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, 1996
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, 1996
- ------------------------------------ -------------------------------
Common Stock, par value $1 per share 2,691,405
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JACLYN, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I. FINANCIAL INFORMATION:
Item 1
Condensed Consolidated Balance Sheets--
September 30, 1996 (unaudited) and June 30, 1996
(derived from audited financial statements) 3
Condensed Consolidated Statements of Earnings--
Three Months Ended September 30, 1996 and 1995 (unaudited) 4
Condensed Consolidated Statemets of Cash Flows--Three Months
Ended September 30, 1996 and 1995 (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 I. FINANCIAL INFORMATION
JACLYN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
September 30, June 30,
1996 1996
------------- -----------
(Unaudited) (See below)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,723 $ 665
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Securities available for sale 3,607 3,614
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Accounts receivable, net 11,016 10,305
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Inventories:
Raw materials 2,356 4,379
Work in process 961 1,797
Finished goods 5,318 4,896
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8,635 11,072
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Prepaid expenses and other assets 2,813 3,087
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TOTAL CURRENT ASSETS 27,794 28,743
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PROPERTY, PLANT AND EQUIPMENT, net 1,456 1,481
OTHER ASSETS 1,713 1,757
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TOTAL ASSETS $30,963 $31,981
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable--bank $ 3,650 $ 1,100
Accounts payable 3,067 6,279
Other current liabilities 4,667 5,371
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TOTAL CURRENT LIABILITIES 11,384 12,750
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GUARANTEED BANK LOAN--ESOP 704 704
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OTHER NON-CURRENT LIABILITIES 28 32
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DEFERRED TAXES ON INCOME 1,656 1,657
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COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock 3,369 3,369
Additional paid-in capital 12,117 12,117
Retained earnings 9,381 9,026
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24,867 24,512
Less: Common shares in treasury at cost 7,011 7,011
Guaranteed bank loan--ESOP 704 704
Add: Unrealized gain on securities
available for sale 39 41
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TOTAL STOCKHOLDERS' EQUITY 17,191 16,838
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $30,963 $31,981
======= =======
The June 30, 1996 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,
------------------------
1996 1995
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Revenues:
Net Sales $ 22,977 $ 17,838
Other Income 60 82
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23,037 17,920
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Cost of Goods Sold 17,731 13,338
Shipping, Selling and Administrative Expenses 4,626 4,124
Interest Expense 89 66
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22,446 17,528
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Earnings before income taxes 591 392
Provision for income taxes 236 156
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Net Earnings $ 355 $ 236
========== ==========
Average number of shares outstanding 2,691,405 2,691,405
========== ==========
Earnings per common share $ 0.13 $ 0.09
========== ==========
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,
-------------------
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 355 $ 236
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 121 76
Deferred income tax (1) 5
Unrealized loss from marketable securities 5 9
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (711) 1,227
Decrease in inventories 2,437 1,967
Decrease in prepaid expenses and other
current assets 45 146
Decrease in prepaid and refundable income taxes 229 147
Decrease (increase) in security deposits and
other assets 5 (10)
Decrease in accounts payable and other
current liabilities (3,916) (1,088)
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Net cash (used in) provided by operating activities (1,431) 2,715
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (67) (26)
Proceeds from sale of property 10 1
Maturities of marketable securities
--at cost--available for sale -- 36
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Net cash (used in) provided by investing activities (57) 11
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CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in loans payable--bank 2,550 (603)
(Decrease) in other non-current liabilities payable (4) --
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Net cash provided by (used in) financing activities 2,546 (603)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 1,058 2,123
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 665 243
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,723 $ 2,366
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SUPPLEMENTAL INFORMATION:
Interest paid $ 89 $ 66
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Taxes paid $ 22 $ 22
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See notes to condensed consolidated financial statements.
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<PAGE>
JACLYN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of September 30, 1996 and the
condensed consolidated statements of operations and cash flows for the three
month periods ended September 30, 1996 and 1995 have been prepared by the
Company and are unaudited. In the opinion of management, all adjustments (which
include only normal recurring adjustments) have been made that are necessary to
present fairly the financial position, results of operations and cash flows for
all periods presented. It is suggested that these condensed consolidated
financial statements be read in conjunction with the audited financial
statements and notes thereto included in the Company's 1996 Annual Report to
Stockholders. The results of operations for the period ended September 30, 1996
are not necessarily indicative of operating results for the full fiscal year.
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<PAGE>
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, 1996 to $1,723,000 from $665,000 at June 30, 1996. The
increase this period was due to an increase in funds provided by financing
activities of $2,546,000 from increased borrowing under the Company's bank
line of credit for working capital needs, offset by funds used in operating
activities, mainly for the payment of accounts payable and other current
liabilities. 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 requirements. There are no plans for significant
capital expenditures in the near term.
RESULTS OF OPERATIONS
Net sales were $22,977,000 during the three month period ended September 30,
1996, compared to $17,838,000 in the three month period ended September 30,
1995. The increase in sales was primarily due to higher sales for the Company's
new sleepwear division and Saddle River(TM) division. Cost of goods sold in
proportion to sales was higher this quarter as compared to last year's same
quarter due to lower margins achieved in certain divisions where short-term
promotional selling was used to establish or maintain market share. Shipping,
selling and administrative expenses increased mainly due to an increase in
volume related expenses; however, the percentage of these costs versus net sales
declined approximately 3% when compared to the same quarter in fiscal 1996.
Other income, primarily from investments, was lower this year compared to last
year's same quarter due to lower funds available for investment resulting from
the previously announced purchase of the Saddle River trademark. The increase in
earnings before income taxes for the first quarter in fiscal 1997 compared to
the equivalent period of fiscal 1996 was mainly due to an increase in sales and
proportionately lower shipping, selling, and administrative expenses. Net
earnings for the quarter ended September 30, 1996 were $335,000 compared to net
earnings for the same period last year of $236,000.
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<PAGE>
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, 1996.
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 12, 1996 /s/ ALLAN GINSBURG
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Allan Ginsburg
Chairman of the Board
November 12, 1996 /s/ ANTHONY CHRISTON
-----------------------------
Anthony Christon
Vice President
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
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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, 1996 and the
Condensed Consolidated Statements of Operations for the period ended September
30, 1996. This information 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-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 1,723
<SECURITIES> 3,607
<RECEIVABLES> 11,016
<ALLOWANCES> 0
<INVENTORY> 8,635
<CURRENT-ASSETS> 27,794
<PP&E> 1,456
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,963
<CURRENT-LIABILITIES> 11,384
<BONDS> 0
0
0
<COMMON> 3,369
<OTHER-SE> 13,822
<TOTAL-LIABILITY-AND-EQUITY> 30,963
<SALES> 22,977
<TOTAL-REVENUES> 23,037
<CGS> 17,731
<TOTAL-COSTS> 4,626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89
<INCOME-PRETAX> 591
<INCOME-TAX> 236
<INCOME-CONTINUING> 355
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 355
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
