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Previous: THREE D DEPARTMENTS INC, DEF 14A, 1995-12-15 |
Next: TOTAL TEL USA COMMUNICATIONS INC, 10-Q, 1995-12-15 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended October 28, 1995 Commission File No. 1-5967
---------------- ----------
THREE D DEPARTMENTS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-0733200
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
3200 Bristol Street, Costa Mesa, California 92626
---------------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (714) 662-0818
--------------
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 [_]
----- -----
At October 28, 1995 there were 1,151,494 shares of Class A common stock and
1,276,717 shares of Class B common stock, par value $.25, outstanding.
The total number of pages in this report is 8 .
---
1
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
INDEX
-----
Quarter Ended October 28, 1995
------------------------------
Page
----
Part I. Financial Information:
Item 1. Financial Statements:
Balance sheet at October 28, 1995
and July 29, 1995 3
Statement of operations and retained
earnings for the thirteen week periods ended
October 28, 1995 and October 29, 1994 4
Statement of cash flows for the thirteen
week periods ended October 28, 1995
and October 29, 1994 5
Notes to financial statements 6
Item 2. Management's discussion and analysis of results
of operations and financial position 7
Part II. Other Information 8
Signatures 8
2
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
Balance Sheet
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
October 28, July 29,
1995 1995
------------ ------------
Assets
------
<S> <C> <C>
CURRENT ASSETS:
- ---------------
Cash $ 667,252 $ 319,045
Receivables:
Other 314,379 296,291
Inventories 16,137,804 16,260,487
Prepaid expenses 553,918 475,435
Prepaid income taxes 99,213 98,363
Deferred income taxes 341,437 325,936
----------- -----------
Total current assets 18,114,003 17,775,557
----------- -----------
PROPERTY, FIXTURES AND IMPROVEMENTS, at cost:
- ---------------------------------------------
Property, fixtures and equipment 10,860,723 10,988,714
Leasehold improvements 2,942,142 2,821,530
----------- -----------
13,802,865 13,810,244
Less - accumulated depreciation and amortization 6,566,455 6,550,443
----------- -----------
7,236,410 7,259,801
----------- -----------
OTHER ASSETS:
- -------------
Deferred cost of leases, net 1,231,239 1,263,509
Deferred income taxes 875,846 615,415
Other 1,387,471 1,163,003
----------- -----------
3,494,556 3,041,927
----------- -----------
$28,844,969 $28,077,285
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
CURRENT LIABILITIES:
- -------------------
Long term debt - current portion $ 355,495 $ 312,929
Accounts payable 4,325,937 3,406,867
Accrued liabilities 2,474,066 2,177,819
----------- -----------
Total current liabilities 7,155,498 5,897,615
----------- -----------
LONG TERM DEBT, LESS CURRENT PORTION 9,665,282 9,784,325
- ------------------------------------ ----------- -----------
DEFERRED COMPENSATION 200,000 200,000
- --------------------- ----------- -----------
OTHER LIABILITIES 450,000 450,000
- ----------------- ----------- -----------
STOCKHOLDERS' EQUITY:
- --------------------
Preferred stock; $1.00 par value;
authorized 300,000 shares; none issued
Common stock; $.25 par value
Class A - authorized 6,000,000 shares;
issued 1,656,969 shares (July 29, 1995 - 1,656,969) 414,242 414,242
Class B - authorized 6,000,000 shares;
issued 1,576,113 shares (July 29, 1995 - 1,576,113) 394,028 394,028
Additional paid-in-capital 1,246,557 1,246,557
Retained earnings 11,124,095 11,495,251
----------- -----------
13,178,922 13,550,078
Less - 804,871 shares of common stock in treasury,
at cost (July 29, 1995 - 804,871) 1,804,733 1,804,733
----------- -----------
11,374,189 11,745,345
=========== ==========
COMMITMENTS
- -----------
$28,844,969 $28,077,285
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
Statement of Operations and Retained Earnings
---------------------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Thirteen Week Periods Ended
October 28, 1995 October 29, 1994
---------------------------- -----------------
<S> <C> <C>
Revenues:
Sales $12,117,969 $11,704,513
Costs and Expenses:
Cost of sales, including
warehousing and buying expenses 7,158,509 6,582,494
Store operating, administrative and general expenses 5,218,873 5,142,362
Interest expense 350,652 185,948
----------- -----------
12,728,034 11,910,804
----------- -----------
Loss before income taxes (610,065) (206,291)
----------- -----------
Benefit for income taxes
Federal (227,883) (70,232)
State (34,999) (1,991)
----------- -----------
(262,882) (72,223)
----------- -----------
Net loss (347,183) (134,068)
Retained earnings at beginning of period 11,495,251 12,123,208
----------- -----------
11,148,068 11,989,140
Cash dividends (23,973) (28,414)
----------- -----------
Retained earnings at end of period $11,124,095 $11,960,726
=========== ===========
Average number of shares outstanding 2,428,211 2,827,411
=========== ===========
Net loss per share $ (.14) $ (.05)
=========== ===========
Cash dividends per share
Class A common $ .0125 $ .0125
Class B common $ .0075 $ .0075
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
STATEMENT OF CASH FLOWS
-----------------------
Increase (Decrease) in Cash and Cash Equivalents
------------------------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Thirteen Week Periods Ended
October 28, 1995 October 29, 1994
---------------------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(347,183) $ (134,068)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 420,204 350,598
Provision for deferred taxes (260,431) (72,072)
Increase in cash value of life insurance (246,508) (195,975)
Gain on sale of fixtures and equipment (2,093)
Change in assets and liabilities:
Increase in receivables (18,088) (287,153)
Decrease (increase) in inventories 122,683 (2,705,518)
Increase in prepaid expenses (78,483) (65,280)
(Increase) decrease in prepaid income taxes (850) 11,244
Decrease in deposits 53,125
Increase in deferred income taxes (15,501) (13,200)
Increase in accounts payable 919,070 2,358,194
Increase in accrued liabilities 296,247 526,772
Increase in other debt 450,000
---------- -----------
Net cash provided by operating activities 789,067 276,667
---------- -----------
Cash flows from investing activities:
Proceeds from sale of fixtures 2,148
Purchase of property, fixtures and improvements (336,119) (503,747)
Purchase of software (6,440) (16,189)
Purchase of lease (750,000)
---------- -----------
Net cash used in investing activities (340,411) (1,269,936)
---------- -----------
Cash flows from financing activities:
Repayment of debt (76,476) (1,943,488)
Dividends paid (23,973) (28,414)
Purchase of common stock (548,867)
Borrowings from note 900,000
---------- -----------
Net cash used in financing activities (100,449) (1,620,769)
---------- -----------
Net increase (decrease) in cash and cash equivalents 348,207 (2,614,038)
Cash and cash equivalents at beginning of period 319,045 3,311,144
---------- -----------
Cash and cash equivalents at end of period $ 667,252 $ 697,106
========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
Notes to Financial Statements
-----------------------------
1. The accounting policies followed by the Company for the unaudited interim
periods are substantially the same as outlined in the Company's 1995 annual
report, which should be read in conjunction with this quarterly report.
2. The financial statements at October 28, 1995 and for the thirteen weeks
ended October 28, 1995 and October 29, 1994 are unaudited but, in the opinion of
the Company, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the interim
periods.
6
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
Management's Discussion and Analysis of
---------------------------------------
Results of Operations and Financial Position
--------------------------------------------
Sales for the thirteen week period ended October 28, 1995 were $12,117,969
compared to $11,704,513 for the thirteen week period ended October 29, 1994, an
increase of $413,456 or 3.5%. This increase was primarily due to new and
expanded store openings. Sales of stores open in both periods decreased 11.4%.
The decrease reflects a slower economy and the increasingly competitive
environment in the Company's trading areas.
Cost of sales, including warehouse and buying expenses for the thirteen week
periods ended October 28, 1995 and October 29, 1994, were 59.2% and 56.2% sales,
respectively. The competitive situation caused the Company to take increased
markdowns, thereby causing cost of sales to rise.
Store operating, administrative and general expenses for the thirteen week
period ended October 28, 1995 were $5,218,873 or 43.1% of sales compared to
$5,142,362 or 43.9% of sales for the thirteen week period ended October 29,
1994. The decrease was primarily due to reduced advertising and payroll costs.
Interest expense increased to $350,593 for the thirteen week period ended
October 28, 1995 compared to $185,948 for the thirteen week period ended October
29, 1994. This increase was due to higher loan balances.
Total working capital at October 28, 1995 was $10,948,105 compared to
$11,877,942 at July 29,1995. The current ratio decreased from 3.0 to 1 at July
29, 1995 to 2.5 to 1 at October 28, 1995. On October 29, 1994, the current ratio
was 2.13 to 1. This decrease resulted from an increase in accounts payable for
seasonal inventory requirements and an operating loss.
The Company had capital expenditures during the thirteen week period ended
October 28,1995 of approximately $336,000 for fixtures and improvements for a
remodel of one store. The Company projects additional capital expenditures of
approximately $425,000 during fiscal 1996 for two remodeled stores. Such
expenditures will be funded from operations.
7
<PAGE>
THREE D DEPARTMENTS, INC.
-------------------------
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K.
The Company was not required to file a report on form 8-K for any
event during the three months ended October 28, 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.
THREE D DEPARTMENTS, INC.
-------------------------
(Registrant)
Date: December 12, 1995
------------------ ---------------------------------------
Frank Kane
Vice President
Administration and Finance
---------------------------------------
Ronald C. Dow
Treasurer and Controller
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q,
OCTOBER 28, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-29-1995
<PERIOD-START> JUL-30-1995
<PERIOD-END> OCT-28-1995
<CASH> 667,252
<SECURITIES> 0
<RECEIVABLES> 314,379
<ALLOWANCES> 0
<INVENTORY> 16,137,804
<CURRENT-ASSETS> 18,114,003
<PP&E> 13,802,865
<DEPRECIATION> 6,566,455
<TOTAL-ASSETS> 28,844,969
<CURRENT-LIABILITIES> 7,155,498
<BONDS> 0
<COMMON> 808,270
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 28,844,969
<SALES> 12,117,969
<TOTAL-REVENUES> 12,117,969
<CGS> 7,158,509
<TOTAL-COSTS> 5,218,873
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350,652
<INCOME-PRETAX> (610,065)
<INCOME-TAX> (262,882)
<INCOME-CONTINUING> (347,183)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (347,183)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
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