<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 March 31, 1996
-------------------------------------
/ / Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from to
---------------- -----------------
Commission file number 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
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(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 April 30, 1996
- ---------------------------------------- -----------------------------
Common Stock, $3.00 Par Value Per Share 457,323 Shares
<PAGE> 2
DAVID WHITE, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Consolidated Condensed Balance Sheets -
March 31, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Earnings -
Three Months Ended March 31, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 5
Notes to Unaudited Consolidated Condensed
Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Earnings 7 & 8
Part II. Other Information 9 - 12
Signature 13
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAVID WHITE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(000'S)
<TABLE>
<CAPTION>
Assets March 31, December 31,
1996 1995
-------- ------------
(Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 0 $ 0
Trade accounts receivable, net 3,582 1,479
Inventories 4,662 4,611
Other current assets 70 129
------- ------
Total current assets 8,314 6,219
Other Assets
Technology and patents, net 172 183
Intangible pension asset 127 127
Other 175 183
------- ------
474 493
Property, plant and equipment, net 2,406 2,465
------- ------
Total assets $11,194 $9,177
======= ======
<CAPTION>
Liabilities and Stockholders' Investment
<S> <C> <C>
Current Liabilities
Notes payable to bank $ 2,349 $ 714
Trade accounts payable 1,145 763
Accrued liabilities 512 722
Income taxes 57 0
Current maturities of long-term debt 316 309
------- ------
Total current liabilities 4,379 2,508
Long-term debt, less current maturities 1,758 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 4,123 3,895
Additional pension liability <70> <70>
Treasury stock at cost - 234,917 shares <2,294> <2,294>
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Total stockholders' investment 4,860 4,632
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Total liabilities and stockholders' investment $11,194 $9,177
======= ======
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
-3-
<PAGE> 4
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(000'S) EXCEPT SHARE AND PER SHARE DATA
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
March 31,
-------------------
1996 1995
-------- --------
<S> <C> <C>
Net sales $ 3,953 $ 4,827
Cost of goods sold 2,845 3,545
--------- --------
Gross margin 1,108 1,282
Selling and administrative expenses 737 891
--------- --------
Earnings from operations before
other income (expenses) and income taxes 371 391
Other income (expenses)
Other income 0 7
Interest expense <86> <76>
Amortization of intangible assets 0 <45>
Minority interest 0 <4>
--------- --------
Earnings before income taxes 285 273
Income taxes 57 59
--------- --------
Net earnings $ 228 $ 214
========= ========
Net earnings per common share $ .50 $ .41
Average common shares outstanding 457,323 527,823
Dividends per common share outstanding $ .00 $ .00
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
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<PAGE> 5
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000'S)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
March 31,
--------------------
1996 1995
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 228 $ 214
Adjustments to reconcile net earnings to net
cash used in operating activities:
Depreciation 129 103
Amortization of intangible assets 0 45
Minority interest in earnings of subsidiary 0 4
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable <2,103> <2,006>
Inventories <51> <3>
Prepaid expenses and other assets 78 61
Increase (decrease) in:
Accounts payable and accrued liabilities 172 184
Income taxes 57 <81>
------- -------
Net cash used in operating activities <1,490> <1,479>
Cash flows from investing activities:
Additions to property, plant & equipment <70> <244>
------- -------
Net cash used in investing activities <70> <244>
Cash flows from financing activities:
Principal payments on debt <75> <70>
Net increase in notes payable to bank 1,635 894
------- -------
Net cash provided by financing activities 1,560 824
Effect of exchange rate changes on cash 0 7
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 86 76
Income taxes 0 140
======= =======
</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 three months ended March 31, 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
March 31,
1996 and 1995
-------------------
Increase (Decrease)
(000's)
<S> <C>
Net sales <874>
Cost of goods sold <700>
Selling and administrative expenses <154>
Other income <7>
Interest expense 10
Amortization of intangible assets <45>
Minority interest <4>
Earnings before income taxes 12
Income taxes <2>
Net earnings 14
</TABLE>
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<PAGE> 8
RESULTS OF OPERATIONS
FIRST QUARTER 1996 COMPARED TO FIRST QUARTER 1995
Sales for the first quarter of 1996 of $3.95 million were 18% less than sales
for the first quarter of 1995. 1995's sales of $4.83 million include three
months sales of the Company's former subsidiary, Ammann Lasertechnik, AG, which
was sold in May, 1995. Sales for the first quarter of 1996 for David White
(exclusive of Ammann) were up 2% to $3.95 million from 1995 sales of $3.88
million. For the first quarter of 1996, the Company reported a profit of
$228,000 versus a profit of $214,000 for the same period in 1995. Gross
margins increased to 28% in 1996 from 26.6% in 1995. Selling and
administrative expenses decreased 17% due to the inclusion of the former
subsidiary's selling and administrative expenses in 1995. Exclusion of Ammann,
David White's selling and administrative expenses increased 1% over 1995.
Interest expenses for the first quarter of 1996 were up $10,000 due to higher
debt levels required to support the increase in receivables and inventories.
The working capital at the end of the first quarter 1996 was $3.9 million as
compared to $4.8 million at the end of the first quarter 1995. The Company's
current ratio at the end of the first quarter 1996 was 1.9:1 versus 2.4:1 at
the end of the first quarter 1995.
LIQUIDITY
Each year domestic receivables increase during the first quarter as the Company
offers a deferred payment program to its key distributors. The Company will be
reducing its outstanding borrowings in the second quarter as the deferred
payments are collected.
The outlook for housing slowed toward the end of the first quarter, and orders
for the first month of the second quarter were also down. The Company is
therefore making appropriate adjustments, which include finding new,
non-traditional markets and keeping production more in line with demand.
The Company did not have any significant outstanding capital commitments at the
end of the first quarter 1996.
-8-
<PAGE> 9
PART II. OTHER INFORMATION
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]*
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]*
- ------------
* management contract or compensatory plan or arrangement.
9
<PAGE> 10
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]
- --------------
* 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
10.19 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]
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 first 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: May 10, 1996
----------------------
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000082414
<NAME> WHITE DAVID INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 3,677
<ALLOWANCES> (95)
<INVENTORY> 4,662
<CURRENT-ASSETS> 8,314
<PP&E> 8,501
<DEPRECIATION> (6,095)
<TOTAL-ASSETS> 11,194
<CURRENT-LIABILITIES> 4,379
<BONDS> 1,758
0
0
<COMMON> 2,077
<OTHER-SE> 2,783
<TOTAL-LIABILITY-AND-EQUITY> 11,194
<SALES> 3,953
<TOTAL-REVENUES> 3,953
<CGS> 2,845
<TOTAL-COSTS> 737
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86
<INCOME-PRETAX> 285
<INCOME-TAX> 57
<INCOME-CONTINUING> 228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 228
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
