the equivalent
thereof from time to time in effect, then any director who shall exercise
appropriate waivers or take such other action which, in the opinion of counsel
for the Company, is then sufficient to satisfy Rule 16b-3, or the equivalent
thereof from time to time in effect, shall be eligible to serve on the
Committee.
(b) COMMITTEE ACTION. A majority of the Committee shall constitute a
quorum thereof and the action (i) of a majority of the members of the Committee
present and voting at a meeting at which a quorum shall be present, or (ii)
authorized in writing by all members of the Committee, shall be the action of
the Committee. A member of the Committee participating in a meeting by
telephone or similar communications equipment shall be deemed present for this
purpose if the member or members who are present in person can hear him or her
and he or she can hear them.
(c) AUTHORITY OF THE COMMITTEE, ETC. Subject to the power of the
Board to terminate or amend the Plan as provided in Section 6 and to rescind or
overrule any action taken by the
2
<PAGE>
34
Committee, the Committee shall have authority to interpret the Plan and options
granted, to prescribe, amend and rescind rules and regulations, if any, relating
to the Plan, and to make all determinations necessary or advisable for the
administration of the Plan. Decisions of the Committee shall be final and
binding upon all parties who have an interest in the Plan. The Committee shall
have authority to and may make recommendations to the Board as to any matter
under the Plan requiring Board action for final determination, whether or not
expressly so stated, but the Board shall not be bound to follow any
recommendations made by the Committee. No member of the Committee shall be
liable for anything done or omitted to be done by him or her or by any other
member of the Committee in connection with the Plan, except for his or her own
willful misconduct or recklessness.
4. EFFECTIVE DATE AND DURATION
The Plan shall become effective upon its adoption by the Board,
subject, however, to the approval of the Plan by the Company's shareholders
within twelve (12) months of such adoption. Unless sooner terminated by the
Board, the Plan will expire at midnight, prevailing time in Pittsburgh,
Pennsylvania, on April 2, 2005, and no Options may be made, granted or assigned
under the Plan after such date. However, shares issuable upon the exercise of
Options granted on or prior to such date may be subsequently delivered to
Participants in accordance with the terms and conditions applicable to their
respective Options.
5. ELIGIBILITY
Options shall be granted under the Plan only to employees, including
officers and directors who are employees, of the Company who are responsible for
the management, growth and protection of the business of the Company. Only
persons regularly employed on a full-time basis by the Company are eligible to
receive a recommendation of the Committee, from among those eligible.
6. AMENDMENT AND TERMINATION OF THE PLAN
The Board may at any time terminate the Plan, or from time to time
make such amendments thereto, including additions or deletions, as the Board
deems advisable, except that no amendment may adversely affect any Option
theretofore granted to a Participant, except to the extent deemed necessary or
advisable by the Board to assure that such Option qualifies as an Incentive
Stock Option under Section 422A of the 1986 Code, or the equivalent thereof from
time to time in effect, and meets the requirements of Rule 16b-3, or the
equivalent thereof from time to time in effect. No amendment shall be made,
however, unless approved by the Shareholders of the Company, which would (a)
increase the maximum number of shares of Common Stock that may be issued under
the Plan,
3
<PAGE>
35
(b) extend the period during which Options may be granted, (c) change the
purchase price per share at which Options may be granted, (d) materially modify
the requirements as to eligibility for participation in the Program, (e)
increase the maximum period for exercise of any Option, or (f) cause Rule 16b-3,
or the equivalent thereof from time to time in effect, to become inapplicable.
7. STOCK SUBJECT TO THE PLAN
Subject to adjustments made pursuant to Section 8, the total number of
shares of Common Stock that may be issued under the Plan (which shares may be
authorized but unissued shares or treasury shares) is 250,000, less any shares
for which payment may be made under Section 14(e) hereof.
8. EFFECT OF RECAPITALIZATION, MERGER, ETC.
(a) In the event there is a change in, reclassification, subdivision
or combination of, stock dividend on, or exchange of stock or other securities
of the Company for, the outstanding Common Stock, or other similar event, the
maximum number and class of shares as to which Options may be granted under the
Plan, the number and class of shares subject to Options theretofore granted
under the Plan, and the price per share payable upon exercise of such Options
shall be appropriately adjusted by the Board, whose determination shall be
conclusive.
(b) If, prior to the expiration of any Option granted under the Plan,
there shall be a merger, consolidation or reorganization of the Company with
another corporation in which the Company is not the surviving corporation, the
holder of any then outstanding Option shall thereafter be entitled to receive,
upon exercise of the unexercised portion of the Option, the same number and kind
of shares, securities or other property (including cash) as the optionee would
have received had the optionee exercised the unexercised portion of the Option
immediately prior to such merger, consolidation or reorganization.
Notwithstanding the foregoing, any Participant may agree to the assumption of
his or her Option by a corporation other than the Company, or the substitution
of a stock option of a corporation other than the Company for his or her Option.
9. PROCEDURE FOR GRANTING OF OPTIONS AND RELATED MATTERS
(a) BOARD TO MAKE DETERMINATION. Subject to the terms, provisions
and conditions of the Plan, the Board, on the recommendation of the Committee,
shall (i) select the employees to whom Options shall be granted, (ii) determine
the number of shares subject to each Option granted, (iii) determine the time or
times when Options will be granted, and (iv) determine the time or times when
each Option may be exercised within the limits stated in the
4
<PAGE>
36
Plan; and the Committee shall prescribe the form, which shall be consistent with
the Plan, of the instruments evidencing any Options granted hereunder.
(b) REQUISITE ACTION BY PARTICIPANTS, ETC. As a condition to the
granting of an Option, each Participant shall be required to enter into an
Agreement (the "Option Agreement") with the Company which shall contain such
provisions consistent with the Plan as may be prescribed by the Board, on the
recommendation of the Committee, including such restrictions as to the
transferability of the shares to be issued upon the exercise of an Option as the
Board may, in its discretion, deem appropriate. Such restrictions may be for
the purpose of assuring compliance with Federal and state securities laws (as
contemplated by Section 14(d)) or for other reasons deemed advisable by the
Board.
10. OPTION PRICE
Except as provided in Section 12, the purchase price per share of
Common Stock under each Option granted pursuant to the Plan shall be 100% of the
Fair Market Value per share of Common Stock at the time such Option is granted.
11. DURATION OF OPTIONS
Each Option granted under the Plan shall expire not later than ten
(10) years after the date on which it was granted.
12. OPTIONS FOR EMPLOYEES WHO OWN MORE THAN 10% OF COMMON STOCK
In the event of a grant of an Option to an employee who owns more than
10% of the outstanding Common Stock, then (a) the purchase price per share of
Common Stock under each such Option granted shall be 110% of the Fair Market
Value per share of Common Stock at the time of such grant, and (b) such Option
shall terminate not later than five (5) years after the date it is granted.
13. NONTRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be transferable by a
Participant otherwise than by will or the laws of descent and distribution; and
an Option may be exercised, during a Participant's lifetime, only by the
Participant.
14. EXERCISE OF OPTIONS; RESTRICTIONS ON EXERCISE
(a) Each Option shall be exercisable according to terms set by the
Board, on the recommendation of the Committee, at the time of the grant;
provided, however, that the aggregate Fair Market Value (determined at the time
the Option is granted) of the
5
<PAGE>
37
stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under all plans of the
Participant's employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000. The Board may direct that an Option become
exercisable in installments, which need not be annual installments, over a
period which may be less than the term of the Option. At such time as an
installment shall become exercisable, it may be exercised at any time thereafter
in whole or in part until the expiration or termination of the Option. Unless
otherwise provided in the Option Agreement referred to in Section 9(b), an
Option granted under the Plan shall be exercisable, prior to the expiration or
termination of the Option, in whole at any time or in part form time to time.
Only full shares which a Participant is entitled to purchase will be issued; no
fractional shares will be issued.
(b) A Participant may purchase shares pursuant to an Option granted
under the Plan only by giving the Company written notice of his or her election
to exercise the Option, specifying the number of shares to be purchased.
Payment for the shares may be in cash, or by delivery to the Company of shares
of its Common Stock owned by the Optionee having a Fair Market Value equal to
the required purchase price. A Participant shall have none of the rights of a
Shareholder with respect to any shares as to which he or she has exercised an
Option until the shares are issued to him or her.
(c) Each Option granted under the Plan shall be subject to the
condition that if at any time, in the opinion of counsel for the Company, the
registration, listing or qualification of the shares covered by the Option under
the Securities Act of 1933, as amended (the "Act"), upon any securities exchange
or under any state law, or the consent or approval of any governmental
regulatory body or the updating, amendment or revision of any registration
statement, listing application or similar document, is required as a condition
of, or in connection with, the purchase of shares under such Option, no such
Option may be exercised unless and until such registration, listing,
qualification, consent, approval, updating, amendment or revision shall have
been effected or obtained free of any conditions not acceptable to the Board.
If the right to exercise any Option is suspended for any of the foregoing
reasons and the Option would otherwise expire during such suspension, the
expiration date of the Option shall be extended until thirty (30) days after the
date on which the holder of such Option is notified that such suspension of the
right to exercise the Option has ended; provided, however, that the Option shall
not be exercisable more than ten (10) years after the date on which it was
granted.
(d) The Board, on the recommendation of the Committee, may, as a
condition to the exercise by a Participant of an Option, require that the
Participant agree in writing that he or she will
6
<PAGE>
38
not dispose of the shares to be acquired upon such exercise in a transaction
which, in the opinion of counsel for the Company, would violate the Act and the
rules and regulations promulgated thereunder. The Board shall have the
authority to require additional agreements or impose additional conditions which
it reasonably believes are necessary to assure compliance with Federal and state
securities and other laws.
(e) The Board, on the recommendation of the Committee, in its sole
discretion and under such terms and conditions as the Committee deems
appropriate, may accept surrender by a Participant of a right to exercise in
whole or in part an Option previously granted, and may authorize a payment in
consideration therefor of an amount equal to the excess of the Fair Market Value
of the shares of Common Stock over the option price, such payment to be in
shares of Common Stock valued at Fair Market Value on the date of surrender of
the Option, or in cash, or partly in such shares and partly in cash, provided
the Committee determines that such settlement is consistent with the provisions
set forth in Section 1 hereof.
(f) In the event that a Participant is subject to the alternative
minimum tax under Section 55 of the 1986 Code as a result of the exercise of an
Option, such Participant may, with the approval of the Committee, provide for
the payment of the additional income tax resulting from such exercise by
delivering to the Company shares of Common Stock having a Fair Market Value
equal to the additional income tax, such Fair Market Value to be credited to the
Participant's income tax withholding account with the Company.
15. TERMINATION OF EMPLOYMENT, DISABILITY, RETIREMENT OR DEATH
(a) If the employment of a Participant by the Company or a subsidiary
shall terminate for any reason except death after such Participant shall have
been continuously employed by the Company for one (1) year after the granting of
an Option to such Participant, such Option may be exercised by such Participant
within ninety (90) days after such termination to the extent the Option might
have been exercised at the date of such termination of employment and provided
that the exercise would not occur later than the expiration date of the Option.
(b) In the event of the death of a Participant while employed by the
Company (or within ninety (90) days after the termination of such employment),
any Option granted to the Participant may be exercised, within one (1) year
after his or her death, by the legal representative of his or her estate, but
only to the extent such Option was exercisable by the Participant at the date of
death and provided that the exercise would not occur later than the expiration
date of the Option.
7
<PAGE>
39
(c) In the event of the termination of employment with the Company or
a subsidiary by reason of the disability of a Participant while employed (or in
the event of the disability of a Participant within ninety (90) days after the
termination of such Participant's employment by the Company), the Board may
extend the time within which such Participant or his or her legal representative
may exercise any Option held by such Participant, but only to the extent such
Option was exercisable by the Participant at the date of such termination of
employment and provided that the exercise would not occur later then the
expiration date of the Option.
To the extent that any Option held by any Participant whose employment
is terminated shall not have been exercised within the applicable period
hereinbefore provided, such Option, and all rights to purchase shares pursuant
thereto, shall thereupon expire.
16. MISCELLANEOUS PROVISIONS
(a) EMPLOYMENT. No employee shall have any claim or right to be
granted an Option under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Company, or to limit the right of the Company to terminate the
employment of any Participant at any time, or to change the terms of such
employment.
(b) NONALIENATION OF BENEFITS. A Participant's rights and
interests under the Plan may not be assigned or transferred in whole or in part
either directly or by operation of law or otherwise (except as specifically
provided in the Plan in the event of a Participant's death), including, but not
by way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no such right or interest of any
Participant shall be subject to any obligations or liability of such
Participant.
(c) EFFECT UPON OTHER COMPENSATION PLANS. The adoption of the Plan
shall not affect any other compensation or incentive plan in effect for the
Company, and the Plan shall not preclude the Board from establishing any other
forms of incentive or compensation for employees of the Company.
8
<PAGE>
EXHIBIT 11-K
DECORATOR INDUSTRIES, INC.
COMPUTATION OF FULLY DILUTED INCOME PER SHARE OF COMMON STOCK
FOR THE FIVE FISCAL YEARS ENDED DECEMBER 30, 1995
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net income (loss) $2,414,678 $2,823,770 $2,370,232 $1,528,787 ($125,551)
---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------
Average number of
common shares
outstanding 1,939,181 1,971,976 1,897,858 1,814,842 2,095,660
Dilutive effect of
stock options on
net income 153,457 198,731 271,344 226,062 5,374
---------- ---------- ---------- ---------- ---------
2,092,638 2,170,707 2,169,202 2,040,904 2,101,034
---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------
Fully diluted
earnings per
share:
Net income (loss) $1.15 $1.30 $1.09 $0.75 ($0.06)
---------- ---------- ---------- ---------- ---------
---------- ---------- ---------- ---------- ---------
</TABLE>
Note: Per share amounts and shares outstanding have been adjusted for a two-for-
one stock split in April 1993.
<PAGE>
EXHIBIT 24C
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Registration Statement No.
33-47895 on Form S-8 and the Prospectus included therein of our reports dated
February 10, 1996 included in the Annual Report on Form 10-K of Decorator
Industries, Inc. for the fiscal year ended December 30, 1995.
/s/ Louis Plung & Company
LOUIS PLUNG & COMPANY
Certified Public Accountants
Pittsburgh, Pennsylvania
March 11, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 5,269,772
<SECURITIES> 14,607
<RECEIVABLES> 3,085,751
<ALLOWANCES> 229,722
<INVENTORY> 3,005,383
<CURRENT-ASSETS> 11,431,174
<PP&E> 5,076,884
<DEPRECIATION> 1,988,557
<TOTAL-ASSETS> 15,415,659
<CURRENT-LIABILITIES> 4,505,822
<BONDS> 0
0
0
<COMMON> 528,973
<OTHER-SE> 10,618,781
<TOTAL-LIABILITY-AND-EQUITY> 15,415,659
<SALES> 34,207,259
<TOTAL-REVENUES> 34,207,259
<CGS> 25,760,666
<TOTAL-COSTS> 30,228,970
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 72,374
<INTEREST-EXPENSE> 47,237
<INCOME-PRETAX> 3,858,678
<INCOME-TAX> 1,444,000
<INCOME-CONTINUING> 2,414,678
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,414,678
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.15
</TABLE>
