SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q
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[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended January 22, 1995
[ ] 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 0-314
Pulaski Furniture Corporation
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
54-0594965
(IRS employer identification number)
P.O. Box 1371, Pulaski, Virginia
(Address of principal executive offices)
24301
(Zip Code)
703-980-7330
(Registrant's telephone number)
Indicate by checkmark 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:
2,837,082 shares of common stock outstanding as of March 3, 1995
<PAGE>
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
January 22, 1995 and October 30, 1994 . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended January 22, 1995
and January 23, 1994 . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
Three 4-week periods ended January 22, 1995
and January 23, 1994 . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Condensed Financial Statements . . . . . . 5
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income . . . . . . . . . . . 6
Exhibit 3 - Computation of Earnings per Share . . . . . . . . . . 7
PART II: Other Information and Signatures . . . . . . . . . . . . . . 8
<PAGE>
Pulaski Furniture Corporation
Consolidated Condensed Balance Sheets
(in thousands)
January 22, October 30,
1995 1994
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 228 $ 1,088
Short-term investments 65 65
Accounts receivable, net 32,258 33,428
---------- ----------
32,551 34,581
Inventories:
Raw materials 14,362 14,651
Work-in-process 6,495 6,049
Finished goods 27,626 27,020
---------- ----------
48,483 47,720
Less LIFO reserve (15,391) (13,777)
---------- ----------
33,092 33,943
Prepaid expenses 442 465
Deferred income tax 493 493
---------- -----------
Total current assets 66,578 69,482
Investments and other assets 1,221 1,235
Property, plant and equipment, net 40,172 41,069
Cash surrender value of life insurance 964 964
---------- ----------
Total assets $ 108,935 $ 112,750
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 8,167 $ 8,544
Notes payable 5,000 8,000
Wages and commissions 883 2,396
Taxes withheld from employees 664 579
---------- ----------
14,714 19,519
Federal and state income taxes 1,018 757
Current portion of long-term debt 2,000 2,004
---------- ----------
Total current liabilities 17,732 22,280
Long-term notes payable 31,236 31,398
Deferred income taxes 3,849 3,871
Deferred compensation 1,983 1,938
Shareholders' equity
Common stock 5,974 6,084
Retained earnings 48,472 47,529
Unamortized restricted stock (311) (350)
---------- ----------
Total shareholders' equity 54,135 53,263
---------- ----------
Total liabilities and shareholders' equity $ 108,935 $ 112,750
========== ==========
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Three 4-week periods ended
Jan. 22, Jan. 23, Incr
1995 1994 (Decr) %
--------- --------- -------- ----
Net sales $ 41,270 $ 32,150 $ 9,120 28.4%
Costs and expenses
Cost of sales 33,032 25,740 7,292 28.3
Selling & administrative 5,569 4,946 623 12.6
---------- ---------- --------
Operating income 2,669 1,464 1,205 82.3
Other income and expenses
Interest expense 593 336 257 76.5
Interest income (6) (6) 0 0.0
---------- ---------- --------
Total 587 330 257 77.9
Income before income taxes
and cumulative effect of
accounting change 2,082 1,134 948 83.6
Provision for taxes on income 709 405 304 75.1
---------- ---------- --------
Income before cumulative
effect of accounting change 1,373 729 644 88.3
Cumulative effect of change
in accounting for income taxes 396
---------- ---------- --------
Net income $ 1,373 $ 1,125 $ 248 22.0
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,863,258 2,880,823
Assuming full dilution 2,863,258 2,889,116
Earnings per share before cumulative
effect of accounting change:
Primary $0.48 $0.25
Assuming full dilution $0.48 $0.25
Earnings per share of cumulative
effect of accounting change:
Primary $0.14
Assuming full dilution $0.14
Earnings per share after cumulative
effect of accounting change:
Primary $0.48 $0.39
Assuming full dilution $0.48 $0.39
Cash dividends per share: $0.15 $0.14
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Three 4-week periods ended
January 22, January 23,
1995 1994
------------ ------------
OPERATING ACTIVITIES
Net income $ 1,373,023 $ 728,926
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation 1,098,256 804,199
Provision for deferred income taxes (22,500) (22,500)
Provision for deferred compensation 45,239 41,374
Proportionate share in loss of
investee company 14,130 14,096
Changes in operating assets and liabilities:
Decrease in trade receivables 1,169,792 4,229,947
Decrease in inventories 851,031 60,330
(Increase) decrease in prepaid expenses 23,613 (192,355)
(Decrease) in accounts payable and
accrued expenses (1,803,848) (2,397,995)
Increase (decrease) in federal and state
income taxes payable 261,262 (637,293)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,009,998 2,628,729
INVESTING ACTIVITIES
Purchase of property, plant and equipment (200,989) (1,793,910)
Sale of investments 0 93,814
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (200,989) (1,700,096)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 0 461,721
Repurchase of common stock (71,931) 0
Payment of dividends (430,362) (397,985)
Decrease in notes payable (3,000,000) 0
Payments on long-term debt (166,666) (1,166,667)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (3,668,959) (1,102,931)
------------ ------------
(Decrease) in cash and cash equivalents (859,950) (174,298)
Cash and cash equivalents at beginning of period 1,088,322 763,438
------------ ------------
Cash and cash equivalents at end of period $ 228,372 $ 589,140
============ ============
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Notes to Consolidated Condensed Financial Statements
See notes to financial statements included in the Corporation's 10-K for the
year ended October 30, 1994, for information concerning accounting policies,
long-term debt, stock options and other financial matters.
On February 11, 1992, the Financial Accounting Standards Board issued
Statement No. 109, "Accounting for Income Taxes." Under the new rules,
deferred taxes are recognized using the liability method, whereby tax rates
are applied to cumulative temporary differences based on when and how they
are expected to affect the tax return. Deferred tax assets and liabilities
are adjusted for tax rate changes. The Corporation adopted the new method
in the quarter ending January 23, 1994, and has shown the initial application
as a cumulative effect of a change in accounting principle. The Corporation
has determined that adoption of Statement 109 decreased the deferred tax
liability by approximately $396,000 but had no cash impact. There have been
no material changes in financial matters since October 30, 1994.
In the opinion of the Corporation, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal accruals) necessary to present fairly the financial position as of
January 22, 1995 and October 30, 1994, and the results of operations and
cash flows for the three 4-week periods ended January 22, 1995 and January
23, 1994.
The results of operations for the three 4-week periods ended January 22,
1995 and January 23, 1994 are not necessarily indicative of the results to
be expected for the full year.
<PAGE>
Pulaski Furniture Corporation
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income
Comparison of First Quarter 1995 to First Quarter 1994 (See page 3 for
dollar and percent changes.)
- ----------------------------------------------------------------------------
The higher sales in the 1995 quarter were due to increased demand for the
Corporation's furniture, and to the additional volume produced by the new
factory.
The increase in selling and administrative expenses, other than commissions,
is primarily due to increased information systems costs. The increase in
information systems costs is due to an expansion of the system. Interest
expense increased due to a higher level of outstanding debt and to higher
interest rates.
The increase in net income is due primarily to higher production and
shipments.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $2,508,000 for the quarter ended
January 22, 1995 compared to $1,566,000 for the quarter ended January 23,
1994. Net working capital increased by $1,644,000 during the first quarter
of 1995 compared with a decrease of $1,326,000 in the first quarter of 1994.
During the first quarter of 1995, the Corporation's average amount of
outstanding indebtedness for borrowed money was $39,888,534. The weighted
average rate of interest on such indebtedness was approximately 6.4% per
annum.
<PAGE>
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
January 22, January 23,
1995 1994
------------ ------------
PRIMARY:
Average shares outstanding 2,854,659 2,850,020
Dilutive stock options - based
on treasury stock method
using average market price 5,324 28,670
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 3,275 2,133
------------ ------------
TOTAL 2,863,258 2,880,823
Net Income before cumulative effect
of accounting change $ 1,373,023 $ 728,926
Cumulative effect of accounting change 396,092
------------ ------------
Net Income after cumulative effect
of accounting change $ 1,373,023 $ 1,125,018
============ ============
Net Income per Share:
Before cumulative effect of accounting change $ 0.48 $ 0.25
Cumulative effect of accounting change 0.14
------- -------
After cumulative effect of accounting change $ 0.48 $ 0.39
======= =======
FULLY DILUTED:
Average shares outstanding 2,854,659 2,850,020
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 5,324 36,963
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 3,275 2,133
------------ ------------
TOTAL 2,863,258 2,889,116
Net Income per Share:
Before cumulative effect of accounting change $ 0.48 $ 0.25
Cumulative effect of accounting change 0.14
------- -------
After cumulative effect of accounting change $ 0.48 $ 0.39
======= =======
<PAGE>
Pulaski Furniture Corporation
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On February 10, 1995, the Corporation held its annual meeting of
shareholders, at which the following business was transacted:
John D. Munford and John G. Wampler were elected to serve as Class
II directors of the Corporation, each for a term of three years.
The votes for the election of the Class II directors were as follows:
FOR AGAINST ABSTAIN
---------- ---------- ----------
Mr. Munford 2,540,320 0 14,512
Mr. Wampler 2,540,113 207 14,512
The terms of the following directors continued beyond the 1995 annual
meeting: Bernard C. Wampler, Clifford A. Cutchins, III, Harry H. Warner,
John W. Stanley, and Hugh V. White, Jr.
Item 5. Other Information
All other information called for by other items of Part II of the Form 10-Q
is either inapplicable or the response to the items would be negative.
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.
PULASKI FURNITURE CORPORATION
Date: March 3, 1995 /s/ John G. Wampler
---------------------------------------
John G. Wampler
(President and Chief Operating Officer)
/s/ Jason A. Gibbs
---------------------------------------
Jason A. Gibbs, Controller
(Principal Accounting Officer)
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