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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 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 0-1359
-------------
PUBCO CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 53-0246410
- ----------------------------------- -----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
3830 Kelley Avenue, Cleveland, Ohio 44114
- --------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 881-5300
----------------------------
NA
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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
----- ------
Number of Common Shares Outstanding as of May 1, 1995: 3,463,727
-----------------------
<PAGE> 2
<TABLE>
PUBCO CORPORATION
<CAPTION>
Page Number
-----------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of
March 31, 1995 and December 31, 1994 . . . . . . . . 3
Consolidated Statements of Operations
for the Three Months Ended March 31,
1995 and 1994. . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
for the Three Months Ended March 31,
1995 and 1994. . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote
of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
2.
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)--Note A.
PUBCO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- ---------------------------
($ in 000's except share amounts)
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
------------ -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 7,150 $ 12,583
Marketable securities and other short-
term investments 5,470 3
Trade receivables (less allowances of
$1,058 in 1995 and $1,250 in 1994) 5,841 5,808
Inventories--Note B 8,023 7,258
Prepaid expenses and other current assets 565 586
-------- --------
TOTAL CURRENT ASSETS 27,049 26,238
PROPERTY AND EQUIPMENT (at cost
less accumulated depreciation,
amortization, and allowance to reduce
fixed assets to net realizable value
of $12,611 in 1995 and $12,576 in 1994) 10,001 10,446
INTANGIBLE ASSETS
(at cost less accumulated amortization of
$365 in 1995 and $324 in 1994) 801 842
EQUITY INVESTMENT 2,659 2,689
OTHER ASSETS 2,642 2,661
-------- --------
TOTAL ASSETS $ 43,152 $ 42,876
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
3.
<PAGE> 4
<TABLE>
PUBCO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets--Continued
- --------------------------------------
($ in 000's except share amounts)
<CAPTION>
March 31 December 31
1995 1994
------------ -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,801 $ 6,509
Accrued liabilities 6,849 8,741
Loans payable--related party 1,911 1,911
Income taxes payable 1,470 1,470
Current portion of long-term debt 1,494 1,740
-------- --------
TOTAL CURRENT LIABILITIES 19,525 20,371
LONG-TERM DEBT 904 949
DEFERRED CREDITS AND NONCURRENT LIABILITIES 4,342 4,378
MINORITY INTEREST 683 630
STOCKHOLDERS' EQUITY
Preferred Stock:
Convertible Preferred Stock - par value $1;
20,000 shares authorized, none issued - -
Preferred Stock - par value $.01;
2,000,000 shares authorized, 70,000
Series A shares issued and outstanding
($7,000 aggregate liquidation preference
in 1995 and 1994) 1 1
Common Stock:
Common Stock - par value $.01; 3,500,000
shares authorized; 2,905,475 issued and
outstanding in 1995 and 2,905,225 issued
and outstanding in 1994 29 29
Class B Stock - par value $.01; 2,000,000
shares authorized, 558,252 issued and
outstanding in 1995 and 558,502 issued
and outstanding in 1994 6 6
Additional paid in capital 30,738 30,957
Retained (deficit) (13,076) (14,445)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 17,698 16,548
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 43,152 $ 42,876
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
4.
<PAGE> 5
<TABLE>
PUBCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
- -------------------------------------
($ in 000's except share amounts)
<CAPTION>
Three Months Ended
March 31
------------------------------
1995 1994
-------- --------
<S> <C> <C>
Net sales $ 13,459 $ 12,256
Cost of sales 9,887 8,739
-------- --------
GROSS PROFIT 3,572 3,517
Costs and expenses:
Selling, general and
administrative expenses 2,304 2,332
Depreciation and amortization expenses 325 312
Interest expense 98 166
-------- --------
2,727 2,810
Other income, net 552 661
-------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND MINORITY INTEREST 1,397 1,368
Provision for income taxes (25) 21
-------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST 1,422 1,347
Minority interest (53) (29)
-------- --------
INCOME FROM CONTINUING OPERATIONS 1,369 1,318
(Loss) from discontinued operations,
net of taxes - (1,705)
-------- --------
NET INCOME (LOSS) $ 1,369 $ (387)
======== ========
Preferred stock dividend requirements 219 175
-------- --------
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCKHOLDERS $ 1,150 $ (562)
======== ========
Earnings (loss) per share:
CONTINUING OPERATIONS $ .33 $ .33
DISCONTINUED OPERATIONS - (.49)
-------- --------
NET INCOME (LOSS) PER SHARE $ .33 $ (.16)
======== ========
Weighted average number
of shares outstanding 3,463,727 3,463,727
========= =========
<FN>
See notes to consolidated financial statements.
</TABLE>
5.
<PAGE> 6
PUBCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
- -------------------------------------
($ in 000's except share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------------------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income from continuing operations $ 1,369 $ 1,318
Adjustments to reconcile net income to
net cash provided by operating activities:
(Loss) from discontinued operations - (1,705)
Depreciation 313 516
Amortization of intangible assets 41 45
Net (gain) on sales of securities - (18)
Net losses on disposal of fixed assets - 15
Minority interest 53 29
Changes in operating assets and liabilities:
Trade receivables (33) 1,445
Inventories (765) (1,633)
Other assets 70 498
Accounts payable 1,292 2,565
Other current liabilities (1,946) (2,166)
Deferred credits and noncurrent liabilities (36) (265)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 358 644
INVESTING ACTIVITIES
Distributions from partnership and trust investments - 24
Purchases of investments (5,467) -
Purchases of fixed assets (102) (315)
Proceeds from the sale of fixed assets 288 30
-------- --------
NET CASH (USED IN) INVESTING ACTIVITIES (5,281) (261)
FINANCING ACTIVITIES
Net borrowings on loans payable - (973)
Proceeds from long-term debt 6,206 9,685
Principal payments on long-term debt (6,497) (9,502)
Dividends paid (219) (175)
-------- --------
NET CASH (USED IN) FINANCING ACTIVITIES (510) (965)
-------- --------
(DECREASE) IN CASH AND CASH EQUIVALENTS (5,433) (582)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,583 1,122
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,150 $ 540
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
6.
<PAGE> 7
PUBCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in 000's except share amounts)
March 31, 1995
NOTE A -- Basis of Presentation
- -------------------------------
The financial information presented herein should be read in conjunction with
the consolidated financial statements and footnotes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994. The
consolidated balance sheet as of December 31, 1994 has been derived from the
audited financial statements at that date.
The accompanying unaudited consolidated financial statements reflect
consolidation of the operations of the Company's wholly-owned subsidiaries and
Bobbie Brooks, Incorporated ("Brooks"), an approximately 91%-owned subsidiary.
At September 30, 1994, the Company discontinued the operations of its retail
and apparel manufacturing segments. As a result of such discontinuance, the
consolidated financial statements for the periods presented have been restated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included, all of which are of a
normal recurring nature.
Net income (loss) per common share has been computed by dividing net income
(loss) after preferred dividend requirements by the weighted average number of
shares of Common Stock and Class B Stock outstanding during the periods. The
Preferred Stock dividend requirement is an annual variable dividend, currently
$12.50 per share.
NOTE B -- Inventories
- ---------------------
The components of inventories consist of the following:
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
------------ -----------
<S> <C> <C>
Raw materials and supplies $ 4,961 $ 4,912
Work in process 985 622
Finished goods 2,077 1,724
------- -------
$ 8,023 $ 7,258
------- -------
</TABLE>
7.
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 1995 and 1994
- ------------------------------------------------------------
The Company has completed its transformation from a company with predominantly
retail and apparel operations into a company which manufactures and distributes
business to business products.
During 1994, the Company closed its retail department store chain and
discontinued its apparel manufacturing operations. These actions have been
accounted for as discontinued operations. The Company's continuing operations
primarily consist of Buckeye Business Products, Inc. ("Buckeye") and Allied
Construction Products, Inc. ("Allied"). Each of these operations is located at
the Company's manufacturing facility in Cleveland, Ohio.
As a result of the discontinuance of the Company's retail and apparel
businesses in 1994, the consolidated statement of operations for the 1994,
period has been restated to reflect these operations as discontinued. The loss
from discontinued operations net of taxes in the three months ended March 31,
1994, represents the operating results from these discontinued segments for the
three months ended March 31, 1994.
Sales increased in the three months ended March 31, 1995, from the three months
ended March 31, 1994, primarily as the result of an increase in sales at
Allied.
The increase in cost of sales as a percentage of sales and the corresponding
decrease in gross profit percentage, from the 1994 period to the 1995 period,
is primarily attributable to increased component and part costs experienced by
Allied because of the lower value of the Dollar versus the Deutsche Mark in
1995, compared to the 1994 period.
8.
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company has over $12,000,000 of cash, cash equivalents, marketable
securities and other short-term investments, and under $1,000,000 of long-term
debt, at March 31, 1995.
The increases in inventories and accounts payable from December 31, 1994 to
March 31, 1995 reflect Allied's normal seasonal build-up of inventories.
Accrued liabilities decreased from December 31, 1994 to March 31, 1995
primarily as the result of the payment of certain expenses related to the
closing of the retail department store chain.
The Company is evaluating the advantages of a possible merger or other
combination with Brooks and Aspen Imaging International, Inc., approximately
41% of which is owned by Brooks.
Stockholders' equity of $17,698,000 at March 31, 1995 includes $7,000,000
attributable to Preferred Stock liquidation preference.
9.
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS. Not Applicable
Item 2. CHANGES IN SECURITIES. None
Item 3. DEFAULTS UPON SENIOR SECURITIES. None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None
Item 5. OTHER INFORMATION. None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Financial Data Schedule
(b) Reports on Form 8-K
None
10.
<PAGE> 11
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.
PUBCO CORPORATION
/s/ Robert H. Kanner
----------------------------------
Robert H. Kanner
Chairman of the Board, President,
Chief Executive Officer and
Chief Financial Officer
Dated: May 12, 1995
11.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEET AT 3/31/95 AND CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 3 MONTHS ENDED 3/31/95 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-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-31-1995
<CASH> 7,150
<SECURITIES> 5,470
<RECEIVABLES> 6,899
<ALLOWANCES> 1,058
<INVENTORY> 8,023
<CURRENT-ASSETS> 27,049
<PP&E> 22,612
<DEPRECIATION> 12,611
<TOTAL-ASSETS> 43,152
<CURRENT-LIABILITIES> 19,525
<BONDS> 904
<COMMON> 35
0
1
<OTHER-SE> 17,662
<TOTAL-LIABILITY-AND-EQUITY> 43,152
<SALES> 13,459
<TOTAL-REVENUES> 13,459
<CGS> 9,887
<TOTAL-COSTS> 9,887
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98
<INCOME-PRETAX> 1,397
<INCOME-TAX> (25)
<INCOME-CONTINUING> 1,369
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,369
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
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