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
MARCH 31, 1995 0-13698
For the Quarter Ended Commission File Number
NUVISION, INC.
(Exact name of registrant as specified in charter)
MICHIGAN 38-1412890
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2284 S. BALLENGER HWY., FLINT, MICHIGAN 48503
(Address of principal executive offices)
(810) 767-0900
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Applicable only to Corporate Issuers: Indicate the number of shares out-
standing of each of the issuer's classes of common stock as of the latest
practicable date: 2,696,000 shares of common stock as of May 12, 1995.
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): Yes [X] No [ ], and
2. has been subject to such filing requirements for the past 90 days:
Yes [X] No [ ]
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
NUVISION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 1995 December 31, 1994
(unaudited)
Current assets:
Cash and equivalents $ 798,000 $ 1,098,000
Marketable securities 450,000 270,000
Receivables--
Trade, net of reserve for
doubtful accounts of
$88,000 in 1995 and 1994 2,539,000 1,966,000
Other, net 595,000 522,000
Inventory 5,766,000 5,502,000
Prepaid expenses, deposits
and other 269,000 496,000
Current portion of notes
receivable from franchisees
and other, net 188,000 231,000
-------- ----------
Total current assets 10,605,000 10,085,000
---------- ----------
Notes receivable from franchisees
and other, net, less current
portion 975,000 992,000
--------- ---------
Property and equipment, at cost:
Construction in progress -- 14,000
Land 7,000 7,000
Buildings and improvements 415,000 415,000
Leasehold improvements 9,646,000 9,456,000
Furniture and equipment 13,643,000 14,007,000
---------- ----------
23,711,000 23,899,000
Less--accumulated depreciation
and amortization 15,053,000 15,211,000
---------- ----------
Net property and equipment 8,658,000 8,688,000
Other assets:
Intangible assets net of
accumulated amortization
of $797,000 in 1995 and
$777,000 in 1994 344,000 211,000
--------- ---------
$20,582,000 $19,976,000
========== ==========
The accompanying notes are an integral part of these statements.
<PAGE>
NUVISION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS --(Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 1995 December 31, 1994
(unaudited)
Current liabilities:
Current portion of long-term debt $ 760,000 $ 959,000
Accounts payable 2,121,000 2,671,000
Store closing reserve and other 278,000 211,000
Accrued expenses:
Payroll and related 1,250,000 1,019,000
Other 1,164,000 673,000
--------- ---------
Total current liabilities 5,573,000 5,533,000
--------- ---------
Long-term debt, less current portion 300,000 118,000
--------- ---------
Deferred liabilities 244,000 248,000
--------- ---------
Shareholders' equity:
Preferred stock, $1.00 par value,
5,000,000 shares authorized;
issued and outstanding -- --
Common stock, $.50 par value,
10,000,000 shares authorized;
issued and outstanding shares-
2,696,426 in 1995 and 1994 1,348,000 1,348,000
Paid-in capital 8,500,000 8,500,000
Retained earnings 4,617,000 4,229,000
---------- ----------
Total shareholders' equity 14,465,000 14,077,000
---------- ----------
$20,582,000 $19,976,000
========== ==========
The accompanying notes are an integral part of these statements.
<PAGE>
NUVISION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
1995 1994
Systemwide sales $17,575,000 $15,652,000
========== ==========
Revenues:
Sales and fees $13,805,000 $12,560,000
Franchise revenues 341,000 298,000
---------- ----------
Total revenues 14,146,000 12,858,000
Cost of sales 3,922,000 3,594,000
---------- ---------
Gross profit 10,224,000 9,264,000
Selling, occupancy, general
and administrative expenses 9,670,000 9,101,000
---------- ---------
554,000 163,000
Interest expense 28,000 39,000
Interest income 33,000 43,000
Net other income 29,000 30,000
-------- -------
Income before income taxes 588,000 197,000
Provision for income taxes 200,000 --
-------- -------
Net income $ 388,000 $ 197,000
======== ========
Earnings per share $ 0.14 $ 0.07
===== =====
Weighted average number of shares outstanding 2,696,000 2,696,000
The accompanying notes are an integral part of these statements.
<PAGE>
NUVISION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
1995 1994
Cash flow from operating activities:
Net income (loss) $ 388,000 $ 197,000
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 612,000 598,000
Net (gain) loss on franchise sales
and other assets (5,000) 1,000
------- ------
995,000 796,000
------- -------
Source (use) of cash resulting from change in:
Receivables (646,000) (558,000)
Inventory (228,000) (218,000)
Prepaid expenses, deposits & other 220,000 (55,000)
Accounts payable (550,000) 203,000
Store closings and other 78,000 (26,000)
Accrued expenses 722,000 585,000
Other (5,000) 4,000
--------- --------
(409,000) (65,000)
--------- --------
Net cash provided by operating activities 586,000 731,000
--------- --------
Cash flow from investing activities:
Collection on franchise sales and
notes receivable 80,000 82,000
Proceeds from sales of property,
plant and equipment 8,000 7,000
Purchase of property, plant
and equipment (459,000) (223,000)
Increase in notes receivable (29,000) (23,000)
Investments in marketable securities (180,000) 26,000
--------- ---------
Net cash (used) in investing activities (580,000) (131,000)
Cash flows from financing activities:
Repayment of debt (306,000) (801,000)
--------- ---------
Net cash (used) by financing activities (306,000) (801,000)
--------- ---------
Net (decrease) in cash and cash equivalents (300,000) (201,000)
Cash and cash equivalents, beginning of year 1,098,000 810,000
--------- ---------
Cash and cash equivalents, end of period $ 798,000 $ 609,000
--------- ----------
Supplemental disclosures of cash flow
information:
Interest paid $ 37,000 $ 41,000
--------- ---------
Income taxes paid $ --- $ ---
The accompanying notes are an integral part of these statements.
<PAGE>
NUVISION, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1995
1. The condensed financial statements included herein have been prepared by
the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The
information furnished reflects all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the
interim periods. These statements and the notes thereto are included in
the Company's Annual Report for the year ended December 31, 1994.
2. Certain amounts in the prior year's financial statements have been
reclassified to conform with the 1995 presentation.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Systemwide Sales and Revenues --
The following table reflects systemwide sales (which includes sales at
franchised locations), total revenue (revenue at Company-owned stores,
franchise royalty revenue, and wholesale revenue) and comparable store
revenue.
First Quarter First Quarter Percent
1995 1994 Variance
Total Systemwide Sales $17,575,000 $15,652,000 +12.3%
Total Revenue 14,146,000 12,858,000 +10.0%
Comparable Stores' Sales 12,607,000 11,816,000 +6.7%
Sales at all levels -- systemwide sales, total revenue, comparable stores' sales
- -- increased during the first quarter of 1995 as compared to the same quarter of
1994. Total revenue increased $1,288,000 or 10.0%, and comparable store sales
increased $791,000 or 6.7% during the first quarter. The increases are
attributable to our continued efforts in marketing and training that the Company
has strengthened over the last two years.
The Company was operating, including franchises, 126 stores at March 31, 1995,
as compared to 111 at the same date last year and 125 at December 31, 1994.
During the first quarter of 1995, the Company opened one new store and purchased
three stores from one franchisee.
Cost of Sales --
Cost of sales, which includes materials and manufacturing costs, decreased to
27.7% of revenue in the first quarter of 1995 from 28.0% in the first quarter of
1994. Gross profit during the first quarter of 1995 increased $960,000 to
$10,224,000 as compared to $9,264,000 in the first quarter of 1994.
Selling, General and Administrative Expenses --
Selling, general and administrative expenses decreased as a percent of revenue
to 68.4% in the first quarter of 1995 from 70.8% in the same period last year
despite the dollar increase of $569,000 to $9,670,000 this year.Almost $260,000
of the increase is attributable to new stores. On a comparable-store basis, the
increase in selling, general and administrative expense was $360,000. The
increases in expenses are predominantly a result of increases in Doctor and
other store payroll, which, combined, increased on a comparable store basis
by $170,000 over the first quarter in 1994. This increase was partially due
to increased coverage to accommodate the increased volume as well as
increases in base rates of pay.
Interest --
Interest expense decreased $11,000 during the quarter, while interest income
decreased $10,000.
Net Other Income --
Net other income remained almost constant at $29,000 as compared to $30,000 in
the first quarter of 1994.
Liquidity and Capital Resources --
Net cash provided by operations was $586,000 and $731,000 during the first
quarter of 1995 and 1994, respectively. The Company had a total of $1,248,000
in cash and marketable securities at the end of the first quarter this year as
compared to $1,172,000 at the same time last year. During the first quarter of
1995 the Company made principal payments of $306,000 predominantly on its bank
loans. The Company had no amounts outstanding under its line of credit with a
bank at the end of the first quarter of 1995. Purchases of property and
equipment during the first quarter of 1995 totalled $459,000, an increase of
$236,000 over the first quarter of 1994.
Working capital at the end of the first quarter this year was $5,032,000 with a
current ratio of 1.9 to 1. At the same time last year, the working capital was
$4,041,000 with a current ratio of 1.7 to 1.
The Company expects its working capital at March 31, 1995, the net cash provided
by operations (including depreciation) and its line of credit to meet its
operating needs and to fund its capital expenditures and debt repayments as
required for 1995.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is a defendant in certain lawsuits alleging various claims incurred
in the ordinary course of business. These claims are generally covered by
various insurance policies, subject to certain deductible amounts and maximum
policy limits, and, in the opinion of management, the resolution of existing
lawsuits will not have a material adverse effect, individually or in the
aggregate, upon the Company's business or financial position.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
No. Description
27 Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K
A report on Form 8-K was filed on May 10, 1995. The 8-K filing relates to an
Agreement and Plan of Merger with American Vision Centers, Inc., and its wholly-
owned subsidiary, NI Acquiring Corp., dated April 27, 1995. The merger
agreement provides for the Purchaser to commence a tender offer for any and
all shares at a price of $7.60 per share. The offer was commenced on May 4,
1995, and is scheduled to expire June 1, 1995, unless extended by the
Purchaser.
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.
NUVISION, INC.
Date: May 11, 1995 By: /S/ STEPHEN L. HIRSCH
Stephen L. Hirsch
Executive Vice President
Treasurer (Principal Financial Officer)
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<COMMON> 1,348
0
0
<OTHER-SE> 13,117
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<CGS> 3,922
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<INCOME-TAX> 200
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<EXTRAORDINARY> 0
<CHANGES> 0
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