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 Quarter Ended June 30, 1995
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 20, 1995:
Class A - Voting 84,984 shares
Class B - Non-voting 1,278,360 shares
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ALLEN ORGAN COMPANY
INDEX
Part I Financial Information
Item 1.Financial Statements
Consolidated Statements of Income for the three months
ended June 30, 1995 and 1994
Consolidated Balance Sheets at June 30, 1995 and December 31, 1994
Consolidated Statements of Cash Flows for the three months ended
June 30, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II Other Information
Item 4.Submission of Matters to a Vote of Security Holders
Item 5.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 6 Months Ended:
6/30/95 6/30/94 6/30/95 6/30/94
Net Sales $7,484,775 $7,013,619 $13,983,100 $14,244,724
Cost and expenses
Costs of sales 5,152,998 4,879,605 9,746,038 9,953,893
Selling, general and
administrative 1,087,428 1,088,024 2,100,048 2,078,898
Total Costs and
Expenses 6,240,426 5,967,629 11,846,086 12,032,791
Income from operations 1,244,349 1,045,990 2,137,014 2,211,933
Interest and other
income 609,167 345,737 1,015,874 681,707
Income before taxes on
income 1,853,516 1,391,727 3,152,888 2,893,640
Provision for taxes on
income 675,000 550,000 1,150,000 1,150,000
Net Income $1,178,516 $841,727 $2,002,888 $1,743,640
Earnings per share $0.86 $0.62 $1.47 $1.27
Shares used in per
share calculation 1,363,895 1,373,763 1,363,895 1,373,763
Dividends per share -
Cash $0.13 $0.13 $0.26 $0.26
See accompanying notes.
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ALLEN ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, Dec 31,
ASSETS 1995 1994
(Unaudited) (Audited)
Current Assets
Cash $ 1,449,357 $ 105,067
Investments including accrued interest 37,077,193 36,783,908
Accounts Receivable 3,054,323 3,052,683
Inventories:
Raw Materials 3,430,609 3,460,015
Work in Process 5,378,936 4,884,735
Finished Goods 739,624 450,015
Total Inventories 9,549,169 8,794,765
Prepaid Income Taxes 0 276,580
Prepaid Expenses 281,224 98,903
Deferred Income Tax Benefits 0 67,420
Total Current Assets 51,411,266 49,179,326
Property, Plant and Equipment 16,043,453 15,877,987
Less accumulated depreciation (8,975,954) (8,714,511)
Total Property, Plant and Equipment 7,067,499 7,163,476
Other Assets
Inventory held for Future Service 1,138,394 1,145,511
Intangible Pension Asset 443,273 443,273
Deferred income tax benefits 43,116 43,116
Note Receivable 81,855 81,855
Cash Value of Life Insurance 408,138 408,138
Total Other Assets 2,114,776 2,121,893
Total Assets $60,593,541 $58,464,695
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable $ 257,271 $ 171,791
Accrued Taxes on Income 144,934 0
Other Accrued Expenses 572,157 623,100
Customer Deposits 520,789 446,657
Total Current Liabilities 1,495,151 1,241,548
Noncurrent Liabilities
Deferred Liabilities 121,288 77,917
Accrued Pension Cost 1,439,734 1,374,007
Total Noncurrent Liabilities 1,561,022 1,451,924
Total Liabilities 3,056,173 2,693,472
STOCKHOLDERS' EQUITY
Common Stock 1995 1994
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 46,524,142 42,828,013
Net income 2,002,888 4,449,703
Dividends - cash 1995 and 1994 (354,589) (753,574)
Balance at end 48,172,441 46,524,142
Unrealized Gain (Loss) on Investments 67,112 (98,399)
Pension Liability Adjustment (489,823) (489,823)
Treasury Stock 1995 1994
Class A 43,120 shares; 43,120 shares (451,436) (451,436)
Class B 131,529 shares; 115,890 shares (3,909,296) (3,861,631)
Total Treasury Stock (4,360,732) (4,313,067)
Total Stockholders' Equity 57,537,368 55,771,223
Total Liabilities and Stockholders' Equity $60,593,541 $58,464,695
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:
6/30/95 6/30/94 6/30/95 6/30/94
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $1,178,516 $841,727 $2,002,888 $1,743,640
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation 132,944 142,530 263,358 285,057
Change in assets and liabilities
(Increase) Decrease in
accounts receivable 219,777 (47,339) (1,640) (549,353)
(Increase) Decrease in
inventories (115,615) (334,814) (747,287) (821,492)
(Increase) Decrease in prepaid
income taxes --- (7,024) 276,580 94,039
(Increase) Decrease in prepaid
expenses (94,830) 45,599 (182,321) (88,937)
(Increase) Decrease in
deferred income tax benefits 12,685 (12,072) 67,420 (28,287)
(Decrease) Increase in
accounts payable 36,434 (94,311) 85,480 23,810
(Decrease) Increase in accrued
taxes (574) (510,719) 144,934 (60,983)
(Decrease) Increase in accrued
expenses (77,078) 397,030 (50,943) 419,788
(Decrease) Increase in
customer deposits 55,953 (283,008) 74,132 (215,319)
(Decrease) Increase in other
noncurrent liabilities 26,373 (66,747) 109,098 10,226
Net Cash Provided by
Operating Activities 1,374,585 70,852 2,041,699 812,189
CASH FLOW FROM INVESTING
ACTIVITIES
Net additions to plant and
equipment (112,266) (137,170) (167,381) (218,763)
Increase in note receivable ---- ----- ---- (40,985)
Net sale (or purchase) of
short term investments (188,797) 780,805 (127,774) 309,975
Net Cash Used In Investing
Activities (301,063) 643,635 (295,155) 50,227
CASH FLOWS FROM FINANCING
ACTIVITIES
Reacquired Class B common (22,722) (325,151) (47,665) (370,462)
shares
Dividends paid in cash (177,284) (177,781) (354,589) (357,018)
Net Cash Used In Financing
Activities (200,006) (502,932) (402,254) (727,480)
NET INCREASE (DECREASE) IN CASH 873,516 211,555 1,344,290 134,936
CASH, BEGINNING 575,841 379,814 105,067 456,433
CASH, ENDING $1,449,357 $591,369 $1,449,357 $591,369
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 1994 Annual Report on Form 10-K.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
Sales for the 1995 second quarter increased by $471,156 from increased
orders in comparison to 1994. Cost of sales remained equal to 1994 at 70%
of sales. Selling, general, and administrative expenses decreased to 14.5%
of sales as compared to 15.5% in 1994 due to increased sales. 1995 non-
operating income was higher than 1994 reflecting variation in rates,
amounts invested, and realized gains on sales of investments.
Second quarter 1995 sales increased by $986,450 over the previous quarter
ended March 31, 1995 from increased orders. Cost of sales remained
relatively equal at 70% of sales. Selling, general, and administrative
expenses increased to 14.5% from 15.5% of sales from the higher volume of
sales. Non-operating income increased by $202,460 as compared to the
previous quarter reflecting variation in rates, amounts invested, and
realized gains on sales of investments.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Annual Meeting: May 16, 1995
(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 1994 and
all contracts, agreements, and employments by the Board of
Directors and officers since the previous annual meeting in
May, 1994. 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 1,098 Class A Shares
was not present and did not vote by proxy.
Item 5. Other Information
On June 7, 1995, the Company announced that it has agreed in
principle to purchase the assets of VIR, Inc. and two
related companies in exchange for cash, notes and Allen
Organ stock totaling approximately $6,000,000. Additionally,
the Company has agreed in principle to purchase inventory
from the seller at a price yet to be determined. The Company
expects to execute a definitive agreement of sale and
simultaneously complete this transaction in July or August.
Item 6. Exhibits and Reports on Form 8-K
(b) Forms 8-K
1. The Company filed a Form 8-K, dated June 7, 1995
announcing it's agreement in principle to purchase the
assets of VIR, Inc. and two related companies.
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: June 20, 1995 STEVEN MARKOWITZ
Steven Markowitz, President and
Chief Executive Officer
Date: June 20, 1995 LEONARD W. HELFRICH
Leonard W. Helfrich, Treasurer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
JUNE 30, 1995 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,449,357
<SECURITIES> 37,077,193
<RECEIVABLES> 3,054,323
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<INVENTORY> 10,687,563
<CURRENT-ASSETS> 51,411,266
<PP&E> 16,043,453
<DEPRECIATION> 8,975,954
<TOTAL-ASSETS> 60,593,541
<CURRENT-LIABILITIES> 1,495,151
<BONDS> 0
<COMMON> 1,537,993
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<OTHER-SE> 55,999,375
<TOTAL-LIABILITY-AND-EQUITY> 60,593,541
<SALES> 13,983,100
<TOTAL-REVENUES> 13,983,100
<CGS> 9,746,038
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