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FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM 10-Q/A
___________________
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1996
Commission File Number 0-16072
DECORA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 68-0003300
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE MILL STREET
FORT EDWARD, NY 12828
(address of principal executive office) (Zip code)
Registrant's telephone number (518) 747-6255
(including area code)
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 requirements for the past 30 days.
Yes X No
--- ---
At November 1, 1996 there were 35,469,390 shares of Common Stock of the
registrant outstanding. This document consists of 8 pages.
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FORM 10-Q/A
INTRODUCTION
Decora Industries, Inc. hereby amends the following section of the September
30, 1996 Form 10-Q to correct the presentation of its statement of cash flows.
TABLE OF CONTENTS
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
as of September 30, 1996 and March 31, 1996 3 - 4
Consolidated Statements of Operations for the Six
Months and Quarters Ended September 30, 1996 and 1995 5
Consolidated Statements of Cash Flows for the Six
Months Ended September 30, 1996 and 1995 6
Notes to Unaudited Consolidated Financial Statements 7
SIGNATURES 8
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FORM 10-Q/A
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DECORA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
UNAUDITED
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------ --------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 520 $ 188
Accounts receivable, less allowances 4,986 4,151
Inventories (Note 2) 6,276 6,003
Prepaid expenses and other current assets 1,331 642
----------- -----------
Total current assets 13,113 10,984
Property and equipment, net 8,183 8,944
Notes receivable 1,776 1,758
Deferred income taxes 2,900 2,900
Intangibles, net, and other assets 11,303 11,571
----------- -----------
Total Assets $ 37,275 $ 36,157
=========== ===========
</TABLE>
(continued)
See accompanying notes to unaudited consolidated financial statements.
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FORM 10-Q/A
DECORA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION> UNAUDITED
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------ --------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,556 $ 2,127
Accrued liabilities 1,798 1,587
Current portion of long-term debt 5,260 5,810
----------- -----------
Total current liabilities 10,613 9,524
Long-term debt 14,130 14,489
Other non-current liabilities - 363
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Total liabilities 24,743 24,376
----------- -----------
Warrants in subsidiary (Note 3) - 1,642
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Shareholders' equity:
Preferred stock, $0.01 par value; 5,000 shares
authorized at September 30, 1996 and March 31, 1996 - -
Common stock, $.01 par value; 45,000 shares authorized;
35,469 and 34,429 shares issued and outstanding at
September 30, 1996 and March 31, 1996, respectively 355 344
Additional paid-in capital 31,862 31,075
Accumulated deficit (19,685) (21,280)
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Total shareholders' equity 12,532 10,139
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Total Liabilities and Shareholders' Equity $ 37,275 $ 36,157
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</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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FORM 10-Q/A
DECORA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
unaudited
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30, SIX MONTHS ENDED SEPTEMBER 30,
-------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $12,904 $9,500 $23,042 $19,202
Cost of goods sold 9,682 7,260 17,376 14,314
Gross profit 3,222 2,240 5,666 4,888
Marketing, general and
administrative expense 1,467 1,378 2,729 2,911
Operating income 1,755 862 2,937 1,977
Interest expense 648 682 1,280 1,383
----------- ----------- ----------- -----------
Income from operations
before taxes 1,107 180 1,657 594
Provision for taxes 29 15 60 28
----------- ----------- ----------- -----------
Net income $1,078 $165 $1,597 $565
=========== =========== =========== ===========
Net income per common share (Note 4): $0.03 $0.01 $0.05 $0.02
=========== =========== =========== ===========
Average shares of common stock used in
computation of income per share 35,469 31,620 34,969 31,171
=========== =========== =========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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FORM 10-Q/A
DECORA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
UNAUDITED
<TABLE>
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30,
-------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,597 $ 565
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 1,106 1,024
Amortization of debt discount 76 65
Accretion of put warrants - 225
Net changes in current assets and liabilities (661) (2,543)
Increase (decrease) in net assets and
liabilities of discontinued operations 123 (1,027)
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Net cash provided by (used in) operating activities 2,241 (1,691)
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Cash flows from investing activities:
Purchase of fixed assets (77) (1,843)
----------- -----------
Net cash (used in) investing activities (77) (1,843)
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Cash flows from financing activities:
Long-term borrowings - 3,874
Repayment of debt (1,862) (458)
Proceeds from issuance of common stock 30 -
----------- -----------
Net cash provided by (used in) financing activities (1,832) 3,416
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Net increase (decrease) in cash 332 ( 118)
Cash at beginning of period 188 309
----------- -----------
Cash at end of period $ 520 $ 191
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</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
During the period ended September 30, 1996, additional common stock in the
amount of $656 and notes payable in the amount of $874 were issued upon the
conversion of $1,642 of warrants in subsidiary. During the period ended
September 30,1995, additional common stock in the amount of $1,378 was
issued to satisfy the terms of an agreement with the former owners of an
inactive subsidiary of the Company.
See accompanying notes to unaudited consolidated financial statements.
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FORM 10-Q/A
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Integration of Financial Statements Reported on Form 10-K
The accompanying unaudited condensed consolidated financial statements should
be read in conjunction with the Company's audited consolidated financial
statements included in its Form 10-K for the fiscal year ended March 31, 1996,
filed with the Securities and Exchange Commission (File No. 0-16072) (the "Form
10-K"). In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the Company's financial position as of September
30, 1996 and March 31, 1996, and the results of its operations and cash flows
for the periods presented. Certain reclassifications of prior year amounts
have been made to conform to the current year's presentation.
NOTE 2 - Inventories
Inventories at September 30, 1996 and March 31, 1996 consisted of the
following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------ --------------
(In thousands)
<S> <C> <C>
Raw Materials $ 3,809 $ 3,838
Work-in-Process 1,093 687
Finished Goods 1,374 1,478
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$ 6,276 $ 6,003
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</TABLE>
NOTE 3 - Warrants in Subsidiary
In connection with the acquisition of the Decora division of United Merchants
and Manufacturers by the Company in April 1990, Decora issued $7,000,000
principal amount of subordinated notes to a lender (CIGNA). These notes were
issued with warrants to purchase 20% of the common stock of the Company s new
Decora Incorporated subsidiary which included certain put features which may
have been payable in May 1997. The present value of such put obligation was
accrued for and carried as a liability on the Company s balance sheet. The
balance of such accrued liability was $1,642,000 as of March 31, 1996.
Effective June 28, 1996, the Company and CIGNA exchanged such warrants for a
non-interest bearing two-year note in the amount of $1,000,000 and 1,000,000
shares of the Company s common stock. If the note is not repaid prior to April
15, 1997, then the amount due will increase by 20% and if the shares of common
stock do not have a market value of at least $3.00 per share as of April 15,
1998, then the Company will issue additional shares to make up any deficiency.
This transaction was closed on June 28, 1996 at which time the note and stock
were issued in exchange for the warrants.
NOTE 4 - Net Income per Share
The number of shares of common stock and common stock equivalents used in the
computation of earnings per share for each period is the weighted average
number of shares outstanding during the period and, if dilutive, common stock
options, warrants and convertible securities which are common stock
equivalents.
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FORM 10-Q/A
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 hereunto duly authorized.
DECORA INDUSTRIES, INC.
(REGISTRANT)
BY/s/ Timothy N. Burditt
----------------------------------
TIMOTHY N. BURDITT
EVP ADMINISTRATION & FINANCE
DATED: February 24, 1997
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