SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM 10-Q
Quarterly Report Pursuant to section 13 or 15(d) of
the Securities and Exchange Act of 1934
____________________
For the Quarter ended Commission File Number
June 30, 1995 0-14903
Baldwin Piano & Organ Company
(Exact name of registrant as specified in its charter)
Delaware 31-1091812
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
422 Wards Corner Road
Loveland, Ohio 45140-8390
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (513) 576-4500
Indicate by check mark whether the registrant (1) has filed
all documents and 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 90 days. Yes X No .
--- ---
The number of shares of the Common Stock outstanding of
Baldwin Piano & Organ Company ("Company"), as of August 1, 1995 is
3,415,196.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1995 and December 31, 1994
Condensed Consolidated Statements of Earnings
for the three months and six months ended
June 30, 1995 and 1994
Condensed Consolidated Statements of Cash Flows
for the six months ended
June 30, 1995 and 1994
Notes to Condensed Consolidated Financial
Statements, June 30, 1995
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote
of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1995 and December 31, 1994
(in thousands of dollars)
June 30, December 31,
ASSETS 1995 1994
------------ ------------
Current assets:
Cash ................................. $ 574 $ 344
Receivables, net ..................... 14,901 12,860
Inventories .......................... 47,613 47,036
Other current assets ................. 6,557 8,557
-------- -------
Total current assets ........... 69,645 68,797
-------- -------
Installment receivables,
less current portion ................. 9,580 8,621
Property, plant and equipment, net ...... 14,314 13,855
Other assets ............................ 6,686 6,187
-------- -------
Total assets ................... $100,225 $97,460
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .... $ 20,581 $16,746
Accounts payable ..................... 4,727 7,218
Income taxes payable ................. 1,432 1,522
Accrued liabilities .................. 7,579 6,871
-------- -------
Total current liabilities ...... 34,319 32,357
-------- -------
Long-term debt, less current portion .... 4,700 5,000
Other liabilities ....................... 9,406 9,949
-------- -------
Total liabilities .............. 48,425 47,306
-------- -------
Shareholders' equity:
Common stock ......................... 41 41
Additional paid-in capital ........... 12,002 12,002
Retained earnings .................... 45,964 44,318
-------- -------
58,007 56,361
Less cost of treasury shares ......... (6,207) (6,207)
-------- -------
Total shareholders' equity ..... 51,800 50,154
________ _______
Total liabilities and
shareholders' equity ........... $100,225 $97,460
======== =======
<FN1>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars, except net earnings per share)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1995 1994 1995 1994
------- -------- ------- -------
Net sales ...................... $30,688 $28,076 $60,448 $53,648
Cost of goods sold ............. 24,070 21,387 47,591 40,724
------- ------- ------- -------
Gross profit .......... 6,618 6,689 12,857 12,924
Income on the sale of
installment receivables ..... 1,249 1,252 2,472 2,641
Interest income on
installment receivables ..... 146 149 302 271
Other operating income, net .... 701 749 1,487 1,525
------- ------- ------- -------
8,714 8,839 17,118 17,361
Operating expenses:
Selling, general
and administrative ....... 6,609 6,959 12,968 13,580
Provision for
doubtful accounts ........ 244 325 497 660
------- ------- ------- -------
Operating profit ...... 1,861 1,555 3,653 3,121
Interest expense ............... 503 462 1,025 859
------- ------- ------- -------
Earnings before
income taxes ............. 1,358 1,093 2,628 2,262
Income taxes 527 420 982 884
------- ------- ------- -------
Net earnings .......... $ 831 $ 673 $ 1,646 $ 1,378
======= ======= ======= =======
Net earnings per share ......... $.24 $.20 $.48 $.40
==== ==== ==== ====
Average number of common
shares outstanding .......... 3,415 3,415 3,415 3,415
===== ===== ===== =====
<FN1>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30, 1995 and 1994
(in thousands of dollars)
INCREASE (DECREASE) IN CASH 1995 1994
- --------------------------- -------- --------
Net cash used in operating activities ...... $ (594) $ (8,140)
Net cash used in investing activities ...... (1,567) (1,283)
Cash flows from financing activities:
Installment contract
receivables written ................. (28,694) (22,195)
Installment receivables liquidated ..... 2,897 2,666
Proceeds from sale of
installment receivables ............. 24,653 19,025
Borrowing under long-term debt ......... 3,535 9,297
Other .................................. -- (82)
-------- --------
Net cash provided by
financing activities ........... 2,391 8,711
-------- --------
Net increase (decrease) in cash ........... 230 (712)
Cash at beginning of period ............... 344 1,203
-------- --------
Cash at end of period ..................... $ 574 $ 491
======== ========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest ............................... $ 1,095 $ 795
======== ========
Income taxes ........................... $ 1,101 $ 1,501
======== ========
<FN1>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(in thousands of dollars)
(1) BASIS OF REPORTING FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain informa-
tion and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Company's Annual Report and Form 10-K for the year ended December 31,
1994.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for
the three month and six month periods ended June 30, 1995 and 1994.
Results of operations for interim periods are not necessarily indicative
of results to be expected for an entire year.
(2) INVENTORIES
Inventories consist of the following:
June 30, December 31,
1995 1994
-------- --------
FIFO cost:
Raw material ......................... $ 13,251 $ 11,790
Work-in-process ...................... 7,106 7,465
Finished goods ....................... 38,385 38,325
-------- --------
58,742 57,580
Excess of FIFO cost
over LIFO inventory value ............ (11,129) (10,544)
-------- --------
Net inventories ................. $ 47,613 $ 47,036
======== ========
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
1995 COMPARED TO 1994
Net earnings for the three months ended June 30, 1995 increased 23%
to $.8 million up from $.7 million in 1994. Net earnings per share rose
correspondingly, to $.24 from $.20 in 1994. Earnings progress came from
improved control of selling, general and administrative expenses.
Sales for the three month period ended June 30, 1995 increased 9% to
$30.7 million, up from $28.1 million in 1994. The contracting business
showed sales growth of 34% over 1994. Acoustic pianos and church organ
sales also showed good progress over 1994.
For the first six months of 1995, net earnings rose 19% to $1.6
million, up from $1.4 million in 1994. Net earnings per share increased
correspondingly, to $.48 from $.40. Sales increased 13% to $60.4 million,
up from $53.6 million last year.
Gross profit did not increase with the growth in sales. This is the
result of higher production costs and a larger proportion of total sales
coming from outside contracting, which carries a lower gross margin.
The Company values a substantial portion of its inventory on the
last-in, first-out (LIFO) method. The gross profit for the three months
and six months ended June 30, 1995 is $.3 million and $.6 million less
than the amounts that would have been presented had the first-in, first-
out (FIFO) method been used.
Income on the sale of installment receivables generated by the
Company's financing operation for the three months and six months ended
June 30, 1995, respectively, was slightly lower than the comparable
periods in 1994. This decrease is primarily the result of higher interest
costs under the floating interest rate provision of the sale agreement.
See "Liquidity and Capital Resources."
Selling, general and administrative expenses decreased $.3 million
and $.6 million for the three months and six months ended June 30, 1995,
respectively, from the comparable periods in 1994. The decreases are
primarily due to reduced selling expenses.
The provision for doubtful accounts declined $.1 million and $.2
million for the three months and six months ended June 30, 1995,
respectively, from the comparable periods in 1994. This decline is due to
continued reductions in losses experienced.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
Interest expense increased $.1 million and $.2 million for the three
months and six months ended June 30, 1995, respectively, from the
comparable periods in 1994. This increase was due to both higher interest
rates and higher average borrowing.
INFLATION, OPERATIONS AND INTEREST RATES
The impact of inflation on manufacturing and operating costs can
affect the Company's results. However, the Company has generally been
able to offset the effects of inflation by price increases and operating
efficiencies.
The operations of the Company and its predecessors are subject to
federal, state and local laws regulating the discharge of materials into
the environment. Although on several occasions the Company has been the
subject of inquiries from government agencies and/or persons who may be
held responsible for environmental liabilities relating to the sites in
question, the Company has been made a party to actual proceedings on only
one occasion to date. The Company's actual liability in such matter was
not material. The Company does not anticipate that any environmental
matters currently known to the Company will result in additional
proceedings against the Company or in any material liability.
The Company and its subsidiaries' operating results are sensitive to
changes in interest rates primarily because of fixed interest rates on
installment receivables and floating interest rates on a substantial
portion of indebtedness. Additionally, the buyer of the installment
receivables earns interest on the outstanding principal balance of the
contracts based upon a floating interest rate provision.
The Company can partially offset the effect of interest rate changes
by adjusting display fees on its consigned inventory and interest rates on
its new installment receivable contracts. In December 1994, the Company
entered into a two year interest rate modification agreement to reduce the
potential impact of increases in interest rates on $40.0 million of
floating-rate long-term debt. The agreement entitles the Company to
receive from the counterparty, on a monthly basis, interest income to the
extent the one-month commercial paper rate exceeds 12%. The Company is
exposed to credit losses in the event of non-performance by the counter-
party to its interest rate cap, but has no off-balance sheet credit risk
of accounting loss. The Company anticipates, however, that the counter-
party will be able to fully satisfy their obligations under the contract.
The Company does not obtain collateral or other security to support
financial instruments subject to credit risk but monitors the credit
standing of the counterparty.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
Effective February 15, 1994, the annual rate of interest under the
revolving line of credit (Revolver) is 150 basis points plus the greater
of the LIBOR on three month deposits or the rate on 60 day high grade
commercial paper. As of June 30, 1995, the interest rate was 7.56%.
LIQUIDITY AND CAPITAL RESOURCES
The Company and its wholly-owned finance subsidiary (Finance) require
significant working capital to support their operations. Working capital
requirements fluctuate throughout the year.
The Company ships musical instruments to its Baldwin dealer network
on a consignment basis. Management believes the consignment program
creates a competitive advantage for its dealers. Dealers are able to
display a larger and more comprehensive product line than they may
otherwise be able to without the Company's financial support. Also the
consignment program is advantageous to the Company for income tax
purposes, and management believes the consignment method minimizes losses
from dealers.
Because the Company finances inventory on consignment to Baldwin
dealers, the Company's borrowing is higher than comparable companies not
operating on the consignment basis. Management believes the advantages of
the consignment program are greater than the risks associated with the
higher leverage.
Under the Revolver, the lender will make available a line of credit
based upon certain percentages of the value of the Company's inventories
and trade accounts receivable. At June 30, 1995, the Company had
approximately $19.7 million of additional borrowing available under this
line of credit.
The Company's debt agreements contain covenants that restrict, among
other things, the payment of dividends, the repurchase of the Company's
common stock and the Company's ability to incur new indebtedness and to
enter new businesses. Such agreements permit the payment of dividends or
repurchase of the Company's common stock equal to the lesser of (i) 50% of
the Company's cumulative net earnings since January 1, 1986 or (ii) the
amount of unused borrowing available under the Company's Revolver, reduced
by the unpaid portion of the term loan. Accordingly, at June 30, 1995,
approximately $14.7 million is available for the payment of dividends or
the repurchase of the Company's common stock. The Company's debt
agreements contain provisions by which a default under one agreement
constitutes a default under the other agreements. The Company is in
compliance with these covenants.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
In December 1994, Finance amended its agreements with an independent
entity to sell substantially all of its installment receivable contracts
up to a maximum outstanding principal amount of $82.0 million from $72.0
million. Certain installment receivables are not eligible for sale and
are retained by Finance. Finance continues to service all installment
receivables sold.
At the time of each installment receivable sale, Finance receives
cash equal to the unpaid principal balance of the contracts, less a
holdback of 10% of the principal balance of the contracts sold.
The buyer of the installment receivables earns interest on the
outstanding principal balance of the contracts based upon a floating
interest rate provision. Over the life of the contracts, the difference
between the actual yield on the installment contracts sold, using the
interest method, and the amount retained by the buyer, is remitted to
Finance as a service fee. In February 1994, Finance entered into a five
year interest rate modification agreement on $20.0 million whereby,
Finance will receive interest income to the extent the floating rate
retained by the buyer exceeds 6% or will pay interest expense to the
extent the floating rate is less than 6%. Finance is exposed to credit
losses in the event of non-performance by the counterparty to its interest
rate swap, but has no off-balance sheet credit risk of accounting loss.
Finance anticipates, however, that the counterparty will be able to fully
satisfy their obligations under the contract. Finance does not obtain
collateral or other security to support financial instruments subject to
credit risk but monitors the credit standing of the counterparty.
Proceeds from sale of installment receivables amounted to $24.7
million for the first six months of 1995 compared to $19.0 million for the
same period of 1994.
Under the sale agreements, Finance is required to repurchase accounts
that become more than 120 days past due or accounts that are deemed
uncollectible. The repurchase price is equal to the remaining unpaid
principal balance of the contract on the date repurchased, less the
related 10% holdback. Finance remains contingently liable on approximate-
ly $67.3 million of installment receivables as of June 30, 1995. The
Company believes the financial statements contain adequate reserves for
any uncollectible installment receivables.
Certain Wurlitzer dealers finance their inventory with floor plan
loans from an independent bank. Dealers can borrow money from the bank
based upon the value of the inventory purchased from Wurlitzer, with the
keyboard instruments pledged as collateral. The dealers had $5.8 million
outstanding under this floor plan arrangement, as of June 30, 1995. The
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
dealers are required to pay the bank monthly interest payments and pay
principal balance after inventory is sold or held longer than twelve
months. The bank may request Wurlitzer to repurchase notes due from
delinquent dealers. The Company believes the financial statements contain
adequate provisions for any loss that may be incurred as a result of this
commitment.
During the second quarter of 1995, the Company announced its plans to
consolidate independent Baldwin and Wurlitzer sales organizations into
one, representing both brands to the dealers. In parallel, the Baldwin
and Wurlitzer dealer networks are being combined, reducing the overall
number of dealers carrying the Baldwin and Wurlitzer brands. The effect
of these changes is to reduce overall overhead, giving Wurlitzer a better
opportunity for profitable growth.
Baldwin's Stock Repurchase Plan permits the Company to purchase an
amount of the Company's common stock not to exceed the lesser of 1,033,000
shares or $12.4 million in dollar value. From the date the plan was
adopted in November 1987 through August 4, 1995, the Company has
repurchased 701,300 shares of its common stock at an aggregate purchase
price of $5.7 million under the plan.
Capital expenditures amounted to $1.6 million in the first six months
of 1995 and $1.3 million in the comparable period of 1994. At June 30,
1995, the Company had outstanding capital commitments amounting to
approximately $1.6 million.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation arising in its normal course of
business. The Company does not believe that any existing claim or suit
will have a material adverse effect on the business or financial condition
of the Company.
ITEM 2. CHANGES IN SECURITIES
No changes have been made to the instruments defining the right of
the holders of the Company's common stock or to the rights of such
shareholders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company is not in default nor has it defaulted on any indebted-
ness. The Company is not obligated to pay any dividends or other payment
to any of its shareholders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters have been submitted to a vote of security holders during
the second quarter of 1995, other than matters arising in connection with
the annual meeting of the Company's shareholders held on May 9, 1995. At
that meeting, the only matters submitted to a vote of the shareholders
were the election of directors and the approval of the appointment of the
Company's auditors. All of the Company's existing directors were elected
to serve as directors until the 1996 annual shareholders meeting by the
following vote of the Company's shareholders:
Votes
For Withheld
--------- --------
George E. Castrucci 2,600,993 2,100
R. S. Harrison 2,600,993 2,100
Joseph H. Head, Jr. 2,600,893 2,200
Karen L. Hendricks 2,600,993 2,100
Roger L. Howe 2,600,993 2,100
KPMG Peat Marwick LLP was approved as the Company's auditor for 1995
with 2,602,593 votes cast "For", 100 votes "Against" and 400 votes
"Abstained."
ITEM 5. OTHER INFORMATION
Not applicable.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
19.1 1995 Second Quarter Report to Shareholders of the
Company.
27.1 Financial Data Schedule.
99.1 Press Release dated May 19, 1995.
99.2 Press Release dated July 7, 1995.
99.3 Press Release dated July 26, 1995.
------------------------------
Index to Exhibits appears on sequentially numbered page 15.
(b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the second
quarter of 1995.
<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 undersigned thereunto duly authorized.
BALDWIN PIANO & ORGAN COMPANY
DATE: August 7, 1995 BY: KAREN L. HENDRICKS
------------------------ ------------------------------
Karen L. Hendricks, Chief
Executive Officer (Principal
Executive Officer) and
President
DATE: August 7, 1995 BY: CHARLES R. JUENGLING
------------------------ ------------------------------
Charles R. Juengling, Vice
President/Treasurer/Secretary
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Exhibit
- -------------- -------
19.1 1995 Second Quarter Report to
Shareholders of the Company.
99.1 Press Release dated
May 19, 1995.
99.2 Press Release dated
July 7, 1995.
99.3 Press Release dated
July 26, 1995.
27.1 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 573,900
<SECURITIES> 0
<RECEIVABLES> 19,355,129
<ALLOWANCES> 4,454,071
<INVENTORY> 47,612,920
<CURRENT-ASSETS> 69,644,852
<PP&E> 29,694,820
<DEPRECIATION> 15,380,769
<TOTAL-ASSETS> 100,225,033
<CURRENT-LIABILITIES> 34,318,512
<BONDS> 5,000,000
<COMMON> 41,649
0
0
<OTHER-SE> 51,758,010
<TOTAL-LIABILITY-AND-EQUITY> 100,225,033
<SALES> 60,447,825
<TOTAL-REVENUES> 64,708,787
<CGS> 47,590,627
<TOTAL-COSTS> 47,590,627
<OTHER-EXPENSES> 12,968,420
<LOSS-PROVISION> 496,998
<INTEREST-EXPENSE> 1,025,147
<INCOME-PRETAX> 2,627,595
<INCOME-TAX> 982,000
<INCOME-CONTINUING> 1,645,595
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,645,595
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
BALDWIN
SECOND QUARTER REPORT 1995
To Our Shareholders
August 1, 1995
Second quarter sales increased 9% to $30.7 million, up from $28.1 million in
1994. The contracting businesses showed the best year-to-year sales growth.
However, acoustic pianos and church organs also showed good progress.
Second quarter net earnings increased 23% to $.8 million, up from $.7 million
in 1994. Net earnings per share rose correspondingly, to $.24 from $.20 in
1994. Earnings progress came from improved control of selling, general and
administrative expenses. Gross profit did not increase with the growth in
sales. This is the result of higher production costs and a larger proportion
of total sales coming from outside contracting, which carries a lower gross
margin.
For the first six months of 1995, sales increased 13% to $60.4 million,
up from $53.6 million last year. Net earnings rose 19% to $1.6 million,
up from $1.4 million in 1994. Net earnings per share increased
correspondingly, to $.48 from $.40.
During the second quarter the Company announced its plans to consolidate
independent Baldwin and Wurlitzer sales organizations into one, representing
both brands to our dealers. In parallel, the Baldwin and Wurlitzer dealer
networks were combined, reducing the overall number of dealers carrying the
Baldwin and Wurlitzer brands. The effect of these changes is to reduce
overall overhead, giving Wurlitzer a better opportunity for profitable
growth.
Rethinking our business processes in this fashion will be essential for
improved earnings performance by our Company.
KAREN L. HENDRICKS
Chief Executive Officer
and President
<PAGE>
<TABLE>
Consolidated Summary of Earnings (unaudited)
(in thousands, except earnings per share)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1995 1994 1995 1994
--------- ---------- --------- ----------
<S> <C> <C>
Net sales $ 30,688 $ 28,076 $ 60,448 $ 53,648
Cost of goods sold 24,070 21,387 47,591 40,724
--------- ---------- --------- ----------
Gross profit 6,618 6,689 12,857 12,924
Income on the sale of installment receivables 1,249 1,252 2,472 2,641
Interest income on installment receivables 146 149 302 271
Other operating income 701 749 1,487 1,525
Selling, general and administrative expenses (6,853) (7,284) (13,465) (14,240)
Interest expense (503) (462) (1,025) (859)
--------- ---------- --------- ----------
Earnings before income taxes 1,358 1,093 2,628 2,262
Income taxes 527 420 982 884
--------- ---------- --------- ----------
Net earnings $ 831 $ 673 $ 1,646 $ 1,378
========= ========== ========= ==========
Net earnings per share $ .24 $ .20 $ .48 $ .40
========= ========== ========= ==========
Average number of shares outstanding (000) 3,415 3,415 3,415 3,415
========= ========== ========= ==========
</TABLE>
<PAGE>
<TABLE>
Consolidated Summary Balance Sheets (unaudited)
(in thousands)
<CAPTION>
June 30,
-----------------------
1995 1994
--------- ----------
<S> <C> <C>
Assets
Receivables, net $ 14,901 $ 10,396
Inventories 47,613 54,391
Other current assets 7,131 6,182
--------- ----------
Total current assets 69,645 70,969
Installment receivables, less current portion 9,580 7,357
Property, plant and equipment, net 14,314 13,754
Other assets 6,686 5,917
--------- ----------
Total assets $ 100,225 $ 97,997
========= ==========
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 20,581 $ 19,981
Other current liabilities 13,738 13,578
--------- ----------
Total current liabilities 34,319 33,559
Long-term debt, less current portion 4,700 5,000
Other liabilities 9,406 8,250
Shareholders' equity 51,800 51,188
--------- ----------
Total liabilities and shareholders' equity $ 100,225 $ 97,997
========= ==========
</TABLE>
<PAGE>
BUSINESSES
- ----------
MANUFACTURING
Acoustic pianos and electronic keyboards
Actions, cabinets, pinblocks, bridges, cables, keys, etc. for piano industry
Printed circuit boards and electro-mechanical assemblies for manufacturers
outside music industry
Variety of wood products
RETAILING
Company owned outlets in Atlanta, Georgia; Cincinnati, Ohio;
Indianapolis, Indiana; Lexington and Louisville, Kentucky
Independent keyboard dealers (400)
FINANCING
Consumer installment financing and dealer consignment
HOME OFFICE
422 Wards Corner Road, Loveland, OH 45140, (513)576-4500
MANUFACTURING LOCATIONS
Conway, Fayetteville and Trumann, Arkansas; Greenwood, Mississippi;
Juarez,Mexico
REGISTRAR AND TRANSFER AGENT
The Provident Bank, One East Fourth Street, Cincinnati, OH 45202
Baldwin Piano & Organ Company common stock is traded on The NASDAQ National
Market; Symbol: BPAO
Photo of Model 470 with caption: Three Manual Church Organ
<PAGE>
BALDWIN
Baldwin Piano & Organ Company
422 Wards Corner Road
Loveland, Ohio 45140-8390
(513) 576-4500
FOR IMMEDIATE RELEASE:
LOVELAND, OHIO, MAY 19, 1995 - The Wurlitzer Company announced
today that it is restructuring its sales departments and is
substantially reducing its existing independent dealer
organization. Wurlitzer also announced that following this
reorganization, Wurlitzer will refocus its market approach on fewer
product offerings and will no longer operate as a full-line
acoustic and electronic keyboard supplier. Wurlitzer believes that
its modified product line and new distribution system will best
allow Wurlitzer to continue its 139 year heritage of providing
instruments and products having real value to its customers.
In order to implement its new philosophy, Wurlitzer will
cancel its current dealer contracts within the next several months.
Prior to the completion of those dealer contracts, Wurlitzer will
make available for sale by its dealers in the normal course of
business all Wurlitzer factory and imported inventories, as well as
current work-in process. Wurlitzer and its parent company, Baldwin
Piano & Organ Company, will fully honor all consuimer warranties.
The Wurlitzer Company is a wholly owned music subsidiary of
Baldwin Piano & Organ Company. Baldwin is the largest domestic
manufacturer of keyboard musical instruments, and also manufactures
printed circuit boards and a variety of wood products.
***
CONTACT: Kenen M. Edgington (513) 576-4695
BALDWIN
Baldwin Piano & Organ Company
422 Wards Corner Road
Loveland, Ohio 45140-8390
(513) 576-4500
July 7, 1995
Contact: Charles Juengling
513-576-4522
BALDWIN PIANO & ORGAN COMPANY APPOINTS NEW DIRECTOR
LOVELAND, OHIO -- Baldwin Piano & Organ Company (NASDAQ:BPAO)
announced today the appointment of William B. Connell as a Director
of Baldwin Piano & Organ Company. Mr. Connell is Chairman of EDB
Holdings, Inc., a venture capital company and primary shareholder
of Vision Express Group, Ltd., a $150 million international optical
retailer.
Mr. Connell, from 1990 to 1994, was President and Vice
Chairman of Whittle Communications.
He began his business career with the Procter & Gamble Company
where he was employed from 1965 to 1989. In 1981 he became General
Manager, Beauty Care and in 1984 he was elected Corporate Vice
President and General manager of the Beauty Care Division.
Mr. Connell serves on the boards of the Remington Products
Company and College View, Inc.
Baldwin piano & Organ Company, headquartered in Loveland,
Ohio, has manufactured and marketed keyboard musical products over
130 years. The market leader of acoustic pianos in the U.S.,
Baldwin also manufactures electronic and electro-mechanical
components for Original Equipment Manufacturers.
BALDWIN
Baldwin Piano & Organ Company
422 Wards Corner Road
Loveland, Ohio 45140-8390
(513) 576-4500
FOR IMMEDIATE RELEASE
- ---------------------
LOVELAND, OHIO, JULY 26, 1995 - Baldwin Piano & Organ Company's 1995 second
quarter net sales increased 9% to $30.7 million from $28.1 million in 1994,
primarily reflecting an increase in all areas of outside contracting --
electronics, music and furniture. Net earnings for the second quarter
increased 23% to $.8 million ($.24 per share) from $.7 million ($.20 per
share) in 1994.
Net sales for the first six months of 1995 increased 13% to $60.4 million
from $53.6 million in 1994, reflecting an increase in the volume of keyboard
sales and outside contracting business. Net earnings for the first six
months of 1995 increased 19% to $1.6 million ($.48 per share) from $1.4
million ($.40 per share) in 1994.
The increase in net earnings for both the second quarter and the first six
months of 1995 is primarily the result of reductions in selling, general and
administrative expenses. Gross profit has not increased in 1995 in spite of
increasing sales. This is the result of higher production costs and a larger
proportion of total sales coming from outside contracting which carries a
lower gross margin.
Three Months Ended Six Months Ended
(in thousands, except June 30, June 30,
net earnings per share) 1995 1994 1995 1994
---- ---- ---- ----
Net sales $30,688 $28,076 $60,448 $53,648
Cost of goods sold 24,070 21,387 47,591 40,724
------- ------- ------- -------
Gross profit 6,618 6,689 12,857 12,924
Income on the sale of
installment receivables 1,249 1,252 2,472 2,641
Interest income on
installment receivables 146 149 302 271
Other operating income 701 749 1,487 1,525
Selling, general and
administrative expenses (6,853) (7,284) (13,465) (14,240)
Interest expense (503) (462) (1,025) (859)
------- ------- ------- -------
Earnings before
income taxes 1,358 1,093 2,628 2,262
Income taxes 527 420 982 884
------- ------- ------- -------
Net earnings $ 831 $ 673 $ 1,646 $ 1,378
======= ======= ======= =======
Net earnings per share $.24 $.20 $.48 $.40
==== ==== ==== ====
Average number of
shares outstanding 3,415 3,415 3,415 3,415
===== ===== ===== =====
...continued
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Baldwin Piano & Organ Company has manufactured and marketed keyboard musical
products over 130 years. The market leader of acoustic pianos in the United
States, Baldwin also manufactures electronic and electro-mechanical
components for Original Equipment Manufacturers.
###
CONTACT: Charles Juengling (513) 576-4522
