<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
OMB Approval
OMB Number: xxxx-xxxx
Expires: Approval Pending
Estimated Average Burden Hours Per Response: 1.0
(Mark One)
/X/ Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30, 1996
--------------------------------------------
/X/ Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from to
------------------------- ---------------
Commission file number 0-3555
----------------------------------------------------------
David White, Inc.
- - --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Wisconsin 39-0967642
- - --------------------------------------- --------------------------------------
(State or Other Jurisdiction of (I. R. S. Employer
Incorporation or Organization) Identification No.)
11711 River Lane, Germantown, WI 53022
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(414) 251-8100
- - --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
--------- ---------
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at July 31, 1996
- - ----------------------------------------- -----------------------------------
Common Stock, $3.00 Par Value Per Share 457,323 Shares
<PAGE> 2
DAVID WHITE, INC.
INDEX
Page No.
Part I. Financial Information
Consolidated Condensed Balance Sheets -
June 30, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Operations -
Three Months and Six Months Ended June 30, 1996
and 1995 4
Consolidated Condensed Statements of Cash Flows -
Six Months Ended June 30, 1996 and 1995 5
Notes to Unaudited Consolidated Condensed
Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 & 8
Part II. Other Information
Item 4. Submission of Matters to a Vote of 9
Security Holders
Item 6. Exhibits and Reports on Form 8-K 9 - 12
Signature 13
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAVID WHITE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(000'S)
<TABLE>
<CAPTION>
Assets June 30, December 31,
1996 1995
---------- ------------
(Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 0 $ 0
Trade accounts receivable, net 2,300 1,479
Inventories 4,274 4,611
Other current assets 75 129
-------- --------
Total current assets 6,649 6,219
Other Assets
Technology and patents, net 160 183
Intangible pension asset 127 127
Other 174 183
-------- --------
461 493
Property, plant and equipment, net 2,301 2,465
-------- --------
Total assets $ 9,411 $ 9,177
======== ========
Liabilities and Stockholders' Investment
Current Liabilities
Notes payable to bank $ 1,064 $ 714
Trade accounts payable 677 763
Accrued liabilities 523 722
Income taxes 64 0
Current maturities of long-term debt 322 309
-------- --------
Total current liabilities 2,650 2,508
Long-term debt, less current maturities 1,675 1,840
Long-term pension liability 197 197
Stockholders' Investment
Preferred stock, par value $1 a share:
Authorized 1,000,000 shares; none issued
Common stock, par value $3 a share:
Authorized 5,000,000 shares; issued 692,240 shares 2,077 2,077
Additional paid-in capital 1,024 1,024
Retained earnings 4,152 3,895
Additional pension liability (70) (70)
Treasury stock at cost - 234,917 shares (2,294) (2,294)
-------- --------
Total stockholders' investment 4,889 4,632
-------- --------
Total liabilities and stockholders' investment $ 9,411 $ 9,177
======== ========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial
statements.
-3-
<PAGE> 4
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(000'S) EXCEPT SHARE AND PER SHARE DATA
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 3,318 $ 4,272 $ 7,271 $ 9,099
Cost of goods sold 2,557 3,220 5,402 6,765
-------- -------- -------- --------
Gross margin 761 1,052 1,869 2,334
Loss on sale of subsidiary 0 (722) 0 (722)
Selling and administrative expenses 655 791 1,392 1,682
-------- -------- -------- --------
Earnings (loss) from operations before
other expenses and income taxes 106 (461) 477 (70)
Other income (expenses)
Other income 25 31 25 34
Interest expense (95) (101) (181) (177)
Amortization of intangible assets 0 (30) 0 (75)
-------- -------- -------- --------
Earnings (loss) before income taxes 36 (561) 321 (288)
Income taxes (benefit) 7 (104) 64 (45)
-------- -------- -------- --------
Net earnings (loss) $ 29 $ (457) 257 (243)
======== ======== ======== ========
Net earnings (loss) per common share $ .06 $ (.91) $ .56 $ (.47)
Average common shares outstanding 457,323 504,323 457,323 516,073
Dividends per common share outstanding $ .00 $ .00 $ .00 .00
</TABLE>
See accompanying notes to unaudited consolidated condensed financial
statements.
-4-
<PAGE> 5
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000'S)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1996 1995
-------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 257 $ (243)
Adjustments to reconcile net earnings to net
cash used in operating activities:
Depreciation 265 205
Amortization of intangible assets 0 75
Loss on sale of subsidiary 0 722
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable (821) (558)
Inventories 337 (433)
Prepaid expenses and other assets 86 (54)
Increase (decrease) in:
Accounts payable and accrued liabilities (285) (16)
Income taxes 64 0
------- -------
Net cash used in operating activities (97) (302)
Cash flows from investing activities:
Additions to property, plant & equipment (101) (684)
------- -------
Net cash used in investing activities (101) (684)
Cash flows from financing activities:
Principal payments on debt (152) (139)
Net increase in notes payable to bank 350 228
------- -------
Net cash provided by financing activities 198 89
Effect of exchange rate changes on cash 0 5
Net increase (decrease) in cash and cash equivalents 0 (892)
Cash and cash equivalents at beginning of year 0 892
Cash and cash equivalents at end of period $ 0 $ 0
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest 181 156
Income taxes 0 165
</TABLE>
See accompanying notes to unaudited consolidated condensed financial
statements.
-5-
<PAGE> 6
DAVID WHITE, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the audited financial statements
and the notes thereto incorporated by reference in the Company's latest
annual report on Form 10-KSB.
2. In the opinion of management, the aforementioned statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary
for a fair presentation of the results for the interim periods. The
results of operations for the six months ended June 30, 1996 are not
necessarily indicative of the results to be expected for the full year.
3. It is not practicable to segregate the amounts of raw materials, work in
progress, finished goods or supplies.
-6-
<PAGE> 7
DAVID WHITE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors that have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statements of operations.
A summary of the period to period changes in the principal items included in
the consolidated condensed statements of operations is shown below:
<TABLE>
<CAPTION>
Comparison of
---------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
1996 and 1995 1996 and 1995
------------------- -------------------
Increase (Decrease) Increase (Decrease)
(000's) (000's)
<S> <C> <C>
Net sales (954) (1,828)
Cost of goods sold (663) (1,363)
Selling and administrative expenses (136) (290)
Other income (6) (9)
Loss on sale of subsidiary (722) (722)
Interest expense (6) 4
Amortization of intangible assets (30) (75)
Earnings before income taxes 597 609
Income taxes (benefit) 111 109
Net earnings 486 500
</TABLE>
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<PAGE> 8
RESULTS OF OPERATIONS
SECOND QUARTER 1996 COMPARED TO SECOND QUARTER 1995
Sales for the second quarter of 1996 of $3.3 million were 22% less than sales
for the second quarter of 1995. 1995's sales of $4.3 million include two
months sales of the Company's former subsidiary which was sold in May, 1995.
Sales for second quarter of 1996 for David White of $3.3 million were off 8%
from 1995 sales of $3.6 million. For the second quarter of 1996, the Company
reported a profit of $29,000 versus a loss of $457,000 during the same period
in 1995. 1995's loss included a one time loss, net of taxes, of $575,000 on
the sale of the Company's Swiss subsidiary, Ammann Lasertechnik. Gross margins
decreased to 23% in 1996 from 25% in 1995 due to competitive pricing made
necessary to move products remaining from the former Swiss subsidiary. Selling
and administrative expenses decreased 17% due to inclusion of the former
subsidiary's selling and administrative expenses in 1995. David White's
selling and administrative expenses were the same for both years during the
second quarter. Interest expense for the second quarter of 1996 was down
$6,000.
FIRST SIX MONTHS 1996 COMPARED TO THE FIRST SIX MONTHS 1995
Sales for the first six months of 1996 of $7.3 million were down $1.8 million
from 1995's first six months sales of $9.1 million. Most of the decrease, or
$1.6 million, is attributed to the inclusion of the Ammann's sales for the
first five months of 1995. David White's sales are down 3% or $227,000. Gross
margins for the two years remained constant at 26%. Selling and administrative
expenses decreased 17% due to the inclusion of Ammann's selling and
administrative expenses in 1995. David White's selling and administrative
expenses for the first six months of 1996 were up less than 1%. Interest
expense for the first six months of 1996 is up $4,000.
LIQUIDITY
At the end of the second quarter, the Company had $1,064,000 of revolving debt.
The debt agreement allows the Company to borrow at the bank's prime rate. The
term note remaining is payable in monthly installments of $40,000 through
August, 2001. The Company anticipates that the revolving debt will be paid in
the third quarter. The current ratio was 2.5:1 on June 30, 1996 down slightly
from the 2.7:1 on June 30, 1995.
The Company did not have any significant outstanding capital commitments at the
end of the second quarter of 1996.
-8-
<PAGE> 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the 1996 Annual Meeting of Shareholders of the Company held on May 7, 1996,
the shareholders reelected Marshall A. Loewi and R. Ron Heiligenstein to the
board of directors for three year terms to expire at the Company's 1999 annual
meeting of shareholders. The final voting was as follows:
<TABLE>
<CAPTION>
Total Shares Total Shares
For Abstain Voted Outstanding
------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Marshall A. Loewi 372,975 49,111 422,086 457,323
R. Ron Heiligenstein 374,586 47,500 422,086 457,323
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
3.1 Restated Articles of Incorporation [Incorporated by reference
to Exhibit 3 to the Company's Form 8-K dated May 8, 1992]
3.2 By-Laws, as amended through February 22, 1996 [Incorporated by
reference to Exhibit 3.2 to the Company's Form 10-KSB for the year
ended December 31, 1995]
4.1 Rights Agreement, dated as of August 29, 1988, between Company
and First Wisconsin Trust Company, as Rights Agent [Incorporated by
reference to Exhibit 4 to the Company's Form 8-K dated September 15,
1988]
4.2 Amendment to Rights Agreement, dated as of November 9, 1988,
between Company and First Wisconsin Trust Company, as Rights Agent
[Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K
dated November 10, 1988]
4.3 Amendment No. 2 to Rights Agreement dated as of June 30, 1989
between the Company and First Wisconsin Trust Company, as Rights
Agent [Incorporated by reference to Exhibit 4.2 to the Company's Form
8-K dated June 30, 1989]
4.4 Amendment No. 3 to Rights Agreement dated as of January 22,
1992, between the Company and First Wisconsin Trust Company, as
Rights Agent [Incorporated by reference to Exhibit 4.3 to the
Company's Form 8-K dated February 7, 1992]
10.1 Amended and Restated 1981 Stock Option Plan [Incorporated by
reference to Exhibit 10.4 to the Company's Form 10-K for the year
ended December 31, 1988]*
- - ------------------
* management contract or compensatory plan or arrangement.
-9-
<PAGE> 10
10.2 Form of 1981 Incentive Stock Option Agreement, as amended
[Incorporated by reference to Exhibit 10.5 to the Company's Form 10-K
for the year ended December 31, 1988]*
10.3 Form of Amendment to 1981 Incentive Stock Option Agreement
[Incorporated by reference to Exhibit 10.6 to the Company's Form 10-K
for the year ended December 31, 1988]
10.4 Form of Key Executive Employment and Severance Agreement, dated
as of January 25, 1990, entered into between the Company and each of
the following: Tony L. Mihalovich, Ronald J. Jansen, James L. Younk,
E. Gustav Malm, Larry Clark, Walker J. Young and Robert L. Underberg
[Incorporated by reference to Exhibit 10.4 to the Company's Form 10-K
for the year ended December 31, 1992]*
10.5 Employment Agreement, dated as of January 1, 1994, between the
Company and Tony L. Mihalovich [Incorporated by reference to Exhibit
10.5 of the Company's Form 10-KSB for the year ended December 31,
1993, as amended by Form 8 dated April 20, 1994]*
10.6 Amendment to Employment Agreement, dated as of December 5,
1995, between the Company and Tony L. Mihalovich [Incorporated
by reference to Exhibit 10.6 to the Company's Form 10-KSB for the
year ended December 31, 1995]*
10.7 Stock Option Agreement, dated as of January 1, 1994, between
the Company and Tony L. Mihalovich [Incorporated by reference to
Exhibit 10.6 at the Company's Form 10-KSB for the year ended December
31, 1993]*
10.8 Amendment to Stock Option Agreement, dated as of December 5,
1995, between the Company and Tony L. Mihalovich [Incorporated
by reference to Exhibit 10.8 to the Company's Form 10-KSB for the
year ended December 31, 1995]*
10.9 Stock Option Agreement, dated as of January 11, 1990, between
Company and R. Ron Heiligenstein [Incorporated by reference to
Exhibit 10.11 to the Company's Form 10-K for the year ended December
31, 1989]*
10.10 Form of Indemnity Agreement, dated as of January 24, 1990, entered
into between the Company and each of the following: Charles D.
Jacobus, Hans-Rudolf Ammann, E. Gustav Malm, R. Ron Heiligenstein,
Marshall A. Loewi, Michael S. Ariens and Richard H. Bromley
[Incorporated by reference to Exhibit
10.12 to the Company's Form 10-K for the year ended December 31, 1989
- - --------------
* management contract or compensatory plan or arrangement.
-10-
<PAGE> 11
10.11 1992 Stock Option Plan [Incorporated by reference to Exhibit
10.9 to the Company's Form 10-K for the year ended December 31,
1992]*
10.12 Form of 1992 Incentive Stock Option Agreement [Incorporated by
reference to Exhibit 10.10 to the Company's Form 10-K for the year
ended December 31, 1992]*
10.13 1995 Stock Option Plan [Incorporated by reference to Exhibit
10.11 to the Company's Form 10-QSB for the end of the second quarter
of 1995]*
10.14 Stock Purchase Agreement, dated as of May 31, 1995, entered
into between the Company and Hans-Rudolf Ammann, Jolanda Ammann,
Konrad Bachmaier and Thomas Ammann [Incorporated by reference to
Exhibit 10.12 to the Company's Form 10-QSB for the end of the second
quarter of 1995]
10.15 License Agreement, dated as of May 31, 1995, entered into
between the Company and Ammann Lasertechnik, AG [Incorporated by
reference to Exhibit 10.13 to the Company's Form 10-QSB for the end
of the second quarter of 1995]
10.16 Ammann Lasertechnik AG Supply Agreement, dated as of May 31,
1995, entered into between the Company and Ammann Lasertechnik, AG
[Incorporated by reference to Exhibit 10.14 to the Company's Form
10-QSB for the end of the second quarter of 1995]**
10.17 David White, Inc. Supply Agreement, dated as of May 31, 1995,
entered into between the Company and Ammann Lasertechnik, AG
[Incorporated by reference to Exhibit 10.15 to the Company's Form
10-QSB for the end of the second quarter of 1995]**
10.18 Transfer and Assignment Agreement, dated as of May 31, 1995,
entered into between the Company and Ammann Lasertechnik, AG
[Incorporated by reference to Exhibit 10.16 to the Company's Form
10-QSB for the end of the second quarter of 1995]
10.19 Pledge Agreement, dated as of May 31, 1995, entered into
between the Company and Hans-Rudolf Ammann, Jolanda Ammann, Konrad
Bachmaier and Thomas Ammann [Incorporated by reference to Exhibit
10.17 to the Company's Form 10-QSB for the end of the second quarter
of 1995]
- - ------------------
* management contract or compensatory plan or arrangement.
** Certain information in this Exhibit was omitted pursuant to a
request for confidential treatment. The information and the request
were separately filed with the Commission.
-11-
<PAGE> 12
10.20 Summary [English Translation] of German Joint Venture Ammann
Lasertechnik GmbH, March 1991 [Incorporated by reference to Exhibit
10.8 to the Company's Form 10-K for the year ended December 31, 1991]
27 Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company
with the Securities and Exchange Commission during the second quarter of
1996.
-12-
<PAGE> 13
SIGNATURE
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.
DAVID WHITE, INC.
---------------------------------
(Registrant)
/s/ Tony L. Mihalovich
---------------------------------
Tony L. Mihalovich
(President)
/s/ James L. Younk
---------------------------------
James L. Younk
(Vice President-Finance)
Date: August 12, 1996
--------------------------------
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<PAGE> 14
SIGNATURE
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.
DAVID WHITE, INC.
---------------------------------
(Registrant)
---------------------------------
Tony L. Mihalovich
(President)
---------------------------------
James L. Younk
(Vice President-Finance)
Date: August 12, 1996
------------------------------
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000082414
<NAME> WHITE DAVID INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 2,395
<ALLOWANCES> (95)
<INVENTORY> 4,274
<CURRENT-ASSETS> 6,649
<PP&E> 8,532
<DEPRECIATION> (6,231)
<TOTAL-ASSETS> 9,411
<CURRENT-LIABILITIES> 2,650
<BONDS> 1,675
0
0
<COMMON> 2,077
<OTHER-SE> 2,812
<TOTAL-LIABILITY-AND-EQUITY> 9,411
<SALES> 7,271
<TOTAL-REVENUES> 7,271
<CGS> 5,402
<TOTAL-COSTS> 1,392
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 181
<INCOME-PRETAX> 321
<INCOME-TAX> 64
<INCOME-CONTINUING> 257
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
