SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark one)
( X ) Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended March 31, 1996
Or
( ) Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from _______________ to _______________
Plasti-Line, Inc.
(Exact name of registrant as specified in its charter)
Tennessee
(State or other jurisdiction of incorporation or
organization)
62-1218546
(I.R.S. Employer Identification Number)
0-15214
(Commission File Number)
623 E. Emory Road, P.O. Box 59043, Knoxville, Tennessee
37950-9043
(Address of principal executive offices)
(423) 938-1511
(Registrant's phone number including area code)
Not applicable
(Former name, former address and former fiscal year, if
changed since last 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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X
No
As of May 8, 1996 there were 3,783,157 shares of common
stock outstanding.
<PAGE>
<TABLE>
PART I
ITEM 1
FINANCIAL INFORMATION
PLASTI-LINE, INC.
Consolidated Condensed Balance Sheets
March 31, 1996 (1996) and December 31, 1995 (1995)
(in thousands)
<CAPTION>
Assets 1996 1995
(Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10 $ 10
Receivables, net 24,255 27,050
Inventories 33,000 31,564
Prepaid expenses 1,774 1,080
Deferred income taxes 1,876 1,876
Total current assets 60,915 61,580
Net property and equipment 13,634 13,854
Goodwill 1,477 1,508
Other assets 134 208
Total Assets $ 76,160 $ 77,150
See accompanying notes to consolidated condensed financial
statements.
<PAGE>
Liabilities and Stockholders' Equity
1996 1995
(Unaudited) (Audited)
Current liabilities:
Current installments of
long-term debt $ 745 $ 1,723
Accounts payable 14,617 14,660
Accrued liabilities 7,401 5,704
Income taxes payable 449 708
Customer deposits and
deferred revenue 5,640 5,673
Total current liabilities 28,852 28,468
Long-term debt, excluding
current installments 21,681 23,575
Deferred income taxes 1,123 1,123
Deferred liabilities 93 93
Stockholders' equity:
Preferred stock, $.001 par value.
Authorized 5,000,000 shares;
issued none - -
Common stock, $.001 par value.
Authorized 20,000,000 shares,
issued 3,783,157 shares 4 4
Additional paid-in-capital 2,790 2,729
Notes receivable, common stock (169) (169)
Retained earnings 21,786 21,327
Total Stockholders' Equity 24,411 23,891
Total Liabilities and
Stockholders' Equity $ 76,160 $ 77,150
See accompanying notes to consolidated condensed financial
statements.
<PAGE>
</TABLE>
<TABLE>
PLASTI-LINE, INC.
Consolidated Condensed Statements of Operations
For the three months ended March 31,1996 (1996) and April 2, 1995 (1995) 1995 (1995)
(in thousands, except per share data)
<CAPTION>
1995 1994
<S> <C> <C>
Net sales $ 30,142 $ 20,056
Cost of sales 25,159 16,686
Gross profit 4,983 3,370
Selling, general, and
administrative expenses 3,793 3,094
Operating income 1,190 276
Interest income - -
Interest expense 451 214
Income before income taxes 739 62
Income taxes 281 34
Net income $ 458 $ 28
Net income per share $ 0.12 $ 0.01
See accompanying notes to consolidated condensed financial
statements.
<PAGE>
</TABLE>
<TABLE>
PLASTI-LINE, INC.
Consolidated Condensed Statements of Cash Flows
Three months ended March 31, 1996 (1996) and April 2, 1995 (1995)
(Unaudited)
(in thousands)
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 458 $ 28
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 515 402
Loss on sale of investments
in marketable securities - 6
Provision for losses on
accounts receivable 52 (2)
Decrease in net receivables 2,743 2,342
Increase in inventories (1,436) (1,503)
Decrease (increase) in
prepaid expenses (694) 70
Decrease in accounts payable (43) (133)
Increase in accrued liabilities 1,702 857
Decrease in other assets 65 -
Increase (decrease) in income
taxes payable (259) 76
Increase (decrease) in customer
deposits and deferred revenue (33) 256
Net cash provided by
operating activities 3,070 2,399
Cash flows from investing activities:
Purchases of property and equipment (255) (605)
Investment in marketable securities - -
Proceeds from the sale and maturity
of investments - 593
Net cash used by investing activities (255) (12)
Cash flows from financing activities:
Net payments on line of credit (2,860) (2,401)
Principal payments on long-term debt (17) (17)
Proceeds from sales of common stock 62 18
Payments of notes receivable -
common stock 0 13
Net cash provided used by
financing activities (2,815) (2,387)
Net increase in cash and cash equivalents - -
Cash and cash equivalents at
beginning of year 10 10
Cash and cash equivalents at
end of period $ 10 $ 10
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ 463 $ 203
Income taxes $ 259 $ 13
Noncash transactions:
Amortization of compensation from
restricted stock $ 4 $ 18
See accompanying notes to consolidated condensed financial
statements.
<PAGE>
</TABLE>
PLASTI-LINE, INC.
Notes to Consolidated Condensed Financial Statements
1.Condensed Consolidated Financial Statements
The consolidated condensed balance sheet as of March 31,
1996, and the consolidated condensed statements of
operations and cash flows for the three months ended
March 31, 1996 and April 2, 1995, have been prepared by
the Company, without audit. In the opinion of
management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the
financial position, results of operations and changes in
cash flows at March 31,1996 and for all periods presented
have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
consolidated condensed financial statements be read in
conjunction with the financial statements and notes
thereto included in the Company's 1995 Annual Report to
Stockholders. The results of operations for the period
ended March 31, 1996 are not necessarily indicative of
the operating results for the full year.
2.Principles of Consolidation
The financial statements include the accounts of the
Company and its wholly owned subsidiaries, American Sign
& Marketing Services, Inc., and Carter-Miot, Inc. All
significant intercompany accounts and transactions have
been eliminated.
3.Inventories
Inventories consist of the following:
March 31, 1996 December 31, 1995
(in thousands)
Finished goods $ 24,818 $ 22,008
Work-in-process 2,787 4,289
Raw materials 7,458 7,330
Less: LIFO inventory reserve (2,063) (2,063)
Total net inventory $ 33,000 $ 31,564
Inventories are stated at the lower-of-cost or market.
Cost is determined by the last-in, first-out method
(LIFO).
4.Earnings Per Share
Net income per common share is based on the weighted
average number of common and common equivalent shares
outstanding in each period. For purposes of computing
common equivalent shares outstanding, shares relating to
options have been calculated using the treasury stock
method for the portion of each period for which the
options were outstanding and using the fair value of the
Company's stock for each of the respective periods.
The weighted average number of common and common stock
equivalent shares outstanding at March 31, 1996 were
3,800,000.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated results of operations for the three months
ended March 31, 1996 (1996 Quarter) compared to the
consolidated results of operations for the three months
ended April 2, 1995 (1995 Quarter):
The Company's sales in the first quarter of 1996 increased
50% to $30,142,000 from $20,056,000 for the same period last
year. First quarter 1996 sales were higher than prior year
due to sales of $3,200,000 from our new subsidiary, Carter-
Miot, Inc., as well as stronger volume across all of our
businesses.
The Company's gross profit margin during the 1996 Quarter
(16.5%) was flat as compared to the margin during the 1995
Quarter (16.8%).
Selling, general, and administrative expenses were
$3,793,000 for the 1996 Quarter versus $3,094,000 for the
1995 Quarter, a 22.6% increase. The increase is primarily
due to the addition of our Carter-Miot subsidiary.
Operating income was $1,190,000 and $276,000 for the 1996
and 1995 Quarters, respectively. The increase in income was
primarily related to the higher sales volume.
Net income for the quarter was $458,000 as compared to
$28,000 for the first quarter of 1995. Net income per share
for the quarter was $0.12 as compared to $0.01 for the first
quarter of 1995.
Net interest expense increased to $451,000 for the 1996
Quarter compared to $214,000 in the 1995 Quarter.
The increased expense was primarily the result of higher
average debt balances.
Liquidity and Capital Resources
The Company had working capital of $30,063,000, a decrease
of $1,049,000 from the amount of working capital at
December 31, 1995. Funds of $3,070,000 were provided
by operating activities. Decreases in receivables was
the primary source of funds.
Investing activities used $255,000 as a result of property
and equipment purchases. Financing activities used
$2,815,000 primarily as a result of decreased net borrowings
under the Company's line of credit during the 1996 Quarter.
The Company's future capital expenditures will relate
principally to the acquisition of new machinery and
equipment and furniture and fixtures designed to increase
productivity and factory efficiency. The Company believes
its cash generated from operations and funds available under
the existing line of credit are sufficient for all planned
operating and capital requirements.
Seasonality
The Company's sales exhibit limited seasonality , with sales
in the first quarter generally being the lowest and fourth
quarter sales the highest. First quarter sales tend to be
relatively lower because of weather constraints which slow
down customer's construction schedules and their pattern of
sign purchases. Sales have normally accelerated in the
second, third, and fourth quarters corresponding with
accelerating construction schedules.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Default Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information:
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the
quarter ended March 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
PLASTI-LINE, INC.
Registrant
/s/ Mark J. Deuschle
______________________________________
Mark J. Deuschle
Vice-President of Finance
(Authorized Officer and Principal Financial Officer)
May 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 24869
<ALLOWANCES> 614
<INVENTORY> 33000
<CURRENT-ASSETS> 60915
<PP&E> 31062
<DEPRECIATION> 17428
<TOTAL-ASSETS> 76160
<CURRENT-LIABILITIES> 28852
<BONDS> 21681
<COMMON> 4
0
0
<OTHER-SE> 24407
<TOTAL-LIABILITY-AND-EQUITY> 76160
<SALES> 30142
<TOTAL-REVENUES> 30142
<CGS> 25159
<TOTAL-COSTS> 25159
<OTHER-EXPENSES> 3741
<LOSS-PROVISION> 52
<INTEREST-EXPENSE> 451
<INCOME-PRETAX> 739
<INCOME-TAX> 281
<INCOME-CONTINUING> 458
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 458
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
