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 December 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 December 31, 1996
Common Stock (no par value) 5,069,892 shares
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
12/31/96 12/31/95
____________ _____________
<S> <C> <C>
Net sales $ 30,993,000 $ 33,024,000
Cost of sales 23,911,000 26,550,000
____________ ____________
Gross margin on sales 7,082,000 6,474,000
Selling and administrative expenses 5,376,000 4,883,000
Interest on capitalized leases 25,000 30,000
Interest income (695,000) (658,000)
___________ ___________
Earnings before provision
for income taxes 2,376,000 2,219,000
Provision for income taxes 939,000 878,000
___________ ___________
Net earnings $ 1,437,000 $ 1,341,000
=========== ===========
Earnings per share data:
Earnings per share $ 0.28 $ 0.26
Average common shares outstanding 5,070,000 5,070,000
Dividends paid per share $ 0.40 $ 0.40
</TABLE>
<PAGE>
<TABLE>
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
12/31/96 9/30/96
____________ _____________
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 12,624,000 $ 20,587,000
U.S. Government securities - short-term 8,953,000 12,568,000
Accounts receivable, less estimated
uncollectibles of $511,000 at
12/31/96 and $514,000 at 9/30/96 14,962,000 26,041,000
Inventories 32,886,000 28,639,000
Other current assets 5,343,000 5,558,000
____________ ____________
Total current assets 74,768,000 93,393,000
U.S. Government Securities - long-term 20,870,000 7,003,000
Property, plant and equipment, less
accumulated depreciation and amortization 14,331,000 14,915,000
Other assets 4,631,000 4,236,000
_____________ _____________
TOTAL $ 114,600,000 $ 119,547,000
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $ 3,502,000 $ 4,609,000
Accrued liabilities 8,819,000 11,321,000
Federal and state income taxes payable 819,000 1,572,000
Current portion of capitalized leases 124,000 124,000
_____________ ___________
Total current liabilities 13,264,000 17,626,000
_____________ ___________
Capitalized lease obligations, net of
current portion 2,913,000 2,937,000
Deferred income taxes 2,873,000 2,843,000
_____________ ___________
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
12/31/96 and 9/30/96 2,535,000 2,535,000
Additional paid-in-capital 5,821,000 5,821,000
Retained earnings 87,194,000 87,785,000
_____________ ___________
Total shareholders' equity 95,550,000 96,141,000
_____________ ___________
TOTAL $ 114,600,000 $ 119,547,000
============ ============
</TABLE>
<PAGE>
<TABLE>
GARAN, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
12/31/96 12/31/95
____________ _____________
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 1,437,000 $ 1,341,000
Non cash items included in earnings:
Depreciation and amortization 857,000 881,000
Provision for losses on accounts receivable 11,000 4,000
Deferred income taxes 30,000 20,000
Changes in assets and liabilities:
U.S. Government Securities - short-term 1,583,000 735,000
Accounts receivable 11,068,000 9,156,000
Inventories (4,247,000) (326,000)
Other current assets 215,000 (1,824,000)
Accounts payable (1,107,000) (2,992,000)
Accrued liabilities (2,502,000) (2,341,000)
Income taxes payable (753,000) 50,000
Other assets (395,000) (147,000)
_____________ _____________
Net Cash Flows From Operating Activities 6,197,000 4,557,000
Cash Flows From Investing Activities:
Sale of U.S. Gov't securities - long-term 3,037,000 0
Purchase of U.S. Gov't securi-
ties - long-term (14,872,000) 0
Additions to property plant and equipment (323,000) (596,000)
Proceeds from sales of property,
plant and equipment 50,000 0
_____________ _____________
Net Cash Flows From Investing Activities (12,108,000) (596,000)
Cash Flows From Financing Activities:
Payment of dividends (2,028,000) (2,028,000)
Repayment of capitalized lease obligations (24,000) (23,000)
_____________ _____________
Net Cash Flows From Financing Activities (2,052,000) (2,051,000)
_____________ _____________
Increase in Cash and Cash Equivalents (7,963,000) 1,910,000
Cash and Cash Equivalents At Beginning
of Period 20,587,000 8,649,000
_____________ _____________
Cash and Cash Equivalents At End of Period $ 12,624,000 $ 10,559,000
============ ============
Supplemental Disclosures
Cash Paid During The Period For:
Interest $ 25,000 $ 30,000
Income taxes 1,691,000 1,157,000
</TABLE>
<PAGE> GARAN, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 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>
12/31/96 09/30/96
____________ _____________
<S> <C> <C>
Raw Materials $ 5,188,000 $ 3,115,000
Work in process 6,752,000 6,837,000
Finished Goods 20,946,000 18,687,000
___________ ____________
$ 32,886,000 $ 28,639,000
=========== ============
</TABLE>
<PAGE>
ITEM 2.
GARAN, INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At December 31, 1996, working capital was $61,504,000, a decrease of
$14,263,000 from September 30, 1996, working capital of $75,767,000. The
decrease was primarily a result of the $13,867,000 additional investment in
long-term U.S. Government Securities, which are not included in working
capital. Shareholders' equity at December 31, 1996, was $95,550,000, or
$18.84 book value per share, as compared to $96,141,000, or $18.96 book value
per share, at September 30, 1996. The decrease in book value resulted from
the payment in November, 1996 of the 1996 fiscal year-end special dividend
and the first fiscal 1997 regular quarterly dividend.
RESULTS OF OPERATIONS
Three Month Periods Ended December 31, 1996, and December 31, 1995.
Net sales for the three month period ended December 31, 1996, were
$30,993,000 compared to $33,024,000, for the same period last year. Net
earnings for the three month period were $1,437,000, equal to $0.28 per
share, compared to $1,341,000, or $0.26 per share, last year. The decrease
in net sales for the quarter was the result of a decline in unit selling
prices and fewer units shipped.
Gross margin for the three months ended December 31, 1996, was $7,082,000,
or 22.9% of net sales, compared to $6,474,000, or 19.6% of net sales, for
the comparable period last year. The increase in gross margin was due
primarily to improvements in manufacturing efficiency and absorption of
overhead.
Selling and administrative expenses for the three months ended
December 31, 1996, were $5,376,000, or 17.4% of net sales, as compared to
$4,883,000, or 14.8% of net sales, for the comparable period last year.
The increase in selling and administrative expenses was a result of
increases in data processing and royalty expenses. The increase in data
processing expenses resulted from the costs related to improvements to
internal operating systems and implementation of vendor-managed programs.
<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 December 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: February 14, 1997
<TABLE> <S> <C>
<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>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-1-1996
<PERIOD-END> DEC-31-1996
<CASH> 12,624,000
<SECURITIES> 8,953,000
<RECEIVABLES> 15,473,000
<ALLOWANCES> 511,000
<INVENTORY> 32,886,000
<CURRENT-ASSETS> 74,768,000
<PP&E> 33,443,000
<DEPRECIATION> 19,112,000
<TOTAL-ASSETS> 114,600,000
<CURRENT-LIABILITIES> 13,264,000
<BONDS> 2,913,000
<COMMON> 2,535,000
0
0
<OTHER-SE> 93,015,000
<TOTAL-LIABILITY-AND-EQUITY> 114,600,000
<SALES> 30,993,000
<TOTAL-REVENUES> 30,993,000
<CGS> 23,911,000
<TOTAL-COSTS> 23,911,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,000
<INCOME-PRETAX> 2,376,000
<INCOME-TAX> 939,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,437,000
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0
</TABLE>
