UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A No. 2
(Restated)
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 26, 1994
Commission file number 1 - 8509
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NANTUCKET INDUSTRIES, INC.
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Exact name of registrant as specified in its charter
Delaware 58-0962699
- ---------------------------------- ----------
State or other jurisdiction of IRS Employer
incorporation of organization Identification Number
105 Madison Avenue, New York, New York 10016
- -------------------------------------- ______
Address of principal executive offices Zip Code
(212)889-5656
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Registrant's telephone number, including area code
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 twelve 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 ninety days.
X YES NO
----- ------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. As of January 9,
1995, the Registrant had outstanding 2,978,796 shares of Common stock.
<PAGE>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------------
QUARTERLY REPORT
----------------
QUARTER ENDED NOVEMBER 26, 1994
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(Restated)
I N D E X
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Part I.
FINANCIAL INFORMATION PAGE
- --------------------- ----
Consolidated balance sheets 3
Consolidated statements of operations 4
Consolidated statements of cash flows 6
Notes to consolidated financial statements 9
Signature 12
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
November 26, 1994 (Restated)
-------------------------------------------------------
As Previously February 26,
Reported Restatements As Restated 1994
------------- -------------- ------------- ------------
(unaudited) (1)
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $30,037 - $30,037 $595,918
Accounts receivable, less allowance for
doubtful accounts of $205,000 and $175,000
respectively 8,380,452 - 8,380,452 4,928,272
Inventories 12,940,981 (1,091,929) 11,849,052 11,390,858
Refundable income taxes 30,766 - 30,766 558,000
Other current assets 501,030 - 501,030 538,062
-------------- ------------- ------------- -------------
Total Current Assets 21,883,266 (1,091,929) 20,791,337 18,011,110
PROPERTY PLANT & EQUIPMENT - NET 3,883,700 - 3,883,700 3,772,008
OTHER ASSETS 407,915 - 407,915 412,324
-------------- ------------- ------------- -------------
$26,174,881 ($1,091,929) $25,082,952 $22,195,442
============== ============= ============= =============
</TABLE>
(1) Derived from audited financial statements
See notes to Consolidated Financial Statements.
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
November 26, 1994 (Restated)
-------------------------------------------------------
As Previously February 26,
Reported Restatements As Restated 1994
------------- -------------- ------------- ------------
(unaudited) (1)
LIABILITIES AND STOCKHOLDER EQUITY
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $975,000 - $975,000 $700,000
Accounts payable 2,467,052 160,471 2,627,523 3,693,908
Accrued salaries 658,275 - 658,275 907,906
Accrued unusual charge 465,000 - 465,000 765,000
Accrued expenses 660,659 - 660,659 1,671,988
Income taxes payable 2,640 - 2,640 10,184
-------------- ------------- ------------- -------------
Total Current Liabilities 5,228,626 160,471 5,389,097 7,748,986
LONG-TERM DEBT
Note payable to related party 300,000 - 300,000 300,000
Long-term debt 11,394,109 - 11,394,109 7,999,847
Accrued unusual charge 1,122,864 - 1,122,864 1,450,000
-------------- ------------- ------------- -------------
TOTAL LIABILITIES 18,045,599 160,471 18,206,070 17,498,833
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value; 500,000 shares
authorized, of which 5,000 shares have been
designated as non-voting convertible and are
issued and outstanding 500 - 500 -
Common stock, $.10 par value; authorized
6,000,000 shares; issued 2,991,848 299,185 - 299,185 299,185
Additional paid-in capital 11,576,898 - 11,576,898 10,577,398
Accumulated deficit (3,662,162) (1,252,400) (4,914,562) (2,898,532)
-------------- ------------- ------------- -------------
8,214,421 (1,252,400) 6,962,021 7,978,051
Less-13,052 shares at November 26, 1994 and
503,052 shares at February 26, 1994 of
common stock held in treasury, at cost 85,139 - 85,139 3,281,442
-------------- ------------- ------------- -------------
8,129,282 (1,252,400) 6,876,882 4,696,609
-------------- ------------- ------------- -------------
$26,174,881 ($1,091,929) $25,082,952 $22,195,442
============== ============= ============= =============
</TABLE>
(1) Derived from audited financial statements
See notes to Consolidated Financial Statements.
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
39 Weeks Ended
---------------------------------------------------------------------------
November 26, 1994 (Restated)
-------------------------------------------------------
As Previously November 27,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales $28,713,098 - $28,713,098 $33,770,918
Cost of sales 22,529,333 - 22,529,333 27,634,314
------------- ------------- ------------- ------------
Gross profit-Amount 6,183,765 - 6,183,765 6,136,604
Selling, general and administrative
expenses 5,764,594 - 5,764,594 7,097,809
Unusual Charge 1,252,400 1,252,400
------------- ------------- ------------- ------------
Operating (loss) profit 419,171 (1,252,400) (833,229) (961,205)
Interest expense (887,846) - (887,846) (568,036)
------------- ------------- ------------- ------------
Loss before income taxes (468,675) (1,252,400) (1,721,075) (1,529,241)
Income tax benefit - - - 557,187
------------- ------------- ------------- ------------
NET LOSS ($468,675) ($1,252,400) ($1,721,075) ($972,054)
============= ============= ============= ============
NET LOSS PER COMMON SHARE ($0.18) ($0.47) ($0.65) ($0.39)
Weighted Average Common Shares Outstanding 2,663,103 2,663,103 2,663,103 2,524,576
</TABLE>
See notes to Consolidated Financial Statements.
-5-
<PAGE>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE><CAPTION>
13 Weeks Ended
---------------------------------
November 26, November 27,
1994 1993
------------ ------------
<S> <C> <C>
Net sales $10,995,726 $13,396,023
Cost of sales 8,621,446 11,476,563
------------ ------------
Gross profit-Amount 2,374,280 1,919,460
Selling, general and administrative
expenses 2,042,738 2,719,283
------------ ------------
Operating (loss) profit 331,542 (799,823)
Interest expense (307,098) (179,762)
------------ ------------
Loss before income taxes 24,444 (979,585)
Income tax benefit - 414,116
------------ ------------
NET LOSS $24,444 ($565,469)
============ ------------
NET LOSS PER COMMON SHARE $0.01 ($0.22)
Weighted Average Common Shares Outstanding 2,978,796 2,535,757
</TABLE>
See notes to Consolidated Financial Statements.
-6-
<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
39 Weeks Ended
---------------------------------------------------------------------------
November 26, 1994 (Restated)
-------------------------------------------------------
As Previously November 27,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net loss ($468,675) ($1,252,400) ($1,721,075) ($972,054)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities
Depreciation and amortization 238,676 - 238,676 377,261
Provision for doubtful accounts 60,000 - 60,000 48,581
Unusual charge 1,252,400 1,252,400 -
Provision for obsolete inventory 180,000 - 180,000 -
(Increase) decrease in assets
Accounts receivable (3,512,180) - (3,512,180) (593,012)
Inventories (1,730,123) - (1,730,123) 1,429,494
Refundable income taxes 527,234 - 527,234 129,677
Other current assets 37,032 - 37,032 (44,779)
(Decrease) increase in liabilites
Accounts payable (1,226,856) - (1,226,856) (647,474)
Accrued expenses and other liabilities (1,260,960) - (1,260,960) 403,916
Income taxes payable (7,544) - (7,544) (27,577)
Accrued unusual charge (627,136) - (627,136) -
------------- ------------- ------------- ------------
Net cash used in operating
activities (7,790,532) - (7,790,532) 104,033
------------- ------------- ------------- ------------
Cash flows from investing activities:
Additions to property, plant and equipment (350,368) - (350,368) (168,257)
Decrease in other assets 4,409 - 4,409 78,797
------------- ------------- ------------- ------------
Net cash used in investing activities (345,959) - (345,959) (89,460)
------------- ------------- ------------- ------------
Cash flows from financing activities:
Payments of line of credit agreement (5,090,294) - (5,090,294) (285,529)
Payments of long-term debt and capital
lease obligations (500,000) - (500,000) (158,674)
Issuance of convertible preferred stock 1,000,000 - 1,000,000 -
Proceeds from sale of Treasury Stock 2,901,351 - 2,901,351 -
Borrowings under line of credit agreement 9,259,553 - 9,259,553 -
------------- ------------- ------------- ------------
Net cash provided by (used in) financing
activities 7,570,610 - 7,570,610 (444,203)
------------- ------------- ------------- ------------
</TABLE>
Continued on next page
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
39 Weeks Ended
---------------------------------------------------------------------------
November 26, 1994 (Restated)
-------------------------------------------------------
As Previously November 27,
Reported Restatements As Restated 1993
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
NET DECREASE IN CASH ($565,881) - ($565,881) ($429,630)
Cash at beginning of period 595,918 - $595,918 631,962
------------- ------------- ------------- ------------
Cash at end of period $30,037 - $30,037 $202,332
============= ============= ============= ============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the period:
Interest $705,906 - $705,906 $531,240
============= ============= ============= ============
Income taxes $60,577 - $60,577 $1,623
============= ============= ============= ============
</TABLE>
See notes to consolidated financial statements.
-8-
<PAGE>
NANTUCKET INDUSTRIES, INC.
--------------------------
AND SUBSIDIARIES
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
THIRTY-NINE WEEKS ENDED NOVEMBER 26, 1994
------------------------------------------
AND NOVEMBER 27,1993
--------------------
(unaudited)
I. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of November 26, 1994 and the
consolidated statements of operations for the thirty-nine and thirteen
week periods and statements of cash flows for the thirty-nine weeks ended
November 26, 1994 and November 27, 1993 have been prepared by the Company
without audit. In the opinion of management, all adjustments (consisting
of only normal recurring accruals) necessary for a fair presentation of the
financial position of the Company and its subsidiaries at November 26, 1994
and the results of their operations and their cash flows for the thirty-
nine and thirteen week periods and cash flows for the thirty-nine weeks
ended November 26, 1994 have been made on a consistent basis.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's 1994 Annual Report on Form 10-K.
The results of operations for the periods presented are not necessarily
indicative of the operating results for the full year.
II. INVENTORIES
Inventories reflecting the restatement (Note V) consists of the following:
November 26, February 26,
1994 1994
-------------- ------------
Raw materials $ 2,627,019 $ 3,283,744
Work in process 5,637,381 4,048,556
Finished goods 3,584,652 4,058,558
-------------- ------------
$ 11,849,052 $ 11,390,858
============== ============
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<PAGE>
III. INCOME TAXES
At November 26, 1994 the Company had a net deferred tax asset in excess
of $3,400,000 which is fully reserved until it can be utilized to offset
deferred tax liabilities or realized against taxable income. In addition,
the Company had a net operating loss carryforward for book and tax of
approximately $11,000,000 and $4,000,000 respectively.
IV. STOCKHOLDERS' EQUITY
On March 22, 1994, the Company issued 5,000 shares, $.10 par value per
share, of non-voting convertible preferred stock for $1,000,000. The
preferred stock is convertible into shares of common stock at the rate of
$5.00 per share. The shares may be redeemed in whole or in part by the
Company after February 28, 1999 and have a liquidation preference of $200
per share.
On August 22, 1994, the Company sold 490,000 shares of its common
treasury stock to GUESS?, Inc. and certain of its affiliates at $6.00 per
share. The treasury stock issued had an average cost of $6.52 per share.
Accordingly, the difference between the net proceeds, approximating
$2,900,000 and the treasury shares cost of $3,196,000 was applied to the
Company's retained earnings.
V. UNUSUAL CHARGE
In the fourth quarter of fiscal 1994, the Company formulated plans to
close its Puerto Rico facility, discontinue a portion of its women's
innerwear business, reduce costs and 0streamline operations. In fiscal
1994, the Company provided $5,450,000 for the costs associated with these
matters as an unusual charge.
The Company also terminated the employment contracts of its Chairman
and Vice Chairman. In accordance with agreement, they will be paid an
aggregate of $400,000 per year in severance, as well as other benefits,
through February 28, 1999. The present value of these payments was accrued
as part of the unusual charge for the year ended February 26, 1994.
The Puerto Rico facility shutdown was completed in July, 1994. A
final assessment associated with this closing required additional
write-offs, reflected as an unusual charge of $1,252,400 in the period
ended August 27, 1994. This matter was identified in connection with the
physical inventory related to the completion of the financial statements
for the year ended February 25, 1995. Accordingly, the accompanying
financial statements for the thirty-nine weeks ended November 26,1994 have
been restated to reflect the additional unusual charge associated with the
shutdown of the Puerto Rico facility.
-10-
<PAGE>
Through November 26, 1994, payments of the unusual charge approximated
$650,000; $460,000 associated with the shutdown of the Puerto Rico
facility and approximately $297,000 representing payments against the
present value of the termination payments to the former Chairman and Vice
Chairman.
-11-
<PAGE>
Signature
---------
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.
NANTUCKET INDUSTRIES, INC.
(Registrant)
By:
/s/ Ronald S. Hoffman
----------------------------
Ronald S. Hoffman,
June 5, 1995 Vice President - Finance
(Chief Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS INFORMATION EXTRACTED FROM THE STATEMENTS DATED AUGUST
26, 1995 AS FILED IN FORM 10-Q FOR THE QUARTERLY PERIOD THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-26-1994
<PERIOD-END> NOV-28-1994
<CASH> 30,037
<SECURITIES> 0
<RECEIVABLES> 8,585,452
<ALLOWANCES> 205,000
<INVENTORY> 11,849,052
<CURRENT-ASSETS> 20,791,337
<PP&E> 7,474,958
<DEPRECIATION> 3,591,258
<TOTAL-ASSETS> 25,082,952
<CURRENT-LIABILITIES> 5,389,097
<BONDS> 0
<COMMON> 299,185
0
500
<OTHER-SE> 6,577,197
<TOTAL-LIABILITY-AND-EQUITY> 25,082,952
<SALES> 28,713,098
<TOTAL-REVENUES> 28,713,098
<CGS> 22,529,333
<TOTAL-COSTS> 22,529,333
<OTHER-EXPENSES> 6,926,994
<LOSS-PROVISION> 90,000
<INTEREST-EXPENSE> 887,846
<INCOME-PRETAX> (1,721,075)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,721,075)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,721,075)
<EPS-PRIMARY> (0.85)
<EPS-DILUTED> (0.85)
</TABLE>
