SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 30, 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: 0-8550
PCA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-0888429
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)
815 Matthews Mint Hill Road
Matthews, North Carolina 28105
(Address of principal executive offices)
(Zip Code)
(704) 847-8011
(Registrant's telephone number, 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 report), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No____
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Common Stock, $0.20 par value 7,472,071
Class Outstanding at August 31, 1995
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
I N D E X
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION: PAGE NO.
<S> <C> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets - July 30, 1995 and
January 29, 1995 1
Consolidated Statements of Income - Three Months and Six Months
Ended July 30, 1995 and July 31, 1994 2
Consolidated Statement of Changes in Shareholders' Equity - Six
Months Ended July 30, 1995 3
Consolidated Statements of Cash Flows - Six Months Ended July
30, 1995 and July 31, 1994 4
Condensed Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-10
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
Exhibit Index 12-13
Exhibit 11 14
Exhibit 27 15
</TABLE>
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
July 30, January 29,
1995 1995
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 355,999 $ 311,759
Accounts receivable (net of allowance for
doubtful accounts of $1,229,305 and $845,843):
Due from licensor stores and customers 9,365,843 6,408,629
Other, including employee advances 481,610 1,263,681
Inventories 2,782,027 3,243,571
Deferred income taxes 2,458,513 1,952,293
Prepaid expenses 469,354 636,907
Total Current Assets 15,913,346 13,816,840
Property:
Land and improvements 1,169,495 1,169,495
Building and improvements 7,678,863 7,630,427
Photographic and sales equipment 41,695,933 40,884,594
Photographic finishing equipment 12,133,558 12,076,064
Furniture and equipment 9,749,062 9,475,787
Transportation equipment 207,122 205,664
Leasehold improvements 10,419,692 10,408,620
Construction in progress 2,129,198 1,629,026
Total 85,182,923 83,479,677
Less: Accumulated depreciation and amortization 41,488,761 37,752,137
Property, net 43,694,162 45,727,540
Other Assets 22,669 12,569
Total Assets $59,630,177 $59,556,949
</TABLE>
<TABLE>
<CAPTION>
July 30, January 29,
1995 1995
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 9,326,074 $ 974,215
Accounts payable-trade 9,912,550 11,418,568
Accrued and withheld sales and payroll taxes 304,619 332,432
Accrued income taxes -- 1,492,427
Accrued compensation 2,790,249 3,015,943
Other accrued liabilities 4,927,161 3,279,824
Total Current Liabilities 27,260,653 20,513,409
Deferred Income Taxes 3,661,623 3,083,062
Other Liabilities 3,029,511 2,928,023
Shareholders' Equity:
Preferred stock, $10.00 par value
(authorized-2,000,000 shares; outstanding-none) -- --
Common Stock, $0.20 par value
(authorized 20,000,000 shares; issued 7,468,271
shares and 8,160,171 shares) 1,493,655 1,632,035
Additional paid-in capital 4,950,644 12,204,069
Retained earnings 19,398,295 19,444,035
Cumulative foreign currency translation adjustments (158,339) (215,087)
Total 25,684,255 33,065,052
Less: Unearned compensation 5,865 32,597
Total Shareholders' Equity 25,678,390 33,032,455
Total Liabilities and Shareholders' Equity $59,630,177 $59,556,949
</TABLE>
See Condensed Notes to Consolidated Financial Statements
1
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 30, July 31, July 30, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
SALES $28,629,613 $31,104,809 $61,238,244 $61,041,253
COSTS AND EXPENSES:
Advertising and promotional costs 3,301,889 4,675,710 6,933,418 8,723,459
Costs of photographic sales 10,161,151 11,966,199 20,926,906 23,404,188
Store commissions and selling costs 9,386,383 10,122,585 19,761,622 19,396,232
General and administrative expenses 5,227,037 5,128,972 11,545,000 10,128,802
Total costs and expenses 28,076,460 31,893,466 59,166,946 61,652,681
INCOME (LOSS) FROM OPERATIONS 553,153 (788,657) 2,071,298 (611,428)
Interest expense, net 211,584 184,675 265,545 254,953
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
341,569 (973,332) 1,805,753 (866,381)
INCOME TAX PROVISION (BENEFIT) 143,067 (393,794) 756,250 (350,494)
INCOME (LOSS) FROM CONTINUING OPERATIONS 198,502 (579,538) 1,049,503 (515,887)
INCOME FROM DISCONTINUED OPERATIONS (net of income taxes)
-- 412,406 -- 412,406
NET INCOME (LOSS) $ 198,502 $ (167,132) $1,049,503 $ (103,481)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Primary 7,942,103 8,526,640 8,211,481 8,536,487
Fully Diluted 8,063,348 8,529,968 8,384,172 8,538,151
PRIMARY AND FULLY DILUTED EARNINGS PER COMMON SHARE:
Income (loss) from continuing operations $ 0.02 $ (0.07) $ 0.13 $ (0.06)
Discontinued operations -- 0.05 -- 0.05
Net income (loss) $ 0.02 $ (0.02) $ 0.13 $ (0.01)
CASH DIVIDENDS PER COMMON SHARE $ 0.07 $ 0.07 $ 0.14 $ 0.14
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
2
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JULY 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Cumulative
Foreign
Additional Currency
Common Stock Paid-In Retained Translation Unearned
Shares Amount Capital Earnings Adjustments Compensation
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 29,1995: 8,160,171 $1,632,035 $12,204,069 $19,444,035 $(215,087) $(32,597)
Net income 1,049,503
Exercise of stock options 52,400 10,480 318,349
Dividends (1,095,243)
Acquisition of Company stock (744,300) (148,860) (7,565,092)
Compensatory stock options 20,050
Canceled compensatory stock
options (6,682) 6,682
Foreign currency translation
adjustment 56,748
BALANCE, JULY 30, 1995: 7,468,271 $1,493,655 $ 4,950,644 $19,398,295 $(158,339) $ (5,865)
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
3
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
July 30, July 31,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $1,049,503 $ (103,481)
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation 4,071,946 3,578,870
Increase in allowance for doubtful accounts 382,417 438,654
Provision for deferred income taxes 72,341 475,009
Loss on disposal of property 80,070 19,495
Compensatory stock option expense 20,050 98,502
Increase in other liabilities 101,488 53,219
(Increase) decrease in other noncurrent assets (10,100) 87,129
Changes in operating assets and liabilities:
Increase in accounts receivable (2,562,255) (5,799,691)
Decrease in inventories 463,523 947,378
Decrease in deferred costs applicable to unsold portraits -- 311,867
Decrease in prepaid expenses 167,780 298,597
Decrease in accounts payable (1,515,784) (4,989,793)
Decrease in accrued expenses (108,187) (1,618,658)
NET CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES 2,212,792 (6,202,903)
INVESTING ACTIVITIES:
Purchase of property (2,115,147) (10,683,261)
Proceeds from sale of fixed assets 43,298 70,088
NET CASH USED IN INVESTING ACTIVITIES (2,071,849) (10,613,173)
FINANCING ACTIVITIES:
Increase in short-term borrowings 8,351,859 13,620,806
Exercise of stock options 328,829 50,012
Acquisition of company stock (7,713,952) --
Cash dividends (1,095,243) (1,140,009)
NET CASH (USED IN) PROVIDED FROM FINANCING ACTIVITIES (128,507) 12,530,809
Effect of exchange rate changes on cash 31,804 49,291
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 44,240 (4,235,976)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 311,759 5,118,896
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 355,999 $ 882,920
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Flow Data:
Interest paid $ 182,520 $ 196,236
Income taxes paid $ 2,307,431 $ 362,984
Schedule of Non-cash Financial Activities:
Stock options canceled and unearned compensation credited $ 6,682 $ 56,300
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
4
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
With respect to the significant accounting policies of PCA
International, Inc., and its subsidiaries (the "Company"), which are
wholly-owned, reference is made to note 1 of the financial statements in
the Company's Form 10-K filed for the fiscal year ended January 29,
1995. The interim financial statements reflect all adjustments
(consisting of normal recurring accruals) which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods presented.
2. STOCK OPTIONS:
The Company's 1990 Non-Qualified Stock Option Plan (the "1990
Plan") provides for the grant of up to 1,425,000 non-qualified stock
options to key employees and non-employee Directors. As of July 30,
1995, options for approximately 521,050 shares were exercisable and
in-the-money; options for 137,800 shares were exercisable and
out-of-the-money; and options for 34,350 shares were available for
future grant under the 1990 Plan. As of July 31, 1994, options for
330,650 shares were exercisable and in- the-money and options for
169,150 shares were exercisable and out-of-the-money.
The Company's 1992 Non-Qualified Stock Option Plan (the "1992
Plan") provides for the grant of 1,725,000 non-qualified stock options
to key employees and non-employee Directors of the Company. As of July
30, 1995, options for 120,300 shares were exercisable and in-the-money;
options for 201,500 shares were exercisable and out-of-the-money; and
options for 828,700 shares were available for future grant under the
1992 Plan. As of July 31, 1994, options for 216,500 shares were
exercisable and out-of-the-money.
The following table summarizes all stock option activity for the
six months ended July 30, 1995 and the prior year six months ended July
31, 1994:
Number of Option
Shares Price
Options outstanding January 29, 1995 1,880,550 $ 1.67-$17.00
Exercised (52,400) $ 1.67-$10.00
Canceled (98,200) $ 1.67-$16.33
Granted 136,800 $ 10.13-$11.00
Options outstanding July 30, 1995 1,866,750 $ 1.67-$17.00
Options outstanding January 30, 1994 1,787,750 $ 1.67-$20.25
Exercised (12,200) $ 1.67
Canceled (45,600) $ 1.67-$16.33
Granted 21,500 $ 10.25
Options outstanding July 31, 1994 1,751,450 $ 1.67-$20.25
5
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. COMMON STOCK:
On March 8, 1995, the Company's Board of Directors increased the
number of shares authorized for repurchase by 754,490, bringing the
total number of shares authorized for repurchase to 1,000,000. During
the first six months, the Company purchased, in various transactions,
744,300 shares. The average purchase price per share was $10.36.
6
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The Company provides portrait photography services, primarily in
permanent studios operated in Kmart stores, throughout the United
States, Canada, Mexico, Puerto Rico, and the Virgin Islands. In its
Institutional Division, the Company also provides portrait services to
church congregations through traveling promotions. The Company's Kmart
Store Division accounted for approximately 95% of sales during the
second quarter and the first six months of fiscal 1995.
The Company completed the phase-out of its Kmart traveling
photography promotions in July 1994. Prior to August 1994, the Company
operated one-week traveling promotions on a seven-week rotating cycle in
Kmart stores that did not have a permanent studio. Traveling promotion
sales in Kmart stores were $1.5 million in the second quarter and $3.3
million for the first six months of fiscal 1994.
The Company completed the conversion in all of its Kmart studio
locations to its new Digital Imaging System technology in July 1994.
The new Digital Imaging System allows customers to approve each portrait
during the photography session as each pose is displayed on a video
monitor. With this technology, the Company no longer relies on the
production of portraits on a speculative basis, but produces only those
custom portraits which the customer purchases. The conversion to
digital technology has resulted in very significant changes in the
Company s operations, increasing the emphasis on higher-quality
portraits and service and allowing the Company to improve its
per-customer sales average. The Company also has benefited from lower
production costs primarily through the elimination of waste from
speculative portrait production.
During the second quarter, Kmart Corporation announced the
closing of 72 stores. The Company had portrait studios in 34 of those
stores. The Company discontinued operating in these 34 locations in the
second quarter and has either reallocated the assets from these
locations to other stores during the second quarter or will reassign the
assets to new locations in the third quarter of fiscal 1995. (In January
1995, Kmart Corporation closed 110 stores, including 24 in which the
Company operated studios.) During the second quarter, the Company
opened 20 new studios and at July 30, 1995, the Company was operating
1,435 Kmart permanent studios, a net increase of 18 studios for the
first six months of 1995, after giving effect to the Kmart store
closings noted above. Kmart Corporation has not announced any further
store closings and the Company is not aware of any planned additional
closings. There can be no assurance, however, that Kmart Corporation
will not close more stores in the future or that the Company will be
able to reallocate studio assets to new studios in the event of
additional studio closings.
During the last half of fiscal 1994, the Company restructured the
management of day-to-day operations. The new management structure has
allowed the President more time to explore ways to leverage PCA's
technology and expertise through diversification. As part of the
Company's diversification activities, the first phase of a permanent pet
photography studio test
7
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
program with PETsMART began in the second quarter. The pilot program
will run through December 31, 1995, and will include up to 14 PETsMART
stores in two different markets.
Seasonality
The Company's portrait photography business is seasonal, with the
greatest sales volume occurring in the fourth fiscal quarter during the
Thanksgiving and Christmas holiday seasons. The fourth quarters of
fiscal 1994 and 1993 contributed approximately 31% and 35%,
respectively, of annual sales and 79% and 93%, respectively, of earnings
for such years. The Company's operations can also be adversely affected
by inclement weather.
Results of Operations
The following table presents the percentage of sales represented
by the following line items from the Company's statements of income for
the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 30, July 31, July 30, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
Costs and Expenses 98.1 102.5 96.6 101.0%
Income (loss) from Operations 1.9 (2.5) 3.4 (1.0)
Interest Expense 0.7 0.6 0.4 0.4
Income (loss) from Continuing Operations
before Income Taxes 1.2 (3.1) 3.0 (1.4)
Income Tax Provision (benefit) 0.5 (1.3) 1.3 (0.6)
Income (loss) from Continuing Operations 0.7 (1.8) 1.7 (0.8)
Income from Discontinued Operations (net
of income taxes) -- 1.3 -- 0.6
Net Income (loss) 0.7% (0.5%) 1.7 (0.2%)
</TABLE>
Sales for the Company's 1995 second quarter were $28.6 million, a
decrease of 8% as compared with sales of $31.1 million for the second
quarter of 1994. Income from operations in the second quarter of fiscal
1995 was $0.6 million, an increase of $1.3 million as compared to the
comparable period in fiscal 1994. The operating profit margin was 1.9%
in the second quarter of fiscal 1995. Income from continuing operations
was $0.2 million, or $0.02 per share, versus a loss from continuing
operations of $0.6 million, or $0.07 per share, in the comparable
quarter of the prior year. Net income for the 1995 second quarter was
$0.2 million, or $0.02 per share, compared to a net loss of $0.2
million, or $0.02 per share for the same period of 1994,
8
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
which benefited from a one-time gain of $0.4 million, or $0.05 per
share, realized from the discontinuance of the Department Store
operation.
Sales for the first six months of 1995 increased slightly to $61.2
million from $61.0 million. For the six months ended July 30, 1995,
income from continuing operations and net income increased to $1.0
million, or $0.13 per share, versus a loss from continuing operations of
$0.5 million, or $0.06 per share. The net loss for the first six months
of last year was $0.1 million, or $0.01 per share, after giving affect
to the one-time gain for the discontinuance of the Department Store
operations.
Second quarter sales reflect the loss of $1.5 million in sales
from the Kmart traveling business, which the Company phased out during
the second quarter of fiscal 1994 and the loss of sales from the 34
permanent studios closed in the second quarter as previously discussed.
A 9% reduction in customers photographed in Kmart permanent studios was
principally offset by a 7% increase, or $3.51, in the average customer
purchase, to $57.10, in permanent studios. For the first six months of
1995, sales in Kmart permanent studios increased by 7%, or $3.7 million,
as the average customer purchase increased by 13%, to $58.33 from
$51.59, while customers photographed declined by 6%. The Company
attributes the increases in the average customer purchase to consumer
acceptance of its Digital Imaging System, improved compensation plans
which have enabled the Company to retain quality studio managers, and
training programs designed to enhance the portrait photography
experience. The reduction in customers photographed reflects the
Company's emphasis on improved customer services, higher advertising
expenditures in fiscal 1994's second quarter to introduce the Company's
Digital Imaging System, and the increased number of permanent portrait
studios operated by its competitors. Sales in the Institutional Division
decreased by 10%, to $1.5 million, in the quarter and 7%, to $3.2
million, for the six months versus the comparable period in fiscal 1994.
The increase in income from operations is attributable to higher
average sales per customer, lower production costs resulting from the
proprietary Digital Imaging System, and the elimination of start-up
costs incurred in the second quarter of fiscal 1994 to introduce the
Digital Imaging System. Partially offsetting the aforementioned factors
are higher labor costs resulting from the improved compensation and
training plans.
The income tax provision for the first six months of fiscal 1995
was $0.8 million. This resulted in an effective tax rate of 41.9% for
fiscal 1995. For the first six months of fiscal 1994, the Company had a
tax benefit of $0.4 million.
Liquidity and Capital Resources
The Company's principal sources of working capital are cash from
operations and the Company's revolving line of credit. On July 30,
1995, the Company had $9.3 million in
9
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, continued
short-term debt outstanding and $0.4 million in cash and cash
equivalents. The Company has a $16.0 million revolving line of credit
with NationsBank of North Carolina, N.A., ("NationsBank") to meet
seasonal capital requirements.
During May, June, and July of 1995 (the second quarter of fiscal 1995),
the Company had property additions of $1.4 million, principally for
materials and equipment for the Company's Kmart permanent studios.
Operating activities provided $3.2 million in cash to the Company.
Shareholders' equity decreased by $0.2 million to $25.7 million in
the second quarter of fiscal 1995. Net income for the quarter was $0.2
million. Dividends paid in the quarter totaled $0.5 million.
The Company believes, based on its short- and long-term business
plans, that it has the ability to adequately fund its operating and
capital expenditure needs for fiscal 1995 from operations, augmented by
borrowings under its line of credit for seasonal credit needs. Due to
the seasonality of the Company's operations, cash is generally consumed
during the first fiscal quarter. During the remaining fiscal quarters,
operating activities usually generate cash.
10
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Computation of Primary and Fully Diluted Earnings Per
Common Share
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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.
PCA INTERNATIONAL, INC.
(Registrant)
Date: September 8, 1995 /s/ John Grosso
John Grosso
President
(Principal Executive Officer)
Date: September 8, 1995 /s/ Bruce A. Fisher
Bruce A. Fisher
Senior Vice President
(Principal Accounting Officer)
11
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page Number
<S> <C> <C>
4 Instruments defining the rights of security holders,
incorporated by reference to Exhibit 4 to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 3,
1992.
10(a) Amendment dated as of June 1, 1994, to Loan Agreement
between PCA International, Inc., Photo Corporation of
America, PCA National, Inc., and PCA Photo Corporation of
Canada, Inc., PCA Mexico, S.A. de C.V. and NationsBank of
North Carolina, N.A., incorporated by reference to Exhibit
10(a) to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1994.
10(b) Revised Exclusive License Agreement dated July 1, 1994,
between Kmart Corporation and PCA International, Inc.,
incorporated by reference to Exhibit 10(b) to the Company's
Amendment No. 1 on Form 10-Q/A to its Quarterly Report on
Form 10-Q for the quarter ended July 31, 1994.
10(c) New Sales Contract dated August 11, 1994, between PCA
International, Inc., and Agfa Division of Miles, Inc.,
incorporated by reference to Exhibit 10(c) to the Company's
Amendment No. 1 on Form 10-Q/A to its Quarterly Report on
Form 10-Q for the quarter ended July 31, 1994.
10(d) The 1990 Non-Qualified Stock Option Plan, incorporated by
reference to Exhibit 4 to the Company's Registration
Statement on Form S-8 (Registration No. 33-36793).
10(e) The 1992 Non-Qualified Stock Option Plan, as amended and
restated, incorporated by reference to Exhibit 10(e) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1995.
10(f) Loan Agreement dated September 8, 1992, between PCA
International, Inc., Photo Corporation of America, PCA
National, Inc., and PCA Photo Corporation of Canada, Inc.,
and NationsBank of North Carolina, N.A., incorporated by
reference to Exhibit 10(o) to the Company's Quarterly Report
on Form 10-Q for the quarter ended August 2, 1992
(Commission File No. 0-8550).
10(g) Amendment dated as of September 14, 1993, to Loan Agreement
between PCA International, Inc., Photo Corporation of
America, PCA National, Inc., PCA Photo Corporation of
Canada, Inc., and NationsBank of North Carolina, N.A.,
incorporated by reference to Exhibit 10(g) to the Company's
Quarterly Report on Form 10-Q for the quarter ended July 31,
1994.
12
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
10(h) Amendment dated as of March 31, 1995, to Loan Agreement
between PCA International, Inc., Photo Corporation of
America, PCA National, Inc., PCA Photo Corporation of
Canada, Inc., and PCA Mexico, S.A. de C.V. and NationsBank
of North Carolina, N.A., incorporated by reference to
Exhibit 10(h) to the Company s Annual Report on Form 10-K
for the year ended January 29, 1995.
11 Computation of Primary and Fully Diluted Earnings Per Common
Share
27 Financial Data Schedule
</TABLE>
13
<PAGE>
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED
EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 30, 1995 July 31, 1994 July 30, 1995 July 31, 1994
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE:
EARNINGS APPLICABLE TO COMMON STOCK:
Income (loss) from continuing operations $ 198,502 $ (579,538) $1,049,503 $ (515,887)
Discontinued operations -- 412,406 -- 412,406
Net income (loss) $ 198,502 $ (167,132) $1,049,503 $ (103,481)
COMPUTATION OF COMMON SHARES AND
COMMON EQUIVALENT SHARES:
Weighted average number of common shares 7,461,168 8,147,159 7,785,287 8,144,182
Dilutive effect of stock options 480,935 379,481 426,194 392,305
Weighted average number of common shares after
dilutive effect 7,942,103 8,526,640 8,211,481 8,536,487
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE:
Income (loss) from continuing operations $ 0.02 $ (0.07) $ 0.13 $ (0.06)
Net income (loss) $ 0.02 $ (0.02) $ 0.13 $ (0.01)
FULLY DILUTED EARNINGS PER COMMON SHARE:
EARNINGS APPLICABLE TO COMMON STOCK:
Income (loss) from continuing operations $ 198,502 $ (579,538) $1,049,503 $ (515,887)
Discontinued operations -- 412,406 -- 412,406
Net income (loss) $ 198,502 $ (167,132) $1,049,503 $ (103,481)
COMPUTATION OF COMMON SHARES AND
COMMON EQUIVALENT SHARES:
Weighted average number of common shares outstanding 7,461,168 8,147,159 7,785,287 8,144,182
Dilutive effect of stock options 602,180 382,809 598,885 393,969
Weighted average number of common shares after
dilutive effect 8,063,348 8,529,968 8,384,172 8,538,151
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE ASSUMING FULL DILUTION:
Income (loss) from continuing operations $ 0.02 $ (0.07) $ 0.13 $ (0.06)
Net income (loss) $ 0.02 $ (0.02) $ 0.13 $ (0.01)
</TABLE>
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<RECEIVABLES> 11,076,758
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0
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