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 March 31, 1996 Commission File No 1-4506
GARAN, INCORPORATED
(Exact name of registrant as specified in its charter)
VIRGINIA 13-5665557
(State of Incorporation) (I.R.S. Employer Identification No.)
350 Fifth Avenue, New York, NY 10118
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 563-2000
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 than 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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
Class Outstanding March 31, 1996
Common Stock (no par value) 5,069,892 shares
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PART I. - FINANCIAL INFORMATION
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
3/31/96 3/31/95
__________________ __________________
<S> <C> <C>
Net sales $ 26,882,000 $ 28,380,000
Cost of sales 20,907,000 21,792,000
____________ ____________
Gross margin on sales 5,975,000 6,588,000
Selling and administrative expenses 4,951,000 5,581,000
Interest on capitalized leases 29,000 30,000
Interest income (658,000) (747,000)
_____________ _____________
Earnings before provision
for income taxes 1,653,000 1,724,000
Provision for income taxes 651,000 672,000
____________ ____________
Net earnings $ 1,002,000 $ 1,052,000
============ ============
Earnings per share data:
Earnings per share $ 0.20 $ 0.21
Average common shares outstanding 5,070,000 5,070,000
Dividends paid per share $ 0.20 $ 0.20
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<PAGE>
<TABLE>
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<CAPTION>
SIX MONTHS ENDED
3/31/96 3/31/95
__________________ __________________
<S> <C> <C>
Net sales $ 59,906,000 $ 67,048,000
Cost of sales 47,457,000 53,056,000
____________ ____________
Gross margin on sales 12,449,000 13,992,000
Selling and administrative expenses 9,834,000 11,631,000
Interest on capitalized leases 59,000 69,000
Interest income (1,316,000) (1,272,000)
_____________ _____________
Earnings before provision
for income taxes 3,872,000 3,564,000
Provision for income taxes 1,529,000 1,390,000
____________ ____________
Net earnings $ 2,343,000 $ 2,174,000
============ ============
Earnings per share data:
Earnings per share $ 0.46 $ 0.43
Average common shares outstanding 5,070,000 5,070,000
Dividends paid per share $ 0.60 $ 0.60
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<TABLE>
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
3/31/96 9/30/95
_____________ _____________
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 5,942,000 $ 8,649,000
U.S. Government securities - short-term 18,936,000 20,424,000
Accounts receivable, less estimated
uncollectibles of $514,000 at
3/31/96 and 9/30/95 14,240,000 25,746,000
Inventories 38,191,000 29,454,000
Other current assets 6,912,000 4,412,000
_____________ _____________
Total current assets 84,221,000 88,685,000
U.S. Government Securities - long-term 12,015,000 12,015,000
Property, plant and equipment, less
accumulated depreciation and amortization 14,476,000 15,069,000
Other assets 4,757,000 4,662,000
_____________ _____________
TOTAL $ 115,469,000 $ 120,431,000
============= =============
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $ 4,148,000 $ 6,851,000
Accrued liabilities 9,911,000 11,005,000
Federal and state income taxes payable 1,764,000 2,227,000
Current portion of capitalized leases 154,000 154,000
_____________ _____________
Total current liabilities 15,977,000 20,237,000
_____________ _____________
Capitalized lease obligations, net of
current portion 3,018,000 3,061,000
_____________ _____________
Deferred income taxes 2,858,000 2,818,000
_____________ _____________
Shareholders' Equity:
Preferred stock ($10 par value) 500,000
shares authorized; none issued
Common stock (no par value) 15,000,000
shares authorized; 5,069,892 issued at
3/31/96 and 9/30/95 2,535,000 2,535,000
Additional paid-in-capital 5,821,000 5,821,000
Retained earnings 85,260,000 85,959,000
_____________ _____________
Total shareholders' equity 93,616,000 94,315,000
_____________ _____________
TOTAL $ 115,469,000 $ 120,431,000
============= =============
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<PAGE>
<TABLE>
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
SIX MONTHS ENDED
3/31/96 3/31/95
_____________ _____________
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 2,343,000 $ 2,174,000
Non cash items included in earnings:
Depreciation and amortization 1,778,000 1,781,000
Provision for losses on accounts receivable 14,000 40,000
Deferred income taxes 40,000 130,000
Changes in assets and liabilities:
U.S. Government Securities - short-term 1,488,000 (22,532,000)
Accounts receivable 11,492,000 20,625,000
Inventories (8,737,000) (2,990,000)
Other current assets (2,500,000) 57,000
Accounts payable (2,703,000) (1,121,000)
Accrued liabilities (930,000) (2,362,000)
Income taxes payable (463,000) (419,000)
Other assets (95,000) (235,000)
______________ ______________
Net Cash Flows From Operating Activities 1,727,000 (4,852,000)
______________ ______________
Cash Flows From Investing Activities:
Sale of U.S. Gov't securities - long-term 0 3,000,000
Purchase of U.S. Gov't securities - long-term 0 (987,000)
Additions to property plant and equipment (1,349,000) (1,033,000)
Proceeds from sales of property,
plant and equipment 0 365,000
______________ ______________
Net Cash Flows From Investing Activities (1,349,000) 1,345,000
______________ ______________
Cash Flows From Financing Activities:
Payment of dividends (3,042,000) (3,042,000)
Repayment of capitalized lease obligations (43,000) (455,000)
______________ ______________
Net Cash Flows From Financing Activities (3,085,000) (3,497,000)
______________ ______________
Decrease in Cash and Cash Equivalents (2,707,000) (7,004,000)
Cash and Cash Equivalents At Beginning
of Period 8,649,000 7,664,000
______________ ______________
Cash and Cash Equivalents At End of Period $ 5,942,000 $ 660,000
============= =============
Supplemental Disclosures
Cash Paid During The Period For:
Interest $ 59,000 $ 69,000
Income taxes 1,494,000 1,424,000
============= =============
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<PAGE>
GARAN, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. In the opinion of management, all adjustments necessary to a fair
statement of the results of operations have been reflected.
2. Earnings per share are calculated on the basis of the weighted average
number of common shares outstanding during the period.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
3/31/96 09/30/95
____________ ____________
<S> <C> <C>
Raw Materials $ 5,049,000 $ 5,135,000
Work in process 10,349,000 9,374,000
Finished Goods 22,793,000 14,945,000
____________ ____________
$ 38,191,000 $ 29,454,000
============ ============
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<PAGE>
ITEM 2.
GARAN, INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At March 31, 1996, working capital was $68,244,000, a decrease of $204,000
from September 30, 1995. Shareholders' equity at March 31, 1996, was
$93,616,000, or $18.46 book value per share, as compared to $94,315,000,
or $18.60 book value per share, at September 30, 1995. The book value
decrease resulted primarily from the payment in November, 1995, of the
fiscal year end special dividend and the regular quarterly dividends.
RESULTS OF OPERATIONS
Three and Six Month Periods Ended March 31, 1996 and March 31, 1995
Net sales for the three month period ended March 31, 1996, were
$26,882,000, compared to $28,380,000 for the same period last year. Net
earnings for the three month period were $1,002,000, equal to $0.20 per
share, compared to $1,052,000, or $0.21 per share, last year.
Net sales for the six month period ended March 31, 1996, were $59,906,000,
compared to $67,048,000 for the same period last year. Net earnings for
the six month period were $2,343,000, or $0.46 per share, as compared to
$2,174,000, or $0.43 per share, last year.
Gross margin for the three months ended March 31, 1996, was $5,975,000, or
22.2% of net sales, compared to $6,588,000, or 23.2% of net sales, for
the comparable period last year. Gross margin for the six months ended
March 31, 1996, was $12,449,000, or 20.8% of net sales, as compared to
$13,992,000, or 20.9% of net sales, for the comparable period last year.
The decreases in net sales and gross margin for the three and six month
periods were caused by reduced unit sales resulting from prevailing
competitive conditions in the marketplace.
Selling and administrative expenses for the three month period ended
March 31, 1996, were $4,951,000, or 18.4% of net sales, as compared to
$5,581,000, or 19.7% of net sales, for the comparable period last year.
Selling and administrative expenses for the six months ended March 31,
1996, were $9,834,000, or 16.4% of net sales, as compared to $11,631,000,
or 17.3% of net sales, for the comparable period last year. Selling and
administrative expenses declined primarily as a result of reduced royalty
and commission expenses associated with reduced sales in our sports
licensing and Disney divisions.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No reports have been filed on Form 8-K during the quarter
ended March 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
GARAN, INCORPORATED
BY:Seymour Lichtenstein
Seymour Lichtenstein
Principal Executive Officer
BY:William J. Wilson
William J. Wilson
Principal Financial Officer
DATE: May 13, 1996
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF EARNINGS AND BALANCE SHEETS OF GARAN, INCORPORATED
AND SUBSIDIARIES ANNEXED HERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000039917
<NAME> GARAN, INCORPORATED
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1995 SEP-30-1995
<PERIOD-START> JAN-1-1996 OCT-1-1995
<PERIOD-END> MAR-31-1996 MAR-31-1996
<CASH> 5,942,000 5,942,000
<SECURITIES> 18,936,000 18,936,000
<RECEIVABLES> 14,754,000 14,754,000
<ALLOWANCES> 514,000 514,000
<INVENTORY> 38,191,000 38,191,000
<CURRENT-ASSETS> 84,221,000 84,221,000
<PP&E> 33,983,000 33,983,000
<DEPRECIATION> 19,507,000 19,507,000
<TOTAL-ASSETS> 115,469,000 115,469,000
<CURRENT-LIABILITIES> 15,977,000 15,977,000
<BONDS> 3,018,000 3,018,000
<COMMON> 2,535,000 2,535,000
0 0
0 0
<OTHER-SE> 93,616,000 93,616,000
<TOTAL-LIABILITY-AND-EQUITY> 115,469,000 115,469,000
<SALES> 26,882,000 59,906,000
<TOTAL-REVENUES> 26,882,000 59,906,000
<CGS> 20,907,000 47,457,000
<TOTAL-COSTS> 20,907,000 47,457,000
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 29,000 59,000
<INCOME-PRETAX> 1,653,000 3,872,000
<INCOME-TAX> 651,000 1,529,000
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,002,000 2,343,000
<EPS-PRIMARY> 0.20 0.46
<EPS-DILUTED> 0 0
</TABLE>
