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 1, 1995
_________ 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.
(Exact name of registrant as specified in its charter)
DELAWARE 62-0643336
(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 offices) (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
At July 1, 1995, there were outstanding 4,375,492 shares of
registrant's Common Stock, par value $1.00 per share.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NCC INDUSTRIES, INC. AND SUBSIDIARY
BALANCE SHEETS
(UNAUDITED)
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<S> <C> <C>
July 1, December 31,
1995 1994
ASSETS
Current assets
Cash and cash equivalents $ 472,168 $ 1,034,820
Accounts receivable, net 18,252,878 16,448,704
Inventories (Note 2) 46,789,204 39,104,654
Other current assets 2,694,691 2,002,917
Total Current Assets 68,208,941 58,591,095
Property, plant and equipment at cost, net 10,658,051 11,186,318
Bond issuance cost 68,391 78,578
Other assets 1,569,105 1,732,012
$80,504,488 $71,588,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ - $12,000,000
Due to Majority Shareholder 16,329,435 -
Accounts payable and accrued expenses 37,271,286 10,997,312
Current portion of long-term debt 445,000 445,000
Total Current Liabilities 37,716,286 23,442,312
Long term debt, less current portion 2,361,415 9,361,415
Other liabilities 2,728,167 2,800,628
Shareholder's equity 37,698,620 35,983,648
$80,504,488 $71,588,000
</TABLE>
See notes to financial statements.
-2-
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
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<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
STATEMENTS OF INCOME
Net Sales $34,085,221 $37,767,068 $61,870,819 $61,633,164
Cost and expenses
Cost of sales, shipping, selling,
general and administrative expenses 32,116,222 33,857,991 58,654,359 56,583,634
Interest expense 469,167 497,198 853,306 931,904
32,585,389 34,355,189 59,507,665 57,515,538
Income before taxes 1,499,832 3,411,879 2,363,154 4,117,626
Income taxes
Current 536,130 877,324 873,242 910,705
Deferred ( 106,731) 25,840 (225,060) 85,521
Net Income $1,070,433 $2,508,715 $1,714,972 $ 3,121,400
Income per common share $.24 $.57 $.39 $.71
Weighted average shares used in
computing per share amounts 4,375,492 4,375,516 4,375,492 4,375,634
</TABLE>
-3-
<TABLE>
<S> <C> <C> <C> <c
Six Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
STATEMENTS OF RETAINED EARNINGS
Retained earnings, beginning $29,366,463 $23,502,847 $28,721,924 $22,890,162
Net income 1,070,433 2,508,715 1,714,972 3,121,400
Retained earnings, ending $30,436,896 $26,011,562 $30,436,896 $26,011,562
</TABLE>
See notes to financial statements.
-4-
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<S> <C> <C>
Six Months Ended
July 1, July 2,
1995 1994
Cash flows from operating activities
Net income $1,714,972 $ 3,121,400
Adjustments to reconcile net income to net cash
used in operating activities
Depreciation 735,648 710,906
Amortization 10,187 11,804
Provision for losses on accounts receivable 54,000 67,500
Loss from retirement of equipment 11,848 2,523
Net change in operating assets and liabilities
Increase in accounts receivables ( 1,858,170) ( 5,095,453)
Increase due Majority Shareholder 16,329,435
(Increase) decrease in inventory ( 7,684,550) 4,060,516
Increase in accounts
payable and accrued expenses 9,944,539 77,148
(Increase) decrease in other assets 162,907 ( 50,632)
Increase (decrease)in other liabilities ( 72,461) 121,812
Increase in other current assets ( 691,774) ( 117,022)
Net cash provided by operating activities 18,656,581 2,910,502
Cash flows from investing activities
Purchase of plant & equipment (219,229) ( 434,794)
Decrease in investments - ( 2,048,064)
Net cash used in investing activities (219,229) ( 2,482,858)
</TABLE>
See notes to financial statements.
-5-
NCC INDUSTRIES, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<S> <C> <C>
Six Months Ended Six Months Ended
July 1, July 2,
1995 1994
Cash flows from financing activities
Long term debt repayments $( 7,000,000) $ -
Net borrowings (repayments) under notes payable,
and bank (12,000,000) (294,841)
Treasury stock purchases - ( 3,100)
Net cash provided by financing activities (19,000,000) ( 297,941)
Net increase (decrease) in cash ( 562,652) 129,703
Cash, beginning of year $ 1,034,820 442,085
Cash, end of quarter $ 472,168 $ 571,788
Supplemental disclosure of cash flow
information
Cash paid during the six months for interest $ 445,561 $ 919,007
Cash paid during the six months for income taxes $ 68,629 $ 271,737
</TABLE>
See notes to financial statements.
-6-
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 to 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 1, 1995 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1995.
The balance sheet at December 31, 1994 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, 1994.
2. Inventory:
a) Inventories at July 1, 1995 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:
July 1, July 2,
1995 1994
(unaudited
Raw Materials $ 7,346,498 $7,687,878
Work in process 12,355,648 9,475,085
Finished goods 27,087,058 26,892,904
Total $ 46,789,204 $44,055,867
3. Net income per share:
Per share amounts are based on the weighted average number
of shares outstanding during the period.
-7-
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Net sales for the second quarter of 1995 were 9.8% lower than the
second quarter of 1994 due to reduced shipments of unbranded styles,
some of which have been discontinued partially offset by increased shipments
of branded products. Net sales for the first six months of 1995 were
generally consistent with the net sales for the first six months of 1994. Net
income for the second quarter of 1995 was 57.3% less than net income
for the second quarter of 1994 due to reduced shipments, higher expenses and
reduced margins. Net income for the first six months of 1995 was 45%
less than net income for the first six months of 1994. Because of the sales
mixture achieved, average revenue per unit sold decreased 3.5% in
the second quarter of 1995 as compared to the second quarter of 1994.
Unit volume decreased by 6.8% in the second quarter of 1995 as compared to
the second quarter of 1994.
Cost of sales as a percentage of sales increased in the second quarter
and the first six months of 1995 as compared to the second quarter and the
first six months of 1994 because of increased labor and material costs.
Shipping costs are higher as a percentage of sales in the second quarter and
the first six months of 1995 as compared to the second quarter and first six
months of 1994. Selling, advertising, and general and administative expenses
were consistent as a percentage of sales in th esecond quarter and first six
months of 1995 as compared to the second quarter and first six months of
1994. Interest expense was consistent during the second quarter and first
six months of 1995 as compared to the second quarter and first six months of
1994 due to lower average borrowings offset by higher interest rates.
As a result of the aforementioned items, net income decreased 57.3%
in the second quarter of 1995, and 45.1% for the first six months of 1995
as compared to the second quarter and first six months of 1994.
Financial Condition
Net cash flows provided by operating activities increased during
the first six months of 1995 as compared to the first six months of 1994,
primarily due to the repayment of bank loans by Registrant's majority
shareholder. Inventories at July 1, 1995 was approximately $7,685,000
higher than at December 31, 1994 due to lower than anticipated shipments
in the second quarter of 1995.
Net cash flows from operating activites during the first six months of
1995 were used primarily to repay short and long term debt. In order to
finance its capital and other corporate expenditures. Registrant expects to
continue to use cash for operations. Registrant had borrowed approximately
$16,330,000 from its majority shareholder at July 1, 1995.
-8-
NCC INDUSTRIES, INC.
PART II - OTHER INFORMATION
(No applicable items)
INDEX
ITEM DESCRIPTION PAGE
27 FINANCIAL DATA SCHEDULE 12
SIGNATURES
Pursuant to the requirements to 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.
NCC INDUSTRIES, INC.
Date ________________ By:_/S/Peter Muehlbauer
Peter Muehlbauer
Vice President, Finance
Date ________________ By:_/S/ Ira Glazer
Ira Glazer
President
-11-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-01-1995
<CASH> 472,168
<SECURITIES> 0
<RECEIVABLES> 18,252,878
<ALLOWANCES> 0
<INVENTORY> 46,789,204
<CURRENT-ASSETS> 2,694,691
<PP&E> 10,658,051
<DEPRECIATION> 0
<TOTAL-ASSETS> 80,504,488
<CURRENT-LIABILITIES> 37,716,286
<BONDS> 0
<COMMON> 4,866,841
0
0
<OTHER-SE> 32,831,779
<TOTAL-LIABILITY-AND-EQUITY> 80,504,488
<SALES> 61,870,819
<TOTAL-REVENUES> 61,870,819
<CGS> 58,654,359
<TOTAL-COSTS> 58,654,359
<OTHER-EXPENSE> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSES> 853,306
<INCOME-PRETAX> 2,363,154
<INCOME-TAX> 648,182
<INCOME-CONTINUING> 1,714,972
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 1,714,972
<EPS-PRIMARY> .39
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