THIS DOCUMENT IS A COPY OF THE FORM 10-QSB FILED ON MAY 22, 1995 PURSUANT TO A
RULE 201 TEMPORARY HARDSHIP EXEMPTION.
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1995
Commission File Number: 0-4728
ARROW-MAGNOLIA INTERNATIONAL, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Texas 75-0408335
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2646 Rodney Lane, Dallas, Texas 75229
(Address of Principal Executive Offices)
(214) 247-7111
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 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.
X
Yes No
Number of common shares outstanding as of March 31, 1995:
Common Stock, $0.10 par value, 1,000,000 shares
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ARROW-MAGNOLIA INTERNATIONAL, INC.
March 31, 1994
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION.
Item 1. Financial Statements Page
Arrow-Magnolia International, Inc. and Subsidiary 2
Condensed Consolidated Balance Sheets as of
March 31, 1995 (unaudited) and December 31, 1994.
Arrow-Magnolia International, Inc. and Subsidiary 3
Condensed Consolidated Statements of Earnings for
the Three Months Ended March 31, 1995 and 1994.
Arrow-Magnolia International, Inc. and Subsidiary 4
Condensed Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1995 and 1994.
Arrow-Magnolia International, Inc. and Subsidiary 5
Notes to Condensed Consolidated Financial
Statements March 31, 1995 and 1994.
Item 2. Management's Discussion and Analysis or 6
Plan of Operation.
PART II. OTHER INFORMATION.
Item 6. Exhibits and Reports on Form 8-K 7
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<TABLE>
<CAPTION>
ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
March 31 December 31,
Assets 1995 1994
(unaudited)
<S> <C> <C>
Current assets:
Cash $ 764,222 856,883
Trade accounts receivable, less
allowance for doubtful accounts
of $282,874 in 1995 and $241,508
in 1994 1,122,836 869,663
Other receivables 52,766 18,583
Inventories 638,702 610,613
Deferred income taxes 88,067 78,368
Prepaid expenses 2,703 19,142
Total current assets 2,669,296 2,453,252
Property and equipment, net 388,372 400,415
Intangible assets, net 116,308 122,308
Note receivable 40,000 40,000
Deferred income taxes 19,056 19,056
Other assets 1,000 1,000
$3,234,032 3,036,031
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $78,175 108,175
Accounts payable 455,156 294,807
Accrued liabilities 81,154 129,810
Income taxes payable 102,804 129,666
Total current liabilities 717,289 662,458
Note payable 660,000 690,000
Long-term debt, excluding current
installments 359,058 361,352
Total liabilities 1,736,347 1,713,810
Stockholders' equity:
Preferred stock - par value $.10;
authorized 500,000 shares; none
issued - -
Common stock - par value $.10;
authorized 10,000,000 shares;
1,000,000 shares issued and
outstanding 100,000 100,000
Additional paid-in capital 900,000 900,000
Accumulated earnings 497,685 322,221
Total stockholders' equity 1,497,685 1,322,221
Commitments
$3,234,032 $3,036,031
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Earnings
Three Months ended March 31, 1995 and 1994
1995 1994
<S> <C> <C>
Net sales $1,969,818 1,652,176
Cost of sales 910,683 778,498
Gross profit 1,059,135 873,678
General and administrative expenses 751,354 686,187
Operating income 307,781 187,491
Other income (expenses):
Interest expense (25,892) (25,627)
Gain on disposition of assets - 805
Other income 3,419 1,946
Other expenses, net (22,473) (22,876)
Earnings before income taxes 285,308 164,615
Income taxes:
Current 119,543 70,404
Deferred income tax benefit (9,699) (14,434)
Net earnings $ 175,464 108,645
Earnings per common share:
Net earnings $.18 .11
Weighted average shares outstanding 1,000,000 1,000,000
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
Three Months ended March 31, 1995 and 1994
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $175,464 108,645
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 20,999 22,512
Gain on disposition of property
and equipment - (805)
Deferred income taxes (9,699) (14,434)
Provision for doubtful accounts 45,433 42,402
Changes in assets and liabilities:
Increase in receivables (332,789) (294,568)
Decrease (increase) in inventories (28,089) 3,709
Decrease in prepaid expenses 16,439 22,493
Increase in other assets - (4,867)
Increase in accounts payable 160,349 81,412
Increase in accrued liabilities (48,656) (46,406)
Increase in income taxes payable (26,862) 70,404
Net cash used in operating
activities (27,411) (9,503)
Cash flows from investing activities:
Acquisition of property and equipment (2,956) (18,294)
Proceeds from sale of property and
equipment - 19,131
Net cash provided by (used in)
investing activities (2,956) 837
Cash flows from financing activities:
Repayments of note payable (30,000) (25,000)
Repayments of long-term debt (32,294) (41,770)
Repayments of capital lease obligation - (1,605)
Net cash used in financing activities (62,294) (68,375)
Net decrease in cash (92,661) (77,041)
Cash at beginning of period 856,883 517,404
Cash at end of period $764,222 440,363
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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[CAPTION]
ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
March 31, 1995 and 1994
(1) Basis of Presentation
The March 31, 1995 condensed consolidated financial statements include the
accounts of Arrow-Magnolia International, Inc. and its Chemco Chemical
Company Division, and its wholly-owned subsidiary, Bio/Dyne Chemical Company,
an inactive corporation. All significant intercompany balances and
transactions have been eliminated.
The quarterly financial information included herein is unaudited; however,
such information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary for
a fair statement of results for the interim period.
The results of operations for the three-month periods ended March 31, 1995
and 1994 are not necessarily indicative of the results to be expected for the
full year.
For further information, refer to the financial statements and notes thereto
included in the Company's annual report on Form 10-KSB as of and for the year
ended December 31, 1994.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
Material Changes in Financial Condition.
The Company's working capital (total current assets less total current
liabilities), which was $1,790,794 as of December 31, 1994, increased to
$1,952,007 as of March 31, 1995 primarily due to increased accounts
receivable during the first quarter partially offset by increased accounts
payable, both attributable to increased sales during the first quarter of the
fiscal year, and decreased cash resulting in large part from payment of
$133,000 in income taxes during the first quarter.
These trends are likewise reflected in the Company's cash flows, which
reflect a net use of cash in operating activities of $27,411. Net earnings
of $175,464 were offset by increased accounts receivable and supported by
increased accounts payable, all attributable to growth in sales. The Company
also used funds to reduce its indebtedness, resulting in a total use of cash
of $92,661.
Other than spending necessary to fund growth, the Company anticipates no
material commitments for capital expenditures in the near future and manage-
ment therefore anticipates that cash from operations will provide adequate
funding for the foreseeable future.
Material Changes in Results of Operations
Net sales for the quarter ended March 31, 1995 increased to $1,968,818 from
$1,652,176, or 19.2%, from the same quarter of the previous year. Cost of
sales, including salesmen expenses, decreased as a percentage of net sales
from $778,498, or 47.1% of net sales, for the quarter ended March 31, 1994 to
$910,683, or 46.2% of net sales for the same quarter of 1995 as a result of
continuing cost control efforts. Gross profit therefore improved from
$873,678 to $1,059,135 for the quarter ended March 31, 1995
Selling, general and administrative expenses increased by 9.5% as the
Company incurred additional costs to support its sales growth.
As a result, net earnings increased to $175,464 for the quarter ended March
31, 1995 from $108,645 for the comparable three month period in 1994, an
increase of 61.5%.
<PAGE>
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports.
(a) None
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SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ARROW-MAGNOLIA INTERNATIONAL, INC.
Date: May 15, 1995 By: /s/ Morris Shwiff
Morris Shwiff, President
and Principal Executive Officer
Date: May 15, 1995 By: /s/ Fred Kenner
Fred Kenner, Vice President,
Secretary and Treasurer; the
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
registrant's Form 10-QSB for the quarter ended March 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
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<ALLOWANCES> 282874
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