<PAGE>
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
Commission File Number 0-5703
For Quarter and six months ended December 31, 1995
Exact name of registrant as specified in itOs charter D
J. Michaels, Inc.
State or other jurisdiction of incorporation or organization D
New York
I.R.S. employer identification no. D 11-1796714
Address of principal executive offices D 182 Smith Street
Brooklyn, N.Y. 11201
RegistrantOs telephone number, including area code D 718-852-6100
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 that the
registrant was required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuers of common
stock, as of the latest practicable date. 891,282 SHARES OF COMMON STOCK OF
$1.00 PAR VALUE, AS OF DECEMBER 31, 1995.
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<TABLE>
<CAPTION>
J.MICHAELS,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amount in thousands except per
share data)
For the 9 and 3 months ended 12/31
Year to date Quarter
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $3,694 $4,661 $1,398 $1,839
Credit service charges 996 1,143 319 389
-------- ---------------------------
Total revenues 4,690 5,804 1,717 2,228
Cost of sales and operating expenses
Cost of sales,including buying
and occupancy expenses 1,628 2,066 570 810
Selling,general and administrative
expenses 2,939 3,134 1,093 1,084
Bad debts expense 387 314 135 120
Depreciation and amortization 60 109 13 36
------------------------------------
5,014 5,623 1,811 2,050
------------------------------------
Operating income (324) 181 (94) 178
------------------------------------
Other income (expense) net
Interest and dividend income 341 254 119 100
Capital gains 38 (28) - 14
Other,net (2) 39 (4) 7
------------------------------------
377 265 115 121
------------------------------------
Income before taxes 53 446 21 299
Taxes on income 20 191 1 128
------------------------------------
Net income $33 $255 $20 $171
====================================
Net income per share 0.04 0.30 O.O2 0.20
Weighted number of shares outstanding855,633 851,282 889,604 851,282
Cash dividends per share 0.27 0.27 0.09 0.09
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
J.MICHAELS,INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
12/31/95 12/31/94 3/31/95
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $5,397,434 $5,364,532 $9,057,812
Restricted cash - 1,033,514 1,012,012
Available for sale securities 5,500,000 4,892,389 1,456,562
Customer's installment receivables net
of allowances for doubtful accounts
of $400,000 in 1993 and 1992 3,500,429 4,601,303 4,080,538
Other trade receivables 78,444 55,207 28,066
Notes Receivable 380,000
Inventories net of LIFO reserve 714,371 781,311 667,697
Prepaid income taxes 214,025 119,026 226,674
Deferred income taxes 209,691 258,866 209,691
Prepaid expense and other current assets 31,168 46,845 38,016
------------------------------------
Total current assets 16,025,562 17,152,993 16,777,068
Property,plant and equipment at cost
net of accumulated depreciation and
amortization (Note 3) 403,753 417,406 422,687
Assets held for lease,net of
accumulated amortization Note 3) 213,556 104,439 93,060
Deferred income taxes 44,292 10,000 44,292
------------------------------------
Total Assets $16,687,163 $17,684,838 $17,337,107
====================================
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Current portion,long term debt - $4,167 -
Accounts payable and accrued expenses $567,127 919,253 $427,163
Short positions in marketable securities - 1,033,514 1,012,012
----------- ------------------------
Total current liabilities 567,127 1,956,934 1,439,175
Shareholders Equity 16,120,036 15,727,904 15,897,932
------------------------------------
Total Liabilities and shareholders equity $16,687,163 $17,684,838 $17,337,107
=========== ========================
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
J.MICHAELS,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
Amount in thousands
For the nine months
ended
12/31/95 12/31/94
<S> <C> <>C
Cash flow from operating activities:
Net income $33 $255
Adjustments to reconcile net income to net
cash provided by operating activities-
Depreciation 60 109
Decrease (increase) in receivables 150 28
Decrease (increase) in inventories,
prepaid expenses (27) 54
Increase (decrease) in payables 140 461
------------------
Net cash flows from operating activities 356 907
------------------
Cash flow applied to investing activities:
Purchase of fixed assets (164) (45)
Sale of fixed assets - 10
Decrease (increase) in restricted cash 1,012 (223)
Decrease (increase) in investments (5,055) (135)
-------- ---------
Net cash flows from (applied to)
investing activities (4,207) (393)
------------------
Cash flow applied to financing activities:
Sale of common stock-re:warrants 420 -
Payment of cash dividends to stockholders (230) (230)
-------- ---------
Net cash flow from (applied to) investing activiti
activities 190 (230)
------------------
Net increase(decrease) in cash and cash equivalents (3,661) 284
Cash and cash equivalents, beginning of period 9,058 5,376
------- ---------
Cash and cash equivalents, end of period $5,397 $5,660
==================
</TABLE>
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<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Earnings per share are computed by dividing net earnings by weighted
average number of common shares outstanding during the period.
2.The financial information presented is unaudited. Such information reflects
all adjustments, which in the opinion of management, are necessary to present
fairly the consolidated results of operations and changes in financial position
for the three months then ended.
The financial statements and related information for the nine months ended
December 31, 1994 has been restated to conform to restated statements presented
in 10K filed for year ended March 31, 1995.
3.Accumulated depreciation and amortization was:
Property Plant Leasing
Equipment Assets
At December 31, 1995 $986,021 $763,768
At December 31, 1994 $960,181 $716,034
At March 31, 1995 $956,137 $733,451
4. The Statements of Cash Flows are presented pursuant to the provisions of
Statement Financial Accounting Standards No. 95, OStatement of Cash FlowsO.
5. ShareholdersO equity includes net unrealized gain (loss) on Securities
available for sale.
At December 31, 1995 D0D
At December 31, 1994 $6,204
6. Subsequent Event. On February 1, 1996, the Company signed a letter of
intent in connection with a proposed merger with Muriel Siebert Capital Markets
Group, Inc. The letter of intent contemplates that the Company will liquidate
all of its existing assets, and at the effectiveness of the Merger, the
existing shareholders of the Company will receive out of the liquidation
proceeds a cash payment and the right to share pro rata the remaining net after
tax proceeds (after payment of expenses and liabilities) realized from the sale
of the existing assets of the Company. After the Merger, the shareholders of
the Company as of the effectiveness of the Merger will retain 2.5% of the
shares of the surviving company, and the shareholders of Siebert will own 97.5%
of the shares of the surviving company. The surviving company will continue the
existing brokerage business conducted by Muriel Siebert & Co., Inc.
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<PAGE>
MANAGEMENTOS DISCUSSION AND ANALYSIS OF
FINANCIAL STRUCTURE AND RESULTS OF OPERATION
J. Michaels, Inc. and its subsidiaries are principally engaged in the retail
sale of household furnishings, primarily on credit. The Company also operates a
retail furniture rental division in the Buffalo area.
Approximately 85% of retail furniture sales were made to revolving credit
customers.
Sales (including finance charges) for the nine months decreased from the
previous year by 19.9% Net earnings decreased by 87%. The decrease in sales
reflects the continued weakness in regional economy. Gross margin for the six
months was 53.9% as compared to 55.4% last year. Credit Service Charges
decreased by 10.2% over the previous year.
Selling general and administrative expenses decreased by $195,000 primarily
representing decreased advertising, payroll and payroll related costs.
Capital gains realized for the current nine months was approximately $38,000.
At December 31, 1995 the Company had no investments which varied with the
market. The reserve for unrealized gains, and losses, therefore, was reduced to
zero.
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<PAGE>
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
Ratios Useful in Analyzing the Results of Operations
Nine months ended
December 31,
1995 1994
<S> <C> <C>
Sales, including credit service charges (in thousands) $4,690 $5,804
Percent increase (decrease) over previous year (19.9) (13.6)
Cost of sales as a percent of sales 34.7 35.6
Selling, general & administrative expenses-
as a percent of sales 44.1 54.0
Bad debt expense as a percent of sales 8.3 5.4
Depreciation and amortization as a percent of sales 1.3 1.9
Interest and dividend income as a percent of sales 7.3 4.4
Net income (in thousands) $33 $255
Net income (as a percentage of sales) .7 4.4
</TABLE>
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<PAGE>
Part II D Other Information
Item 5. Other Information. On February 1, 1996, the Company signed a letter of
intent in connection with a merger of the Company, and the liquidation of the
CompanyOs assets. See note 6 to the financial statements.
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<PAGE>
Signatures
Pursuant to the requirements of the securities exchanges act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
J. Michaels, Inc.
By: /s/ Arthur Fettner, Treasurer
Arthur Fettner, Treasurer
Date: February 8, 1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 5397
<SECURITIES> 5500
<RECEIVABLES> 3978
<ALLOWANCES> 400
<INVENTORY> 1037
<CURRENT-ASSETS> 16026
<PP&E> 1129
<DEPRECIATION> 986
<TOTAL-ASSETS> 16687
<CURRENT-LIABILITIES> 567
<BONDS> 0
656
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16687
<SALES> 3694
<TOTAL-REVENUES> 4690
<CGS> 1628
<TOTAL-COSTS> 5014
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53
<INCOME-TAX> 20
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
