<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
__________
(MARK ONE) 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 July 2, 1994.
----- 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 0-3305
NCC INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 62-0643336
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
165 Main Street, Cortland, New York 13045
----------------------------------- --------------------
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (607) 756-2841
--------------
Indicate by check mark whether 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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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At July 2, 1994, there were outstanding 4,375,492 shares of
registrant's Common Stock, par value $1.00 per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NCC INDUSTRIES, INC. AND SUBSIDIARY
BALANCE SHEETS
(UNAUDITIED)
<TABLE>
<CAPTION>
July 2, December 31,
1994 1993
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<S> <C> <C>
ASSETS
Current assets:
Cash $ 571,788 $ 442,085
Short-term investments 2,747,268 699,204
Accounts receivable, net 17,381,624 12,353,671
Inventories (Note 2) 44,055,867 48,116,383
Other current assets 2,445,441 2,328,419
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Total current assets 67,201,988 63,939,762
Property, plant and equipment at cost, net 11,278,824 11,557,459
Bond Issuance Costs 89,440 101,244
Other assets 1,116,805 1,066,173
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$79,687,057 $76,664,638
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable and bank overdraft $23,786,159 $24,081,000
Accounts payable and accrued expenses 8,580,998 8,503,850
Current portion of long-term debt 445,000 445,000
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Total current liabilities 32,812,157 33,029,850
Long-term debt, less current portion 10,806,415 10,806,415
Other liabilities 2,795,199 2,673,387
Shareholders' Equity 33,273,286 30,154,986
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$79,687,057 $76,664,638
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</TABLE>
See notes to financial statements.
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<PAGE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
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July 2, July 3, July 2, July 3,
1994 1993 1994 1993
------------------ ---------------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENTS OF INCOME:
---------------------
Net Sales $37,767,068 $32,007,020 $61,633,164 $57,975,740
Cost and expenses:
Cost of sales, shipping, selling
general and administrative expenses 33,857,991 28,868,994 56,583,634 53,054,964
Interest expense 497,198 449,154 931,904 888,204
----------- ----------- ----------- -----------
34,355,189 29,318,148 57,515,538 53,943,168
Income before taxes 3,411,879 2,688,872 4,117,626 4,032,572
Income taxes:
Current 877,324 923,071 910,705 1,031,748
Deferred 25,840 (104,566) 85,521 (129,700)
----------- ----------- ----------- -----------
Net income $ 2,508,715 $ 1,870,367 $ 3,121,400 $ 3,130,524
=========== =========== =========== ===========
Income per common share $ .57 $ .43 $ .71 $ .71
=========== =========== =========== ===========
Weighted average shares used in
computing per share amounts 4,375,516 4,380,392 4,375,634 4,380,456
STATEMENTS OF RETAINED EARNINGS:
--------------------------------
Retained earnings, beginning $23,502,847 $20,539,078 $22,890,162 $19,278,921
Net income 2,508,715 1,870,367 3,121,400 3,130,524
----------- ----------- ----------- -----------
Retained earnings, ending $26,011,562 $22,409,445 $26,011,562 $22,409,445
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
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<PAGE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Six Months
Ended July 2, Ended July 3,
1994 1993
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,121,400 $ 3,130,524
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 710,906 566,791
Amortization 11,804 13,420
Provision for losses on accounts receivable 67,500 55,200
Loss from retirement of equipment 2,523 -
Net change in operating assets and liabilities:
Increase in accounts receivables ( 5,095,453) ( 3,678,155)
(Increase) decrease in inventory 4,060,516 ( 7,705,781)
Increase (decrease) in accounts payable and
accrued expenses 77,148 ( 1,225,477)
(Increase) decrease in other assets ( 50,632) 79,283
Increase (decrease) in other liabilities 121,812 ( 400,304)
(Increase) decrease in other current assets ( 117,022) 282,756
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Net cash provided by (used in) operating activities 2,910,502 ( 8,881,743)
Cash flows from investing activities:
Purchase of plant & equipment ( 434,794) ( 2,373,313)
(Increase) decrease in investments ( 2,048,064) 892,088
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Net cash used in investing activities ($ 2,482,858) ($ 1,481,225)
</TABLE>
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<PAGE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Six Months
Ended July 2, Ended July 3,
1994 1993
-------------- --------------
<S> <C> <C>
Cash flows from financing activities:
Net borrowings (repayment) under notes
payable, banks and overdrafts ($ 294,841) $10,534,237
Treasury stock purchases ( 3,100) ( 2,025)
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Net cash provided by (used in) financing activities ( 297,941) 10,532,212
Net increase in cash 129,703 189,244
Cash, beginning of year 442,085 658,948
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Cash, end of quarter $ 571,788 $ 848,192
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Supplemental disclosure of cash flow information:
Cash paid for the six months for interest $ 919,007 $ 793,956
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Cash paid for the six months for income taxes $ 271,737 $ 676,437
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</TABLE>
See notes to financial statements.
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<PAGE>
NCC INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
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 with the instructions of Form 10-Q and Rule 10-01 of
Regulation S-X of the Securities and Exchange Commission.
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 of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Operating results for the six month period ended July 3, 1994 are
not necessarily indicative of the results that may be expected for
the year ended December 31, 1994. The balance sheet at December
31, 1993 has been derived from the audited balance sheet at that
date. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1993.
2. Inventory:
a) Inventories at July 3, 1994 are stated
at the lower of cost (first-in, first-out)
or market (generally realizable net amount),
and are obtained from the perpetual inventory
records of the Company. No physical inventory
was taken.
b) Inventories consist of:
<TABLE>
<CAPTION>
July 2, December 31,
1994 1993
(unaudited)
----------- -----------
<S> <C> <C>
Raw materials $ 7,687,878 $ 7,110,600
Work in process 9,475,085 10,916,850
Finished goods 26,892,904 30,088,933
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Total $44,055,867 $48,116,383
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</TABLE>
3. Net income per share:
Per share amounts are based on the weighted average number
of shares outstanding during the period.
4. Short-term investments are principally money market funds,
government or other agencies securities and are held for sale, as
of July 2, 1994, market approximates cost.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
---------------------
Net sales for the second quarter and the first six months of 1994 were
higher than the second quarter and first six months of 1993 by 18.0%
and 6.3%, respectively, because of increased demand for Registrant's
products. Average revenue per unit sold increased 4.6% for the second
quarter of 1994 when compared to the second quarter of 1993. Average
revenue per unit sold increased 3.3% for the first six months of 1994,
as compared to the first six months of 1993. Unit volume increases were
12.1% for the second quarter of 1994 and 2.5% for the first six months
of 1994 as compared to the second quarter and the first six months of
1993.
Cost of sales as a percentage of sales increased in the second quarter
and the first six months of 1994 as compared to the second quarter and
the first six months of 1993 because of declining margins. Shipping,
selling, administrative and interest expenses were generally consistent
as a percentage of sales for the second quarter and the first six
months of 1994 as compared to the second quarter and the first six
months of 1993. Advertising expenses decreased in the second quarter
and six months ended July 2, 1994 as compared to the second quarter and
the six months ended July 2, 1993 because of the non-recurrence in 1994
of expenditures related to a national advertising campaign promoting
one of Registrant's brands, which commenced in the first quarter of
1993.
As a result of the aforementioned factors, net income for the second
quarter of 1994 was higher than the second quarter of 1993 by 34.1%.
Net income during the first six months of 1994 was slightly lower than
the first six months of 1993, due to a higher effective tax rate.
Financial Condition for the First Six Months of 1994
----------------------------------------------------
Net cash flows provided by operating activities increased during the
first six months of 1994 compared with the first six months of 1993,
primarily due to a decrease in inventory. Inventories at July 2, 1994
were approximately $4,061,000 lower than at December 31, 1993 because
of higher shipments in the second quarter of 1994.
Net cash flows from operating activities during the first six months of
1994 were used primarily to purchase equipment and repay short term
bank debt. In order to finance its capital and other corporate
expenditures, Registrant expects to continue to use cash from
operations and its available lines of credit.
At July 2, 1994, Registrant had borrowed a total of
$30,100,000 and had unused borrowing capacity available in an
aggregate amount of $15,900,000 under all of its financing
arrangements and lines of credit.
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<PAGE>
NCC INDUSTRIES, INC.
PART II - OTHER INFORMATION
(No applicable items).
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<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
19934, the Registrant had duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
NCC INDUSTRIES, INC.
Date: August 8, 1994 BY: /s/ Peter Muehlbauer
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Peter Muehlbauer
Vice President, Finance
Date: August 8, 1994 BY: /s/ Frank Magrone
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Frank Magrone
President
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