UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A No. 1
(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 August 27, 1994
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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
- -------------
Registrant's telephone number, including area code
Former name, former address and former fiscal year, if changed since last report
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 July 6, 1994,
the Registrant had outstanding 2,488,796 shares of Common stock.
<PAGE>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------------
QUARTERLY REPORT
----------------
QUARTER ENDED AUGUST 27, 1994
-----------------------------
(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
August 27, 1994 (Restated)
-------------------------------------------------------
As Previously February 26,
Reported Restatements As Restated 1994
------------- -------------- ------------- ------------
(unaudited) (1)
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $40,915 - $40,915 $595,918
Accounts receivable, less allowance for
doubtful accounts of $205,000 and $175,000
respectively 7,018,168 - 7,018,168 4,928,272
Inventories 12,911,489 (1,091,929) 11,819,560 11,390,858
Refundable income taxes 77,028 - 77,028 558,000
Other current assets 577,352 - 577,352 538,062
------------- ------------- ------------- -------------
Total Current Assets 20,624,952 (1,091,929) 19,533,023 18,011,110
PROPERTY PLANT & EQUIPMENT - NET 3,883,299 - 3,883,299 3,772,008
OTHER ASSETS 478,565 - 478,565 412,324
------------- ------------- ------------- -------------
$24,986,816 ($1,091,929) $23,894,887 $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)
August 27, 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 2,396,400 160,471 2,556,871 3,693,908
Accrued salaries 486,172 - 486,172 907,906
Accrued unusual charge 465,000 - 465,000 765,000
Accrued expenses 616,133 - 616,133 1,671,988
Income taxes payable 2,640 - 2,640 10,184
------------- ------------- ------------- -------------
Total Current Liabilities 4,941,345 160,471 5,101,816 7,748,986
LONG-TERM DEBT
Note payable to related party 300,000 - 300,000 300,000
Long-term debt 10,459,608 - 10,459,608 7,999,847
Accrued unusual charge 1,181,021 - 1,181,021 1,450,000
------------- ------------- ------------- -------------
TOTAL LIABILITIES 16,881,974 160,471 17,042,445 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 (3,686,602) (1,252,400) (4,939,002) (2,898,532)
------------- ------------- ------------- -------------
8,189,981 (1,252,400) 6,937,581 7,978,051
Less-13,052 shares at August 27, 1994 and
503,052 shares at February 26, 1994 of
common stock held in treasury, at cost 85,139 - 85,139 3,281,442
------------- ------------- ------------- -------------
8,104,842 (1,252,400) 6,852,442 4,696,609
------------- ------------- ------------- -------------
$24,986,816 ($1,091,929) $23,894,887 $22,195,442
============= ============= ============= =============
</TABLE>
(1) Derived from audited financial statements
See notes to Consolidated Financial Statements.
-4-
<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
13 Weeks Ended
---------------------------------------------------------------------------
August 27, 1994 (Restated)
-------------------------------------------------------
As Previously August 28,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales $9,208,664 - $9,208,664 $10,041,732
Cost of sales 7,059,314 - 7,059,314 8,195,953
-------------- ------------- ------------- -------------
Gross profit-Amount 2,149,350 - 2,149,350 1,845,779
Selling, general and administrative
expenses 1,840,642 - 1,840,642 2,166,435
Unusual Charge 1,252,400 1,252,400
-------------- ------------- ------------- -------------
Operating (loss) profit 308,708 (1,252,400) (943,692) (320,656)
Interest expense (353,245) - (353,245) (196,063)
-------------- ------------- ------------- -------------
Loss before income taxes (44,537) (1,252,400) (1,296,937) (516,719)
Income tax benefit - - - 173,386
-------------- ------------- ------------- -------------
NET LOSS ($44,537) ($1,252,400) ($1,296,937) ($343,333)
============== ============= ============= =============
NET LOSS PER COMMON SHARE ($0.02) ($0.50) ($0.51) ($0.14)
Weighted Average Common Shares Outstanding 2,521,104 2,521,104 2,521,104 2,441,835
</TABLE>
See notes to Consolidated Financial Statements.
-5-
<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
26 Weeks Ended
---------------------------------------------------------------------------
August 27, 1994 (Restated)
-------------------------------------------------------
As Previously August 28,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales $17,717,372 - $17,717,372 $20,374,895
Cost of sales 13,907,887 - 13,907,887 16,157,751
-------------- ------------- ------------- -------------
Gross profit-Amount 3,809,485 - 3,809,485 4,217,144
Selling, general and administrative
expenses 3,721,856 - 3,721,856 4,378,526
Unusual Charge 1,252,400 1,252,400
-------------- ------------- ------------- -------------
Operating (loss) profit 87,629 (1,252,400) (1,164,771) (161,382)
Interest expense (580,747) - (580,747) (388,274)
-------------- ------------- ------------- -------------
Loss before income taxes (493,118) (1,252,400) (1,745,518) (549,656)
Income tax benefit - - - 143,071
-------------- ------------- ------------- -------------
NET LOSS ($493,118) ($1,252,400) ($1,745,518) ($406,585)
============== ============= ============= =============
NET LOSS PER COMMON SHARE ($0.20) ($0.50) ($0.70) ($0.17)
Weighted Average Common Shares Outstanding 2,509,950 2,509,950 2,509,950 2,441,835
</TABLE>
See notes to Consolidated Financial Statements.
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
26 Weeks Ended
---------------------------------------------------------------------------
August 27, 1994 (Restated)
-------------------------------------------------------
As Previously August 28,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net loss ($493,118) ($1,252,400) ($1,745,518) ($406,585)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities
Depreciation and amortization 149,773 - 149,773 269,156
Provision for doubtful accounts 66,407 - 66,407 1,360
Unusual charge 1,252,400 1,252,400
Provision for obsolete inventory 120,000 - 120,000 -
(Increase) decrease in assets
Accounts receivable (2,156,303) - (2,156,303) 63,325
Inventories (1,640,631) - (1,640,631) (1,430,627)
Refundable income taxes 480,972 - 480,972 -
Other current assets (39,290) - (39,290) (319,874)
(Decrease) increase in liabilites
Accounts payable (1,297,508) - (1,297,508) 963,166
Accrued expenses and other liabilities (1,516,228) - (1,516,228) 278,035
Income taxes payable (7,544) - (7,544) 485,959
Accrued unusual charge (568,979) - (568,979) -
-------------- ------------- ------------- -------------
Net cash used in operating
activities (6,902,449) - (6,902,449) (96,085)
-------------- ------------- ------------- -------------
Cash flows from investing activities:
Additions to property, plant and equipment (261,064) - (261,064) (143,862)
(Increase) Decrease in other assets (66,241) - (66,241) 40,275
-------------- ------------- ------------- -------------
Net cash used in investing activities (327,305) - (327,305) (103,587)
-------------- ------------- ------------- -------------
Cash flows from financing activities:
Payments of line of credit agreement (5,090,294) - (5,090,294) -
Payments of long-term debt and capital
lease obligations (500,000) - (500,000) (60,034)
Issuance of convertible preferred stock 1,000,000 - 1,000,000 -
Proceeds from sale of Treasury Stock 2,939,990 - 2,939,990
Borrowings under line of credit agreement 8,325,055 - 8,325,055
-------------- ------------- ------------- -------------
Net cash provided by (used in) financing
activities 6,674,751 - 6,674,751 (60,034)
-------------- ------------- ------------- -------------
</TABLE>
Continued on next page
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<PAGE>
<TABLE><CAPTION>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
26 Weeks Ended
---------------------------------------------------------------------------
August 27, 1994 (Restated)
-------------------------------------------------------
As Previously August 28,
Reported Restatements As Restated 1993
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
NET DECREASE IN CASH ($555,003) - ($555,003) ($259,706)
Cash at beginning of period 595,918 - $595,918 631,962
-------------- ------------- ------------- -------------
Cash at end of period $40,915 - $40,915 $372,256
============== ============= ============= =============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the period:
Interest $460,041 - $460,041 $395,084
============== ============= ============= =============
Income taxes $36,880 - $36,880 -
============== ============= ============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
NANTUCKET INDUSTRIES, INC.
--------------------------
AND SUBSIDIARIES
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
THIRTY-NINE WEEKS ENDED AUGUST 27, 1994
---------------------------------------
AND AUGUST 28,1993
------------------
(unaudited)
I. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of August 27, 1994 and the
consolidated statements of operations for the twenty-six and
thirteen week periods and statements of cash flows for the
twenty-six weeks ended August 27, 1994 and August 28, 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 August 27, 1994 and
the results of their operations and their cash flows for the
twenty-six and thirteen week periods and cash flows for the
twenty-six weeks ended August 27, 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:
August 27, February 26,
1994 1994
------------- -------------
Raw materials $ 3,257,301 $ 3,283,744
Work in process 5,760,442 4,048,556
Finished goods 2,801,817 4,058,558
------------- -------------
$ 11,819,560 $ 11,390,858
============= =============
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<PAGE>
III. INCOME TAXES
At August 27, 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 net operating loss
carry forward 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 streamline
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 have been
restated to reflect the additional unusual charge associated with
the shutdown of the Puerto Rico facility.
-10-
<PAGE>
Through August 27, 1994, payments of the unusual charge
approximated $650,000; $460,000 associated with the shutdown of the
Puerto Rico facility and approximately $190,000 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 THIS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-26-1994
<PERIOD-END> AUG-27-1994
<CASH> 40,915
<SECURITIES> 0
<RECEIVABLES> 7,223,168
<ALLOWANCES> 205,000
<INVENTORY> 11,819,560
<CURRENT-ASSETS> 19,533,023
<PP&E> 7,236,282
<DEPRECIATION> 3,352,983
<TOTAL-ASSETS> 23,894,887
<CURRENT-LIABILITIES> 5,101,816
<BONDS> 0
<COMMON> 299,185
0
500
<OTHER-SE> 6,552,757
<TOTAL-LIABILITY-AND-EQUITY> 23,894,887
<SALES> 17,717,372
<TOTAL-REVENUES> 17,717,372
<CGS> 13,907,887
<TOTAL-COSTS> 13,907,887
<OTHER-EXPENSES> 4,914,256
<LOSS-PROVISION> 60,000
<INTEREST-EXPENSE> 580,747
<INCOME-PRETAX> (1,745,518)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,745,518)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,745,518)
<EPS-PRIMARY> (0.70)
<EPS-DILUTED> (0.70)
</TABLE>
