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 April 14, 1996
[ ] 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)
1 Pulaski Square
P.O. Box 1371, Pulaski, Virginia
(Address of principal executive offices)
24301
(Zip Code)
540-980-7330
(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:
2,783,579 shares of common stock outstanding as of May 23, 1996
<PAGE>
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
April 14, 1996 and October 29, 1995 . . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended April 14, 1996
and April 16, 1995 . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income
Six 4-week periods ended April 14, 1996
and April 16, 1995 . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows
Six 4-week periods ended April 14, 1996
and April 16, 1995 . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . . . 6
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Income . . . . . . . . . . . 7
Exhibit 3 - Computation of Earnings per Share . . . . . . . . . . 8
PART II: Other Information and Signatures . . . . . . . . . . . . . 10
<PAGE>
Pulaski Furniture Corporation
Consolidated Condensed Balance Sheets
(in thousands)
April 14, October 29,
1996 1995
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 814 $ 1,722
Short-term investments 11 15
Accounts receivable, net 29,138 35,674
---------- ----------
29,963 37,411
Inventories:
Raw materials 15,602 16,984
Work-in-process 5,606 6,048
Finished goods 33,240 32,229
---------- ----------
54,448 55,261
Less LIFO reserve (15,101) (14,852)
---------- ----------
39,347 40,409
Prepaid expenses 431 407
Deferred income tax 579 579
---------- -----------
Total current assets 70,320 78,806
Property, plant and equipment, net 37,648 38,894
Cash surrender value of life insurance 988 976
---------- ----------
Total assets $ 108,956 $ 118,676
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 7,893 $ 9,764
Notes payable 6,000 12,000
Wages and commissions 660 2,214
Taxes withheld from employees 845 734
---------- ----------
15,398 24,712
Federal and state income taxes 733 257
Current portion of long-term debt 2,000 2,048
---------- ----------
Total current liabilities 18,131 27,017
Long-term notes payable 28,807 29,355
Deferred income taxes 4,049 4,094
Deferred compensation 2,309 2,269
Shareholders' equity
Common stock 5,031 5,827
Retained earnings 51,025 50,297
Unamortized restricted stock (396) (183)
---------- ----------
Total shareholders' equity 55,660 55,941
---------- ----------
Total liabilities and shareholders' equity $ 108,956 $ 118,676
========== ==========
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
Apr. 14, Apr. 16, Incr
1996 1995 (Decr) %
--------- --------- -------- ----
Net sales $ 39,905 $ 38,989 $ 916 2.3%
Costs and expenses
Cost of sales 32,430 31,599 831 2.6
Selling & administrative 5,851 5,211 640 12.3
---------- ---------- --------
Operating income 1,624 2,179 (555) (25.5)
Other income and expenses
Interest expense 557 530 27 5.1
Interest income (6) (9) 3 33.3
---------- ---------- --------
Total 551 521 30 5.8
Income before income taxes 1,073 1,658 (585) (35.3)
Provision for taxes on income 349 564 (215) (38.1)
---------- ---------- --------
Net income $ 724 $ 1,094 $ (370) (33.8)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,853,119 2,861,519
Assuming full dilution 2,853,119 2,861,519
Earnings per share:
Primary $0.25 $0.38
Assuming full dilution $0.25 $0.38
Cash dividends per share: $0.16 $0.15
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
Six 4-week periods ended
Apr. 14, Apr. 16, Incr
1996 1995 (Decr) %
--------- --------- -------- ----
Net sales $ 76,490 $ 80,259 $(3,769) (4.7)%
Costs and expenses
Cost of sales 61,901 64,631 (2,730) (4.2)
Selling & administrative 11,029 10,780 249 2.3
---------- ---------- --------
Operating income 3,560 4,848 (1,288) (26.6)
Other income and expenses
Interest expense 1,141 1,123 18 1.6
Interest income (9) (15) 6 40.0
---------- ---------- --------
Total 1,132 1,108 24 2.2
Income before income taxes 2,428 3,740 (1,312) (35.1)
Provision for taxes on income 790 1,273 (483) (37.9)
---------- ---------- --------
Net income $ 1,638 $ 2,467 $ (829) (33.6)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,854,974 2,861,868
Assuming full dilution 2,854,974 2,865,616
Earnings per share:
Primary $0.57 $0.86
Assuming full dilution $0.57 $0.86
Cash dividends per share: $0.32 $0.30
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Six 4-week periods ended
April 14, April 16,
1996 1995
------------ ------------
OPERATING ACTIVITIES
Net income $ 1,638,115 $ 2,466,872
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation 2,223,894 2,326,811
Provision for deferred income taxes (45,000) (45,000)
Provision for deferred compensation 40,508 77,610
Proportionate share in loss of
investee company 0 41,515
Changes in operating assets and liabilities:
Decrease in trade receivables 6,536,332 6,297,182
(Increase) decrease in inventories 1,061,028 (6,958,773)
Increase in prepaid expenses (24,275) (131,490)
Increase (decrease) in accounts payable
and other accrued expenses (3,314,517) 1,503,040
Increase in federal and state income
taxes payable 475,801 266,064
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,591,886 5,843,831
INVESTING ACTIVITIES
Purchase of property, plant and equipment (855,896) (1,134,692)
Sale of investments 3,600 0
Increase in cash surrender value (11,863) (9,704)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (864,159) (1,144,396)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 440,722 405,632
Repurchase of common stock (1,570,812) (516,000)
Payment of dividends (909,917) (856,045)
Decrease in notes payable (6,000,000) (4,000,000)
Payments on long-term debt (595,238) (328,278)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (8,635,245) (5,294,691)
------------ ------------
Decrease in cash and cash equivalents (907,518) (595,256)
Cash and cash equivalents at beginning of period 1,721,546 1,088,322
------------ ------------
Cash and cash equivalents at end of period $ 814,028 $ 493,066
============ ============
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 29, 1995, for information concerning accounting policies,
long-term debt, stock options and other financial matters. There have been
no material changes in financial matters since October 29, 1995.
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
April 14, 1996 and October 29, 1995, and the results of operations and
cash flows for the three and six 4-week periods ended April 14, 1996 and
April 16, 1995.
The results of operations for the three and six 4-week periods ended April
14, 1996 and April 16, 1995 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 Second Quarter 1996 to Second Quarter 1995 and Two Quarters of
1996 to Two Quarters of 1995 (See pages 3 and 4 for dollar and percent
changes.)
- ----------------------------------------------------------------------------
The increase in sales for the 1996 second quarter was due primarily to an
increase in demand for the Corporation's furniture in the final month of
the quarter. The decrease in sales for the first half was due to lower
demand in the first quarter, primarily because of the weakness in retail
furniture sales.
Because of the lower demand for the Corporation's furniture for most of the
second quarter, factory production was reduced in order to control inven-
tories. The lower production schedules reduced manufacturing efficiencies
which resulted in lower profits in the quarter and the first half.
At the April Furniture Market in High Point, retailers were optimistic about
the outlook for the second half of 1996. In line with the industry, the
Corporation had a positive market. If this optimism continues, it sets the
stage for a better second half for the Corporation.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $3,736,000 for the two quarters
ended April 14, 1996 compared to $4,791,000 for the two quarters ended April
16, 1995. Net working capital increased by $400,000 during the first two
quarters of 1996 compared with an increase of $2,434,000 in the first two
quarters of 1995.
During the second quarter of 1996, the Corporation's average amount of
outstanding indebtedness for borrowed money was $38,776,147. The weighted
average rate of interest on such indebtedness was approximately 5.9% per
annum.
<PAGE>
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
April 14, April 16,
1996 1995
------------ ------------
PRIMARY:
Average shares outstanding 2,837,281 2,837,882
Dilutive stock options - based
on treasury stock method
using average market price 4,645 15,078
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 11,193 8,559
------------ ------------
TOTAL 2,853,119 2,861,519
------------ ------------
Net Income $ 724,120 $ 1,093,849
============ ============
Net Income per Share: $ 0.25 $ 0.38
======= =======
FULLY DILUTED:
Average shares outstanding 2,837,281 2,837,882
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 4,645 15,078
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 11,193 8,559
------------ ------------
TOTAL 2,853,119 2,861,519
------------ ------------
Net Income per Share: $ 0.25 $ 0.38
======= =======
<PAGE>
Pulaski Furniture Corporation
Part I - Exhibit 3 (continued)
Computation of Earnings Per Share
Six 4-week periods ended
April 14, April 16,
1996 1995
------------ ------------
PRIMARY:
Average shares outstanding 2,841,857 2,846,270
Dilutive stock options - based
on treasury stock method
using average market price 5,786 9,681
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 7,331 5,917
------------ ------------
TOTAL 2,854,974 2,861,868
------------ ------------
Net Income $ 1,638,115 $ 2,466,872
============ ============
Net Income per Share: $ 0.57 $ 0.86
======= =======
FULLY DILUTED:
Average shares outstanding 2,841,857 2,846,270
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 5,786 13,429
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 7,331 5,917
------------ ------------
TOTAL 2,854,974 2,865,616
------------ ------------
Net Income per Share: $ 0.57 $ 0.86
======= =======
<PAGE>
Pulaski Furniture Corporation
Part II - Other Information
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: May 23, 1996 /s/ John G. Wampler
---------------------------------------
John G. Wampler
(President and Chief Operating Officer)
/s/ Jason A. Gibbs
---------------------------------------
Jason A. Gibbs, Chief Financial Officer
(Principal Accounting Officer)
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<S> <C>
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<PERIOD-END> APR-14-1996
<CASH> 814
<SECURITIES> 11
<RECEIVABLES> 29138
<ALLOWANCES> 0
<INVENTORY> 39347
<CURRENT-ASSETS> 70320
<PP&E> 85868
<DEPRECIATION> 48220
<TOTAL-ASSETS> 108956
<CURRENT-LIABILITIES> 18131
<BONDS> 28807
0
0
<COMMON> 5031
<OTHER-SE> 50629
<TOTAL-LIABILITY-AND-EQUITY> 108956
<SALES> 76490
<TOTAL-REVENUES> 76490
<CGS> 61901
<TOTAL-COSTS> 72930
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 100
<INTEREST-EXPENSE> 1141
<INCOME-PRETAX> 2428
<INCOME-TAX> 790
<INCOME-CONTINUING> 1638
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1638
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
</TABLE>
