UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-275
Allen Organ Company
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1263194
(State of Incorporation) (I.R.S. Employer Identification No.)
150 Locust Street, P. O. Box 36, Macungie, Pennsylvania 18062-0036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-966-2200
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 _____
Number of shares outstanding of each of the issuer's classes of common
stock, as of October 28, 1994:
Class A - Voting 84,984 shares
Class B - Non-voting 1,282,453 shares
<PAGE>
ALLEN ORGAN COMPANY
INDEX
Part I Financial Information
Item 1.Financial Statements
Consolidated Statements of Income for the periods
ended September 30, 1994 and 1993
Consolidated Balance Sheets at September 30, 1994
and December 31, 1993
Consolidated Statements of Cash Flows for the periods
ended September 30, 1994 and 1993
Notes to Consolidated 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
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the 3 Months Ended: For the 9 Months Ended:
9/30/94 9/30/93 9/30/94 9/30/93
Net Sales $7,423,909 $7,468,399 $21,668,633 $19,705,548
Cost and expenses
Costs of sales 4,888,475 4,862,273 14,842,368 13,679,603
Selling, general and
administrative 968,748 955,309 3,047,646 2,858,583
Total Costs and
Expenses 5,857,223 5,817,582 17,890,014 16,538,186
Income from operations 1,566,686 1,650,817 3,778,619 3,167,362
Interest and other
income 384,128 311,772 1,065,835 859,821
Income before taxes on
income 1,950,814 1,962,589 4,844,454 4,027,183
Provision for taxes on
income 790,000 778,000 1,940,000 1,603,000
Net Income $1,160,814 $1,184,589 $2,904,454 $2,424,183
Earnings per share $0.85 $0.86 $2.12 $1.74
Shares used in per
share calculation 1,371,631 1,396,540 1,371,631 1,396,540
Dividends per share-Cash $0.13 $0.12 $0.39 $0.36
See accompanying notes.
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ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Sept. 30, Dec 31,
ASSETS 1994 1993
(Unaudited) (Audited)
Current Assets
Cash $ 714,202 $456,433
Accounts Receivable 3,436,789 3,050,496
Investments including accrued interest 35,257,105 34,960,608
Inventories:
Raw Materials 3,495,211 2,343,298
Work in Process 4,764,692 4,852,658
Finished Goods 436,656 676,383
Total Inventories 8,696,559 7,872,339
Prepaid Income Taxes --- 101,063
Prepaid Expenses 366,825 157,068
Deferred Income Tax Benefits 21,889 8,439
Total Current Assets 48,493,369 46,606,446
Property, Plant and Equipment 16,224,649 15,927,068
Less accumulated depreciation (8,977,020) 8,597,573
Total Property, Plant and Equipment 7,247,629 7,329,495
Other Assets
Inventory held for Future Service 1,147,486 1,098,861
Intangible Pension Asset 517,263 517,263
Note Receivable 83,790 ---
Cash Value of Life Insurance 326,703 200,505
Total Other Assets 2,075,242 1,816,629
TOTAL ASSETS $57,816,240 $55,752,570
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable $359,174 $191,562
Customer Deposits 514,989 895,392
Accrued Taxes on Income 144,276 60,983
Accrued Expenses 700,386 424,809
Total Current Liabilities 1,718,825 1,572,746
Noncurrent Liabilities
Deferred Liabilities 226,674 233,128
Accrued Pension Cost 1,021,353 1,076,870
Total Noncurrent Liabilities 1,248,027 1,309,998
Total Liabilities 2,966,852 2,882,744
STOCKHOLDERS' EQUITY
Common Stock 1994 1993
Class A 128,104 shares; 128,104 shares 128,104 128,104
Class B 1,409,889 shares;1,409,889 shares 1,409,889 1,409,889
Capital in Excess of Par Value 12,610,377 12,610,377
Retained Earnings
Balance at beginning of current fiscal year 42,828,013 40,067,860
Net income 2,904,454 3,456,154
Dividends - cash 1994 and 1993 (534,784) (696,001)
Balance at end 45,197,683 42,828,013
Pension Liability Adjustment (256,740) (256,740)
Unrealized Loss on Investments (31,258) (11,612)
Treasury Stock 1994 1993
Class A 43,120 shares; 43,120 shares (451,436) (451,436)
Class B 127,436 shares;115,890 shares (3,757,231) (3,386,769)
Total Treasury Stock (4,208,667) (3,838,205)
Total Stockholders' Equity 54,849,388 52,869,826
Total Liabilities and Stockholders' Equity $57,816,240 $55,752,570
See accompanying notes.
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ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the 3 Months For the 9 Months
Ended: Ended:
9/30/94 9/30/93 9/30/94 9/30/93
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $1,160,814 $1,184,589 $2,904,454 $2,424,183
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 142,525 152,376 427,582 453,829
Change in assets and liabilities
(Increase) Decrease in
accounts receivable 163,060 (719,631) (386,293) (1,073,623)
(Increase) Decrease in
inventories (51,353) 199,907 (872,845) (719,959)
(Increase) Decrease in prepaid
income taxes 7,024 212,691 101,063 (52,636)
(Increase) Decrease in prepaid
expenses (120,820) (138,828) (209,757) (186,854)
(Increase) Decrease in
deferred income tax benefits 14,837 ----- (13,450) -----
(Decrease) Increase in
accounts payable 143,802 226,433 167,612 135,938
(Decrease) Increase in accrued
taxes 144,276 51,627 83,293 19,627
(Decrease) Increase in accrued
expenses (144,211) (99,192) 275,577 217,989
(Decrease) Increase in
customer deposits (165,084) 37,286 (380,403) 170,774
(Decrease) Increase in other
noncurrent liabilities (72,197) (69,004) (61,971) 18,987
Net Cash Provided by
Operating Activities 1,222,673 1,038,254 2,034,862 1,408,255
CASH FLOW FROM INVESTING
ACTIVITIES
Net additions to plant and
equipment (126,953) (172,415) (345,716) (296,481)
Increase in cash value of life
insurance (126,198) ------ (126,198) ------
Increase in note receivable (42,805) ------ (83,790) ------
Net sale (or purchase) of
investments (626,118) (2,060,565) (316,143) 450,299
Net Cash Used In Investing
Activities (922,074) (2,232,980) (871,847) 153,818
CASH FLOWS FROM FINANCING
ACTIVITIES
Reacquired Class B common
shares ------ (103,875) (370,462) (847,253)
Dividends paid in cash (177,766) (165,549) (534,784) (502,943)
Net Cash Used In Financing
Activities (177,766) (269,424) (905,246) (1,350,196)
NET INCREASE (DECREASE) IN CASH 122,833 (1,464,150) 257,769 211,877
CASH, BEGINNING 591,369 2,179,495 456,433 503,468
CASH, ENDING $714,202 $715,345 $714,202 $715,345
See accompanying notes.
<PAGE>
ALLEN ORGAN COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results of operations for the interim periods shown in this report
are not necessarily indicative of results to be expected for the fiscal
year. In the opinion of management, the information contained herein
reflects all adjustments necessary to make the results of operations
for the interim periods a fair statement of such operations. All such
adjustments are of a normal recurring nature.
Certain notes and other information have been condensed or omitted from
the interim financial statements presented in the Quarterly Report on
Form 10-Q. Therefore, these financial statements should be read in
conjunction with the company's 1993 Annual Report on Form 10-K.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
Sales for the 1994 third quarter decreased by $44,490 from the third
quarter of 1993, reflecting a level amount of orders and production. Cost
of sales increased to 65.8% of sales as compared to 65.1% in 1993 from
product mix variations and additional start-up costs related to the
introduction of new models. Selling, general, and administrative expenses
increased to 13.0% of sales as compared to 12.8% in 1993 due primarily to
increased marketing activity. 1994 non-operating income was higher than
1993 reflecting variation in rates and amounts.
Third quarter 1994 sales increased by $410,290 over the previous quarter
ended June 30, 1994 from incoming order volume and a reduction of the order
backlog. Cost of sales decreased from ongoing production efficiencies to
65.8% of sales from 69.6%. Selling, general, and administrative expenses
decreased to 13.0% from 14.5% of sales from the higher volume despite
increased marketing activity. Non-operating income increased by $38,391 as
compared to the previous quarter reflecting variation in rates.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1994.
<PAGE>
ALLEN ORGAN COMPANY AND SUBSIDIARIES
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.
Allen Organ
Company
(Registrant)
Date: October 28, 1994 STEVEN MARKOWITZ
Steven Markowitz, President and
Chief Executive Officer
Date: October 28, 1994 LEONARD W. HELFRICH
Leonard W. Helfrich, Treasurer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1994 FINANCIAL STATMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 714,202
<SECURITIES> 35,257,105
<RECEIVABLES> 3,436,789
<ALLOWANCES> 0
<INVENTORY> 9,844,045
<CURRENT-ASSETS> 48,493,369
<PP&E> 16,224,649
<DEPRECIATION> 8,977,020
<TOTAL-ASSETS> 57,816,240
<CURRENT-LIABILITIES> 1,718,825
<BONDS> 0
<COMMON> 1,537,993
0
0
<OTHER-SE> 53,311,395
<TOTAL-LIABILITY-AND-EQUITY> 57,816,240
<SALES> 21,668,633
<TOTAL-REVENUES> 21,668,633
<CGS> 14,842,368
<TOTAL-COSTS> 14,842,368
<OTHER-EXPENSES> 3,047,646
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,844,454
<INCOME-TAX> 1,940,000
<INCOME-CONTINUING> 2,904,454
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<EXTRAORDINARY> 0
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<NET-INCOME> 2,904,454
<EPS-PRIMARY> 2.12
<EPS-DILUTED> 2.12
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