<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995 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 0-12362
Berger Holdings, Ltd.
(Exact Name of Registrant as Specified in its Charter)
PENNSYLVANIA 23-2160077
(State or Other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
805 Pennsylvania Boulevard, Feasterville, PA 19053
(Address of principal executive offices)
Registrant's telephone number, including area code:
(215) 355-1200
Indicate by check mark whether the Registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past ninety days.
(1) YES X NO _____
-----
(2) YES X NO _____
-----
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES X NO _____
-----
As of May 9, 1995, the Registrant had outstanding 3,191,439 shares of
Common Stock, par value $.01 per share.
<PAGE>
BERGER HOLDINGS, LTD.
INDEX
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated
Balance Sheets at March 31, 1995
and December 31, 1994 3
Condensed Consolidated Statement of
Operations for the three month periods
ended March 31, 1995 and 1994 5
Condensed Consolidated Statements
of Cash Flows for the quarter
ended March 31, 1995 and 1994 6
Notes to Condensed Consolidated
Financial Statements 8
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior securities 11
Item 4. Submission of Matters to a
Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Current assets
Cash $ 102,794 $ 79,391
Trade accounts receivable, net of
allowance for doubtful accounts
of $73,000 in 1995 & 1994 1,765,453 1,239,431
Inventories (Note 2) 2,303,722 1,881,896
Prepaid and other assets 226,301 211,172
------------ -------------
Total current assets 4,398,270 3,411,890
------------ -------------
Other assets
Property and equipment, net (Note 3) 6,073,195 6,155,729
Other assets 191,533 155,169
Goodwill, net of accumulated
amortization 610,214 629,974
------------ -------------
Total other assets 6,874,942 6,940,872
------------ -------------
$11,273,212 $10,352,762
============ =============
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
------------- ------------
<S> <C> <C>
Current liabilities
Current maturities of long term debt
and demand notes payable $ 229,774 $ 228,174
Accounts payable 996,717 620,603
Accrued expenses 457,958 459,365
----------- -----------
Total current liabilities 1,684,449 1,308,142
Long term debt, net of current
maturities 4,382,997 3,873,299
----------- -----------
Total liabilities 6,067,446 5,181,441
----------- -----------
Stockholders' Equity
Common stock $.0l par value
Authorized 20,000,000 shares
Issued and outstanding 3,191,439 shares
in 1995 and 1994 31,914 31,914
Additional paid-in capital 14,778,238 14,778,238
Deficit (9,404,386) ( 9,438,831)
----------- -----------
5,405,766 5,371,321
Less common stock subscribed (200,000) ( 200,000)
----------- -----------
Total stockholders' equity 5,205,766 5,171,321
----------- -----------
$11,273,212 $10,352,762
=========== ===========
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1995 1994
-------------- --------------
<S> <C> <C>
Net sales $4,047,504 $2,618,115
Cost of sales 3,309,334 2,385,518
---------- ----------
Gross profit 738,170 232,597
Operating expenses
Selling, administrative and general
expenses 557,916 427,026
---------- ----------
Income (loss) from operations 180,254 (194,429)
---------- ----------
Other (expenses) income
Interest expense (145,925) (117,716)
Interest income 117 2,608
---------- ---------
(145,808) (115,108)
---------- ---------
Net income (loss) $34,446 ($309,537)
========== =========
Per Share amounts
Net income (loss) per common share $.01 ($.14)
========== ==========
Weighted average number of common
shares outstanding 3,191,439 2,249,188
========== ==========
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
----------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $34,446 ($309,537)
----------- ----------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Depreciation and amortization 175,765 194,598
(Increase) decrease in assets
Accounts receivable (526,022) (446,824)
Inventories (421,826) (262,226)
Other current and long-term assets (51,493) 70,855
Increase in liabilities
Accounts payable and accrued expenses 374,707 348,829
----------- -----------
Total adjustments (448,869) (94,768)
----------- -----------
Net cash used in operating
activities (414,423) (404,305)
----------- -----------
Cash flows from investing activities
Acquisition of property and equipment (73,472) (273,819)
----------- -----------
Net cash used in investing activities (73,472) (273,819)
----------- -----------
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
----------- ----------
<S> <C> <C>
Cash flows from financing activities
Net borrowings and loan repayments $511,298 $(15,982)
Gross proceeds from issuance of stock
and subordinated debt under private
placement -0- 382,000
Cost of private placement -0- (25,073)
----------- ----------
Net cash provided by
financing activities 511,298 340,945
----------- ----------
Net increase (decrease) in cash 23,403 (337,179)
Cash, beginning of period 79,391 578,729
----------- ----------
Cash, end of period $102,794 $241,550
=========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for
interest $145,925 $117,716
</TABLE>
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<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
Note 1. Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
solely of normal recurring accruals) considered necessary for a fair
presentation have been included.
Note 2. Inventories:
Inventories are valued at the lower of cost or market. Cost is determined
using the first-in, first-out method ("FIFO").
Components of inventories at March 31, 1995 and December 31, 1994 consist
of the following:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
<S> <C> <C>
Raw materials $1,084,709 $1,010,187
Finished goods 1,172,875 850,771
Packaging materials
and supplies 88,138 102,938
Less provision for
obsolescence (42,000) (82,000)
---------- ----------
$2,303,722 $1,881,896
========== ==========
</TABLE>
All inventory is currently used in the business of the Company's
subsidiary, Berger Bros. Company ("Berger").
Note 3. Property, Plant and Equipment:
Property, plant and equipment is recorded at cost. Costs of major additions
and betterments are capitalized; maintenance and repair costs, which do not
improve or extend the life of the respective assets, are charged to operations
as incurred. Leasehold improvements are amortized over the shorter of the lease
term or useful life.
-8-
<PAGE>
When an asset is sold, retired, or otherwise disposed of, the
cost of the property and the related accumulated depreciation is removed from
the respective accounts, and any resulting gains or losses are included in
income.
For financial reporting purposes, depreciation is computed on the
straight-line method over the estimated useful lives of the assets. For income
tax purposes, depreciation is computed on accelerated methods.
ITEM 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operation.
Results of Operations
The financial statements include the accounts of the Company and its
wholly-owned subsidiary, Berger Financial Corporation and Berger Financial's
wholly-owned subsidiary, Berger Bros Company. All intercompany transactions and
balances have been eliminated.
During the quarter ended March 31, 1995 (the "Current Quarter") the
Company reported a net income of $34,446 on net sales of $4,047,504. This
compares to a net loss of $309,537 on net sales of $2,618,115 for the quarter
ended March 31, 1994 (the "Comparable Quarter").
The Current Quarter's sales increased 54.6% ($1,429,389) over the
Comparable Quarter. This sales increase is directly related to a successful
sales program that added several significant customers and additional direct
sales coverage. Also, weather conditions were much better in the Northeast
during the Current Quarter versus the Comparable Quarter.
Cost of Sales increased to $3,309,334 in the Current Quarter from
$2,385,518 in the Comparable Quarter as a result of the increased sales volume,
but decreased as a percentage of net sales to 81.8% in the Current Quarter from
91.1% in the Comparable Quarter primarily as a result of economies of scale.
Selling, general and administrative expenses were $557,916 in the
Current Quarter as compared to $427,026 in the Comparable Quarter. This increase
in expenses is due to higher sales commissions, promotional costs and
advertising fees in the Current Quarter. As a percentage of net sales, selling,
general and administrative expenses decreased to 13.8% in the Current Quarter as
compared to 16.3% in the Comparable Quarter.
-9-
<PAGE>
Liquidity and Capital Resources
At March 31, 1995 working capital was $2,713,821 resulting in a ratio
of current assets to current liabilities of 2.61 to 1, as compared to working
capital of $2,103,748 (2.61 to 1) at December 31, 1994.
Current liabilities at March 31, 1995 totalled $1,684,449 consisting
primarily of $1,454,675 in accounts payable and accrued expenses. At December
31, 1994, total current liabilities were $1,308,142 consisting primarily of
$1,079,968 in accounts payable and accrued expenses.
At March 31 1995, the Company had stockholders' equity of $5,205,766 as
compared to $5,171,321 at December 31, 1994. The increase is attributable to the
Current Quarter's net income.
Depending upon the Company's performance and market conditions, the
exercise of outstanding warrants could produce additional proceeds. There can be
no assurance that any warrants will be exercised.
In February 1995, the Company reached an agreement with a supplier of
new equipment originally ordered in 1990. Delivery is expected during the fourth
quarter of 1995 pursuant to an 11 month purchase agreement which requires
payments in 1995 of approximately $200,000.
Cash used in operating activities for the Current Quarter was $414,423
as compared to $404,305 used in the Comparable Quarter. These uses of cash
result primarily from the increase in inventory and accounts receivable during
both the Current and Comparable Quarter.
Net cash used in investing activities totaled $73,472 in the Current
Quarter as compared to $273,819 used in the Comparable Quarter.
Net cash provided by financing activities was $511,298 in the Current
Quarter, as compared to $340,945 provided in the Comparable Quarter. The current
unused credit line as of March 31, 1995 was approximately $700,000. As of June
30, 1995, the Company will be commencing the final year of its current loan
agreement and as a result all of this debt will be classified as current debt
unless otherwise extended. The Company is presently discussing new financing
terms with its current lender as well as with other lenders.
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<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings.
None.
Item 2 - Changes in Securities.
None.
Item 3 - Defaults Upon Senior Securities.
None.
Item 4 - Submission of Matters to a Vote of Securities Holders.
None.
Item 5 - Other Information.
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K.
None.
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<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.
BERGER HOLDINGS, LTD.
By:/s/ JOSEPH F. WEIDERMAN
Joseph F. Weiderman
President and
Chief Financial Officer
Date: May 09, 1995
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 102,794
<SECURITIES> 0
<RECEIVABLES> 1,765,453
<ALLOWANCES> 73,000
<INVENTORY> 2,303,722
<CURRENT-ASSETS> 4,398,270
<PP&E> 6,073,195
<DEPRECIATION> 4,391,755
<TOTAL-ASSETS> 11,273,212
<CURRENT-LIABILITIES> 1,684,449
<BONDS> 1,726,000
<COMMON> 31,914
0
0
<OTHER-SE> 5,173,852
<TOTAL-LIABILITY-AND-EQUITY> 11,273,212
<SALES> 4,047,504
<TOTAL-REVENUES> 4,047,504
<CGS> 3,309,334
<TOTAL-COSTS> 557,916
<OTHER-EXPENSES> 145,808
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,000
<INCOME-PRETAX> 34,446
<INCOME-TAX> 0
<INCOME-CONTINUING> 180,254
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,446
<EPS-PRIMARY> .01
<EPS-DILUTED> .008
</TABLE>
