<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From __________ To __________
Commission File Number 0-15051
AMERICAN CONSUMER PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 34-1376833
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31100 Solon Road, Solon, Ohio 44139
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (216) 248-7000
--------------
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, as
amended, during the preceding 12 months (or for such shorter period that
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
---- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Shares, $.10 per value 2,471,179 Shares
- ----------------------------- ----------------------------
(Class) (Outstanding at May 1, 1995)
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PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
AMERICAN CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
($ in 000's except per share data)
<TABLE>
<CAPTION>
13 Weeks Ended 14 Weeks Ended
April 1, 1995 April 2, 1994
-------------- --------------
<S> <C> <C>
Net Sales............................................ $26,000 $25,285
Cost of Goods Sold................................... 19,726 19,099
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Gross Profit......................................... 6,274 6,186
Operating Expenses................................... 5,729 5,590
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Income from Operations............................... 545 596
Costs Associated With Abandoned
Business Combination............................. -- 190
Interest Expense..................................... 695 498
------- -------
Loss Before Income Taxes........................... (150) (92)
Provision for Income Taxes........................... (68) (37)
------- -------
Net Loss .......................................... ($82) ($55)
======= =======
Net Loss Per Common Share.......................... $ (.03) $ (.02)
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
AMERICAN CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
April 1, 1995 Dec. 31, 1994
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ASSETS ($ in 000's)
<S> <C> <C>
Current Assets:
Cash......................................................... $ 112 $ 209
Accounts receivable, net of allowance for doubtful
accounts of $1,203,000 and $1,251,000, respectively........ 14,829 15,255
Inventories.................................................. 27,440 28,622
Prepaid expenses and other assets............................ 1,931 2,176
-------- --------
Total current assets....................................... 44,312 46,262
-------- --------
Property and Equipment, at cost:
Machinery and equipment...................................... 30,403 29,641
Furniture and fixtures....................................... 1,505 1,499
Leasehold improvements....................................... 2,070 2,080
-------- --------
33,978 33,220
Less-Accumulated depreciation................................ (23,694) (22,863)
-------- --------
10,284 10,357
Other Assets:
Cost in excess of net tangible assets of acquired
businesses, net............................................ 2,550 2,575
Deferred income taxes........................................ 488 488
Deferred costs and other assets.............................. 244 248
-------- --------
3,282 3,311
-------- --------
Total assets.............................................. $ 57,878 $ 59,930
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term obligations.................. $ 398 $ 395
Accounts payable............................................. 4,875 5,295
Accrued payroll and related expenses......................... 2,504 2,965
Accrued expenses............................................. 936 1,197
Accrued interest............................................. 687 700
Accrued and deferred income taxes............................ 372 503
-------- --------
Total current liabilities.................................. 9,772 11,055
-------- --------
Long-term Obligations, net of current maturities................. 29,441 30,130
-------- --------
Stockholders' Equity:
Series preferred stock, $.10 par value;
authorized 500,000 shares; none issued..................... -- --
Common stock, $.10 par value; 5,000,000 authorized;
2,471,179 shares outstanding in 1995 and 1994, respectively 247 247
Additional paid-in capital................................... 8,089 8,089
Foreign currency translation adjustment...................... 36 34
Retained earnings............................................ 10,293 10,375
-------- --------
Total stockholders' equity................................ 18,665 18,745
-------- --------
Total liabilities and stockholders' equity................ $ 57,878 $ 59,930
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
AMERICAN CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in 000's)
<TABLE>
<CAPTION>
13 Weeks Ended 14 Weeks Ended
April 1, 1995 April 2, 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net loss .................................................... ($82) ($55)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............................. 859 814
Changes in assets and liabilities:
Accounts receivable..................................... 428 935
Inventories............................................. 1,182 (911)
Prepaid expenses and other assets....................... 245 (173)
Accounts payable and accrued expenses................... (1,155) 236
Accrued and deferred income taxes....................... (131) 10
Deferred costs and other................................ 1 (3)
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Net cash provided by operating activities............. 1,347 853
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................... (758) (1,548)
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Net cash used in investing activities................. (758) (1,548)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit...................... 5,289 7,059
Repayments under revolving line of credit...................... (5,900) (6,300)
Repayment of other long-term obligations....................... (75) (72)
------- -------
Net cash provided by (used for) financing activities.. (686) 687
------- -------
Net decrease in cash.................................. (97) (8)
Cash at beginning of period........................... 209 109
------- -------
Cash at end of period................................. $112 $101
======= =======
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Interest................................................. $709 $527
Income taxes............................................. 61 (48)
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
AMERICAN CONSUMER PRODUCTS, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The Company has, in its opinion, included all the adjustments
(consisting only of normal adjustments and accruals) necessary for a fair
presentation of the Company's financial position, the results of operations and
the cash flows for each period. The consolidated financial statements and notes
thereto have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission and should be read in conjunction with the
financial statements and notes for the three years ended December 31, 1994
included in the Company's 1994 Annual Report (Form 10-K).
Because of seasonal factors, the earnings for the quarter ended
April 1, 1995 should not be taken as an indication of earnings for all or any
part of the balance of the year.
2. The Company maintains its accounts on a 52-53 week year. The
quarter ended April 1, 1995 contained 13 weeks. The quarter ended April 2, 1994
contained 14 weeks.
3. Earnings per share have been calculated using the weighted average
number of shares outstanding during each period. This calculation also assumes
that outstanding shares were increased by shares issuable upon exercise of
options as to which average market price exceeds the exercise price, less shares
which could have been purchased with related proceeds. The average for the 13
weeks ended April 1, 1995 was 2,486,000 shares and for the 14 weeks ended
April 2, 1994 was 2,471,000 shares.
4. Inventories at April 1, 1995 and December 31, 1994 consisted of:
<TABLE>
<CAPTION>
1995 1994
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(in thousands)
<S> <C> <C>
Raw Materials.............................. $ 5,677 $ 6,224
Work in Process and Finished Goods......... 23,555 23,056
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29,232 29,280
LIFO Reserve............................... (1,792) (658)
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$27,440 $28,622
======= =======
</TABLE>
5. An agreement entered into in March 1994 providing for a combination
with Curtis Industries, Inc., was terminated by the parties and the combination
abandoned in July 1994. Consulting, legal and other expenses related to the
terminated business combination were $190,000 for the 14 weeks ended April 2,
1994.
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL POSITION
(All comparisons are, unless otherwise noted, to the comparable period in 1994)
A. CONSOLIDATED RESULTS OF OPERATIONS
Net Sales for the 13 weeks ended April 1, 1995 increased $715,000 (2.8%) over
the 14 weeks ended April 2, 1994. The increase in sales is primarily
attributable to price increases in the Company's major product lines, which
began to be put into effect during the first quarter of 1995. The effects of
reduced unit sales resulting from having one less week in the first quarter of
1995 were substantially offset by increased sales activity with both new and
existing customers.
Gross Profit for the first quarter of 1995 increased $88,000 (1.4%) to
$6,274,000. The gross profit percentage decreased from 24.5% in the first
quarter of 1994 to 24.1% in the first quarter of 1995. The decrease in the gross
profit percentage resulted from increases in the costs of some of the raw
materials used in manufacturing the Company's products. These cost increases
were only partially offset by increases in the Company's selling prices because
the selling price increases were not all introduced at the beginning of the
quarter.
Operating Expenses increased by $139,000 (2.5%) to $5,729,000 for the 13 weeks
ended April 1, 1995. This increase was due to general increases in wages and
other expenses.
Income from Operations decreased $51,000 for the first quarter of 1995.
An agreement entered into in March 1994 providing for a combination with Curtis
Industries, Inc. was terminated by the parties and the combination abandoned in
July 1994. Consulting, legal and other expenses related to the terminated
business combination were $190,000 for the 14 weeks ended April 2, 1994.
Interest Expense increased $197,000 for the quarter ended April 1, 1995. This
increase is primarily attributable to increases in the prime rate, on which a
substantial portion of the Company's interest costs are based.
The effective income tax rate increased from 40.2% in the first quarter of 1994
to 45.3% in the first quarter of 1995. The increase in the effective tax rate
was primarily attributable to state income taxes.
The Company generated a Net Loss of $82,000 in the first quarter of 1995 as
compared to a Net Loss of $55,000 in the first quarter of 1994.
B. FINANCIAL CONDITION
Working capital decreased $667,000 from year-end to $34,540,000 at April 1,
1995. Long-term borrowings decreased by $689,000 at April 1, 1995 as compared to
December 31, 1994. These decreases are primarily the result of reductions in
inventories.
As of April 1, 1995, the Company had $3,854,000 available under its $35,000,000
revolving line of credit with National City Bank of Cleveland and National Bank
of Detroit. On March 23, 1995, the Company agreed to an amendment which extends
the agreement through April 1997. Borrowings under the revolving line of credit
are based on a formula that includes eligible accounts receivable and
inventories. The line will be reduced by September 30, 1995 in the minimum
amount of $1 million or amounts based on certain formulas or events, as provided
for in the agreement. The line of credit bears interest at the base rate plus
3/8% and is secured by accounts receivable, inventories and equipment.
The Company's liquidity is primarily affected by the levels of working capital
and capital expenditures, in both the short-term and long-term. No significant
changes are anticipated in the amount of working capital. Capital expenditures
for 1995 are anticipated to continue to increase as a result of the placement of
the Company's newly designed key cutting equipment and the ongoing installation
and development of new computer systems. The Company's scheduled repayments of
long-term obligations for the remainder of 1995 and for 1996 are approximately
$320,000 and $408,000, respectively. The Company believes that it has adequate
capital available to meet its current operating needs and anticipated capital
requirements.
6
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibit (27) - Financial Data Schedule
b) Reports on Form 8-K - None
SIGNATURE
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.
AMERICAN CONSUMER PRODUCTS, INC.
Date: May 15, 1995 By: /s/ Joel M. Falck
------------ --------------------
Joel M. Falck
Vice President - Finance
(Authorized Officer and Chief
Accounting Officer)
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME FOR THE QUARTER ENDED APRIL 1, 1995 AND THE
CONSOLIDATED BALANCE SHEET AS OF APRIL 1, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-01-1995
<CASH> 112
<SECURITIES> 0
<RECEIVABLES> 16,032
<ALLOWANCES> 1,203
<INVENTORY> 27,440
<CURRENT-ASSETS> 44,312
<PP&E> 33,978
<DEPRECIATION> 23,694
<TOTAL-ASSETS> 57,878
<CURRENT-LIABILITIES> 9,772
<BONDS> 29,441
<COMMON> 247
0
0
<OTHER-SE> 18,418
<TOTAL-LIABILITY-AND-EQUITY> 57,878
<SALES> 26,000
<TOTAL-REVENUES> 26,000
<CGS> 19,726
<TOTAL-COSTS> 19,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 695
<INCOME-PRETAX> (150)
<INCOME-TAX> (68)
<INCOME-CONTINUING> (82)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (82)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
