UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Thirteen Weeks Ended April 30, 1994
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ________ to ________
Commission File Number 1-8057
L. LURIA & SON, INC.
(Exact name of registrant as specified
in its charter)
FLORIDA 59-0620505
(State of incorporation) (IRS Employer Identification
No.)
5770 Miami Lakes Drive, Miami Lakes, Florida 33014
(Address of principal executive offices) (zip code)
(305) 557-9000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (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 ___
Common stock, par value $.01 per share: 4,035,424 shares
outstanding as of May 31, 1994
Class B stock, par value $.01 per share: 1,375,947 shares
outstanding as of May 31, 1994
This filing consists of 10 pages
L. LURIA & SON, INC.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements . . . . . . . . . . . .
Condensed Balance Sheets - April 30, 1994
(Unaudited), May 1, 1993 (Unaudited), and
January 29, 1994 . . . . . . . . . . . . . . 3
Condensed Statements of Operations (Unaudited)
for the thirteen weeks ended April 30, 1994
and May 1, 1993 . . . . . . . . . . . . . . . 4
Condensed Statements of Cash Flows (Unaudited)
for the thirteen weeks ended April 30, 1994 and
May 1, 1993. . .. . . . . . . . . . . . . . . . 5
Notes to Condensed Financial Statements. . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . 9
Signatures. . . . . . . . . . . . . . . . . . . . 10
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
L. LURIA & SON, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) April 30, May 1, January 29,
1994 1993 1994
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash
equivalents $ 771 $ 6,740 $ 17,371
Accounts receivable 1,814 1,353 2,277
Inventories 90,413 95,575 87,470
Prepaid expenses 3,180 2,960 2,205
Total current assets 96,178 106,628 109,323
Property, net 31,018 26,760 29,448
Other assets 1,350 1,372 1,204
Total assets $128,546 $134,760 $139,975
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank
borrowing $-- $-- $--
Accounts payable and
accrued liabili-
ties 42,655 48,299 53,567
Current portion of
long-term debt
and obligations under
capital leases 206 223 223
Total current liabili-
ties 42,861 48,522 53,790
Long-term debt and
obligations under
capital leases 1,116 1,321 1,156
Deferred taxes 1,183 2,923 1,283
Shareholders' Equity:
Preferred stock: $1 par
value, 5,000,000 shares
authorized; no shares
issued -- -- --
Common stock:
Common: $.01 par value,
14,000,000 shares
authorized; 4,035,799
shares issued and
outstanding at April 30,
1994; 3,721,998 shares
issued and outstanding at
May 1, 1993; and 3,987,314
shares issued and out-
standing at
January 29, 1994 39 37 39
Class B: $.01 par value,
6,000,000 shares
authorized; 1,375,947 shares
issued and outstanding at
April 30, 1994; 1,648,407
shares issued and
outstanding at May 1, 1993;
and 1,426,947 issued and
outstanding at January 29,
1994 14 16 14
Additional paid-in
capital 18,303 17,725 18,353
Retained earnings 65,030 64,216 65,340
Total shareholders'
equity 83,386 81,994 83,746
Total liabilities and
shareholders' equity $128,546 $134,760 $139,975
</TABLE>
See accompanying notes to condensed financial statements.
L. LURIA & SON, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
(in thousands, except income
per common share) Thirteen Weeks Ended
April 30, 1994 May 1, 1993
Net sales $44,201 $48,341
Cost of goods sold, buying
and warehousing costs 31,640 33,762
Gross margin 12,561 14,579
Operating expenses 13,079 14,216
Income (Loss) from operations (518) 363
Interest income - net 18 71
Income (Loss) before income tax (500) 434
Income tax (benefit) (190) 163
Net income (loss) $ (310) $ 271
Weighted average number of common
shares outstanding 5,414 5,365
Income (Loss) per common
share $ (.06) $ .05
</TABLE>
See accompanying notes to condensed financial statements.
L. LURIA & SON, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
(in thousands) Thirteen Weeks Ended
April 30, 1994 May 1, 1993
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ (310) $ 271
Adjustments to reconcile
net income (loss)
to net cash used in
operating activities:
Depreciation 1,126 1,003
Deferred tax (benefit) (100) (24)
Decrease in accounts
receivable 463 1,275
(Increase) in inventories (2,943) (17,675)
(Increase) in prepaid
expenses (975) (520)
(Increase) Decrease in
other assets (146) 49
Decrease in accounts
payable and accrued
liabilities (10,912) (2,294)
Net cash used in operating
activities (13,797) (17,915)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Additions to property (2,696) (205)
Net cash applied to
investing activities (2,696) (205)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowing under line of
credit agreements -- --
Repayments of long-term debt (37) (24)
Repayments of obligations under
capital leases (20) (17)
Treasury shares acquired (50) 43
Net cash provided by financing
activities (107) 2
Net decrease in cash and
cash equivalents (16,600) (18,118)
Cash and cash equivalents,
beginning of period 17,371 24,858
Cash and cash equivalents,
end of period $ 771 $ 6,740
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amounts
capitalized) $ 0 $ 15
Income taxes $ 1,150 $ 2,655
</TABLE>
See accompanying notes to condensed financial statements.
L. LURIA & SON, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED April 30, 1994 AND May 1, 1993
GENERAL
The accompanying condensed financial statements have been prepared
in accordance with the instructions to Form 10-Q of the Securities
and Exchange Commission and in accordance with generally accepted
accounting principles applicable to interim financial statements
and do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management of L. Luria & Son, Inc.
(the "Company"), the accompanying condensed financial statements
reflect all adjustments necessary to present fairly the financial
position of the Company as of April 30, 1994 and May 1, 1993, and
the results of its operations and cash flows for the periods ended
April 30, 1994 and May 1, 1993. Furthermore, all adjustments were
of a normal and recurring nature.
SEASONALITY
The results of operations for the thirteen weeks ended April 30,
1994 are not indicative of the results to be expected for the
entire year because the Company's operations are seasonal.
ACCOUNTING POLICIES
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the 1994 L. Luria
& Son, Inc. Annual Report, which is incorporated by reference in
Form 10-K.
ACCOUNTING CHANGE
As set forth in Note 2 to the Company's financial statements in the
1994 L. Luria & Son, Inc. Annual Report, which is incorporated by
reference in Form 10-K, in the fourth quarter of fiscal year 1994,
the Company changed its method of valuing jewelry inventory from
the LIFO (last-in, first-out) to the FIFO (first-in, first-out)
method. As required, all prior year financial statements presented
have been restated to reflect this change. Accordingly, the first
quarter of last year was restated to reduce net earnings by $39,000
or $.01 per share.
L. LURIA & SON, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
The following table sets forth for the periods indicated
percentages which certain items reflected in the financial data
bear to net sales of the Company:
<TABLE>
<CAPTION>
<S> <C>
RELATIONSHIPS TO NET SALES
PERIOD ENDED
April 30, 1994 May 1, 1993
Net sales 100.0% 100.0%
Cost of goods sold,
buying and warehousing
costs 71.6 69.8
Gross margin 28.4 30.2
Operating expenses 29.6 29.4
Income (Loss) from operations (1.2) .8
Interest income - net .1 .1
Income (Loss) before income tax (1.1) .9
Income tax (benefit) ( .4) .3
Net income (loss) (.7)% .6%
</TABLE>
NET SALES
For the thirteen weeks ended April 30, 1994, net sales were
$44,201,000, an 8.6% decrease compared to the same period last
year. Comparable store sales decreased 9.5%. Last year's first
quarter sales were effected by hurricane replacement purchases. In
addition, this year's first quarter sales were impacted by efforts
to reduce inventory levels below last year's, reductions in
advertising expenditures and softening customer demand in the
Company's South Florida markets.
GROSS MARGINS
Gross margins as a percent of net sales for the first thirteen
weeks of the current year were 28.4% as compared to 30.2% for the
prior year first quarter due to markdowns incurred to reduce
inventory levels. As a result of the Company's efforts, as of
April 30, 1994, inventories are $5 million below last year's level.
The overall sales mix remained constant with jewelry sales
representing 37.1% of total sales in both periods. As set forth in
Note 2 to the Company's financial statements in the 1994 L. Luria
& Son, Inc. Annual Report, in the fourth quarter of fiscal year
1994, the Company changed its method of valuing jewelry inventory
from the LIFO (last-in, first-out) to the FIFO (first-in, first-
out) method. As required, all prior year financial statements
presented have been restated to reflect this change. Accordingly,
the first quarter of last year was restated to reduce net earnings
by $39,000 or $.01 per share.
L. LURIA & SON, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
OPERATING EXPENSES
Operating expenses for the first quarter were $13,019,000, a
reduction of $1,137,000 from last year's expenses. Operating
expenses for the first quarter increased as a percent of net sales
from 29.4% last year to 29.6% this year, due to the sales decrease.
Cost controls reduced expenses from last year's levels in most
expense categories, with significant reductions in advertising and
sales promotion, equipment lease costs, and other overhead
expenses. There were no significant charges to the Restructuring
Charge reserves in the first quarter of fiscal 1995.
INCOME TAX BENEFIT
Income tax benefit for the thirteen-week period ended April 30,
1994 is estimated at 38% which is comparable to last year's 38%
rate for the quarter.
INVENTORIES
At April 30, 1994, inventory levels were $90.4 million, 5.4% below
last year's $95.6 million due to the Company's inventory control
efforts.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1994, the Company had approximately $83.4 million in
shareholders' equity and approximately $1.1 million in long-term
debt and capital leases. Cash and cash equivalents decreased $16.6
million since the end of fiscal 1994 primarily to finance the
payment of inventory purchased earlier in the year and capital
expenditures. At April 30, 1994, the Company had available lines
of credit of $40 million, of which there were no borrowings
outstanding at that time.
The Company believes that cash provided by operations, available
lines of credit and access to the capital markets at competitive
rates will be adequate to meet its working capital and capital
expenditure requirements for fiscal year 1995.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) There were no reports on Form 8-K filed for the
thirteen-week period ended April 30, 1994.
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.
L. LURIA & SON, INC.
Date: June 9, 1994 /s/ Peter Luria
Peter Luria
President and Chief
Operating Officer
Date: June 9, 1994 /s/ Duane R. Wolter
Duane R. Wolter
Sr. Vice President-Finance,
Chief Financial Officer and
and Principal Accounting
Officer
