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, 1996 Commission File Number 0-8894
Benjamin Moore & Co.
(Exact Name of registrant as specified in its charter)
New Jersey 13-5256230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 Chestnut Ridge Road, Montvale, New Jersey 07645
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 573-9600
None
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 May 1, 1996, 9,419,720 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.
--------
Part I. Financial Information
Condensed Consolidated Statements of Income -
Three Months Ended March 31, 1996 and 1995................ 3
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995...................... 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995................ 5
Notes to Condensed Consolidated Financial Statements.......... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 7-8
Part II. Other Information.......................................... 9
<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,
----------------------------
1996 1995
----------- -----------
(Unaudited) (Unaudited)
Net Sales .................................... $ 133,506 $ 126,859
----------- -----------
Costs and expenses:
Cost of products sold .................... 73,371 71,086
Selling, administrative and general ...... 51,864 48,258
Other expense (income), net .............. 290 98
----------- -----------
Total costs and expenses ............. 125,525 119,442
----------- -----------
Income before taxes and minority
interest .................................. 7,981 7,417
Income tax provision ......................... 3,674 3,144
Minority interest in income of
subsidiaries .............................. (244) (60)
----------- -----------
Net income ................................... $ 4,551 $ 4,333
=========== ===========
Weighted average number of common
shares outstanding ........................ 9,445,534 9,599,853
=========== ===========
Earnings per share of common stock ........... $ .48 $ .45
=========== ===========
Cash dividends declared per share of
common stock .............................. $ .40 $ .40
=========== ===========
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>
March 31, December 31,
1996 1995
--------- ---------
(Unaudited) (a)
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments ............................ $ 1,760 $ 11,356
--------- ---------
Accounts and notes receivable - net ........................ 136,674 98,148
--------- ---------
Inventories:
Finished goods ............................................ 42,344 42,082
Raw materials and supplies ................................ 22,814 26,482
--------- ---------
65,158 68,564
--------- ---------
Other current assets ....................................... 33,614 29,216
--------- ---------
Total current assets ................................... 237,206 207,284
Property - net ................................................. 80,301 78,361
Other non-current assets ....................................... 41,616 44,510
--------- ---------
Total assets ........................................... $ 359,123 $ 330,155
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term obligations $ 56,424 $ 30,813
Accounts payable ........................................... 24,627 27,398
Accrued taxes based on income .............................. 1,286
Accrued expenses and other current liabilities ............. 33,461 27,276
--------- ---------
Total current liabilities .............................. 115,798 85,487
--------- ---------
Postretirement and postemployment benefits ..................... 5,400 5,109
--------- ---------
Deferred income taxes .......................................... 2,857 2,876
--------- ---------
Long-term obligations .......................................... 3,948 3,968
--------- ---------
Minority shareholders' interest in net
assets of subsidiaries ...................................... 4,753 5,054
--------- ---------
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 ................................ 31,580 31,564
Retained earnings ......................................... 192,381 191,604
Accumulated currency translation adjustment ............... (2,790) (2,907)
Cost of treasury stock; 3,735,220 shares at
March 31, 1996 and 3,696,419 shares at
December 31, 1995 ....................................... (108,653) (105,837)
Employees' stock ownership and stock purchase
plan notes .............................................. (17,794) (18,406)
--------- ---------
Shareholders' equity - net ............................. 226,367 227,661
--------- ---------
Total liabilities and shareholders' equity ............. $ 359,123 $ 330,155
========= =========
</TABLE>
(a) The condensed balance sheet at December 31, 1995 has been taken from the
audited financial statements at that date.
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
BENJAMIN MOORE & CO. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1996 1995
-------- --------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................ $ 4,551 $ 4,333
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ...................... 3,401 2,759
Minority interest in net income of subsidiaries .... (244) (60)
Other .............................................. 203 310
Change in assets and liabilities:
Increase in accounts and notes receivable ...... (37,732) (35,386)
Decrease (increase) in inventories ............. 5,031 (5,341)
Other .......................................... (159) 3,203
-------- --------
Net cash flows used in operating activities (24,949) (30,182)
-------- --------
Cash flows from investing activities:
Payments for purchase of property, plant and
equipment ............................................ (3,548) (6,524)
(Increase) decrease in short-term investments ......... (68) 12,451
Other ................................................. (317) (1,354)
-------- --------
Net cash flows from investing activities .. (3,933) 4,573
-------- --------
Cash flows from financing activities:
Proceeds from short-term debt ......................... 25,259 28,992
Payment of dividends .................................. (3,662) (3,702)
Purchase of treasury stock ............................ (2,817) (2,754)
Other ................................................. 436 617
-------- --------
Net cash flows used in financing activities 19,216 23,153
-------- --------
Effect of exchange rate changes on cash ................... 1 2
-------- --------
Net decrease in cash ...................................... (9,665) (2,454)
Cash at beginning of period ............................... 11,232 3,435
-------- --------
Cash at end of period ..................................... $ 1,567 $ 981
======== ========
Supplemental disclosures of cash flow information:
Interest paid ......................................... $ 657 $ 326
Income taxes paid ..................................... $ 3,001 $ 2,467
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<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, 1996 and the results of operations for
the three month periods ended March 31, 1996 and 1995, and changes in cash
flows for the three months ended March 31, 1996 and 1995. 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, 1995.
2. The results of operations for the three month periods ended March 31, 1996
and 1995 are not necessarily indicative of operations for the entire year.
-6-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operating Results
Net sales of $133,506,000 in the first quarter of 1996 surpassed those of
the comparable period in 1995 by $6,647,000 or 5.2%
Trade sales coatings showed considerable gains in regional areas of the
United States, particularly in the Mid-Atlantic and Southern states and the Far
West. Sluggishness prevailed in most of the Mid-West and New England and
extended into Canada, where first quarter sales were weak.
Production finishes coatings, which represent less than 10% of total sales,
reflected modest growth in the United States but slowness in Canada.
Cost of products sold benefited from a stabilizing raw material cost
pattern as well as the effect of selected selling price adjustments during the
past year. As a percentage of sales, cost of goods sold declined one full
percentage point to 55%.
Selling, administrative and general expenses were up $3,606,000 or 7.5%
over 1995. Market development initiatives in California, product promotions, and
internal reorganization expense represented a considerable portion of the
increase, although the majority of the increase pertained to the higher sales
volume and general inflationary factors.
The increase in other expense related to interest expense on bank
borrowing primarily in the United States and to a lesser degree in Canada and
New Zealand.
After a provision for federal and state income taxes which reflected a
combined rate of approximately 46% and 42.4% for 1996 and 1995 respectively, net
income amounted to $4,551,000, an increase of $218,000 or 5% over the previous
year.
Earnings per share for the first quarter were $.48, which was $.03 or 6.7%
above the similar period in 1995.
-7-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Although the sales strength of the first quarter may not continue for the
balance of the year, net income in 1996 is expected to substantially exceed the
prior year's result.
Financial Position and Liquidity
The seasonal nature of the industry was evident in the first quarter.
Cash flow from operating activities reflected the traditional springtime
build-up of accounts and notes receivable without the generation of sufficient
quarterly net income to support the increase. Capital expenditures for regularly
scheduled equipment replacement also required funds beyond the profit of the
quarter.
Short-term borrowing under the company's credit facility was utilized as a
source of funds. The loans were also applied to the payment of dividends and the
purchase of treasury stock. Such purchases of stock do not represent the
implementation of a formal acquisition program, but are transacted principally
to provide liquidity for estate taxes and other specific purposes.
The Company plans to continue to employ its credit facility in the United
States for short-term support of its working capital. The Canadian and New
Zealand subsidiaries will maintain borrowings for longer-term capital needs as
well as for operating capital requirements.
-8-
<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 1996 fiscal year were the following which were acted upon at the
Annual Meeting of Shareholders which was held on April 18, 1996.
Election of Directors: - the following persons were elected as Class II
Directors of the Company to serve for a three year term: - Charles H. Bergmann,
Jr., Frank W. Burr, Joseph Sobie, Charles C. Vail, Ward B. Wack and Sara B.
Wardell. The following persons continue in office as directors: Class I
Directors - Benjamin M. Belcher, Jr., Yvan Dupuy, Willaim J. Fritz, Gerald W.
Moore and Michael C. Quaid. Class III Directors: - Ward C. Belcher, Robert J.
Hodgson, 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, 1996.
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 13, 1996 /s/ Yvan Dupuy
-------------------------- --------------------------
Yvan Dupuy
(President)
Date May 13, 1996 /s/ W.J. Fritz
-------------------------- ----------------------------
William J. Fritz, Vice President -
Finance and Treasurer
(Principal Financial Officer)
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE THREE MONTHS
ENDED MARCH 31, 1996 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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,567
<SECURITIES> 193
<RECEIVABLES> 149,814
<ALLOWANCES> 13,145
<INVENTORY> 65,158
<CURRENT-ASSETS> 237,206
<PP&E> 171,577
<DEPRECIATION> 91,276
<TOTAL-ASSETS> 359,123
<CURRENT-LIABILITIES> 115,798
<BONDS> 3,948
0
0
<COMMON> 131,643
<OTHER-SE> 94,724
<TOTAL-LIABILITY-AND-EQUITY> 359,123
<SALES> 133,506
<TOTAL-REVENUES> 133,506
<CGS> 73,371
<TOTAL-COSTS> 125,525
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,073
<INTEREST-EXPENSE> 807
<INCOME-PRETAX> 7,981
<INCOME-TAX> 3,674
<INCOME-CONTINUING> 4,551
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,551
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
