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 September 30, 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
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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
--- ---
As of November 1, 1995, 9,495,249 shares of Common Stock of the registrant were
issued and outstanding.
(Page 1 of 12 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 and Nine Months Ended
September 30, 1995 and 1994................................. 3
Condensed Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994.................... 4
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 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
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
<TABLE><CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
1995 1994 1995 1994
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net Sales................................... $159,491 $158,865 $445,972 $427,833
------- ------- ------- -------
Costs and expenses:
Cost of products sold.................. 86,411 79,893 241,366 218,784
Selling, administrative and general.... 51,144 47,044 152,420 145,701
Other expense (income), net............ 654 111 1,335 (78)
--------- --------- --------- ----------
Total costs and expenses........... 138,209 127,048 395,121 364,407
------- ------- ------- -------
Income before taxes and minority
interest............................... 21,282 31,817 50,851 63,426
Income tax provision........................ 8,840 12,998 21,054 25,864
Minority interest in income of
subsidiary............................. 7 273 67 689
--------- -------- -------- --------
Net income.................................. $12,435 $18,546 $29,730 $36,873
====== ====== ====== ======
Weighted average number of common
shares outstanding..................... 9,517,970 9,662,344 9,557,535 9,641,992
========= ========= ========= =========
Earnings per share of common stock.......... $1.31 $1.92 $3.11 $3.82
==== ==== ==== ====
Cash dividends declared per share
of common stock........................ $.40 $.37 $1.20 $1.11
=== === ==== ====
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE><CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited) (a)
ASSETS
<S> <C> <C>
Current assets:
Cash and short-term investments........................................ $ 1,586 $ 16,007
-------- ---------
Accounts and notes receivable - net.................................... 139,755 87,801
------- ---------
Inventories
Finished goods....................................................... 41,591 38,514
Raw materials and supplies........................................... 24,337 23,026
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65,928 61,540
-------- --------
Other current assets................................................... 29,969 26,837
-------- --------
Total current assets................................................. 237,238 192,185
Property - net............................................................. 78,221 74,269
Other non-current assets................................................... 43,740 37,634
-------- --------
Total assets.................................................... $359,199 $304,088
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term obligations................................................ $ 36,967 $ 8,582
Accounts payable....................................................... 26,621 22,629
Accrued taxes based on income.......................................... 3,480 3,449
Accrued expenses and other current liabilities......................... 41,742 30,820
--------- ---------
Total current liabilities............................................ 108,810 65,480
-------- ---------
Postretirement and postemployment benefits................................. 2,670 3,765
--------- ---------
Deferred income taxes...................................................... 2,668 2,603
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Long-term obligations...................................................... 3,989 5,005
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Minority shareholders' interest in net
assets of subsidiary................................................... 5,557 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............................................. 31,403 31,295
Retained earnings...................................................... 196,567 178,296
Accumulated currency translation adjustment............................ (2,432) (4,019)
Cost of treasury stock; 3,659,088 shares at
September 30, 1995, and 3,542,080 shares at
December 31, 1994.................................................... (102,750) (93,772)
Employees' stock ownership and stock purchase
plan notes........................................................... (18,926) (21,905)
-------- --------
Shareholders' equity - net........................................... 235,505 221,538
------- -------
Total Liabilities and shareholders' equity........................... $359,199 $304,088
======= =======
</TABLE>
(a) The condensed balance sheet at December 31, 1994 has been taken from the
audited financial statements of that date.
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE>
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE><CAPTION>
Nine Months Ended
September 30,
-----------------
1995 1994
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income......................................................... $ 29,730 $ 36,873
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................... 8,550 6,734
Minority interest in net income of subsidiaries................. 67 688
Other........................................................... (325) (408)
Change in assets and liabilities:
Increase in accounts and notes receivable................... (51,385) (45,975)
Increase in inventories..................................... (3,946) (3,511)
Other....................................................... 1,359 22,883
--------- --------
Net cash flows provided by operating activities........ (15,950) 17,284
---------- --------
Cash flows from investing activities:
Payments for purchase of property, plant and
equipment......................................................... (11,004) (14,712)
Decrease in short-term investments................................. 12,449 20,566
Payment for purchase of majority interest in subsidiary............ (1,695)
Other.............................................................. (3,561) (3,446)
---------- ---------
Net cash flows from investing activities............... (2,116) 713
---------- --------
Cash flows from financing activities:
Proceeds from short-term debt...................................... 35,788 3,013
Payment of dividends............................................... (11,087) (10,388)
Purchase of treasury stock......................................... (8,984) (12,460)
Sale of treasury stock............................................. 47 463
Other.............................................................. 307 1,703
--------- --------
Net cash flows used in financing activities............ 16,071 (17,669)
--------- --------
Effect of exchange rate changes on cash................................ 23 12
--------- --------
Net increase (decrease) in cash........................................ (1,972) 340
Cash at beginning of period............................................ 3,435 5,011
--------- --------
Cash at end of period.................................................. $ 1,463 $ 5,351
========= ========
Supplemental disclosures of cash flow information:
Interest paid...................................................... $ 2,047 $ 948
Income taxes paid.................................................. $ 21,245 $ 21,734
</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
financial position as of September 30, 1995 and December 31, 1994, and the
results of operations for the three and nine month periods ended September
30, 1995 and 1994, and changes in cash flows for the nine months ended
September 30, 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 methods of presentation used in 1995.
3. The results of operations for the three and nine month periods ended
September 30, 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
- -----------------
It should be noted that quarterly comparisons between a current and a
previous year are most difficult in the paint industry. The timing and terms of
seasonal dating programs, the timing and extent of price increases, and the
introduction of product promotions can produce wide swings in quarterly results.
Net Sales slowed considerably in the third quarter with unit sales
declining by approximately 2%. The strong sales performance in the early part of
the year enabled the nine months' results to show a small unit gain and a modest
revenue increase. Net Sales for the nine months amounted to $445,972,000, which
was 4.2% above the same period in 1994.
Weakness in trade sales coatings prevailed primarily in the Midwest and
Southwest regions of the United States and in Canada during the third quarter.
Production finishes coatings' sales slackened in the third quarter but benefited
from the acquisition of a small coatings manufacturer in Georgia.
Cost of products sold reflected the significant increases in raw
material cost levels which have been incurred throughout the year. Raw material
cost increases of approximately 8% in the United States and even higher in
Canada, along with a small unit sales gain, resulted in an increase of 10.3% in
cost of goods sold for the nine months.
Selling, administrative and general expenses rose 8.7% in the third
quarter and 4.6% for the nine months. The increases in both periods were
attributable, in addition to general inflationary factors, to higher
depreciation and associated expenses relating to the facilities expansion of the
past two years, sales promotions, and market development activities.
Other expense was up $543,000 and $1,413,000 in the third quarter and
nine months respectively, mostly due to higher interest expense.
-7-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
After providing for income taxes and minority interest, net
income for the third quarter of 1995 was down $6,111,000. For the nine months
net income declined $7,143,000.
Earnings per share were $1.31 in the third quarter and $3.11 for the
nine months.
If sales in the seasonally weaker fourth quarter surpass those of the
previous year, the year-to-date percentage decrease in net income should be
lessened.
FINANCIAL POSITION AND LIQUIDITY
- --------------------------------
Net income of $29,730,000 for the nine months ended September 30,
1995, which was down $7,143,000 from last year, was insufficient to support the
increase in accounts and notes receivable.
Short-term bank borrowing and the utilization of proceeds from
short-term investments were required to supplement the net cash flows from
operating and investing activities.
The increase of $35,788,000 in short term debt in 1995 was
significantly higher than during the same period in 1994 due to working capital
requirements as well as for plant equipment replacements and the completion of
the expanded facilities in Dallas, Texas; Birmingham, Alabama; and Auckland, New
Zealand. The relocated Jacksonville plant was completed and became operational
in the third quarter.
Cash flows used in financing activities reflected dividend payments and
the purchase of treasury stock. Such purchases do not follow a formal plan of
acquisition, but are transacted to provide liquidity for shareholder estate
taxes and other specific purposes.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
It is anticipated that the parent company and its subsidiaries will
continue to utilize their respective lines of credit in the fourth quarter.
However, the actual amount of the bank borrowing should be lower than the level
of September 30, 1995.
-9-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following is an index of the exhibits included in this Form
10-Q:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the nine months ended September 30, 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 November 13, 1995 M.C. Workman
---------------------------- -----------------------------------
Maurice C. Workman
(President)
Date November 13, 1995 W.J. Fritz
---------------------------- -----------------------------------
William J. Fritz, Vice President -
Finance and Treasurer
(Principal Financial Officer)
-10-
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
Exhibit 27
Benjamin Moore & Co.
Financial Data Schedule
For the Nine Months Ended September 30, 1995
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,586
<SECURITIES> 0
<RECEIVABLES> 154,827
<ALLOWANCES> 15,072
<INVENTORY> 65,928
<CURRENT-ASSETS> 237,238
<PP&E> 168,083
<DEPRECIATION> 89,862
<TOTAL-ASSETS> 359,199
<CURRENT-LIABILITIES> 108,810
<BONDS> 3,989
<COMMON> 131,643
0
0
<OTHER-SE> 103,862
<TOTAL-LIABILITY-AND-EQUITY> 359,199
<SALES> 445,972
<TOTAL-REVENUES> 445,972
<CGS> 241,366
<TOTAL-COSTS> 393,786
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,710
<INTEREST-EXPENSE> 2,136
<INCOME-PRETAX> 50,851
<INCOME-TAX> 21,054
<INCOME-CONTINUING> 29,730
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,730
<EPS-PRIMARY> 3.11
<EPS-DILUTED> 3.11
</TABLE>
