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
March 31, 1996 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 May 1, 1996 is
3,415,196.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1996 and December 31, 1995
Condensed Consolidated Statements of Earnings
for the three months ended
March 31, 1996 and 1995
Condensed Consolidated Statements of Cash Flows
for the three months ended
March 31, 1996 and 1995
Notes to Condensed Consolidated Financial
Statements, March 31, 1996
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>
<TABLE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1996 and December 31, 1995
(in thousands of dollars)
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
-------- -----------
<S> <C> <C>
Current assets:
Cash ................................. $ 900 $ 429
Receivables, net ..................... 14,482 14,338
Inventories .......................... 53,121 46,039
Other current assets ................. 5,785 8,791
-------- --------
Total current assets ........... 74,288 69,597
-------- --------
Installment receivables,
less current portion ................. 11,699 11,215
Property, plant and equipment, net ...... 15,603 14,934
Other assets ............................ 5,487 5,683
-------- --------
Total assets ................... $107,077 $101,429
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .... $ 24,989 $ 17,646
Accounts payable ..................... 8,506 10,227
Income taxes payable ................. 908 622
Accrued liabilities .................. 6,272 6,399
-------- --------
Total current liabilities ...... 40,675 34,894
-------- --------
Long-term debt, less current portion .... 4,025 4,250
Other liabilities ....................... 7,579 8,171
-------- --------
Total liabilities .............. 52,279 47,315
-------- --------
Shareholders' equity:
Common stock ......................... 42 42
Additional paid-in capital ........... 12,001 12,001
Retained earnings .................... 48,962 48,278
-------- --------
61,005 60,321
Less cost of treasury shares ......... (6,207) (6,207)
-------- --------
Total shareholders' equity ..... 54,798 54,114
________ ________
Total liabilities and
shareholders' equity ........... $107,077 $101,429
======== ========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three months ended
March 31, 1996 and 1995
(in thousands, except net earnings per share)
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Net sales ................................. $27,147 $29,760
Cost of goods sold ........................ 21,872 23,445
------- -------
Gross profit ........................ 5,275 6,315
Income on the sale of
installment receivables ................ 1,460 1,189
Interest income on installment receivables. 308 206
Other operating income, net ............... 859 893
------- -------
7,902 8,603
Operating expenses:
Selling, general and administrative .... 6,089 6,558
Provision for doubtful accounts ........ 237 253
------- -------
Operating profit .................... 1,576 1,792
Interest expense .......................... 525 522
------- -------
Earnings before income taxes ........ 1,051 1,270
Income taxes .............................. 367 455
------- -------
Net earnings ........................ $ 684 $ 815
======= =======
Net earnings per share $ .20 $ .24
===== =====
Average number of common shares outstanding 3,415 3,415
===== =====
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
March 31, 1996 and 1995
(in thousands of dollars)
<CAPTION>
INCREASE (DECREASE) IN CASH 1996 1995
- --------------------------- -------- --------
<S> <C> <C>
Net cash used in operating activities .... $ (4,794) $ (666)
Net cash used in investing activities .... (1,069) (673)
Cash flows from financing activities:
Installment contract
receivables written ................ (15,069) (14,747)
Installment receivables liquidated .... 2,297 1,328
Proceeds from sale of
installment receivables ............ 11,987 12,244
Borrowing under long-term debt 7,119 2,629
-------- --------
Net cash provided by
financing activities .......... 6,334 1,454
-------- --------
Net increase in cash ..................... 471 115
Cash at beginning of quarter ............. 429 344
-------- --------
Cash at end of quarter ................... $ 900 $ 459
======== ========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
------------------------
Cash paid during the quarter for:
Interest .............................. $ 554 $ 576
======== ========
Income taxes .......................... $ 96 $ 55
======== ========
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(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,
1995.
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 periods ended March 31, 1996 and 1995. Certain prior year
amounts have been reclassified to conform with current year financial
statement presentation. Results of operations for interim periods are not
necessarily indicative of results to be expected for an entire year.
<TABLE>
(2) INVENTORIES
Inventories consist of the following (in thousands of dollars):
<CAPTION>
March 31, December 31,
1996 1995
-------- --------
<S> <C> <C>
FIFO cost:
Raw material ......................... $ 17,483 $ 14,875
Work-in-process ...................... 8,193 7,490
Finished goods ....................... 39,684 35,611
-------- --------
65,360 57,976
Excess of FIFO cost
over LIFO inventory value ............ (12,239) (11,937)
-------- --------
Net inventories ................ $ 53,121 $ 46,039
======== ========
</TABLE>
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
1996 COMPARED TO 1995
First quarter net sales decreased to $27.1 million, down from $29.8
million in 1995. Unit sales in the acoustic piano category, for both the
industry and Baldwin, were down substantially in January and February as
compared to last year. The Company believes that adverse winter weather
affected these retail sales. During March, Baldwin acoustic sales
rebounded. This category decline, along with the effects of the
consolidation of Baldwin and Wurlitzer dealer networks, contributed to the
decline in the first quarter net sales. The Contract Electronics segment
experienced a 12.5% increase in net sales during the first quarter.
Net earnings decreased to $.7 million in the first quarter of 1996,
as compared to $.8 million in 1995. Earnings for the first quarter were
adversely affected by the decline in net sales of music products. The
decline in earnings for music products was partially offset by a strong
performance from the Consumer Finance segment. The Consumer Finance
segment's improvement in the first quarter compared to last year resulted
from stable interest rates and growth in its portfolio during the second
half of 1995.
Gross profit for 1996 declined from the comparable period for 1995
due to the decline in music product sales and lower margins on contract
electronics business.
The Company values a substantial portion of its inventory on the
last-in, first-out (LIFO) method. The first quarter 1996 gross profit is
$.3 million less than the amount 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 1996 increased $.3 million from 1995.
This increase is primarily the result of growth in the dollar value of
contracts sold and stable interest rates.
Selling, general and administrative expenses for 1996 decreased $.5
million from 1995. This decrease was primarily a result of the Baldwin
and Wurlitzer consolidation.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
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 November 1995 and December
1994, the Company entered into two year interest rate cap agreements in
order to reduce the potential impact of increases in interest rates on
$20.0 million and $40.0 million, respectively, of floating-rate long-term
debt. The agreements entitle the Company to receive from the counter-
party, 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 counterparty to its interest
rate caps, but has no off-balance sheet credit risk of accounting loss.
The Company anticipates, however, that the counterparty will be able to
fully satisfy their obligations under the contracts. The Company does not
obtain collateral or other security to support financial instruments
subject to credit risk but monitors the credit standing of the counterpar-
ty.
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
March 31, 1996, the interest rate was 6.97%.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
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 dealer network on a
consignment basis. 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. Because the Company finances inventory on
consignment to its 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.
The Company has a revolving line of credit (Revolver) of $40 million
with an initial due date of February 15, 1999. The Revolver is renewable
for three consecutive one-year periods beyond February 15, 1999. Amounts
outstanding under the Revolver are due one year after demand. However,
the lender retains an absolute discretion regarding further advances, even
if no event of default then exists.
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 March 31, 1996, the Company had
approximately $15.9 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 March 31, 1996,
approximately $11.0 million is available for the payment of dividends or
the repurchase of the Company's common stock. Also, under the covenants
of the Company's debt agreements, Finance can only pay dividends or
repurchase its own stock to the extent its net worth exceeds $4.0 million.
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 1995, 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 $86 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 under the floating
interest rate provision, is remitted to Finance as a service fee. In
February 1994, Finance entered into a five year interest rate swap
agreement in order to reduce the potential impact of increases in interest
rates on $20.0 million of installment contracts. The agreement entitles
Finance to receive from the counterparty, on a monthly basis, interest
income to the extent the floating rate retained by the buyer exceeds 6% or
requires Finance to 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 $12.0
million for the first quarter of 1996 compared to $12.2 million for the
same period of 1995.
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 is responsible for all credit losses
associated with the sold receivables. Finance remains contingently liable
on approximately $75.3 million of installment receivables as of March 31,
1996. Management believes an adequate allowance has been provided for any
uncollectible receivables.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
Certain former Wurlitzer dealers finance their inventory with floor
plan loans from an independent bank. These former 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. If Wurlitzer
does not repurchase such notes, the bank can terminate the floor plan
agreement with the dealers and require Wurlitzer to repurchase up to $2.0
million of the outstanding dealer notes. The Company believes the
financial statements contain adequate provisions for any loss that may be
incurred as a result of this commitment.
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 May 3, 1996, 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 $1.1 million in the first quarter of
1996 and $.7 million in the comparable period of 1995. At March 31, 1996,
the Company had no material outstanding capital commitments.
<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 first quarter of 1996.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
19.1 1996 First Quarter Report to Shareholders of the
Company.
99.1 Press Release dated April 24, 1996.
27.1 Financial Data Schedule.
------------------------------
Index to Exhibits appears on sequentially numbered page 14.
(b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the first
quarter of 1996.
<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: May 8, 1996 BY: KAREN L. HENDRICKS
--------------------- ------------------------------
Karen L. Hendricks, Chief
Executive Officer (Principal
Executive Officer) and
President
DATE: May 8, 1996 BY: CHARLES R. JUENGLING
--------------------- ------------------------------
Charles R. Juengling, Vice
President/Controller/Secretary
(Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Exhibit
- -------------- -------
19.1 1996 First Quarter Report to
Shareholders of the Company.
99.1 Press Release dated
April 24, 1996.
27.1 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 899,955
<SECURITIES> 0
<RECEIVABLES> 10,878,575
<ALLOWANCES> 3,574,277
<INVENTORY> 53,120,742
<CURRENT-ASSETS> 74,288,115
<PP&E> 30,180,624
<DEPRECIATION> 14,577,897
<TOTAL-ASSETS> 107,077,074
<CURRENT-LIABILITIES> 40,675,332
<BONDS> 4,925,000
0
0
<COMMON> 41,649
<OTHER-SE> 54,756,138
<TOTAL-LIABILITY-AND-EQUITY> 107,077,074
<SALES> 27,146,831
<TOTAL-REVENUES> 29,773,546
<CGS> 21,871,541
<TOTAL-COSTS> 21,871,541
<OTHER-EXPENSES> 6,089,002
<LOSS-PROVISION> 237,055
<INTEREST-EXPENSE> 525,406
<INCOME-PRETAX> 1,050,542
<INCOME-TAX> 367,000
<INCOME-CONTINUING> 683,542
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 683,542
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
BALDWIN
FIRST QUARTER REPORT 1996
<PAGE
TO OUR SHAREHOLDERS
May 1, 1996
First quarter net sales decreased 9% to $27.1 million, down from $29.8
million in 1995. Unit sales in the acoustic piano category, for both the
industry and Baldwin, were down substantially in January and February as
compared to last year. We believe that adverse winter weather affected
these retail sales. During March, Baldwin acoustic sales rebounded. This
temporary category decline, along with the effects of the consolidation
of Baldwin and Wurlitzer dealer networks, contributed to the decline in
first quarter net sales. The Contract Electronics segment experienced
double digit growth in net sales for the second consecutive quarter.
Net earnings decreased to $.7 million in the first quarter of 1996, as
compared to $.8 million in 1995. Net earnings per share declined
correspondingly, to $.20 from $.24. The operating profit for the first
quarter was adversely affected by the decline in net sales of music
products. The decline in operating profit for music products was partially
offset by a strong performance from the Consumer Finance segment. The
Consumer Finance segment's improvement in the first quarter compared to
last year resulted from stable interest rates and double digit growth in
its portfolio during the second half of 1995. Selling, general and
administrative expenses for the first quarter were lower than last year
primarily as a result of the Baldwin and Wurlitzer consolidation.
The main focus in 1996 will be the continuation of our change initiative,
affecting our business and organization broadly. These improvements will
result in future profitable sales growth.
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
March 31,
1996 1995
--------- ---------
<S> <C> <C>
Net sales $ 27,147 $ 29,760
Cost of goods sold 21,872 23,445
--------- ---------
Gross profit 5,275 6,315
Income on the sale of installment receivables 1,460 1,189
Interest income on installment receivables 308 206
Other operating income 859 893
Selling, general and administrative expenses (6,326) (6,811)
Interest expense (525) (522)
--------- ---------
Earnings before income taxes 1,051 1,270
Income taxes 367 455
--------- ---------
Net earnings $ 684 $ 815
========= =========
Net earnings per share $ .20 $ .24
========= =========
Average number of shares outstanding 3,415 3,415
========= =========
CONSOLIDATED SUMMARY BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31,
1996 1995
--------- ---------
Assets
Receivables, net $ 14,482 $ 13,638
Inventories 53,121 47,648
Other current assets 6,685 7,611
--------- ---------
Total current assets 74,288 68,897
Installment receivables, less current
portion 11,699 9,609
Property, plant and equipment, net 15,603 13,973
Other assets 5,487 6,789
--------- ---------
Total assets $ 107,077 $ 99,268
========= =========
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 24,989 $ 19,450
Other current liabilities 15,686 14,153
--------- ---------
Total current liabilities 40,675 33,603
Long-term debt, less current portion 4,025 4,925
Other liabilities 7,579 9,771
Shareholders' equity 54,798 50,969
--------- ---------
Total liabilities and shareholders'
equity $ 107,077 $ 99,268
========= =========
</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 (450)
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 with caption)
Baldwin Pianovelle Limited Edition Digital Piano
BALDWIN
BALDWIN PIANO & ORGAN COMPANY
422 Wards Corner Road
Loveland, Ohio 45140-8390
(513) 576-4500
FOR IMMEDIATE RELEASE
- ---------------------
LOVELAND, OHIO, APRIL 24, 1996 -- Baldwin Piano & Organ Company
reports net earnings of $.7 million ($.20 per share) in the first
quarter 1996, as compared to $.8 million ($.24 per share) in 1995.
Net sales were 9% lower in the first quarter 1996, compared to last
year, $27.1 million from $29.8 million.
Unit sales in the acoustic piano category, for both the industry
and Baldwin, were down substantially in January and February as
compared to last year. The Company believes adverse winter weather
affected these retail sales. During March, Baldwin acoustic sales
rebounded. This temporary category decline, along with the effects
of the consolidation of Baldwin and Wurlitzer dealer networks,
contributed to the decline in first quarter net sales. The
Company's Contract Electronics segment experienced double digit
growth in net sales for the second consecutive quarter.
The Company's operating profit for the first quarter was adversely
affected by the decline in net sales of music products. The
decline in operating profit for music products was partially offset
by a strong performance from the Consumer Finance segment. The
Consumer Finance segment's improvement in the first quarter
compared to last year resulted from stable interest rates and
double digit growth in its portfolio during the second half of
1995. Selling, general and administrative expenses for the first
quarter were lower than last year primarily as a result of the
Baldwin and Wurlitzer consolidation.
...Continued
<PAGE>
<TABLE>
(in thousands, except Three months Ended
net earnings per share) March 31,
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net sales $27,147 $29,760
Cost of goods sold 21,872 23,445
------- -------
Gross profit 5,275 6,315
Income on the sale of
installment receivables 1,460 1,189
Interest income on
installment receivables 308 206
Other operating income 859 893
Selling, general and
administrative expenses (6,326) (6,811)
Interest expense (525) (522)
Earnings before
income taxes 1,051 1,270
Income taxes 367 455
------- -------
Net earnings $ 684 $ 815
======= =======
Net earnings per share $.20 $.24
======= =======
Average number of
shares outstanding 3,415 3,415
===== =====
</TABLE>
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
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CONTACT: Larry E. Mustard (513) 576-4506
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