SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended May 24, 1996
Commission File No. 1-5548
Purpose: To amend in its entirety the quarter ended May 24, 1996
10-Q due to an error in the current year treasury stock
reported on the condensed balance sheet table.
Penobscot Shoe Company
(Exact name of registrant as specified in its charter)
Maine
(State or other jurisdiction of incorporation or organization)
01-0139580
(IRS Employer identification no.)
450 North Main Street, Old Town Maine
(Address of principal executive offices)
04468
(Zip code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Registrant's telephone number, including area code: (207) 827-4431
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, and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__
No _____
Common stock of 1,469,917 shares, $1 par value, was outstanding at
May 24, 1996
<PAGE>
<TABLE>
PENOBSCOT SHOE COMPANY
CONDENSED BALANCE SHEET
(In thousands)
<CAPTION>
February 23, 1996 November 24, 1995
(Unaudited) (Note (a))
<S> <C> <C>
CURRENT ASSETS:
Cash & Cash Equivalents $2,150 $1,301
Marketable Securities 3,240 3,271
Refundable income taxes - -
Accounts receivable 2,218 3,492
Inventories (Note 2) 3,121 3,054
Other current assets 587 341
_______ _______
TOTAL CURRENT ASSETS $11,316 $11,459
PROPERTY AND EQUIPMENT, AT COST:
Buildings $1,412 $1,413
All Other 1,631 1,617
Less accumulated depreciation
and amortization 2,711 2,660
_______ _______
NET PROPERTY AND EQUIPMENT $333 $369
_______ _______
TOTAL ASSETS $11,649 $11,828
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $773 $791
Other current liabilities 396 496
_______ _______
TOTAL CURRENT LIABILITIES $1,170 $1,287
DEFERRED INCOME TAXES $146 $146
SHAREHOLDERS' EQUITY:
Common stock, $1 par value:
authorized 2,000,000 shares:
issued 1,533,042 $1,533 $1,533
Capital in excess of par value 1,109 1,109
Retained earnings 7,774 7,667
Add net unrealized gain on
available-for-sale securities
(Note (b)) 249 356
Less treasury stock at cost
63,125 and 50,925 shares; 333 270
NET SHAREHOLDERS' EQUITY _______ _______
(Note 3) $10,333 $10,395
TOTAL LIABILITIES AND SHARE- _______ _______
HOLDERS' EQUITY $11,649 $11,828
======= =======
<FN>
Note: (a) The balance sheet at November 24, 1995, has been derived from
the audited financial statements at that date.
(b) The Company adopted Statement of Accounting Standard No. 115
"Accounting for Certain Investments in Debt and Equity Securities"
effective November 26, 1994.
See notes to the condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
PENOBSCOT SHOE COMPANY
STATEMENT OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
For the For the
Second Quarter Ended Six Months Ended
May May May May
24, 1996 26, 1995 24, 1996 26, 1995
<S> <C> <C> <C> <C>
Net Sales $3,024 $2,455 $7,249 $5,575
Cost and operating expenses:
Cost of sales 2,073 1,629 4,913 3,695
Selling and administrative
expenses 1,034 1,018 2,184 2,104
_______ _______ _______ _______
Operating income (loss) (83) (192) 152 (224)
Other income 131 142 269 195
_______ _______ _______ _______
Income before income taxes 48 (50) 421 (29)
Income taxes 17 (23) 166 (16)
_______ _______ _______ _______
Net income $ 31 ($27) $255 ($13)
======= ======= ======= =======
Per Common Share:
Net income $0.02 ($0.02) $0.17 ($0.01)
Dividends 0.05 0.05 0.05 0.05
Average number of common shares
outstanding 1,474,265 1,482,117 1,478,169 1,482,117
<FN>
See notes to the condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
PENOBSCOT SHOE COMPANY
STATEMENT OF CASH FLOWS
For Six Months Ended May 24, 1996 and May 26, 1995
(In thousands)
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating
activities:
Net cash provided (used) by
operating activities $ 1,074 $1,685
Cash flows from investing
activities:
Proceeds from sale of assets 0 0
Capital expenditures (14) (10)
_______ _______
Net cash provided (used) by
investing activities (14) (10)
Cash flows from financing activities:
Dividends paid (148) (148)
Purchase of treasury stock (63) 0
Net cash provided (used) by _______ _______
financing activities (211) (148)
Net increase (decrease) in _______ _______
cash and cash equivalents 849 1,527
Cash and cash equivalent at
beginning of period 1,301 1,308
Cash and cash equivalent at _______ _______
end of period $2,150 $ 2,637
======= =======
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest $0 $0
Income taxes 438 118
</TABLE>
<PAGE>
PENOBSCOT SHOE COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The condensed balance sheet as of May 24, 1996, the statements of
income for the second quarter periods ended May 24, 1996 and May 26, 1995,
and the condensed statements of cash flows for the six-month periods then
ended have been prepared by the Company, without audit. In the opinion of
management, all necessary adjustments, which include normal recurring
adjustments, have been made to present fairly the financial position, results
of operations, and cash flows at May 24, 1996 and for the other periods
presented. The results of operations for the period ended May 24, 1996
are not necessarily indicative of operating results for the full year.
2. INVENTORIES
Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
5/24/96 11/24/95 5/26/95
<S> <C> <C> <C>
FIFO Cost:
finished shoes $3,630 $3,355 $3,530
shoes in process 4 22 24
raw materials 215 232 393
_______ _______ _______
$3,849 $3,609 $3,947
Excess of FIFO cost over
LIFO inventory value (728) (555) (927)
_______ _______ _______
$3,121 $3,054 $3,020
======= ======= =======
</TABLE>
The Company uses the LIFO method because it more realistically
reflects operating results by charging current costs against current
revenues.
3. SHAREHOLDERS' EQUITY
During the six months ended May 24, 1996, shareholders' equity changed
due to net income of $255,000, dividends declared of $ 148,000 , purchases
of treasury stock of $63,000 and a decrease of $107,000 resulting from a
decrease in the net unrealized gain on available-for-sale securities held by
the Company. Effective November 26, 1994, the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", necessitating the inclusion of this net
unrealized gain on the balance sheet.
<PAGE>
PENOBSCOT SHOE COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS
Liquidity and Capital Resources:
At May 24, 1996, Penobscot Shoe Company had working capital of
approximately $10,147,000 versus approximately $10,172,000 at November
24, 1995, a decrease of $25,000. The ratio of current assets to current
liabilities at May 24, 1996, was 9.7 to 1, compared to 8.9 to 1, at
November 24, 1995.
The statement of cash flows for the six months ended May 24, 1996,
shows an increase of $849,000 in cash and cash equivalents since November
24, 1995. The Company's operations provided $1,074,000 since November 24,
1995, primarily due to seasonal fluctuations in accounts receivable. The
Company's quarterly dividend amounted to a use of $148,000 during the period,
purchases of treasury shares used $63,000 and capital expenditures for
equipment amounted to a further use of $14,000 during the period.
The decreases in the Company's accounts receivable and other current
liabilities, and the increase in other current assets since November 24, 1995,
were the result of ordinary fluctuations.
Management believes that Penobscot Shoe Company remains financially well
structured to consider a variety of financing options should the need arise and
will make choices depending on economic conditions at the time. Options
available include conversion of marketable securities held by the Company into
cash and cash equivalents. The Company also has an established line of credit
with a major bank available for direct borrowing at the prime rate should the
need arise.
Results of Operations:
Net sales for the second quarter ended May 24, 1996, were $3,024,000,
up 23% from $2,455,000 in the same quarter last year. Net income for the
current quarter was $31,000, or $.02 per share, compared to a net loss of
$27,000, or $.01 per share, a year ago.
For the six months ended May 24, 1996, net sales were $7,249,000, up
30% from $5,575,000 a year ago. Net income for the year-to-date period
was $255,000, or $.17 per share, versus a net loss of $13,000, or $.01 per
share, incurred last year.
The significant increase in second quarter net sales compared to last year
was the result of both volume and price factors. Most of the sales increase
was due to higher volume, fueled primarily by strong reorders of Spring 96
merchandise. Higher average prices accounted for the balance of the total
sales increase, primarily due to product mix rather than price increases.
Continued growth in the second half will be contingent on sustained
strength in the retail environment.
Cost of sales was 68.5% of net sales in the second quarter compared to
66.3% a year ago resulting in gross profit margins of 31.5% and 33.7% in the
1996 and 1995 quarters, respectively. Last year's quarter benefited from a
<PAGE>
Results of Operations Continued:
particularly low level of surplus sales while the current year's surplus sales
were at a more normal level. Selling and administrative costs were slightly
higher than a year ago due to costs variable on sales.
Other income in the second quarter of 1996 was $131,000, pre-tax,
compared to $142,000 in the same quarter last year. Both the current quarter
and last year's second quarter benefited from gains on the sales of securities
which totalled approximately $76,000, pre-tax.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
last quarter of the period covered by this report.
<PAGE>
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 under-
signed thereunto duly authorized.
Penobscot Shoe Company
_________________________
(Registrant)
Date: August 1, 1996 Paul Hansen
_________________________
By: Paul Hansen
President and
Chief Executive Officer
Date: August 1, 1996 David L. Keane
________________________
By: David L. Keane
Vice President/Finance and
Administration
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-29-1996
<PERIOD-END> MAY-24-1996
<CASH> 2,150
<SECURITIES> 3,240
<RECEIVABLES> 2,218
<ALLOWANCES> (537)
<INVENTORY> 3,121
<CURRENT-ASSETS> 11,316
<PP&E> 3,043
<DEPRECIATION> 2,711
<TOTAL-ASSETS> 11,649
<CURRENT-LIABILITIES> 1,170
<BONDS> 0
<COMMON> 1,533
0
0
<OTHER-SE> 8,799
<TOTAL-LIABILITY-AND-EQUITY> 11,649
<SALES> 7,249
<TOTAL-REVENUES> 7,249
<CGS> 4,913
<TOTAL-COSTS> 7,097
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (269)
<INCOME-PRETAX> 421
<INCOME-TAX> 166
<INCOME-CONTINUING> 255
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 255
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
