039610Q
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, 1996 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 10, 1996, the Registrant had outstanding 3,531,439
shares of Common Stock, par value $.01 per share.
BERGER HOLDINGS, LTD.
INDEX
Page
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated
Balance Sheets at March 31, 1996
and December 31, 1995 3
Condensed Consolidated Statement of
Operations for the three month periods
ended March 31, 1996 and 1995 5
Condensed Consolidated Statements
of Cash Flows for the quarter
ended March 31, 1996 and 1995 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
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS March 31, December 31,
1996 1995
------------ ------------
Current assets
Cash $ 156,513 $ 171,432
Trade accounts receivable, net of
allowance for doubtful accounts
of $43,000 in 1996 & 1995 1,826,982 1,221,065
Inventories (Note 2) 1,535,022 1,593,642
Prepaid and other assets 170,312 117,347
------------ -------------
Total current assets 3,688,829 3,103,486
------------ -------------
Other assets
Property and equipment, net (Note 3) 5,717,512 5,742,270
Other assets 483,430 488,409
Goodwill, net of accumulated
amortization 531,474 551,174
------------ -------------
Total other assets 6,732,416 6,781,853
------------ -------------
$10,421,245 $ 9,885,339
============ =============
<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
------------ -------------
Current liabilities
Current maturities of long term debt
and demand notes payable $ 444,543 $ 2,077,171
Accounts payable 1,079,327 1,150,365
Accrued expenses 512,094 345,721
----------- -----------
Total current liabilities 2,035,964 3,573,257
Long term debt, net of current
maturities 3,787,675 1,676,713
----------- -----------
Total liabilities 5,823,639 5,249,970
----------- -----------
Stockholders' Equity
Common stock $.01 par value
Authorized 20,000,000 shares
Issued and outstanding 3,531,439 shares
in 1996 and 1995 35,314 35,314
Additional paid-in capital 15,088,747 15,088,747
Deficit (10,326,455) (10,288,692)
----------- -----------
4,797,606 4,835,369
Less common stock subscribed (200,000) ( 200,000)
----------- -----------
Total stockholders' equity 4,597,606 4,635,369
----------- -----------
$10,421,245 $ 9,885,339
=========== ===========
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
-------------- --------------
Net sales $3,611,112 $4,047,504
Cost of sales 3,052,788 3,309,334
---------- ----------
Gross profit 558,324 738,170
Operating expenses
Selling, administrative and general
expenses 471,495 557,916
---------- ----------
Income from operations 86,829 180,254
---------- ----------
Other (expenses) income
Interest expense (124,735) (145,925)
Interest income 142 117
---------- ---------
(124,593) (145,808)
---------- ---------
Net income (loss) ($37,764) $34,446
========== =========
Per Share amounts
Net income (loss) per common share ($.01) $.01
========== ==========
Weighted average number of common
shares outstanding 3,531,439 3,191,439
========== ==========
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
1996 1995
----------- ----------
Cash flows from operating activities
Net income (loss) ($37,764) $34,446
----------- ----------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Depreciation and amortization 171,360 175,765
(Increase) decrease in assets
Accounts receivable (605,917) (526,022)
Inventories 58,620 (421,826)
Other current and long-term assets (47,986) (51,493)
Increase in liabilities
Accounts payable and accrued expenses 95,335 374,707
----------- -----------
Total adjustments (328,588) (448,869)
----------- -----------
Net cash used in operating
activities (366,352) (414,423)
----------- -----------
Cash flows from investing activities
Acquisition of property and equipment (126,901) (73,472)
----------- -----------
Net cash used in investing activities (126,901) (73,472)
----------- -----------
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
1996 1995
----------- ----------
Cash flows from financing activities
Net borrowings and loan repayments 478,334 511,298
----------- ----------
Net cash provided by
financing activities 478,334 511,298
----------- ----------
Net increase (decrease) in cash (14,919) 23,403
Cash, beginning of period 171,432 79,391
----------- ----------
Cash, end of period $156,513 $102,794
=========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for
interest $124,735 $145,925
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, 1996 and December 31, 1995
consist of the following:
March 31, 1996 December 31, 1995
Raw materials $ 851,799 $ 872,126
Finished goods 669,968 704,828
Packaging materials
and supplies 73,255 76,688
Less provision for
obsolescence (60,000) (60,000)
---------- ----------
$1,535,022 $1,593,642
========== ==========
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.
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, 1996 (the "Current Quarter") the
Company reported a loss of $37,764 on net sales of $3,611,112. This
compares to a net income of $34,446 on net sales of $4,047,504 for the
quarter ended March 31, 1995 (the "Comparable Quarter").
The Current Quarter's sales decreased 10.8% ($436,392) from the
Comparable Quarter. This sales decrease is directly related to the most
severe winter on record in the Company's core market in the Northeast during
the Current Quarter.
Cost of Sales decreased to $3,052,788 in the Current Quarter from
$3,309,334 in the Comparable Quarter as a result of the decreased sales
volume.
Selling, general and administrative expenses were $471,495 in the
Current Quarter as compared to $557,916 in the Comparable Quarter. This
decrease in expenses is due to reduced sales commissions, and sales staff
in the Current Quarter. As a percentage of net sales, selling, general and
administrative expenses decreased to 13.1% in the Current Quarter as
compared to 13.8% in the Comparable Quarter.
Liquidity and Capital Resources
Subsequent to March 31, 1996 the Company was able to refinance its debt
facility with the CIT Group. Under the new terms the line of credit was
extended through June 30, 1998. Accordingly, at March 31, 1996 the Company
has classified the CIT debt as long-term. As a result of the extension, the
current ratio has improved significantly, as described in more detail below.
The interest rate has been reduced by one quarter of a point.
At March 31, 1996 working capital was $1,652,865 resulting in a ratio
of current assets to current liabilities of 1.81 to 1, as compared to
working capital of ($469,771) (.87 to 1) at December 31, 1995.
Current liabilities at March 31, 1996 totalled $2,035,964 consisting
primarily of $1,591,421 in accounts payable and accrued expenses. At
December 31, 1995, total current liabilities were $3,573,257 consisting
primarily of $2,077,171 in current maturities of long term debt and
$1,496,086 in accounts payable and accrued expenses. The CIT Loan was
renewed through June 30, 1998 on April 18, 1996 which provided a significant
reduction in current liabilities as compared to December 31, 1995.
At March 31 1996, the Company had stockholders' equity of $4,597,606
as compared to $4,635,369 at December 31, 1995. The decrease is
attributable to the Current Quarter's net loss.
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.
Cash used in operating activities for the Current Quarter was $366,352
as compared to $414,423 used in the Comparable Quarter. The First Quarter
negative cash flow results primarily from the increase in accounts
receivable due to the seasonality of the business.
Net cash used in investing activities totaled $126,901 in the Current
Quarter as compared to $73,472 used in the Comparable Quarter.
Net cash provided by financing activities was $478,334 in the Current
Quarter, as compared to $511,298 provided in the Comparable Quarter. The
unused portion of the credit line as of March 31, 1996 was approximately
$1,200,000.
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.
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 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 156,513
<SECURITIES> 0
<RECEIVABLES> 1,869,982
<ALLOWANCES> 43,000
<INVENTORY> 1,535,022
<CURRENT-ASSETS> 3,688,829
<PP&E> 10,756,761
<DEPRECIATION> 5,039,249
<TOTAL-ASSETS> 10,421,245
<CURRENT-LIABILITIES> 2,035,964
<BONDS> 0
0
0
<COMMON> 35,314
<OTHER-SE> 4,562,292
<TOTAL-LIABILITY-AND-EQUITY> 10,421,245
<SALES> 3,611,112
<TOTAL-REVENUES> 3,611,112
<CGS> 3,052,788
<TOTAL-COSTS> 3,052,788
<OTHER-EXPENSES> 471,495
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 124,735
<INCOME-PRETAX> (37,764)
<INCOME-TAX> 0
<INCOME-CONTINUING> (37,764)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (37,764)
<EPS-PRIMARY> $(.01)
<EPS-DILUTED> $(.01)
</TABLE>
