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 29, 1995
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: 4,011,024 shares
outstanding as of May 31, 1995
Class B stock, par value $.01 per share: 1,415,534 shares
outstanding as of May 31, 1995
L. LURIA & SON, INC.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed Balance Sheets - April 29,
1995 (Unaudited), April 30, 1994
(Unaudited), and January 28, 1995
Condensed Statements of Operations
(Unaudited) for the thirteen weeks
ended April 29, 1995 and April 30,
1994
Condensed Statements of Cash Flows
(Unaudited) for the thirteen weeks
ended April 29, 1995 and April 30,
1994
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
L. LURIA & SON, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) April 29, April 30, January 28,
1995 1994 1995
ASSETS (Unaudited) (Unaudited)
Current assets:
Cash and cash
equivalents $ 1,124 $ 771 $ 11,100
Accounts receivable 1,402 1,814 1,634
Inventories 83,750 90,413 82,931
Prepaid expenses 2,976 3,180 2,716
Total current assets 89,252 96,178 98,381
Property, net 40,055 32,147 40,429
Other assets 222 221 214
Total assets $129,529 $128,546 $139,024
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank
borrowing $ 18,800 $ -- $ --
Accounts payable
and accrued
liabilities 24,792 42,655 52,169
Current portion of
long-term debt
and obligations under
capital leases 206 206 206
Total current liabilities 43,798 42,861 52,375
Long-term debt and
obligations under
capital leases 939 1,116 976
Deferred taxes 1,995 1,183 1,895
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;
4,011,024 shares issued and
outstanding at April 29,
1995; 4,035,799 shares
issued and outstanding at
April 30, 1994; and 3,991,780
shares issued and outstanding
at January 28, 1995 39 39 39
Class B: $.01 par value,
6,000,000 shares authorized;
1,415,534 shares issued and
outstanding at April 29, 1995;
1,375,947 shares issued and
outstanding at April 30, 1994;
and 1,434,534 issued and
outstanding at January 28,
1995 14 14 14
Additional paid-in capital 18,230 18,303 18,230
Retained earnings 64,514 65,030 65,495
Total shareholders'
equity 82,797 83,386 83,778
Total liabilities and
shareholders' equity $129,529 $128,546 $139,024
See accompanying notes to condensed financial statements.
</TABLE>
L. LURIA & SON, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands, except income
per common share) Thirteen Weeks Thirteen Weeks
Ended Ended
April 29, 1995 April 30, 1994
Net sales $37,902 $44,201
Cost of goods sold, buying and
warehousing costs 26,853 31,640
Gross margin 11,049 12,561
Operating expenses 12,436 13,079
Loss from operations (1,387) (518)
Interest income (expense)- net (185) 18
Loss before income tax benefit (1572) (500)
Income tax benefit (590) (190)
Net loss $ (982) $ (310)
Weighted average number of common
shares outstanding 5,427 5,414
Loss per common share $ (.18) $ (.06)
See accompanying notes to condensed financial statements.
</TABLE>
L. LURIA & SON, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands) Thirteen Weeks Thirteen Weeks
Ended Ended
April 29, 1995 April 30, 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) $ (982) $ (310)
Adjustments to reconcile
net (loss) to net cash used
in operating activities:
Depreciation 1,007 1,126
Deferred tax (benefit) 100 (100)
Decrease in accounts receivable 231 463
(Increase) in inventories (819) (2,943)
(Increase) in prepaid expenses (260) (975)
(Increase) Decrease in other
assets (8) (146)
Decrease in accounts payable and
accrued liabilities (27,377) (10,912)
Net cash used in operating
activities (28,108) (13,797)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Additions to property (631) (2,696)
Net cash applied to investing
activities (631) (2,696)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowing under line of
credit agreements 18,800 --
Repayments of long-term debt (37) (37)
Repayments of obligations
under capital leases 0 (20)
Treasury shares acquired --- (50)
Net cash provided by financing
activities 18,763 (107)
Net decrease in cash and cash
equivalents (9,976) (16,600)
Cash and cash equivalents,
beginning of period 11,100 17,371
Cash and cash equivalents,
end of period $ 1,124 $ 771
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period
for:
Interest (net of amounts
capitalized) $ 121 $ 0
Income taxes $ (49) $ 1,150
See accompanying notes to condensed financial statements.
</TABLE>
L. LURIA & SON, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED APRIL 29, 1995
AND APRIL 30, 1994
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 29, 1995 and April 30, 1994,
and the results of its operations and cash flows for the periods
ended April 29, 1995 and April 30, 1994. Furthermore, all
adjustments were of a normal or recurring nature.
SEASONALITY
The results of operations for the thirteen weeks ended April 29,
1995 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 1995 L. Luria
& Son, Inc. Annual Report, which is incorporated by reference in
Form 10-K.
RECLASSIFICATIONS
Certain prior year immaterial amounts have been reclassified to
conform with current year presentation.
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> <C>
RELATIONSHIPS TO NET SALES
PERIOD ENDED
April 29, 1995 April 30, 1994
Net sales 100.0% 100.0%
Cost of goods sold, buying
and warehousing costs 70.8 71.6
Gross margin 29.2 28.4
Operating expenses 32.9 29.6
Loss from operations (3.7) (1.2)
Interest income (expense) net (.5) .1
Loss before income tax (4.2) (1.1)
Income tax benefit (1.6) ( .4)
Net loss (2.6)% ( .7)%
</TABLE>
NET SALES
For the thirteen weeks ended April 29, 1995, net sales were
$37,902,000 a 14.2% decrease compared to the same period last year.
Comparable store sales decreased 13.4%. This year's first quarter
sales were impacted by operating 45 stores vs. 50 stores in the
same period last year, reduced percent off promotions and
softening customer demand in the Company's markets.
GROSS MARGINS
Gross margins as a percent of net sales for the first thirteen
weeks of the current year increased to 29.2% as compared to 28.4%
for the prior year first quarter due to fewer promotional
markdowns and an improved sales mix with jewelry sales
representing 38.2% of total sales this quarter versus 37.1% in last
year's first quarter.
OPERATING EXPENSES
Operating expenses for the current quarter increased as a percent
of net sales to 32.9% this year from 27.5% last year, due primarily
to lower sales than last year. Operating expenses for the quarter
were 4.9% below last year's operating expenses. Expenses were
reduced from last year's levels in most expense categories, with
the most significant reductions in payroll and occupancy expenses.
As part of the Restructuring Plan, the Company closed three catalog
showrooms during the quarter and plans to close and relocate
several additional stores. Approximately $550,000 of incremental
costs associated with closing the three catalog showrooms and
carrying costs associated with previously closed stores has been
charged to the Restructuring Plan reserves established in fiscal
year 1994. The Company currently operates nine superstores (in
addition to 34 catalog showrooms and two jewelry mall stores) and
plans to open at least two additional superstores this year to
replace existing showrooms.
L. LURIA & SON, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
INCOME TAX BENEFIT
Income tax benefit for the thirteen-week period ended April 29,
1995 is estimated at 37.5% compared to last year's 38.0% rate for
the quarter.
INVENTORIES
At April 29, 1995, inventory levels were $83.8 million, 7.3% below
the January 28, 1995 balance of $90.4 million due to the Company's
inventory control efforts and the closing of selected catalog
showrooms.
LIQUIDITY AND CAPITAL RESOURCES
At April 29, 1995, the Company had approximately $82.8 million in
shareholders' equity and approximately $.9 million in long-term
debt and capital leases. Cash and cash equivalents decreased $ 9.9
million since the end of fiscal 1995 primarily to pay for inventory
purchased last year and because land and buildings for stores
opened last year have been internally financed. At April 29,
1995, the Company had available lines of credit of $40 million, of
which there were borrowings outstanding of $18.8 million.
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 1996.
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 29, 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.
L. LURIA & SON, INC.
Date: June 12 , 1995 /s/Peter Luria
Peter Luria
President and Chief
Operating Officer
Date: June 12, 1995 /s/Duane R. Wolter
Duane R. Wolter
Sr. Vice President-Finance,
Chief Financial Officer and
Principal Accounting
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FINANCIAL STATEMENTS - L. LURIA & SON, INC.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-03-1996
<PERIOD-START> JAN-29-1995
<PERIOD-END> APR-29-1995
<CASH> 1,059
<SECURITIES> 65
<RECEIVABLES> 1,402
<ALLOWANCES> 0
<INVENTORY> 83,750
<CURRENT-ASSETS> 89,252
<PP&E> 74,117
<DEPRECIATION> (34,062)
<TOTAL-ASSETS> 129,529
<CURRENT-LIABILITIES> 43,798
<BONDS> 939
<COMMON> 54
0
0
<OTHER-SE> 82,743
<TOTAL-LIABILITY-AND-EQUITY> 129,529
<SALES> 37,902
<TOTAL-REVENUES> 37,902
<CGS> 26,853
<TOTAL-COSTS> 12,436
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 185
<INCOME-PRETAX> (1,572)
<INCOME-TAX> (590)
<INCOME-CONTINUING> (982)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (982)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
</TABLE>
