<PAGE> 1
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, 1999 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.)
4680 Parkway Drive, Suite 200
Mason, Ohio 45040-7198
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (513) 754-4500
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 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, as of August 1, 1999 is 3,452,826.
<PAGE> 2
BALDWIN PIANO & ORGAN COMPANY
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998...................... 3
Unaudited Condensed Consolidated Statements of Earnings
for the three months ended and six months ended
June 30, 1999 and 1998 .................................. 4
Unaudited Condensed Consolidated Statements of Cash
Flows for the six months ended June 30, 1999 and 1998 ... 5
Notes to Unaudited Condensed Consolidated Financial
Statements, June 30, 1999 ............................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................ 10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk ........................................ 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ....................................... 16
Item 2. Changes in Securities and Use of Proceeds ............... 16
Item 3. Defaults upon Senior Securities ......................... 16
Item 4. Submission of Matters to a Vote of Security Holders ..... 16
Item 5. Other Information ....................................... 17
Item 6. Exhibits and Reports on Form 8-K ........................ 17
Signatures ........................................................ 18
Exhibit Index ..................................................... 19
</TABLE>
2
<PAGE> 3
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash ................................... $ 458 $ 327
Receivables, net ....................... 21,618 23,273
Inventories ............................ 46,432 51,089
Deferred income taxes .................. 1,671 1,671
Other current assets ................... 4,462 6,429
-------- --------
Total current assets ......... 74,641 82,789
Installment receivables,
less current portion ................... 13,896 14,616
Property, plant and equipment, net ........... 22,320 22,724
Deferred income taxes ........................ 1,089 1,089
Other assets ................................. 16,952 16,032
-------- --------
Total assets ................. $128,898 $137,250
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................... $ 11,180 $ 11,582
Current portion of long-term debt ...... 13,470 11,380
Income taxes payable ................... 0 452
Accrued liabilities .................... 4,930 5,766
-------- --------
Total current liabilities .... 29,580 29,180
Long-term debt, less current portion ......... 38,517 42,817
Other liabilities ............................ 2,912 3,978
-------- --------
Total liabilities ............ 71,009 75,975
-------- --------
Shareholders' equity:
Common stock ........................... 42 42
Additional paid-in capital ............. 12,636 12,603
Accumulated other comprehensive
income (loss) ..................... (610) (394)
Retained earnings ...................... 52,317 55,520
-------- --------
64,385 67,771
Less cost of treasury shares ........... (6,496) (6,496)
-------- --------
Total shareholders' equity ... 57,889 61,275
-------- --------
Total liabilities and
shareholders' equity ...... $128,898 $137,250
======== ========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated
Financial Statements.
3
<PAGE> 4
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except net earnings per share)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales ................................. $28,544 $32,108 $59,058 $63,795
Cost of goods sold ........................ 24,808 26,695 52,693 53,069
------- ------- ------- -------
Gross profit ........................ 3,736 5,413 6,365 10,726
Income on the sale of
installment receivables ............. 2,017 1,699 4,068 3,500
Interest income on
installment receivables ............. 341 378 696 808
Other operating income, net ............... 106 321 362 742
------- ------- ------- -------
6,200 7,811 11,491 15,776
Operating expenses:
Selling, general and
administrative ................... 6,951 6,501 13,930 12,954
Provision for doubtful
accounts ....................... 341 328 684 658
------- ------- ------- -------
Operating (loss) profit ........ (1,092) 982 (3,123) 2,164
Interest expense .......................... 1,043 700 1,981 1,285
------- ------- ------- -------
Earnings (loss) before
income taxes .............. (2,135) 282 (5,104) 879
Income taxes .............................. 773 110 1,901 338
------- ------- ------- -------
Net earnings (loss) ............ $(1,362) $ 172 $(3,203) $ 541
======= ======= ======= =======
Basic earnings (loss) per share ........... $ (0.40) $ 0.05 $ (0.93) $ 0.16
======= ======= ======= =======
Diluted earnings (loss) per share ......... $ (0.40) $ 0.05 $ (0.93) $ 0.15
======= ======= ======= =======
Weighted average number
of common shares .................... 3,453 3,450 3,453 3,448
======= ======= ======= =======
Weighted average number of common and
common equivalent shares ............ 3,453 3,521 3,453 3,520
======= ======= ======= =======
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated
Financial Statements.
4
<PAGE> 5
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN CASH
Cash flows from operating activities
Net earnings (loss) .......................... $ (3,203) $ 541
Reconciliations of net earnings
to net cash provided by (used in)
operating activities
Depreciation and amortization ...... 1,637 1,398
Gain on sale of asset .............. 18 0
Provision for doubtful accounts .... 684 658
Changes in working capital ......... 4,155 (15,921)
-------- --------
Net cash provided by (used in)
operating activities ............... 3,291 (13,324)
-------- --------
Cash flows from investing activities
Additions to property, plant and equipment ... (1,117) (6,314)
-------- --------
Net cash used in investing activities ........ (1,117) (6,314)
-------- --------
Cash flows from financing activities:
Installment receivables written .............. (46,591) (45,714)
Installment receivables liquidated ........... 4,420 6,734
Proceeds from sale of installment
receivables ............................. 42,338 39,530
(Repayment) borrowing on long-term debt ...... (2,210) 18,780
Proceeds from exercise of stock options ...... 0 48
-------- --------
Net cash (used in) provided by financing
activities .............................. (2,043) 19,378
-------- --------
Net increase (decrease) in cash .................... 131 (260)
Cash at beginning of quarter ....................... 327 680
-------- --------
Cash at end of quarter ............................. $ 458 $ 420
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid (refunded) during the year for:
Interest ..................................... $ 1,450 $ 1,359
======== ========
Income taxes ................................. $ (288) $ 199
======== ========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated
Financial Statements.
5
<PAGE> 6
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(in thousands of dollars, except earnings per share)
(1) BASIS OF REPORTING FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements included
herein have been prepared by Baldwin Piano & Organ Company ("Baldwin"
or "Company") pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information 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,
1998.
The financial statements presented herewith reflect all adjustments
(consisting of normal recurring adjustments) which are, in the opinion
of management, necessary to a fair statement of the results for the
six-month periods ended June 30, 1999 and 1998. 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:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- --------
<S> <C> <C>
FIFO cost:
Raw material ...... $ 18,312 $ 22,224
Work-in-process ... 14,002 11,573
Finished goods .... 24,168 27,492
-------- --------
56,482 61,289
Less revaluation to LIFO (10,050) (10,200)
-------- --------
Net inventories ... $ 46,432 $ 51,089
======== ========
</TABLE>
(3) EARNINGS PER SHARE
A reconciliation of the numerator and denominator of basic earnings per
share to diluted earnings per share is as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30:
1999 1998
------------------------------- ------------------------------
Per Per
Income Shares Share Income Shares Share
-------- ------ ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Earnings per share $(3,203) 3,453 $(0.93) $541 3,448 $.16
Dilutive effect of
options 0 72
------ ------
Earnings per share-
assuming dilution $(3,203) 3,453 $(0.93) $541 3,520 $.15
------- ------ ------ ---- ------ ----
</TABLE>
6
<PAGE> 7
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(in thousands of dollars)
(4) SEGMENT INFORMATION
In June 1997, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 131 "Disclosures about Segments of an Enterprise
and Related Information". SFAS No. 131 establishes standards for
reporting information about operating segments. The adoption of this
statement in 1998 resulted in additional financial statement
information reported on the basis used internally by management to
evaluate performance and allocate resources. The Company did not make
material changes to its previously reported segment groupings.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ---------------------
1999 1998 1999 1998
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Music and related $ 17,139 $ 21,143 $ 35,928 $ 42,152
Contract Electronics 11,405 10,965 23,130 21,643
Retail Financing 2,358 2,074 4,764 4,308
-------- -------- -------- --------
SALES AND RETAIL FINANCING
REVENUE $ 30,902 $ 34,182 $ 63,822 $ 68,103
-------- -------- -------- --------
Music and related (*) $ (853) $ 1,486 $ (2,650) $ 2,559
Contract Electronics 392 557 548 934
Retail Financing 1,408 1,105 2,583 2,344
Corporate G&A and other
unallocated (2,039) (2,167) (3,604) (3,673)
-------- -------- -------- --------
OPERATING (LOSS) PROFIT $ (1,092) $ 981 $ (3,123) $ 2,164
-------- -------- -------- --------
Music and related $ 71,450 $ 71,435 $ 71,450 $ 71,435
Contract Electronics 20,809 22,276 20,809 22,276
Retail Financing 28,472 29,322 28,472 29,322
Corporate G&A 8,167 5,604 8,167 5,604
-------- -------- -------- --------
IDENTIFIABLE ASSETS $128,898 $128,637 $128,898 $128,637
-------- -------- -------- --------
Music and related $ 514 $ 388 $ 1,023 $ 783
Contract Electronics 175 189 348 381
Retail Financing 16 10 29 20
Corporate G&A 125 107 237 214
-------- -------- -------- --------
DEPRECIATION AND
AMORTIZATION $ 830 $ 694 $ 1,637 $ 1,398
-------- -------- -------- --------
Music and related $ 408 $ 2,271 $ 973 $ 5,630
Contract Electronics (49) (145) 63 76
Retail Financing -- -- -- --
Corporate G&A 24 429 81 608
-------- -------- -------- --------
CAPITAL ADDITIONS $ 383 $ 2,555 $ 1,117 $ 6,314
-------- -------- -------- --------
</TABLE>
7
<PAGE> 8
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(in thousands of dollars)
* During the first quarter of 1999 the Company consolidated its grand
piano production. This created a large, one-time decrease in Baldwin's
Music and Related operating profit. Operating loss for Music and
Related for the six months ended June 30, 1999 would have been $1,150
without the effect of the one-time costs.
The amounts reflected as "Sales and Retail Finance Revenue" in the
above table are included in the "Net Sales", "Income on the sale of
installment receivables" and "Interest income on installment
receivables" captions on the Consolidated Statements of Earnings.
The Music and Related segment includes a broad range of acoustic and
electronic instruments serving a broad consumer base. Music products
are sold through Company-owned retail stores, domestic wholesale
dealers and an international dealer network. In addition, this segment
includes furniture and musical components produced on behalf of other
manufacturers.
The Contract Electronics segment assembles printed circuit boards and
electromechanical devices for original equipment manufacturers (OEMs)
outside the music industry.
The Retail Finance segment provides point-of-sale consumer financing
and leasing through keyboard product dealers located throughout the
United States.
The Company uses the LIFO method of valuing music products inventory
and the FIFO method for Contract Electronics inventory.
(5) RESTRUCTURING
On January 6, 1999, the Company announced the consolidation of its
grand piano assembly from its Conway, Arkansas plant to its Trumann,
Arkansas facility. In connection with this consolidation, the Company
recorded a restructuring charge of approximately $587,000 in the first
quarter of 1999 primarily related to severance and direct exit costs.
Other costs associated with the consolidation incurring in the first
quarter of 1999 amounted to $913,000. All of these costs were included
in cost of goods sold. At June 30, 1999, the Company had an accrual of
approximately $230,000 primarily related to accruals related to certain
exit related costs in connection with the consolidation. The Company
believes that the consolidation is substantially complete.
(6) ACCOUNTING PRONOUNCEMENTS
SFAS No. 130, "Reporting Comprehensive Income" was issued in June 1997
and is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided
for comparative purposes was required. The statement requires that an
enterprise classify items of other comprehensive
8
<PAGE> 9
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(in thousands of dollars)
income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section
of the balance sheet. The Company adopted this standard in the first
quarter of 1998.
The Company currently records as other comprehensive income the change
in cumulative translation adjustment resulting from changes in exchange
rates and the effect of those changes upon translation of the financial
statements of the Company's foreign operations.
<TABLE>
<CAPTION>
Comprehensive income (loss): Six Months Ended June 30,
1999 1998
-----------------------------------------------------------
<S> <C> <C>
Net earnings (loss) $(3,203) $ 541
Foreign currency
translation adjustment (216) --
-----------------------------------------------------------
Total comprehensive income (loss) $(3,419) $541
-----------------------------------------------------------
</TABLE>
During June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities". The Board has subsequently delayed for a year the
implementation of the standard, thus the Company will be required to
adopt SFAS No. 133 no later than January 2001. Management has not yet
determined what impact this statement will have on the Company's
financial statements.
9
<PAGE> 10
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
ITEM II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SECOND QUARTER AND SIX MONTHS OF 1999 COMPARED
TO THE SECOND QUARTER AND SIX MONTHS OF 1998
Total second-quarter sales fell 11 percent to $28.5 million, from $32.1
million a year ago. Net losses for the period were $1,362,000, or 40 cents per
share, vs. income of $172,000, or 5 cents per share for the prior year period.
For the first half of 1999 sales were $59.1 million and a net loss of
$3,203,000, or 93 cents per share, including a loss of 27 cents per share
related to restructuring and other non-recurring cost associated with the
consolidation of grand piano assembly operations. For the first half of 1998,
net income was $541,000, or 16 cents per share, on sales of $63.8 million.
First half Music sales decline of 15 percent year-to-year was primarily
a function of the continued adverse impact of low-priced Asian imports.
Through the first half of 1999, Contract Electronics sales have grown 7
percent to $23.1 million from $21.6 million during the first half of 1998.
Portfolio growth increased first-half Retail Financing revenues to $4.8
million versus $4.3 million for the same period last year.
Selling, general and administrative expenses for the six months ended
June 30 of 1999 were $13.9 million, an increase of $0.9 million from $13.0
million for the comparable period in 1998. This increase resulted from costs
associated with opening additional Music retail outlets, upgrading Contract
Electronics' infrastructure and collection expenses at Retail Financing due to
the increase in the portfolio.
Interest expense increased by $0.7 million, to $2.0 million for the six
months ended June 30, 1999 from $1.3 million for the comparable period in 1998.
This increase resulted from the Company's higher debt levels primarily due to an
average increase in inventories of $7 million and capital spending during 1998
of $8.3 million for polyester finishing and piano plate projects.
As publicly announced in July 1999, the Company has retained an
investment banker to seek potential buyers for the Retail Financing businesses,
Keyboard Acceptance Corporation and Signature Leasing Corporation.
10
<PAGE> 11
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
INFLATION, OPERATIONS AND INTEREST RATES
Cost inflation can affect the Company's results. However, the Company has
generally been able to offset the impact of higher employment costs per hour and
higher raw material unit costs by improved efficiency and increases in sales
prices. During 1998 and early 1999, this was not the case for vertical piano
selling prices due to the effect of Asian imports.
The operations of the Company and its predecessors are subject to Federal,
state and local laws regulating the discharge of materials into the environment.
The Company does not anticipate that any environmental matters currently known
to the Company will result 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 contracts 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
increasing interest rates on its new installment receivable contracts. In
November 1997 and December 1998, the Company entered into two-year interest rate
cap agreements in order to reduce the potential impact of increases in interest
rates on $20 million and $44 million, respectively, of floating-rate long-term
debt. The agreements entitle the Company to receive from the counterparty, on a
monthly basis, interest income to the extent the one-month commercial paper rate
exceeds 12%. Further, in mid-March 1999, the Company made arrangements to
replace the swap agreement with a counterparty for a two-year "no-cost collar"
of $32 million which has a floor at the mid-March 1999 Commercial Paper rate and
a ceiling of 108 basis points higher. The Company is exposed to credit losses in
the event of nonperformance 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 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 counterparty.
The annual rate of interest under the Company's revolving Credit
Facility is equal to 1.5 percentage points above LIBOR, or under certain
specified circumstances, 0.5 percentage points per annum above the Prime Rate.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, the Company had outstanding indebtedness of $52.0
million. The Company considers that indebtedness of $20.9 million supports the
retained portion of Retail Financing's portfolio and the remaining indebtedness
of $31.1 million supports the
11
<PAGE> 12
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
$134 million annual operations of Music and Contract Electronics. Further, the
Company has plans to re-engineer its inventory management systems and expects
positive cash flow will be sufficient to support operations based on cash
provided from operations, available borrowings and inventory reductions.
During 1997 the Company replaced its short-term $50 million revolving
line of credit with a long-term, secured $40 million revolving Credit Facility
expiring on October 1, 2000; however the Company can terminate the agreement at
any time with sixty days' notice. Under the Credit Facility, the lenders have
made available a line of credit based upon certain percentages of the carrying
value of the company's inventories and accounts receivable. The annual rate of
interest under the Credit Facility is equal to 1.5 percentage points above
LIBOR, or under certain specified circumstances, 0.5 percentage points per annum
above the Prime Rate. At June 30, 1999, the rate under the Credit Facility was
6.4% and the Company has approximately $3.4 million of additional borrowing
available under this Credit Facility.
The Company's debt agreements contain covenants that require the
Company to maintain certain financial ratios and tangible net worth within
defined amounts.
The Company's finance subsidiary (Retail Financing) sells substantially
all of its installment receivable contracts up to a maximum outstanding
principal amount of $150 million. Certain installment receivables are not
eligible for sale and are retained by Retail Financing. Retail Financing
continues to service all installment receivables sold. At the time of each
installment receivable sale, Retail Financing receives cash equal to the unpaid
principal balance of the contracts, less a purchase discount applied to the
principal balance of the contacts sold. The purchase discount is adjusted at
each receivable sale using the loss experience and effective yield of the
portfolio.
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 duration of the contracts, the difference between the
actual yield on the installment contracts sold and the amount retained by the
buyer under the floating interest rate provisions is remitted to Finance as a
service fee.
Proceeds from the sale of installment receivables amounted to $42.3
million for the six months ended June 30, 1999 and $39.5 million for the
comparable period in 1998. This increase in 1999 compared to 1998 is largely the
result of an increase in the volume of
12
<PAGE> 13
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
new installment contracts written at traditional keyboard dealers and at the
Company's retail stores. Under the sale agreements, Retail Financing 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
purchase discount. Retail Financing is responsible for all credit losses
associated with the sold receivables, and is contingently liable for
approximately $105.5 million of installment receivables sold. The Company
believes an adequate allowance has been provided for all uncollectible
receivables.
Capital expenditures amounted to $1.1 million through the second
quarter of 1999 and $6.3 million in the comparable period of 1998. At June 30,
1999, the Company has less than $500,000 in outstanding capital commitments. The
Company expects 1999 capital expenditures to be less than depreciation expense.
YEAR 2000
The Year 2000 problem is a result of computer programs being written using
two digits (rather than four) to define the applicable year. Any of the
Company's programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000, which would result in
miscalculations or system failures.
The Company's major computer systems consist of third-party software. The
conclusion of the Company's analysis is that the latest existing releases of
this software contain the necessary changes to correct any significant Year 2000
problems. As a matter of ongoing policy, in order to assure continuing
contractual vendor support, the Company promptly installs and implements
third-party releases that it believes are Year 2000 compliant. The Company has
spent approximately $500,000 on these releases during 1998 and $100,000 during
1999, which amounts were planned expenditures irrespective of any Year 2000
issues. The Company has tested and has further plans to test its software for
compliance. Costs of addressing potential problems have not and are not
currently expected to have a material adverse impact on the Company's financial
position, results of operations or cash flows in future periods.
The Company's compliance plan includes review of Year 2000 readiness of its
major manufacturing equipment, products, suppliers and customers. The Company
has no Electronic Data Interchange (EDI) interfaces with either its customers or
vendors. To date, the Company has not discovered any significant Year 2000
issues in these areas and does not anticipate any significant problems. The
Company believes it has substantially completed its Year 2000 compliance plan.
Therefore, the Company has not developed specific contingency plans in
preparation for the year 2000. As the Company continues to evaluate
13
<PAGE> 14
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
and test its readiness for the year 2000, the Company will assess whether there
are any specific areas where a contingency plan could help alleviate possible
adverse effects from the year 2000. If so, the Company will develop contingency
plans in those areas prior to the end of 1999. Accordingly, the Company plans to
devote the necessary resources to resolve all significant Year 2000 issues in a
timely manner.
The most likely Year 2000 problems that the Company may face appear to
arise from the possible noncompliance of third parties. Possible difficulties
could arise in receiving materials from suppliers or from failures in the
operations of the Company's electronic contracting customers. In addition, in
the event that the Year 2000 would cause widespread loss of power or other
utilities in areas where the Company, its suppliers or customers operate, the
Company's business and operations could be disrupted. Such events could have a
material adverse impact on the Company.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements include, without
limitations, the Company's beliefs about trends in the Company's industries, and
its views about the long-term future of these industries and the Company. The
following factors, among others, could cause the Company's financial performance
to differ materially from that expressed in such statements: (i) changes in
consumer preferences resulting in a decline in the demand for pianos, (ii) the
inability to reduce SG&A expenses as expected, (iii) an increase in the price of
raw materials, (iv) political and/or economic instability in foreign countries
where the Company has operations or has suppliers who supply the Company, (v) an
unexpected increase in interest rates, (vi) a shift in strength of the overall
U.S. economy thereby possibly reducing durable goods purchases, and, (vii)
failure to remedy in a timely manner any Year 2000 issues that might arise.
14
<PAGE> 15
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
ITEM III
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The principal market risk (i.e. the risk of loss arising from adverse
changes in market rates and prices) to which the Company is exposed is interest
rates on debt and fixed rate installment receivables and the commodity price of
wood used in the manufacturing process.
At June 30, 1999, the carrying value and estimated fair value of Company's
debt totaled $52.0 million. All of the Company's debt at June 30, 1999 was at
variable interest rates. For such floating rate debt, interest rate changes
generally do not affect the fair market value but do impact earnings and cash
flows, assuming other factors are held constant. Holding other variables
constant (such as foreign exchange rates and debt levels), the earnings and cash
flows impact for the next year resulting from a one percentage point increase in
interest rates on variable rate debt would be approximately $0.5 million. The
Company has limited its risk related to interest rate changes by purchasing
certain interest rate caps and collars discussed above under the "Inflation,
Operations and Interest Rates".
The Company is subject to market risk with respect to certain commodities,
principally wood prices, because the ability to recover increased costs through
higher pricing may be limited by the competitive environment in which the
Company operates. The Company does not use futures contracts to hedge
anticipated purchases of wood used in the manufacturing and assembly of piano
cases.
15
<PAGE> 16
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in legal proceedings 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.
The operations of the Company and its predecessors are subject to federal,
state and local laws regulating the discharge of pollutants into the
environment. The Company does not anticipate that any environmental matters
currently known to the Company will result in proceedings against the Company or
in any material liability.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) 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 indebtedness.
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
At the Company's 1999 Annual Meeting of Shareholders held on June 14-15,
1999, the following actions were taken:
The following Directors were elected for terms of office expiring at the Annual
Meeting of Shareholders in 2000 -
Authority
Votes For Withheld
--------- --------
George E. Castrucci 1,610,424 1,455,517
William B. Connell 1,610,424 1,455,517
John H. Gutfreund 1,610,423 1,455,518
Joseph H. Head, Jr. 1,610,323 1,455,618
Karen L. Hendricks 1,610,423 1,455,518
Roger L. Howe 1,610,424 1,455,517
16
<PAGE> 17
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)
<TABLE>
<CAPTION>
Authority
Votes For Withheld Abstain
--------- -------- -------
<S> <C> <C> <C>
Appointment of
Deloitte & Touche LLP as
independent accountants
for 1999 3,064,014 301 1,626
</TABLE>
The two shareholders who submitted shareholder proposals for inclusion in the
Company's May 20, 1999 proxy statement did not present such proposals for action
by the Company's shareholders at the Annual Meeting. Accordingly, those
proposals were not voted upon at the Annual Meeting.
ITEM 5. OTHER INFORMATION
As publicly announced in July 1999, the Company has retained an
investment banker to seek potential buyers for the Retail Financing businesses,
Keyboard Acceptance Corporation and Signature Leasing Corporation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
19 1999 Second Quarter Report to Shareholders of the Company.
99.1 Press Release, dated June 15, 1999 announcing re-election
of Directors.
99.2 Press Release, dated July 22, 1999 announcing the
Company's financial results for the second quarter of
1999.
27 Financial Data Schedule.
------------------------------
Index to Exhibits appears on sequentially numbered page 19.
(b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the quarter ended
June 30, 1999.
17
<PAGE> 18
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
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 13, 1999 BY: /S/ KAREN L. HENDRICKS
--------------------- ------------------------------
Karen L. Hendricks, Chairman,
Chief Executive Officer and
President
DATE: August 13, 1999 BY: /S/ DUANE D. KIMBLE
------------------------ ------------------------------
Duane D. Kimble,
Executive Vice President, and
Chief Financial Officer
18
<PAGE> 19
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
19 1999 Second Quarter Report to Shareholders of the Company.
99.1 Press Release, dated June 15, 1999 announcing re-election of Directors
99.2 Press Release, dated July 22, 1999 announcing the Company's financial
results for the second quarter of 1999.
27 Financial Data Schedule.
19
<PAGE> 1
Exhibit 19
Consolidated Summary of Earnings (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except earnings per share) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $28,544 $32,108 $ 59,058 $ 63,795
Cost of goods sold 24,808 26,695 52,693 53,069
- --------------------------------------------------------------------------------------------------
Gross profit 3,736 5,413 6,365 10,726
Income on the sale of installment receivables 2,017 1,699 4,068 3,500
Interest income on installment receivables 341 378 696 808
Other operating income 106 321 362 742
Selling, general and administrative expenses (7,292) (6,829) (14,614) (13,612)
Interest expense (1,043) (700) (1,981) (1,285)
- --------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes (2,135) 282 (5,104) 879
Income taxes (773) 110 (1,901) 338
- --------------------------------------------------------------------------------------------------
Net earnings (loss) $(1,362) $ 172 $ (3,203) $ 541
==================================================================================================
Basic earnings (loss) per share $ (0.40) $ 0.05 $ (0.93) $ 0.16
- --------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share $ (0.40) $ 0.05 $ (0.93) $ 0.15
- --------------------------------------------------------------------------------------------------
Basic number of shares outstanding (000) 3,453 3,450 3,453 3,448
- --------------------------------------------------------------------------------------------------
Diluted number of shares outstanding (000) 3,453 3,521 3,453 3,520
==================================================================================================
</TABLE>
<PAGE> 2
Consolidated Summary Balance Sheets (unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, December 31,
1999 1998 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Receivables, net $ 21,618 $ 24,257 $ 23,273
Inventories 46,432 47,014 51,089
Other current assets 6,591 6,155 8,427
- -------------------------------------------------------------------------------------------------
Total current assets 74,641 77,426 82,789
Installment receivables, less current portion 13,896 15,124 14,616
Property, plant and equipment, net 22,320 23,326 22,724
Other assets 18,041 12,761 17,121
- -------------------------------------------------------------------------------------------------
Total assets $128,898 $128,637 $137,250
=================================================================================================
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 13,470 $ 1,000 $ 11,380
Other current liabilities 16,110 14,001 17,800
- -------------------------------------------------------------------------------------------------
Total current liabilities 29,580 15,001 29,180
Long-term debt, less current portion 38,517 46,330 42,817
Other liabilities 2,912 6,147 3,978
Shareholders' equity 57,889 61,159 61,275
- -------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $128,898 $128,637 $137,250
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
August 5, 1999
Our Board of Directors has authorized Lehman Brothers, the Company's
investment banker, to seek potential buyers for the Retail Financing businesses,
Keyboard Acceptance Corporation and Signature Leasing Corporation. Baldwin,
which has been financing keyboard instruments for almost 100 years, is among the
category's market leaders.
For the second quarter, we reported a net loss of $1,362,000, or 40 cents
per share, on sales of $28.5 million. A year ago, the Company reported net
income of $172,000, or 5 cents per share, on sales of $32.1 million. For the
first half, we reported sales of $59.1 million and a net loss of $3,203,000, or
93 cents per share, including a loss of 27 cents per share related to
restructuring and other non-recurring costs associated with the consolidation of
grand piano assembly operations. Last year, the Company reported first-half net
income of $541,000, or 16 cents per share, on sales of $63.8 million.
The sharp decline in first-half Music sales was primarily the result of
dealer inventories swollen by 1998 purchases of bargain-priced pianos. However,
the flow of Asian piano imports and dealer inventories appear to be approaching
near-normal levels. As part of our ongoing effort to improve long-term
performance, we reduced total headcount by more than 12 percent during the first
half and cut debt by $2.2 million, a direct result of the Company's ongoing
effort to trim inventories and receivables.
Portfolio growth pushed first-half Retail Financing revenues to $4.8
million, up 11 percent from the same period last year. At Contract Electronics,
first-half sales grew 7 percent to $23.1 million, up from $21.6 million a year
ago.
We do not believe that Baldwin's current market capitalization fairly values
our Retail Financing unit, and in keeping with our commitment to enhance
shareholder value we have decided to sell this business. Retail Financing has
evolved into a successful business for Baldwin, but the investment required to
finance its growth has limited the Company's capital resources. The sale, which
should result in a significant one-time gain, should enhance shareholder value,
reduce debt levels and increase available capital.
Karen L. Hendricks
Chairman, Chief Executive Officer and President
<PAGE> 4
Music Products Division
Grand pianos, vertical pianos, computerized auto-player piano systems and
digital pianos.
Company owned retail outlets in Atlanta, Georgia; Cincinnati, Ohio; Indianapolis
and Fort Wayne, Indiana; Lexington and Louisville, Kentucky;
Lansing, Michigan; Memphis, Tennessee.
Independent keyboard dealers (400).
Retail Financing Division
Point-of-sale consumer financing for new and used pianos, and special promotion
programs.
Piano leasing programs.
Contract Electronics Division
Printed circuit board assemblies, design, engineering, testing,
electro-mechanical and mechanical assemblies, post-production repair and order
fulfillment.
Home Office
4680 Parkway Drive, Suite 200, Mason, OH 45040-7198, (513) 754-4500 e-mail:
[email protected] web sites: www.baldwinpiano.com or www. pianovelle.com
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 458
<SECURITIES> 0
<RECEIVABLES> 22,660
<ALLOWANCES> 1,042
<INVENTORY> 46,432
<CURRENT-ASSETS> 74,641
<PP&E> 41,123
<DEPRECIATION> 18,803
<TOTAL-ASSETS> 128,898
<CURRENT-LIABILITIES> 29,580
<BONDS> 38,517
0
0
<COMMON> 42
<OTHER-SE> 57,847
<TOTAL-LIABILITY-AND-EQUITY> 128,898
<SALES> 59,058
<TOTAL-REVENUES> 64,184
<CGS> 52,693
<TOTAL-COSTS> 52,693
<OTHER-EXPENSES> 13,930
<LOSS-PROVISION> 684
<INTEREST-EXPENSE> 1,981
<INCOME-PRETAX> (5,104)
<INCOME-TAX> (1,901)
<INCOME-CONTINUING> (3,203)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,203)
<EPS-BASIC> (.93)
<EPS-DILUTED> (.93)
</TABLE>
<PAGE> 1
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Duane Kimble Joel Pomerantz
Baldwin Piano The Dilenschneider Group, Inc.
(513) 754-4500 (212) 922-0900
FINAL VOTE TALLY SHOWS
BALDWIN PIANO SHAREHOLDERS RE-ELECT BOARD
MASON, OH, June 15, 1999 - The final tally of votes at the Baldwin
Piano and Organ Company's (NASDAQ:BPAO) annual meeting here yesterday confirmed
that shareholders had re-elected the company's six-member board. Of the total
3,065,941 shares voted, at least 1,610,323 were voted in favor of each board
member, representing more than a plurality of the votes.
Re-elected to the Baldwin board, along with Karen L. Hendricks,
chairman, president and chief executive officer, were George E. Castrucci,
William B. Connell, John H. Gutfreund, Joseph H. Head, Jr., and Roger L. Howe.
All directors were elected to serve one-year terms.
Shareholders also ratified the appointment of Deloitte & Touche LLP,
the company's auditors, by a majority vote.
Baldwin Piano & Organ Company has marketed keyboard musical products
for over 137 years and has been providing consumer financing for the keyboard
industry for nearly a century. Baldwin, maker of America's best selling pianos,
also manufactures electronic and electro-mechanical components for Original
Equipment Manufacturers.
# # #
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995:
This release contains forward looking statements that are subject to risks
and uncertainties, including, but not limited to, the impact of
competitive products and pricing, product demand and market acceptance,
reliance on key strategic alliances, fluctuations in operating results and
other risks detailed from time to time in the company's filings with the
Securities and Exchange Commission.
<PAGE> 1
Exhibit 99.2
CONTACTS: Duane Kimble Joel Pomerantz
Baldwin Piano The Dilenschneider Group
(513) 754-4647 (212) 922-0900
BALDWIN PIANO REPORTS SECOND-QUARTER RESULTS
COMPANY SEEKING BUYER FOR RETAIL FINANCING BUSINESS
MASON, OH, July 22, 1999 -- Baldwin Piano & Organ Company (NASDAQ:BPAO)
today announced results for the second quarter ended June 30, 1999, noting that
last year's surge in low-priced Asian piano imports continued to adversely
impact the performance of its Music business.
The company also said that its board of directors has authorized Lehman
Brothers, Baldwin's investment banker, to seek potential buyers for its Retail
Financing businesses, Keyboard Acceptance Corporation (KAC) and Signature
Leasing Corporation. Baldwin, which has been financing keyboard instruments for
almost 100 years, is among the category's market leaders.
For the second quarter, Baldwin reported a net loss of $1,362,000, or
40 cents per share, on sales of $28.5 million. A year ago, the company reported
net income of $172,000, or 5 cents per share, on sales of $32.1 million. For the
first half, Baldwin reported sales of $59.1 million and a net loss of
$3,203,000, or 93 cents per share, including a loss of 27 cents per share
related to restructuring and other non-recurring costs associated with the
consolidation of grand piano assembly operations. Last year, the company
reported first-half net income of $541,000, or 16 cents per share, on sales of
$63.8 million.
Karen L. Hendricks, chairman, president and chief executive officer of
Baldwin said, "The sharp decline in first-half Music sales was primarily the
result of dealer inventories swollen by 1998 purchases of bargain-priced pianos.
However, the flow of Asian piano imports and dealer inventories appear to be
approaching near-normal levels."
<PAGE> 2
-more-
-2-
Ms. Hendricks continued, "As part of our ongoing effort to improve
long-term performance, Baldwin reduced total headcount by more than 12 percent
during the first half and cut debt by $2.2 million, a direct result of the
company's ongoing effort to trim inventories and receivables."
Portfolio growth pushed first-half Retail Financing revenues to $4.8
million, up 11 percent from the same period last year. At Contract Electronics
(CE), first-half sales grew 7 percent to $23.1 million, up from $21.6 million a
year ago.
Commenting on the potential sale of Baldwin's Retail Financing
operations, Ms. Hendricks said, "We do not believe that Baldwin's current market
capitalization fairly values our Retail Financing unit, and in keeping with our
commitment to enhance shareholder value we have decided to sell these
businesses. Retail Financing has evolved into a successful business for Baldwin,
but the investment required to finance its growth has limited the company's
capital resources. The sale, which should result in a significant one-time gain,
should enhance shareholder value, reduce debt levels and increase available
capital.
Baldwin Piano & Organ Company has marketed keyboard musical products
for over 137 years and has been providing consumer financing for the keyboard
industry for nearly a century. Baldwin, maker of America's best selling pianos,
also manufactures electronic and electro-mechanical components for Original
Equipment Manufacturers.
# # #
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995:
This release contains forward-looking statements that are subject to risks
and uncertainties, including, but not limited to, the impact of
competitive products and pricing, product demand and market acceptance,
reliance on key strategic alliances, fluctuations in operating results and
other risks detailed from time to time in the company's filings with the
Securities and Exchange Commission.
(Unaudited Condensed Earnings Statement and Balance Sheet Attached)
<PAGE> 3
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
(Unaudited)
(In Thousands, except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
1999 1998 1999 1998
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $28,544 $32,108 $ 59,058 $ 63,795
Cost of goods sold (1) $24,808 26,695 52,693 53,069
------- ------- -------- --------
Gross profit 3,736 5,413 6,365 10,726
Interest income on installment receivables $ 2,358 2,077 4,764 4,308
Other operating income, net $ 106 321 362 742
Selling, general and administrative $(7,292) (6,829) (14,614) (13,612)
Interest expense $(1,043) (700) (1,981) (1,285)
------- ------- -------- --------
Earnings (loss) before income taxes (2,135) 282 (5,104) 879
Income taxes $ (773) 110 (1,901) 338
------- ------- -------- --------
Net earnings (loss) $(1,362) $ 172 $ (3,203) $ 541
======= ======= ======== ========
Basic earnings (loss) per share $ (0.40) $ 0.05 $ (0.93) $ 0.16
======= ======= ======== ========
Diluted earnings (loss) per share $ (0.40) $ 0.05 $ (0.93) $ 0.15
======= ======= ======== ========
Average number of shares outstanding 3,453 3,450 3,453 3,448
======= ======= ======== ========
Diluted number of shares outstanding 3,453 3,521 3,453 3,520
======= ======= ======== ========
</TABLE>
(1) DURING THE FIRST QUARTER OF 1999, THE COMPANY RECOGNIZED THE EXPECTED
RESTRUCTURING AND OTHER NON-RECURRING COSTS ASSOCIATED WITH THE
CONSOLIDATION OF GRAND PIANO ASSEMBLY TO ITS TRUMANN, ARKANSAS, FACILITY
OF $1.5 MILLION OR 27 CENTS PER SHARE.
CONSOLIDATED SUMMARY BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
(Unaudited)
June 30,
--------------------- December 31,
1999 1998 1998
-------- -------- ------------
<S> <C> <C> <C>
Assets
Receivables, net $ 21,618 $ 24,257 $ 23,273
Inventories 46,432 47,014 51,089
Other current assets 6,591 6,155 8,427
-------- -------- --------
Total current assets 74,641 77,426 82,789
Installment receivables, less current portion 13,896 15,124 14,616
Property, plant and equipment, net 22,320 23,326 22,724
Other assets 18,041 12,761 17,121
======== ======== ========
Total assets $128,898 $128,637 $137,250
======== ======== ========
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 13,470 $ 1,000 $ 11,380
Other liabilities 16,110 14,001 17,800
-------- -------- --------
Total current liabilities 29,580 15,001 29,180
Long-term debt, less current portion 38,517 46,330 42,817
Other liabilities 2,912 6,147 3,978
Shareholders' equity 57,889 61,159 61,275
======== ======== ========
Total liabilities and shareholders' equity $128,898 $128,637 $137,250
======== ======== ========
</TABLE>
