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 20, 1997
[ ] 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:
2,789,527 shares of common stock outstanding as of May 29, 1997
<PAGE>
Pulaski Furniture Corporation
Index
PART I: Financial Statements
Consolidated Condensed Balance Sheets as of
April 20, 1997 and November 3, 1996 . . . . . . . . . . . . . . . 2
Consolidated Condensed Statements of Income
Three 4-week periods ended April 20, 1997
and April 14, 1996 . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income
Six 4-week periods ended April 20, 1997
and April 14, 1996 . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows
Six 4-week periods ended April 20, 1997
and April 14, 1996 . . . . . . . . . . . . . . . . . . . . . . . 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 20, November 3,
1997 1996
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 1,184 $ 2,397
Short-term investments 11 11
Accounts receivable, net 26,675 39,473
---------- ----------
27,870 41,881
Inventories:
Raw materials 16,201 16,323
Work-in-process 7,998 6,635
Finished goods 38,542 33,874
---------- ----------
62,741 56,832
Less LIFO reserve (16,442) (15,054)
---------- ----------
46,299 41,778
Prepaid expenses 1,120 655
Deferred income tax 600 600
---------- -----------
Total current assets 75,889 84,914
Property, plant and equipment, net 38,078 38,340
Cash surrender value of life insurance 1,096 1,082
---------- ----------
Total assets $ 115,063 $ 124,336
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses:
Accounts payable $ 10,514 $ 9,380
Notes payable 9,000 16,000
Wages and commissions 770 2,731
Taxes withheld from employees 934 683
---------- ----------
21,218 28,794
Federal and state income taxes 302 1,349
Current portion of long-term debt 2,000 2,000
---------- ----------
Total current liabilities 23,520 32,143
Long-term notes payable 26,907 27,851
Deferred income taxes 4,100 4,145
Deferred compensation 2,554 2,519
Shareholders' equity
Common stock 4,990 5,031
Retained earnings 53,363 52,804
Unamortized restricted stock (371) (157)
---------- ----------
Total shareholders' equity 57,982 57,678
---------- ----------
Total liabilities and shareholders' equity $ 115,063 $ 124,336
========== ==========
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. 20, Apr. 14, Incr
1997 1996 (Decr) %
--------- --------- -------- ----
Net sales $ 35,322 $ 39,905 $(4,583) (11.5)%
Costs and expenses
Cost of sales 27,931 32,430 (4,499) (13.9)
Selling & administrative 5,599 5,851 (252) (4.3)
---------- ---------- --------
Operating income 1,792 1,624 168 10.3
Other income and expenses
Interest expense 464 557 (93) (16.7)
Interest income (5) (6) 1 16.7
---------- ---------- --------
Total 459 551 (92) (16.7)
Income before income taxes 1,333 1,073 260 24.2
Provision for taxes on income 481 349 132 37.8
---------- ---------- --------
Net income $ 852 $ 724 $ 128 17.7
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,813,118 2,853,119
Assuming full dilution 2,813,118 2,853,119
Earnings per share:
Primary $0.30 $0.25
Assuming full dilution $0.30 $0.25
Cash dividends per share: $0.17 $0.16
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. 20, Apr. 14, Incr
1997 1996 (Decr) %
--------- --------- -------- ----
Net sales $ 70,744 $ 76,490 $(5,746) (7.5)%
Costs and expenses
Cost of sales 56,418 61,901 (5,483) (8.9)
Selling & administrative 10,914 11,029 (115) (1.0)
---------- ---------- --------
Operating income 3,412 3,560 (148) (4.2)
Other income and expenses
Interest expense 1,049 1,141 (92) (8.1)
Interest income (9) (9) 0 0.0
---------- ---------- --------
Total 1,040 1,132 (92) (8.1)
Income before income taxes 2,372 2,428 (56) (2.3)
Provision for taxes on income 856 790 66 8.4
---------- ---------- --------
Net income $ 1,516 $ 1,638 $ (122) (7.4)
========== ========== ========
Weighted average number
of shares outstanding:
Primary 2,816,147 2,854,974
Assuming full dilution 2,816,147 2,854,974
Earnings per share:
Primary $0.54 $0.57
Assuming full dilution $0.54 $0.57
Cash dividends per share: $0.34 $0.32
See accompanying notes to financial statements.
<PAGE>
Pulaski Furniture Corporation
Consolidated Statements of Cash Flows
Six 4-week periods ended
April 20, April 14,
1997 1996
------------ ------------
OPERATING ACTIVITIES
Net income $ 1,515,580 $ 1,638,115
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation 2,437,046 2,223,894
Provision for deferred income taxes (45,000) (45,000)
Provision for deferred compensation 35,239 40,508
Changes in operating assets and liabilities:
Decrease in trade receivables 12,798,212 6,536,332
(Increase) decrease in inventories (4,520,316) 1,061,028
Increase in prepaid expenses (465,438) (24,275)
Decrease in accounts payable and
other accrued expenses (576,193) (3,314,517)
Increase (decrease) in federal and
state income taxes payable (1,047,074) 475,801
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,132,056 8,591,886
INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,995,935) (855,896)
Sale of investments 3,600
Increase in cash surrender value (14,191) (11,863)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (2,010,126) (864,159)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 486,219 440,722
Repurchase of common stock (920,000) (1,570,812)
Payment of dividends (957,113) (909,917)
Decrease in notes payable (7,000,000) (6,000,000)
Payments on long-term debt (944,272) (595,238)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (9,335,166) (8,635,245)
------------ ------------
Decrease in cash and cash equivalents (1,213,236) (907,518)
Cash and cash equivalents at beginning of period 2,396,850 1,721,546
------------ ------------
Cash and cash equivalents at end of period $ 1,183,614 $ 814,028
============ ============
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 November 3, 1996, for information concerning accounting policies,
long-term debt, stock options and other financial matters. There have been
no material changes in financial matters since November 3, 1996. In February
1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings Per Share, which is required to be adopted on December 31, 1997. At
that time, the Corporation will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under
the new requirements for calculating primary earnings per share, the dilutive
effect of stock options will be excluded. The impact of Statement 128 on the
calculation of primary and fully diluted earnings per share for the periods
reported is not expected to be material.
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 20, 1997 and November 3, 1996, and the results of operations and
cash flows for the three and six 4-week periods ended April 20, 1997 and
April 14, 1996.
The results of operations for the three and six 4-week periods ended April
20, 1997 and April 14, 1996 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 1997 to Second Quarter 1996 and Two Quarters of
1997 to Two Quarters of 1996 (See pages 3 and 4 for dollar and percent
changes.)
- ----------------------------------------------------------------------------
The lower net sales in the second quarter and two quarters of 1997 were due
primarily to lower demand for the Corporation's product. Fewer units were
shipped in both the second quarter and first half of 1997 than in 1996, at
higher average selling prices in 1997.
Production costs were lower as a percentage of sales in the second quarter
and two quarters of 1997 due primarily to improved operational efficiencies
and increases in sales prices. Selling and administrative expenses were
higher as a percentage of sales in 1997 due primarily to the lower sales
volume. Interest expense declined due to lower levels of outstanding debt.
Net income increased during the second quarter of 1997 despite lower ship-
ments due mainly to the lower cost of sales.
Capital Resources and Liquidity
- --------------------------------
Working capital provided by operations was $3,943,000 for the two quarters
ended April 20, 1997 compared to $3,736,000 for the two quarters ended April
14, 1996. Net working capital decreased by $3,402,000 during the first two
quarters of 1997 compared with an increase of $400,000 in the first two
quarters of 1996.
During the second quarter of 1997, the Corporation's average amount of
outstanding indebtedness for borrowed money was $39,542,505. The weighted
average rate of interest on such indebtedness was approximately 5.4% per
annum.
<PAGE>
Pulaski Furniture Corporation
Part I - Exhibit 3
Computation of Earnings Per Share
Three 4-week periods ended
April 20, April 14,
1997 1996
------------ ------------
PRIMARY:
Average shares outstanding 2,797,637 2,837,281
Dilutive stock options - based
on treasury stock method
using average market price 1,737 4,645
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 13,744 11,193
------------ ------------
TOTAL 2,813,118 2,853,119
------------ ------------
Net Income $ 851,739 $ 724,120
============ ============
Net Income per Share: $ 0.30 $ 0.25
======= =======
FULLY DILUTED:
Average shares outstanding 2,797,637 2,837,281
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 1,737 4,645
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 13,744 11,193
------------ ------------
TOTAL 2,813,118 2,853,119
------------ ------------
Net Income per Share: $ 0.30 $ 0.25
======= =======
<PAGE>
Pulaski Furniture Corporation
Part I - Exhibit 3 (continued)
Computation of Earnings Per Share
Six 4-week periods ended
April 20, April 14,
1997 1996
------------ ------------
PRIMARY:
Average shares outstanding 2,805,377 2,841,857
Dilutive stock options - based
on treasury stock method
using average market price 1,861 5,786
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 8,909 7,331
------------ ------------
TOTAL 2,816,147 2,854,974
------------ ------------
Net Income $ 1,515,580 $ 1,638,115
============ ============
Net Income per Share: $ 0.54 $ 0.57
======= =======
FULLY DILUTED:
Average shares outstanding 2,805,377 2,841,857
Dilutive stock options - based on
treasury stock method using the
greater of year-end market value
or average market value 1,861 5,786
Dilutive shares under Employee
Stock Purchase Plan - based
on average shares issuable 8,909 7,331
------------ ------------
TOTAL 2,816,147 2,854,974
------------ ------------
Net Income per Share: $ 0.54 $ 0.57
======= =======
<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 29, 1997 /s/ John G. Wampler
---------------------------------------
John G. Wampler
(President and Chief Executive Officer)
/s/ Jason A. Gibbs
---------------------------------------
Jason A. Gibbs, Chief Financial Officer
(Principal Accounting Officer)
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<PERIOD-END> APR-20-1997
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<SECURITIES> 11
<RECEIVABLES> 26675
<ALLOWANCES> 0
<INVENTORY> 46299
<CURRENT-ASSETS> 75889
<PP&E> 91182
<DEPRECIATION> 53105
<TOTAL-ASSETS> 115063
<CURRENT-LIABILITIES> 23520
<BONDS> 26907
0
0
<COMMON> 4990
<OTHER-SE> 52992
<TOTAL-LIABILITY-AND-EQUITY> 115063
<SALES> 70744
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<CGS> 56418
<TOTAL-COSTS> 67332
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<EXTRAORDINARY> 0
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