FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-5863
JACLYN, INC.
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(Exact name of registrant as specified in its charter)
Delaware 22-1432053
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
635 59th Street, West New York, New Jersey 07093
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(Address of principal executive offices)
(Zip Code)
(201) 868-9400
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(Registrant's telephone number, including area code)
NONE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all the 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
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 1, 1995
- ------------------------------------ -------------------------------
Common Stock, par value $1 per share 2,691,405
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JACLYN, INC. AND SUBSIDIARIES
INDEX
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Page No.
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Part I. Financial Information:
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Item 1
Condensed Consolidated Balance Sheets -
September 30, 1995 (unaudited) and June 30, 1995 (derived from audited financial
statements) ......................................................................... 3
Condensed Consolidated Statements of Earnings -
Three Months Ended September 30, 1995 and 1994 (unaudited) .......................... 4
Condensed Consolidated Statements of Cash Flows - Three Months
Ended September 30, 1995 and 1994 (unaudited) ....................................... 5
Notes to Condensed Consolidated Financial Statements ..................................... 6
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................................. 7
Part II. Other Information:
Item 6
Exhibits and reports on Form 8-K ......................................................... 8
Signatures ............................................................................... 8
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PART 1. FINANCIAL INFORMATION
JACLYN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
September 30, June 30,
1995 1995
(Unaudited) (See below)
------------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ......................... $ 2,366 $ 243
-------- --------
Securities available for sale ..................... 4,912 4,948
-------- --------
Accounts receivable, net .......................... 9,323 10,550
-------- --------
Inventories:
Raw materials ................................... 1,376 1,829
Work in process ................................. 690 1,065
Finished goods .................................. 3,709 4,848
-------- --------
5,775 7,742
-------- --------
Prepaid expenses and other assets ................. 2,625 2,918
-------- --------
TOTAL CURRENT ASSETS .............................. 25,001 26,401
PROPERTY, PLANT AND EQUIPMENT, net ................ 1,565 1,614
OTHER ASSETS ...................................... 402 394
-------- --------
TOTAL ASSETS .................................... $ 26,968 $ 28,409
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable--bank ............................. $ 2,936 $ 3,538
Accounts payable ................................ 1,645 3,022
Other current liabilities ....................... 3,907 3,618
-------- --------
TOTAL CURRENT LIABILITIES ......................... 8,488 10,178
-------- --------
GUARANTEED BANK LOAN--ESOP ....................... 888 888
-------- --------
OTHER NON-CURRENT LIABILITIES ..................... 32 33
-------- --------
DEFERRED TAXES ON INCOME .......................... 1,373 1,368
-------- --------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock .................................... 3,369 3,369
Additional paid-in capital ...................... 12,117 12,117
Retained earnings ............................... 8,543 8,341
-------- --------
24,029 23,827
Less: Common shares in treasury at cost ........ 7,011 7,011
Guaranteed bank loan--ESOP ............... 888 888
Unrealized (gain) on securities
available for sale ..................... (57) (14)
-------- --------
TOTAL STOCKHOLDERS' EQUITY ........................ 16,187 15,942
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........ $ 26,968 $ 28,409
======== ========
The June 30, 1995 Balance Sheet is derived from audited financial
statements. See notes to condensed consolidated financial statements.
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JACLYN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended
September 30,
1995 1994
---------- ----------
Revenues:
Net Sales ........................................ $ 17,838 $ 23,801
Other Income ..................................... 82 103
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17,920 23,904
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Cost of Goods Sold ............................... 13,338 18,785
Shipping, Selling and Administrative Expenses .... 4,124 4,491
Interest Expense ................................. 66 85
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17,528 23,361
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Earnings before income taxes ....................... 392 543
Provision for income taxes ......................... 156 160
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Net Earnings ....................................... $ 236 $ 383
========== ==========
Average number of shares outstanding ............... 2,691,405 2,691,198
========== ==========
PER SHARE DATA:
Earnings per common share .......................... $ 0.09 $ 0.14
---------- ----------
Cash dividends per common share .................... $ -- $ 0.125
========== ==========
See notes to condensed consolidated financial statements.
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JACLYN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Three Months Ended
September 30,
1995 1994
------- -------
Cash Flows From Operating Activities:
Net Earnings ............................................. $ 236 $ 383
Adjustments to reconcile net income to net cash
provided by/(used in) operating activities:
Depreciation and amortization ............................ 76 139
Deferred income tax ...................................... 5 18
Unrealized loss (gain) from marketable securities ........ 9 (37)
Changes in assets and liabilities:
Net purchases of marketable securities--
at cost--Trading .................................... -- (60)
Decrease (Increase) in accounts receivable ............ 1,227 (1,136)
Decrease in inventories ............................... 1,967 1,352
Decrease in prepaid expenses and other current assets . 146 56
Decrease in prepaid and refundable income taxes ....... 147 164
(Increase) Decrease in security deposits
and other assets .................................... (10) 8
Decrease in accounts payable and other current
liabilities ......................................... (1,088) (626)
------- -------
Net cash provided by operating activities ............... 2,715 261
------- -------
Cash Flows From Investing Activities:
Additions to property and equipment ................... (26) (49)
Proceeds from sale of property ........................ 1 28
Maturities of marketable securities--at cost--
available for sale .................................. 36 699
------- -------
Net cash provided by investing activities ................ 11 678
------- -------
Cash Flows From Financing Activities:
Dividends paid ........................................ -- (336)
Exercise of stock options ............................. -- 27
Acquisition of treasury stock ......................... -- (28)
Decrease in loans payable--bank ....................... (603) (37)
Increase in security deposits payable ................. -- 3
------- -------
Net cash (used in) financing activities .................. (603) (371)
------- -------
Net Increase in Cash and Cash Equivalents ................ 2,123 568
Cash and Cash Equivalents, beginning of period ........... 243 185
------- -------
Cash and Cash Equivalents, end of period ................. $ 2,366 $ 753
======= =======
See notes to condensed consolidated financial statements.
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JACLYN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows have been made. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's 1995 Annual
Report to Stockholders. The results of operations for the period ended September
30, 1995 are not necessarily indicative of operating results for the full fiscal
year.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents increased during the three month
period ended September 30, 1995 to $2,366,000 from $243,000 at June 30, 1995.
The increase this period was due to an increase in funds provided by operating
activities of $2,715,000, primarily from net earnings and a decrease in
inventories and accounts receivable, offset by a decrease in accounts payable
and other current liabilities. This was offset by funds used in financing
activities due to the pay down of short-term bank loans of $603,000. The Company
believes that funds provided by operations, existing working capital and the
Company's current bank lines will be sufficient to meet foreseeable working
capital needs. There are no plans for significant capital expenditures in the
near term.
RESULTS OF OPERATIONS
Net sales were $17,838,000 during the three month period ended September
30, 1995, compared to $23,801,000 in the three month period ended September 30,
1994. The decrease in sales was primarily due to the decline in sales of the
Company's children's and moderately priced product lines. Cost of goods sold in
proportion to sales was lower this quarter as compared to last year's same
quarter due to higher margins achieved as a benefit of the Company's recent
restructuring and due to higher department store margins attributable to the
impact of a new "pre-sold" inventory program resulting in fewer off-price sales.
Shipping, selling and administrative expenses decreased due to a decrease in
volume related expenses as well as savings associated with the restructuring,
representing a reduction in personnel and the closure of a warehouse and
showroom. Other income, primarily from investments, was lower this three month
period than last year's due mainly to the adoption on July 1, 1994 of SFAS 115,
which added $20,000 to investment income in last year's quarter. The decrease in
earnings before income taxes this three month period as compared to the
equivalent period of fiscal 1994 was due mainly to the decrease in sales offset
by higher margins and lower shipping, selling and administrative expenses. Net
earnings for the quarter ended September 30, 1995 were $236,000 compared to net
earnings for the same period last year of $383,000.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
a) Exhibit 27. Financial Data Schedule.
b) Reports on Form 8-K. The registrant did not file any reports on Form 8-K
during the three months ended September 30, 1995.
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.
JACLYN, INC.
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(Registrant)
November 10, 1995 /s/ ROBERT CHESTNOV
-------------------------
Robert Chestnov
President
Chief Executive Officer
November 10, 1995 /s/ ANTHONY CHRISTON
-------------------------
Anthony Christon
Vice President
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
27 Financial Data Schedule 10
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Jaclyn, Inc. Condensed Consolidated Balance Sheet at September 30, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 2,366
<SECURITIES> 4,912
<RECEIVABLES> 9,323
<ALLOWANCES> 0
<INVENTORY> 5,775
<CURRENT-ASSETS> 25,001
<PP&E> 1,565
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,968
<CURRENT-LIABILITIES> 8,488
<BONDS> 0
<COMMON> 3,369
0
0
<OTHER-SE> 12,818
<TOTAL-LIABILITY-AND-EQUITY> 26,968
<SALES> 17,838
<TOTAL-REVENUES> 17,920
<CGS> 13,338
<TOTAL-COSTS> 4,124
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 66
<INCOME-PRETAX> 392
<INCOME-TAX> 156
<INCOME-CONTINUING> 236
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 236
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
