SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File Number 0-8894
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Benjamin Moore & Co.
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(Exact Name of registrant as specified in its charter)
New Jersey 13-5256230
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 Chestnut Ridge Road, Montvale, New Jersey 07645
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 573-9600
-----------------------------
None
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Former name, former address and former fiscal year, if changed since last
report.
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
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As of May 1, 1995, 9,561,830 shares of Common Stock of the registrant were
issued and outstanding.
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(Page 1 of 11 Pages)
<PAGE>
BENJAMIN MOORE & CO. and Subsidiaries
INDEX
Page No.
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Part I. Financial Information
Condensed Consolidated Statements of Income -
Three Months Ended March 31, 1995 and 1994 ............ 3
Condensed Consolidated Balance Sheets -
March 31, 1995 and December 31, 1994 .................. 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 ............ 5
Notes to Condensed Consolidated Financial Statements ...... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................... 7 - 9
Part II. Other Information...................................... 10
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<PAGE>
PART I. FINANCIAL INFORMATION
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended
March 31,
----------------
1995 1994
(Unaudited) Unaudited)
Net Sales .................................. $ 126,859 $ 111,998
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Costs and expenses:
Cost of products sold .................. 71,086 61,182
Selling, administrative and general .... 48,258 44,000
Other expense (income), net ............ 98 (204)
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Total costs and expenses ........... 119,442 104,978
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Income before taxes and minority
interest ................................ 7,417 7,020
Income tax provision ....................... 3,144 2,886
Minority interest in income of
subsidiary .............................. (60) 58
---------- ----------
Net income ................................. $ 4,333 $ 4,076
========== ==========
Weighted average number of common
shares outstanding ...................... 9,599,853 9,645,382
========== ==========
Earnings per share of common stock ......... $ .45 $ .42
========== ==========
Cash dividends declared per share of
common stock ............................ $ .40 $ .37
========== ==========
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
<TABLE><CAPTION>
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
March 31, December 31,
1995 1994
----------- -----------
(Unaudited) (a)
ASSETS
<S> <C> <C>
Current assets:
Cash and short-term investments.................................... $ 1,101 $ 16,007
-------- -------
Accounts and notes receivable - net................................ 123,266 87,801
-------- -------
Inventories:
Finished goods.................................................... 42,854 38,514
Raw materials and supplies........................................ 24,093 23,026
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66,947 61,540
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Other current assets............................................... 28,805 26,837
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Total current assets........................................... 220,119 192,185
Property - net......................................................... 78,578 74,269
Other non-current assets............................................... 39,195 37,634
-------- --------
Total assets................................................... $337,892 $304,088
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term obligations....... $ 37,645 $ 8,582
Accounts payable................................................... 26,794 22,629
Accrued taxes based on income...................................... 3,993 3,449
Accrued expenses and other current liabilities..................... 32,602 30,820
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Total current liabilities...................................... 101,034 65,480
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Postretirement and postemployment benefits............................. 2,670 3,765
-------- --------
Deferred income taxes.................................................. 2,608 2,603
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Long-term obligations.................................................. 5,130 5,005
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Minority shareholders' interest in net
assets of subsidiaries.............................................. 5,550 5,697
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Shareholders' equity:
Preferred stock, $10 par value - authorized
500,000 shares; issued - none
Common stock, $10 par value - authorized
40,000,000 shares; issued 13,164,312 shares..................... 131,643 131,643
Additional paid-in capital........................................ 31,357 31,295
Retained earnings................................................. 178,790 178,296
Accumulated currency translation adjustment....................... (3,253) (4,019)
Cost of treasury stock; 3,576,716 shares at
March 31, 1995 and 3,542,080 shares at
December 31, 1994............................................... (96,521) (93,772)
Employees' stock ownership and stock purchase
plan notes...................................................... (21,116) (21,905)
-------- --------
Shareholders' equity - net..................................... 220,900 221,538
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Total liabilities and shareholders' equity..................... $337,892 $304,088
======= =======
(a) The condensed balance sheet at December 31, 1994 has been taken from the audited
financial statements at that date.
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
<TABLE><CAPTION>
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income......................................................... $ 4,333 $ 4,076
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................... 2,759 1,850
Minority interest in net income of subsidiary................... (60) 58
Other........................................................... 310 (235)
Change in assets and liabilities:
Increase in accounts and notes receivable................... (35,386) (28,569)
Increase in inventories..................................... (5,341) (4,818)
Other....................................................... 3,203 7,083
-------- --------
Net cash flows used in operating activities............ (30,182) (20,555)
-------- -------
Cash flows from investing activities:
Payments for purchase of property, plant and
equipment......................................................... (6,524) (4,828)
Decrease in short-term investments................................. 12,451 20,568
Other.............................................................. (1,354) (215)
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Net cash flows from investing activities............... 4,573 15,525
-------- --------
Cash flows from financing activities:
Proceeds from short-term debt...................................... 28,992 7,459
Payment of dividends............................................... (3,702) (3,480)
Purchase of treasury stock......................................... (2,754) (3,930)
Other.............................................................. 617 408
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Net cash flows used in financing activities............ 23,153 457
-------- ---------
Effect of exchange rate changes on cash................................ 2 2
-------- ---------
Net decrease in cash................................................... (2,454) (4,571)
Cash at beginning of period............................................ 3,435 5,011
-------- ---------
Cash at end of period.................................................. $ 981 $ 440
======== =========
Supplemental disclosures of cash flow information:
Interest paid...................................................... $ 326 $ 226
Income taxes paid.................................................. $ 2,467 $ 1,786
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
BENJAMIN MOORE & CO. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of its
financial position as of March 31, 1995 and the results of operations for
the three month periods ended March 31, 1995 and 1994, and changes in cash
flows for the three months ended March 31, 1995 and 1994. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
2. Certain reclassifications have been made in the 1994 financial statements
to conform to the method of presentation used in 1995.
3. The results of operations for the three month periods ended March 31, 1995
and 1994 are not necessarily indicative of operations for the entire year.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
Operating Results
- -----------------
Net Sales in the first quarter of 1995 amounted to $126,859,000, which
represented an increase of $14,861,000 or 13.3% over the comparable period of
the prior year.
Trade sales coatings reflected considerable unit gains in both the United
States and Canada. The favorable weather pattern in 1995 combined with the
gradual economic recoveries in the Northeast and Mid-Atlantic region of the
United States were significant factors contributing to the sales strength which
prevailed throughout the quarter.
Production finishes coatings, which account for less than 10% of
consolidated sales revenues, also showed sales growth in both countries.
Cost of products sold in 1995 rose 1.4% as a percentage of sales from
54.6% in 1994 to 56.0% in 1995. Raw material cost levels, which commenced a
rising trend in the second half of 1994 continued their acceleration and
registered an increase of 5.5% in the first quarter. In order to recover the
higher cost of raw materials, a general selling price adjustment for trade
products will be effective in the second quarter. Production expense rose in
accordance with the increased volume of production and the generally low
inflationary factor. Cost of products sold for the first quarter of 1995 was
$71,086,000, up $9,904,000 or 16.2% over the previous year.
Selling, administrative and general expenses of $48,258,000 rose
$4,258,000 or 9.7% over the prior year. The increase was attributable to the
higher sales volume and general inflation. Included in the 1994 expenses was a
non-recurring charge of $1,275,000 due to the adoption of Statement of Financial
Accounting Standards No. 112 "Employers' Accounting for Postemployment
Benefits".
The increase in other expense was attributable to interest expense on
short-term bank borrowings.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
After providing for federal and state income taxes which represented a
combined rate of approximately 42% and 41% for 1995 and 1994 respectively, net
income was $4,333,000, an improvement of $257,000 or 6.3% over 1994.
Earnings per share were $.45, a gain of $.03 over the same period in 1994.
The sales momentum of the first quarter is not expected to continue at the
same pace for the balance of the year, although modest growth is anticipated for
the year. Net income should also show a modest increase if raw material costs
exhibit more stability in the next three quarters.
Financial Position and Liquidity
- --------------------------------
Cash flows from operating activities reflected the seasonality of the
industry. The increases in accounts and notes receivable due to dated order
shipments and the higher inventory levels in the first quarter of 1995 exceeded
those of the previous year. The significant sales increase in 1995 was the
principal driver of the increases. Net income, similar to 1994, was insufficient
to provide the financial support for the increase.
A major source of the funds required for the deficiency in operating
activities in both 1995 and 1994 was a decrease in short-term investments. The
utilization of short-term investments was supplemented by short-term debt of
$28,992,000 and $7,459,000 in 1995 and 1994 respectively.
Cash flows from investing activities consisted of the reduction in
short-term investments which was applied to various capital assets in addition
to the aforementioned support of accounts and notes receivable and inventories.
Cash flows from financing activities were derived from short-term debt
financing which in the first quarter of 1995 amounted to $28,992,000 compared
with $7,459,000 in the comparable period of the prior year. Partial application
of the proceeds provided for payment of dividends and the purchase of treasury
stock. Such purchases of stock
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
are not a reflection of a formal acquisition program, but are transacted
principally to provide liquidity for estate taxes and other specific purposes.
The Company expects to continue to utilize short-term bank borrowing in
the United States through the second quarter and at decreasing levels in the
third quarter. In the fourth quarter the amounts are anticipated to be minimal.
The Canadian and New Zealand subsidiaries utilize their respective
lines of credit for supporting working capital requirements and for longer-term
capital needs.
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<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Securityholders
- --------------------------------------------------------
The only matters which were submitted to a vote of shareholders to date
during the 1995 fiscal year were the following which were acted upon at the
Annual Meeting of Shareholders which was held on April 20, 1995.
Election of Directors: - the following persons were elected as Class I
Directors of the Company to serve for a three year term: - Benjamin M. Belcher,
Jr., Yvan Dupuy, William J. Fritz, Gerald W. Moore and Michael C. Quaid. The
following person was elected as Class III Director of the Company to serve for a
two year term: - Robert J. Hodgson. The following persons continue in office as
directors: Class II Directors - Charles H. Bergmann, Frank W. Burr, Joseph
Sobie, Charles C. Vail, Ward B. Wack and Sara B. Wardell. Class III Directors: -
Ward C. Belcher, Ralph W. Lettieri, John C. Moore, Jr., Richard Roob and Maurice
C. Workman.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the three months ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Benjamin Moore & Co.
----------------------------------
(Registrant)
Date May 12, 1995 M.C. Workman
-------------------- ----------------------------------
Maurice C. Workman
(President)
Date May 12, 1995 W.J Fritz
-------------------- ----------------------------------
William J. Fritz, Vice President -
Finance and Treasurer
(Principal Financial Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE THREE MONTHS ENDED
MARCH 31, 1995 EXTRACTED FROM THE CONDENSED CONSOLIDATED STATEMENT OF INCOME,
CONDENSED CONSOLIDATED BALANCE SHEET, CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS AND THE NOTES THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 981
<SECURITIES> 120
<RECEIVABLES> 135,275
<ALLOWANCES> 12,009
<INVENTORY> 66,947
<CURRENT-ASSETS> 220,119
<PP&E> 163,182
<DEPRECIATION> 84,604
<TOTAL-ASSETS> 337,892
<CURRENT-LIABILITIES> 101,034
<BONDS> 5,130
<COMMON> 131,643
0
0
<OTHER-SE> 89,257
<TOTAL-LIABILITY-AND-EQUITY> 337,892
<SALES> 126,859
<TOTAL-REVENUES> 126,859
<CGS> 71,086
<TOTAL-COSTS> 119,442
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,179
<INTEREST-EXPENSE> 474
<INCOME-PRETAX> 7,417
<INCOME-TAX> 3,144
<INCOME-CONTINUING> 4,333
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,333
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
