SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended May 2, 1998
Commission file number: 015230
MICHAEL ANTHONY JEWELERS, INC.
(Exact name of registrant as specified in its charter)
Delaware No. 132910285
(State of Incorporation) (I.R.S. Employer Identification No.)
115 South MacQuesten Parkway
Mount Vernon, New York 105501724
(Address of principal executive offices)
Registrant's telephone number, including area code:
(914) 699-0000
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 [ ].
CLASS
-----
Number of Shares
Common Stock, Par Value $.001 Outstanding as of
May 27, 1998
------------
7,285,000
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
INDEX
PAGE
----
PART I FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets,
May 2, 1998 (Unaudited) and
January 31, 1998......................................... 3
Consolidated Condensed Statements of Operations
Three-Month Period Ended
May 2, 1998 and May 3, 1997 (Unaudited) ................. 4
Consolidated Condensed Statement of Changes in
Stockholders' Equity, Three-Month Period Ended
May 2, 1998 (Unaudited).................................. 5
Consolidated Condensed Statements of Cash Flows,
Three-Month Period Ended
May 2, 1998 and May 3, 1997 (Unaudited).................. 6
Notes to Consolidated Condensed Financial
Statements................................................. 7-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.............................................. 10-15
PART II OTHER INFORMATION:
Item 1 Through Item 6 ....................................... 16
Signature Page.............................................. 17
<PAGE>
MICHAEL ANTHONY JEWELERS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
May 2, January 31,
1998 1998
-------- --------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 3,091 $ 6,747
Accounts receivable:
Trade (less allowances of $1,756 and $1,196, respectively) 24,586 22,234
Other 62 40
Inventories 12,044 12,913
Income tax refundable 1,667 1,667
Prepaid expenses and other current assets 1,680 1,640
Deferred taxes 720 720
-------- --------
Total current assets 43,850 45,961
PROPERTY, PLANT AND EQUIPMENT - net 17,613 18,045
INTANGIBLES - net 532 584
OTHER ASSETS 918 1,054
-------- --------
$ 62,913 $ 65,644
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 1,483 $ 2,870
Current portion of long-term debt
and lease liability 1,438 1,446
Accrued expenses 3,869 4,385
-------- --------
Total current liabilities 6,790 8,701
-------- --------
LONG-TERM DEBT 12,588 12,617
-------- --------
CAPITAL LEASE LIABILITY 71 119
-------- --------
DEFERRED TAXES 818 818
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock - par value $1.00 per share;
1,000,000 shares authorized; none issued -- --
Common stock - par value $.001 per share;
20,000,000 shares authorized; 8,282,000
shares issued and outstanding 8 8
Additional paid-in capital 31,747 31,747
Retained earnings 13,718 13,484
Treasury stock, 998,000 and 578,000 shares as of
May 2, 1998 and January 31, 1998, respectively (2,827) (1,850)
-------- --------
Total stockholders' equity 42,646 43,389
-------- --------
$ 62,913 $ 65,644
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-3-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
Three Months Ended
--------------------
May 2, May 3,
1998 1997
-------- --------
NET SALES $ 30,432 $ 27,606
COST OF GOODS SOLD 23,925 22,544
-------- --------
GROSS PROFIT ON SALES 6,507 5,062
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 5,688 5,252
-------- --------
OPERATING INCOME/(LOSS) 819 (190)
OTHER INCOME/(EXPENSES):
Gold consignment fee (260) (260)
Interest expense (277) (381)
Interest income 81 125
Other income 15 24
-------- --------
Total Other Income/(Expense) (441) (492)
-------- --------
INCOME/(LOSS) BEFORE INCOME
TAXES 378 (682)
INCOME TAX PROVISION/(BENEFIT) 144 (259)
-------- --------
NET INCOME/(LOSS) $ 234 $ (423)
======== ========
EARNINGS/(LOSS) PER SHARE
- BASIC AND DILUTED $ 0.03 $ (0.05)
======== ========
WEIGHTED AVERAGE NUMBER
OF SHARES 7,436 7,869
======== ========
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(IN THOUSANDS)
Common Stock Additional Treasury Stock
----------------- Paid-in Retained -------------------
Shares Dollars Capital Earnings Shares Dollars Total
------ -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
DOLLARS
Balance -
January 31, 1998 8,282 $ 8 $ 31,747 $ 13,484 (578) $(1,850) $43,389
Purchase of treasury stock -- -- -- -- (420) (977) (977)
Net income -- -- -- 234 -- -- 234
------ -------- -------- -------- -------- ------- -------
Balance -
May 2, 1998 8,282 $ 8 $ 31,747 $ 13,718 (998) $(2,827) $42,646
====== ======== ======== ======== ======== ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-5-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
May 2, May 3,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: -------- ----------
Net income/(loss) $ 234 $ (423)
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 907 1,016
Provision for accounts receivable 86 60
Provision for sales returns 680 (145)
Asset write-off -- 259
(Increase)/decrease in operating assets:
Accounts receivable (3,140) (363)
Inventories 869 (1,068)
Prepaid expenses and other current assets (40) (587)
Other assets 136 (185)
Increase/(decrease) in operating liabilities:
Accounts payable (1,387) 452
Accrued expenses (516) (365)
-------- --------
Net cash used in operating activities (2,171) (1,349)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment - net (423) (723)
-------- --------
Net cash used in investing activities (423) (723)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt
and capital lease liabilities (85) (248)
Purchase of treasury stock (977) (921)
-------- --------
Net cash used in financing activities (1,062) (1,169)
-------- --------
DECREASE IN CASH AND EQUIVALENTS (3,656) (3,241)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 6,747 10,430
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD $ 3,091 $ 7,189
======== ========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period for:
Interest and gold consignment fees $ 608 $ 693
Taxes $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
-18-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
FORM 10-Q FOR QUARTER ENDED MAY 2, 1998
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited interim consolidated condensed balance sheet as of May 2,
1998 and the unaudited consolidated condensed statements of operations for
the three months ended May 2, 1998 and May 3, 1997, the unaudited
consolidated statement of changes in stockholders' equity for the three
months ended May 2, 1998, and the unaudited consolidated condensed
statements of cash flows for the three months ended May 2, 1998 and May 3,
1997, and related notes have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, 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. The
accompanying unaudited interim consolidated condensed financial statements
and related notes should be read in conjunction with the financial
statements and related notes included in the 1998 Annual Report to
Stockholders of Michael Anthony Jewelers, Inc. (the "Company").
The information furnished reflects, in the opinion of the management of the
Company, all adjustments, consisting of normal recurring accruals, which
are necessary to present a fair statement of the results for the interim
periods presented.
The interim figures are not necessarily indicative of the results to be
expected for the fiscal year due to the seasonal nature of the business.
EARNINGS PER SHARE
During fiscal 1998, the Company adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share", ("SFAS 128"), which requires
presentation of basic and diluted earnings per share ("EPS") on the face of
the consolidated statements of operations and requires a reconciliation of
the numerators and denominators of the basic and diluted EPS calculations.
Basic EPS is computed by dividing net income by the weighted average shares
outstanding for the period. Earnings per share for all periods presented
were computed on a basic basis using the weighted average number of common
shares outstanding. Diluted EPS reflects the potential dilution that could
occur if options to issue common stock were exercised and converted to
common stock. Options and warrants outstanding were not materially
dilutive. Earnings per share for prior periods have been computed in
accordance with SFAS 128.
-7-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
FORM 10-Q FOR QUARTER ENDED MAY 2, 1998
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
2. PRODUCT PRICING
The Company's products, the principal component of which is gold, are
generally sold at prices which are based on the market price of gold on the
date merchandise is shipped to the customer.
Therefore, the Company's sales volume is significantly influenced by the
market price of gold. The selling prices for certain customers may be fixed
for a specific period of time. In such cases, the Company is able to shift
a substantial portion of the risks of gold price fluctuation by hedging
against changes in the price of gold by entering into forward contracts or
purchasing futures or options on futures.
The Company's consigned gold inventory is hedged against the effects of
price fluctuations. The Company has entered into arrangements with certain
gold lenders (the "Gold Lenders") pursuant to which the Company does not
purchase gold from the Gold Lenders until receipt of a purchase order from,
or shipment of jewelry to, its customers. These arrangements permit the
Company to match the sales price of the product with the price the Company
pays for the gold.
The average price of gold in the current quarter was $301 per ounce as
compared to $349 per ounce for the quarter ended May 3, 1997.
3. INVENTORIES
Inventories consist of:
May 2, January 31,
1998 1998
------- -------
(Unaudited)
(In thousands)
Finished goods $32,117 $27,691
Work in process 16,828 13,335
Raw materials 10,876 5,095
------- -------
59,821 46,121
Less:
Consigned gold 47,777 33,208
------- -------
$12,044 $12,913
======= =======
Inventories as of May 2, 1998 and January 31, 1998 excluded 155,700 and
108,900 ounces of gold on consignment, respectively.
-8-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
FORM 10-Q FOR QUARTER ENDED MAY 2, 1998
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
5. STOCK REPURCHASE PROGRAM
In December 1995, the Company announced a Common Stock repurchase program
pursuant to which the Company may repurchase up to 750,000 shares of Common
Stock. On April 4, 1997, the Board of Directors authorized an increase of
an additional 500,000 shares of Common Stock that the Company may
repurchase under the Stock Repurchase Plan. During fiscal 1999, the Company
had purchased an additional 527,000 shares on the open market for an
aggregate of approximately $1,223,000. On May 26, 1998, the Board of
Directors authorized an increase of up to an additional 1,000,000 shares of
common stock that the Company may repurchase under the Stock Repurchase
Plan. As of May 27, 1998, the Company had repurchased a total of 1,164,000
shares on the open market for an aggregate price of approximately
$3,221,000.
-9-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
- ------------------------------------------------
MAY 2, 1998 AND MAY 3, 1997
- ----------------------------
Net sales for the three months ended May 2, 1998 were approximately $30,432,000,
an increase of 10% from net sales of approximately $27,606,000 for the
comparable period last year. Had it not been for the decrease in the average
gold price, $301 versus last year's $349 an ounce, net sales would have
increased $6,231,000 or 23%.
Gross profit margin increased to approximately 21.4% of net sales for the three
months ended May 2, 1998 compared to approximately 18.3% for the comparable
period last year, primarily due to the lower average gold price and to a lesser
extent, a change in product mix.
Selling, general and administrative expenses for the three months ended May 2,
1998 were approximately $5,688,000, an increase of $436,000 or 8% from
approximately $5,252,000 for the comparable period last year. The increase is
primarily attributable to increases in (i) advertising related expenses, (ii)
product and packaging supplies, and (iii) payroll and payroll related expenses.
These increases were primarily due to the Company's increased sales volume. As a
percentage of net sales, adjusted for the gold price difference, selling,
general and administrative expenses decreased to 16.8% for the three months
ended May 2, 1998 from 19.0% for the comparable period of the prior year.
Interest expense and gold consignment fees for the three months ended May 2,
1998 were approximately $537,000, a decrease of $104,000 or 16% compared to
approximately $641,000 for the comparable period last year. Interest expense
decreased due to the Company's principal payments on its long term debt.
Interest income decreased $44,000 due to the Company's lower cash position
compared to last year.
As a result of the above factors the Company had net income for the three months
ended May 2, 1998 of approximately $234,000 or $.03 per share on 7,436,000
weighted average shares outstanding, compared to a net loss of $423,000 or $.05
per share on 7,869,000 weighted average shares outstanding for the comparable
period last year.
-10-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
Liquidity and Capital Resources
- -------------------------------
The Company relies on a gold consignment program, short-term and long-term
borrowings and internally generated funds to finance its operations. The Company
fills most of its gold supply needs through gold consignment arrangements with
the Gold Lenders. Under the terms of those arrangements, the Company is entitled
to lease the lesser of (i) an aggregate of 250,000 ounces of fine gold or (ii)
consigned gold with an aggregate value equal to $106,695,000. However, on May
15, 1998, at the Company's request, the aggregate amount of fine gold available
for consignment was reduced to the lessor of (i) an aggregate of 218,000 ounces
or (ii) consigned gold with an aggregate value equal to $90,350,000. The
consigned gold is secured by certain property of the Company including inventory
and machinery and equipment. The Company pays the Gold Lenders a consignment fee
based on the dollar value of ounces of gold outstanding under their respective
agreements, which value is based on the daily Second London Gold Fix. The
Company believes that its financing rate under the consignment arrangements is
substantially similar to the financing rates charged to gold consignees
similarly situated to the Company. As of May 2, 1998, the Company held 155,700
ounces of gold on consignment with a market value of $47,777,000.
The consignment agreements contain certain restrictive covenants relating to
maximum usage, net worth, working capital and other financial ratios and each of
the agreements requires the Company to own a specific amount of gold at all
times. At May 2, 1998, the Company was in compliance with the covenants in its
consignment agreements and the Company's owned gold inventory was valued at
approximately $3,170,000. Management believes that the supply of gold available
through the Company's gold consignment arrangements, in conjunction with the
Company's owned gold, is sufficient to meet the Company's requirements.
The consignment agreements are terminable by the Company or the respective Gold
Lenders upon 30 days notice. If any Gold Lender were to terminate its existing
gold consignment arrangement, the Company does not believe it would experience
an interruption of its gold supply that would materially adversely affect its
business. The Company believes that other consignors would be willing to enter
into similar arrangements if any Gold Lender terminates its relationship with
the Company.
On June 3, 1998, the Company received notice from an existing Gold Lender that
it plans to terminate its consignment agreement with the Company on June 30,
1998. This will reduce the aggregate ounces the Company is entitled to lease to
188,000, with an aggregate value equal to $80,300,000. Based upon current and
anticipated needs, Management believes this change will not have any impact on
the Company. However, it is the Company's present intention to explore
relationships with other consignors or expand its relationships with its
existing Gold Lenders.
-11-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
Liquidity and Capital Resources (Continued)
- -------------------------------
Consigned gold is not included in the Company's inventory, and there is no
related liability recorded. As a result of these consignment arrangements, the
Company is able to shift a substantial portion of the risk of market
fluctuations in the price of gold to the Gold Lenders, since the Company does
not purchase gold from the Gold Lenders until receipt of a purchase order from,
or shipment of jewelry to, its customers. The Company then either locks in the
selling price of the jewelry to its customers concurrently with the required
purchase of gold from the Gold Lenders or hedges against changes in the price of
gold by entering into forward contracts or purchasing futures or options on
futures that are listed on the COMEX.
While the Company believes its supply of gold is relatively secure, significant
increases or rapid fluctuations in the cost of gold may result in reduced demand
for the Company's products. From January 31, 1998 until May 2, 1998, the closing
price of gold according to the Second London Gold Fix ranged from a low of $290
per ounce to a high of nearly $313 per ounce. There can be no assurances that
fluctuations in the precious metals and credit markets would not result in an
interruption of the Company's gold supply or the credit arrangements necessary
to allow the Company to support its accounts receivable and continue the use of
consigned gold.
In 1992, the Company issued $10,000,000 principal amount of senior secured notes
with various insurance companies, which accrue interest at 8.61% per annum. In
February 1995, the Company issued an additional $6,000,000 principal amount of
senior secured notes with various insurance companies, which currently accrue
interest at 7.13% per annum. The various insurance company lenders are
collectively referred to as the "Senior Note Holders". These notes are secured
by the Company's accounts receivable, machinery and equipment, inventory
(secondary lien to the Gold Lenders) and proceeds. In addition, the note
purchase agreements contain certain restrictive financial covenants and restrict
the payment of dividends. At May 2, 1998, the Company was in compliance with the
covenants and $11,556,000 of principal remained outstanding under the notes
issued in 1992 and 1995.
In October 1995, the Company obtained a loan from a bank in the amount of
$2,500,000. As collateral for the loan, the Company granted the bank a first
mortgage on the Company's corporate headquarters. The mortgage has a ten-year
term and interest on the mortgage accrues at 8% per annum. In addition, the
mortgage contains certain restrictive financial covenants. At May 2, 1998, the
Company was in compliance with the covenants and $2,255,000 of principal
remained outstanding under the mortgage.
-12-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
Liquidity and Capital Resources (Continued)
- -------------------------------
The Company has a line of credit arrangement with a commercial bank (the "Line
of Credit"), under which the Company may borrow up to $15,000,000. The Line of
Credit is secured by certain assets of the Company, including accounts
receivable and inventory. As of May 2, 1998, there was no amount outstanding
under the Line of Credit, due to seasonal borrowings. The Line of Credit
currently expires on July 31, 1998, subject to annual renewal. Management
believes that the line of credit will be renewed. However, if the current lender
decides not to renew the line, the Company believes that other lenders would be
willing to enter into a similar arrangement.
Cash and cash equivalents decreased $3,656,000 during the three months ended May
2, 1998. This decrease was primarily due to the Company's seasonal increase in
accounts receivable, purchases of machinery and equipment, and repurchase of
treasury stock.
During the three months ended May 2, 1998, the Company used $2,171,000 of cash
from operations. The increase is primarily due to the increased accounts
receivable levels which was partially offset by depreciation. The increase in
accounts receivable is primarily related to the increased sales compared to last
year. During the comparable period of the prior year, the Company used
$1,349,000 of cash from operations, primarily due to higher inventory levels and
increased prepaid expenses.
Cash of $423,000 was used for investing activities as compared to $723,000 used
during the comparable three-month period last year. The decrease is primarily
due to the Company's decreased purchases of machinery and equipment.
Cash of $1,062,000 was used in financing activities during the three-month
period, compared to $1,169,000 used for the comparable period of the prior year.
For the balance of fiscal 1999, the Company projects capital expenditures of
approximately $1,100,000.
The Company believes that its long-term debt and existing lines of credit
provide sufficient funding for the Company's operations. In the event that the
Company requires additional financing during fiscal 1999, it will be necessary
to fund this requirement through expanded credit facilities with its existing or
other lenders. The Company believes that such additional financing can be
arranged.
-13-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
Forward Looking Statements
- --------------------------
This Quarterly Report on Form 10-Q contains certain forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements include the words "believe," "expect," "plans" or
similar words and are based in part on the Company's reasonable expectations and
are subject to a number of factors and risks, many of which are beyond the
Company's control. Actual results could differ materially from those discussed
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations", as a result of any of the following factors:
i) general economic conditions and their impact on the retail sales
environment;
ii) fluctuations in the price of gold and other metals used to
manufacture the Company's jewelry;
iii) risks related to the concentration of the Company's customers,
particularly the operations of any of its top customers;
iv) increased competition from outside the United States where labor
costs are substantially lower;
v) variability of customer requirements and the nature of customers'
commitments on projections and orders; and
vi) the extent to which the Company is able to retain and attract key
personnel.
In light of these uncertainties and risks, there can be no assurance that the
forward-looking statements in this Quarterly Report on Form 10-Q will occur or
continue in the future. Except for its required, periodic filings under the
Securities Exchange Act of 1934, the Company undertakes no obligations to
release publicly any revisions to these forward looking statements that may
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
New Accounting Standard
- -----------------------
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an
Enterprise and Related Information, which will be effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 redefines how operating segments
are determined and requires expanded quantitative and qualitative disclosures
relating to a company's operating segments. The Company anticipates that the
adoption of SFAS No. 131 will not have a material impact on current disclosures.
-14-
<PAGE>
ITEM 2 MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1998 IS UNAUDITED)
New Accounting Standard (Continued)
- -----------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about Pensions and
Other Post Retirement Benefits" which will be effective for the 1999 financial
statements. SFAS No. 132 will require new disclosures related to any changes in
the defined contribution plan, including a description of the nature and effect
of any significant changes during the year affecting comparability, such as a
change in the rate of employer contributions, a business combination, or
divestiture.
-15-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 through Item 4
Not applicable.
Item 6.
(a) EXHIBITS
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K Not applicable.
-16-
<PAGE>
MICHAEL ANTHONY JEWELERS, INC. 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.
MICHAEL ANTHONY JEWELERS, INC.
Dated: June 11, 1998 BY: /s/ ALLAN CORN
----------------------------------
Allan Corn
Senior Vice President and
Chief Financial Officer
-17-
<PAGE>
EXHIBIT INDEX
TO
FORM 10-Q FOR QUARTER ENDED MAY 2, 1998
Exhibit No. Page No.
----------- --------
27 Financial Data Schedule 19
-18-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the financial
statements for Michael Anthony Jewelers, Inc. and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000799515
<NAME> Michael Anthony Jewelers, Inc.
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> MAY-02-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
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0
0
<COMMON> 8
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<EPS-PRIMARY> .03
<EPS-DILUTED> 0
</TABLE>
