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 June 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 July 27, 1994:
Class A - Voting 84,984 shares
Class B - Non-voting 1,282,453 shares
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ALLEN ORGAN COMPANY
INDEX
Page No.
Part I Financial Information
Item I.Financial Statements
Consolidated Statements of Income for the periods
ended June 30, 1994 and 1993 2
Consolidated Balance Sheets at June 30, 1994 and
December 31, 1993 3
Consolidated Statements of Cash Flows for the periods
ended June 30, 1994 and 1993 4
Notes to Consolidated Financial Statements 5
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders 5
Item 6 Exhibits and Reports on Form 8-K 5
Signatures 6
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PART I FINANCIAL INFORMATION
ITEM I.FINANCIAL STATEMENTS
ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the 3 Months Ended: For the 6 Months Ended:
6/30/94 6/30/93 6/30/94 6/30/93
Net Sales $7,013,619 $6,478,909 $14,244,724 $12,237,149
Cost and expenses
Costs of sales 4,879,605 4,720,797 9,953,893 8,817,330
Selling, general and
administrative 1,088,024 941,116 2,078,898 1,903,274
Total Costs and Expenses 5,967,629 5,661,913 12,032,791 10,720,604
Income from operations 1,045,990 816,996 2,211,933 1,516,545
Interest and other income 345,737 265,703 681,707 548,049
Income before taxes on
income 1,391,727 1,082,699 2,893,640 2,064,594
Provision for taxes on
income 550,000 430,000 1,150,000 825,000
Net Income $841,727 $652,699 $1,743,640 $1,239,594
Earnings per share $0.62 $0.46 $1.27 $0.88
Shares used in per share
calculation 1,373,763 1,404,776 1,373,763 1,404,776
Dividends per share-Cash $0.13 $0.12 $0.26 $0.24
See accompanying notes.
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ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, Dec 31,
ASSETS 1994 1993
(Unaudited) (Audited)
Current Assets
Cash $ 591,369 $ 456,433
Accounts Receivable 3,599,849 3,050,496
Investments including accrued interest 34,610,573 34,960,608
Inventories:
Raw Materials 3,518,566 2,343,298
Work in Process 4,562,317 4,852,658
Finished Goods 618,294 676,383
Total Inventories 8,699,177 7,872,339
Prepaid Income Taxes 7,024 101,063
Prepaid Expenses 246,005 157,068
Deferred Income Tax Benefits 36,726 8,439
Total Current Assets 47,790,723 46,606,446
Property, Plant and Equipment 16,133,535 15,927,068
Less accumulated depreciation 8,870,334 8,597,573
Total Property, Plant and Equipment 7,263,201 7,329,495
Other Assets
Inventory held for Future Service 1,093,515 1,098,861
Intangible Pension Asset 517,263 517,263
Note Receivable 40,985 ---
Cash Value of Life Insurance 200,505 200,505
Total Other Assets 1,852,268 1,816,629
TOTAL ASSETS $56,906,192 $55,752,570
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable $ 215,372 $ 191,562
Customer Deposits 680,073 895,392
Accrued Taxes on Income ------- 60,983
Accrued Expenses 844,597 424,809
Total Current Liabilities 1,740,042 1,572,746
Noncurrent Liabilities
Deferred Liabilities 228,549 233,128
Accrued Pension Cost 1,091,675 1,076,870
Total Noncurrent Liabilities 1,320,224 1,309,998
Total Liabilities 3,060,266 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 1,743,640 3,456,154
Dividends - cash 1994 and 1993 (357,018) (696,001)
Balance at end 44,214,635 42,828,013
Pension Liability Adjustment (256,740) (256,740)
Unrealized Loss on Investments (51,672) (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 53,845,926 52,869,826
Total Liabilities and Stockholders' Equity $56,906,192 $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 6 Months
Ended: Ended:
6/30/94 6/30/93 6/30/94 6/30/93
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $841,727 $652,699 $1,743,640 $1,239,594
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 142,530 194,846 285,057 301,453
Change in assets and liabilities
(Increase) Decrease in
accounts receivable (47,339) (640,998) (549,353) (353,992)
(Increase) Decrease in
inventories (334,814) (79,810) (821,492) (919,866)
(Increase) Decrease in prepaid
income taxes (7,024) (271,038) 94,039 (265,327)
(Increase) Decrease in prepaid
expenses 45,599 11,133 (88,937) (48,026)
(Increase) Decrease in
deferred income tax benefits (12,072) ----- (28,287) -----
(Decrease) Increase in
accounts payable (94,311) 47,622 23,810 (90,495)
(Decrease) Increase in accrued
taxes (510,719) (314,674) (60,983) (32,000)
(Decrease) Increase in accrued
expenses 397,030 118,045 419,788 317,181
(Decrease) Increase in
customer deposits (283,008) 31,785 (215,319) 133,488
(Decrease) Increase in other
noncurrent liabilities (66,747) 5,996 10,226 87,991
Net Cash Provided by
Operating Activities 70,852 (244,394) 812,189 370,001
CASH FLOW FROM INVESTING ACTIVITIES
Net additions to plant and
equipment (137,170) (130,297) (218,763) (124,066)
Increase in note receivable ----- (40,985)
Net sale (or purchase) of
short term investments 780,805 2,712,862 309,975 2,510,864
Net Cash Used In Investing
Activities 643,635 2,582,565 50,227 2,386,798
CASH FLOWS FROM FINANCING ACTIVITIES
Reacquired Class B common
shares (325,151) (728,434) (370,462) (743,378)
Dividends paid in cash (177,781) (168,483) (357,018) (337,394)
Net Cash Used In Financing
Activities (502,932) (896,917) (727,480)(1,080,772)
NET INCREASE (DECREASE) IN CASH 211,555 1,441,254 134,936 1,676,027
CASH, BEGINNING 379,814 738,241 456,433 503,468
CASH, ENDING $591,369 $2,179,495 $591,369 $2,179,495
See accompanying notes.
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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.
The sales for the 1994 second quarter increased by $534,710 from a
reduction in the 1994 order backlog, while 1993 quarter sales had been
adversely impacted by orders requiring a longer production cycle. Cost
of sales decreased to 69.6% of sales as compared to 72.9% in 1993 from
increased production volume over which to absorb fixed overhead
expenses. Selling, general, and administrative expenses increased by
$146,908, 15.5% of sales as compared to 14.5% in 1993 due primarily to
increased marketing activity. 1994 non-operating income was higher than
1993 reflecting variation in rates.
Second quarter 1994 sales decreased by $217,486 over the previous
quarter ended March 31, 1994 from changes in product mix. Cost of sales
decreased from ongoing production efficiencies to 69.6% of sales from
70.1%. Selling, general, and administrative expenses increased by
$97,150, increasing to 15.5% from 13.7% of sales from the lower volume
and increased marketing activity. Non-operating income increased by
$9,767 as compared to the previous quarter reflecting variation in
rates.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders:
(a) Annual Meeting: May 17, 1994
(b) Election of the following directors for a one-year term:
Steven Markowitz, Eugene Moroz, Leonard Helfrich,
Martha Markowitz, Orville Hawk, and Albert Schuster
(c) In addition to the election of directors and the waiver of
reading of the minutes of the prior meeting, the shareholders
ratified charitable deductions made in 1993 and all contracts,
agreements, and employments by the Board of Directors and officers
since the previous annual meeting in May, 1993. All resolutions
were unanimously adopted by the vote of all shareholders present,
in person or proxy, which was 81,699 Class A Shares constituting
96.1% of the Class A Shares outstanding. A broker holding 1,236
Class A Shares was not present and did not vote by proxy.
Item 6. Exhibits and Reports on Form 8-K
(b) No reports on Form 8-K were filed during the quarter ended
June 30, 1994.
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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:July 27, 1994 STEVEN MARKOWITZ
Steven Markowitz, President and
Chief Executive Officer
Date:July 27, 1994 LEONARD W. HELFRICH
Leonard W. Helfrich, Treasurer and
Principal Accounting Officer
