SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter Ended June 30, 1995
Commission file number 0-12450
CAPITAL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1359190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8900 Keystone Crossing, Suite 1150
Indianapolis, Indiana 46240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-844-3722
The registrant has not changed its name, address or fiscal
year during the period covered by this 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 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
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requirements for the past 90 days.
Yes X No ___
The number of shares outstanding of the registrant's common
stock, as of June 30, 1995 is 273,879.
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INDEX
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Without Audit)
Condensed consolidated balance sheets -- June 30, 1995
and March 31, 1995 3
Condensed consolidated statements of operations and
retained earnings -- Three months ended June 30, 1995
and 1994 5
Condensed consolidated statements of cash flows --
Three months ended June 30, 1995 and 1994 6
Notes to condensed consolidated financial statements --
June 30, 1995 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
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PART I. FINANCIAL INFORMATION
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30 March 31,
1995 1995
(Unaudited) (Note)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 240 $ 167
Accounts receivable, less allowance
for doubtful accounts of $32
at June 30 and $30 at March 31 3,961 3,405
Inventories 4,964 4,831
Prepaid Expenses 177 177
------------ ----------
TOTAL CURRENT ASSETS 9,342 8,580
OTHER ASSETS 550 568
PROPERTY AND EQUIPMENT
Land 222 222
Buildings and improvements 1,686 1,686
Machinery and equipment 584 566
Transportation equipment 185 178
------------ ----------
2,677 2,652
Less allowances for depreciation and
amortization (906) (862)
------------ -----------
TOTAL PROPERTY AND EQUIPMENT 1,771 1,790
------------ ----------
$ 11,663 $ 10,938
============ ===========
<FN>
Note: The balance sheet at March 31, 1995, has been derived from the audited
financial statements at that date.
SEE Notes to Condensed Consolidated Financial Statements.
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CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(dollars in thousands)
June 30, March 31,
1995 1995
(Unaudited) (Note)
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt
and capital lease obligations $ 477 $ 477
Accounts payable 4,010 3,407
Employee compensation & payroll taxes 290 426
Accrued expenses 394 437
------------ ------------
TOTAL CURRENT LIABILITIES 5,171 4,747
LONG-TERM DEBT 22 33
OTHER LONG-TERM LIABILITIES 111 113
CONVERTIBLE SUBORDINATED DEBENTURES 2,500 2,500
STOCKHOLDERS' EQUITY
Common stock, no par value, authorized-
2,500,000 shares, issued and outstanding-
273,879 shares 1,195 1,195
Paid-in capital 1,552 1,552
Retained earnings 1,112 798
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 3,859 3,545
------------ ------------
$ 11,663 $ 10,938
============ ============
<FN>
Note: The balance sheet at March 31, 1995, has been derived from the audited
financial statements at that date.
SEE Notes to Condensed Consolidated Financial Statements.
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<CAPTION>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
(in thousands except per share data)
Three Months Ended
June 30,
1995 1994
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Net sales $ 7,205 $ 7,324
Cost of sales 4,630 4,768
------------- -------------
Gross profit 2,575 2,556
Selling, administrative & general 2,099 2,231
Depreciation and amortization 57 65
------------- -------------
Total operating expenses 2,156 2,296
------------- -------------
Income from operations
before other income (expense)
and income taxes 419 260
Other income 4 14
Interest expense (89) (102)
--------------- -------------
(85) (88)
-------------- -------------
Income from operations
before income taxes 334 172
Income taxes 20 10
-------------- --------------
Net income 314 162
Retained earnings at
beginning of period 798 767
-------------- --------------
Retained earnings at end of period $ 1,112 $ 929
============== ==============
Net income per share $ 1.15 $ 0.59
============= ==============
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<CAPTION>
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(dollars in thousands)
Three Months Ended
June 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 314 $ 162
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 57 65
(Increase) in accounts receivable (556) (282)
(Increase) in inventory (133) (107)
(Increase) in other assets
and liabilities, net (170) (392)
Increase (Decrease) in accounts payable 603 (334)
---------- ----------
Net cash provided by (used in)
operating activities 115 (888)
---------- ----------
Cash flows from investing activities:
Capital expenditures, net (31) (72)
----------- ----------
Net cash provided by (used in)
investing activities (31) (72)
---------- ----------
Cash flows from financing activities:
Net line-of-credit (repayments) borrowings 0 997
Payments on long-term debt (11) (48)
---------- ----------
Net cash provided by (used in)
financing activities (11) 949
---------- -----------
Net increase (decrease) in cash 73 (11)
Cash at beginning of period 167 230
---------- -----------
Cash at end of period $ 240 $ 219
========= ==========
Supplemental disclosures of cash
flow information:
Cash paid during the period for interest $ 27 $ 39
========= ============
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CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 1995
Note A - Basis of Presentation
The accompanying unaudited condensed 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.
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 accruals)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended June 30, 1995,
are not necessarily indicative of the results that may be
expected for the year ending March 31, 1996. For further
information, refer to the financial statements and footnotes
thereto as of and for the year ended March 31, 1995.
Note B - Pending Sale of Subsidiary
On July 17, 1995, the Company signed a definitive agreement to
sell its Truckpro Parts and Service, Inc. subsidiary to Haygood
Ltd. Partnership, Little Rock, Arkansas. The Company will sell
substantially all of the assets of Truckpro. The purchase price
will consist of cash and the assumption of certain liabilities.
The amount of the purchase price will be determined based
primarily upon the net book value of the assets to be sold as
adjusted as of the closing date. Closing on the sale is expected
to occur on or about August 31, 1995. Proceeds from the sale
will first be used to repay indebtedness. Following these
transactions, the Company expects to begin the process of
dissolution, ultimately making a distribution to shareholders.
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CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 30, 1995
RESULTS OF OPERATIONS
Net sales for the first quarter of fiscal 1996 of $7,205,000 were
approximately 2% less than net sales of $7,324,000 reported in
the first quarter of fiscal 1995.
COSTS AND EXPENSES
Despite the slight decrease in sales, the Company reported an
increase in gross profit. Gross profit totalled $2,575,000
versus $2,556,000 in last year's first quarter. Gross margin
measured 35.7% of net sales for the June, 1995 quarter compared
to 34.9% for the June, 1994 quarter.
Operating expenses also exhibited improvement, measuring
$2,156,000 compared to $2,296,000 last year.
OTHER INCOME AND EXPENSE
Interest expense also decreased, measuring $89,000 for the
quarter versus $102,000 in last year's first quarter. This
decrease is attributed to lower average amounts outstanding under
the Company's line of credit.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a line of credit facility of $2,000,000 which is
considered adequate to fulfill the Company's working capital
needs for the foreseeable future. Borrowings on this line of
credit have been classified as current maturities on the
Company's balance sheet as of June 30.
There were no material commitments for capital expenditures as of
June 30, 1995. The sum of all capital expenditures for the
fiscal year 1996 is expected to be less than depreciation
expense.
PART II. OTHER INFORMATION
CAPITAL INDUSTRIES, INC., AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
None
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
On July 25, 1995, a report on Form 8-K was filed. The item
covered by the report was:
Item 2. Acquisition or Disposition of Assets.
SIGNATURES
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.
CAPITAL INDUSTRIES, INC.
Date: August 9, 1995 /s/ O. U. Mutz
------------------------
O.U. Mutz
Chairman
Date: August 9, 1995 /s/ Phillip A. Gough
-------------------------
Phillip A. Gough
Vice President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<PERIOD-TYPE> 3-MOS
<CASH> 240
<SECURITIES> 0
<RECEIVABLES> 3,993
<ALLOWANCES> (32)
<INVENTORY> 4,964
<CURRENT-ASSETS> 9,342
<PP&E> 2,677
<DEPRECIATION> (906)
<TOTAL-ASSETS> 11,663
<CURRENT-LIABILITIES> 5,171
<BONDS> 0
0
0
<COMMON> 2,747
<OTHER-SE> 1,112
<TOTAL-LIABILITY-AND-EQUITY> 11,663
<SALES> 7,205
<TOTAL-REVENUES> 7,205
<CGS> 4,630
<TOTAL-COSTS> 6,786
<OTHER-EXPENSES> (4)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89
<INCOME-PRETAX> 334
<INCOME-TAX> 20
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 314
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
</TABLE>
