SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the quarterly
period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from to .
0-5860
(Commission file number)
RECOTON CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 11-1771737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2950 LAKE EMMA ROAD, LAKE MARY, FLORIDA 32746
(Address of principal executive offices, including zip code)
407-333-8900
(Registrant's telephone number, including area code)
Indicate by check mark 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 filings
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 most recent practicable date:
OUTSTANDING AS OF
CLASS NOVEMBER 12, 1996
Common Shares, par
value $.20 a share 11,371,848
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
RECOTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Tabular Amounts in Thousands)
SEPTEMBER 30, DECEMBER 31,
ASSETS 1996 1995
-------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 10,189 $ 12,393
Accounts receivable (less allowance for
possible loss of $3,918,000 in 1996 and
$1,587,000 in 1995) 91,726 55,019
Inventories 111,949 66,484
Prepaid and refundable income taxes 5,253
Prepaid expenses and other current assets 15,178 6,583
------- -------
Total current assets 234,295 140,479
Property and equipment (at cost, less accumulated
depreciation and amortization) 29,985 24,163
Goodwill (less accumulated amortization) 31,553 16,391
Other assets 9,387 4,021
-------- --------
T O T A L $305,220 $185,054
======== ========
LIABILITIES
Current liabilities:
Bank loans and drafts payable $ 49,893 $ 13,176
Current portion of long-term debt 13,365 5,131
Accounts payable 23,377 15,144
Accrued expenses 19,366 7,417
Income taxes payable 2,632 3,209
-------- --------
Total current liabilities 108,633 44,077
Long-term debt (less current portion above) 68,301 20,511
Other noncurrent liabilities 1,695 1,069
-------- --------
Total liabilities 178,629 65,657
-------- --------
STOCKHOLDERS' EQUITY
Preferred stock - $1.00 par value each - authorized
10,000,000 shares; none issued -- --
Common stock - $.20 par value each - authorized
25,000,000 shares; issued
12,579,248 shares in
1996 and 12,296,160 shares in 1995 2,516 2,459
Additional paid-in capital 75,828 72,926
Retained earnings 55,096 48,797
Cumulative foreign currency translation
adjustment (760) (300)
-------- --------
Total 132,680 123,882
Treasury stock - 1,223,085 shares in 1996 and
1,132,770 shares in 1995, at cost (6,089) (4,485)
--------- ---------
Total stockholders' equity 126,591 119,397
-------- --------
T O T A L $305,220 $185,054
======== ========
The attached notes are made a part hereof.
<PAGE>
RECOTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
----- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $86,839 $55,729 $193,243 $135,210
Cost of goods sold 52,231 34,171 118,485 84,199
------- ------- -------- --------
Gross profit 34,608 21,558 74,758 51,011
------- ------- -------- --------
Selling, general and administrative
expenses 27,996 15,922 64,279 39,497
Interest expense 1,137 15 2,291 144
Investment (income) (58) (134) (202) (554)
------- ------- ------- -------
T o t a l 29,075 15,803 66,368 39,087
------- ------- ------- -------
Income before income taxes 5,533 5,755 8,390 11,924
Income tax provision 1,406 1,597 2,092 3,166
------- ------- ------- -------
NET INCOME $ 4,127 $ 4,158 $ 6,298 $ 8,758
======= ======= ======== =========
Earnings per common share:
Primary $.36 $.36 $.54 $.78
==== ==== ==== ====
Assuming full dilution $.36 $.36 $.54 $.76
==== ==== ==== ====
Number of shares used in
computing per share amounts:
Primary 11,591 11,472 11,660 11,292
====== ====== ====== ======
Assuming full dilution 11,591 11,605 11,665 11,522
====== ====== ====== ======
Dividends None None None None
====== ====== ====== ======
The attached notes are made a part hereof.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RECOTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Tabular Amounts in Thousands)
Nine Months Ended
SEPTEMBER 30,
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1996 1995
-----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,298 $ 8,758
--------- --------
Adjustments to reconcile results of
operations to net cash provided by
operating activities:
Depreciation and amortization 5,229 2,257
Provision for losses on accounts receivable 734 539
Deferred income taxes (808) (414)
Net change in asset and liability accounts:
Accounts receivable 1,728 (3,888)
Inventory (8,169) (11,683)
Prepaid and refundable income taxes (1,627)
Prepaid expenses and other current assets (2,631) 347
Other assets (196) (842)
Accounts payable and accrued expenses 706 2,561
Income taxes payable (579) 640
Deferred compensation and other noncurrent
liabilities 143 173
--------- ----------
Total adjustments (5,470) (10,310)
-------- --------
Net cash provided by (used for)
operating activities 828 (1,552)
--------- --------
Cash flows from investing activities:
Expenditures for property and equipment (5,613) (8,132)
Expenditures for trademarks, patents and
intellectual property (139) (565)
Payments for acquisitions (net of cash
acquired of approximately $3,148,000 in
1996 and $2,342,000 in 1995) (54,482) (12,539)
-------- --------
Net cash used for investing activities (60,234) (21,236)
------- -------
Cash flows from financing activities:
Net proceeds from bridge loan 83,995
Repayment of debt assumed on acquisition
of International Jensen, Inc. (10,490)
Net (repayments) proceeds under credit
agreements (13,176) 14,539
Repayment of long-term bank borrowings (3,976) (667)
Proceeds from exercise of stock options 1,384 179
Income tax benefit applicable to exercise
of stock options 1,125 4
Purchases of treasury stock (1,154) (680)
-------- --------
Net cash provided by financing activities 57,708 13,375
-------- --------
Effect of foreign exchange rate changes on cash (506) (28)
--------- ---------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (2,204) (9,441)
-------- --------
Cash and cash equivalents - January 1 12,393 15,475
------- -------
CASH AND CASH EQUIVALENTS - SEPTEMBER 30 $10,189 $ 6,034
======= =======
Supplemental disclosures of cash paid for:
Interest $ 1,743 $ 363
======= ========
Income taxes $ 3,642 $ 2,630
======= =========
</TABLE>
Noncash financing activities:
In connection with the exercise of incentive stock options in 1996, 143,701
shares of common stock were issued in exchange for 25,315 shares of previously
issued common stock with a market value of $449,678 and in 1995 9,602 shares
of common stock were issued in exchange for 1,540 shares of previously issued
common stock with a market value of $25,786.
In April 1995, 11,896 shares of treasury stock with a market value of $194,000
were acquired in consideration for the cancellation of a loan receivable.
The attached notes are made a part hereof.
<PAGE>
RECOTON CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE A - The attached summarized financial information does not include all
disclosures required to be included in a complete set of financial
statements prepared in conformity with generally accepted accounting
principles. Such disclosures were included with the consolidated
financial statements of the Company at December 31, 1995, included in
its annual report to shareholders. Such statements should be read in
conjunction with the data herein.
NOTE B - The financial information reflects all normal recurring adjustments
which, in the opinion of management, are deemed necessary for
a fair presentation of the results for the interim periods. The
results for the interim periods are not necessarily indicative of the
results to be expected for the year. Historically, the Company's sales
and earnings have been higher in the second half of each year.
NOTE C - Inventory at September 30, 1996 is comprised of:
Raw materials and work-in-process $ 32,431
Finished goods 68,280
Merchandise in-transit 11,238
-------
T o t a l $111,949
========
NOTE D - Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation" is effective January 1,
1996. As permitted under SFAS No. 123, the Company has decided to
continue accounting for employee stock compensation under APB 25
rules. However, in its financial statements for the year ending
December 31, 1996 the Company will disclose supplementally on a pro
forma basis its net income and earnings per common share as if it has
adopted the new standard's alternative accounting treatment. Such
alternative treatment calculates the total compensation expense to be
recognized as the fair value of the award at the date of grant.
The Company granted stock options for 284,741 and 348,209 shares during
the nine months ended September 30, 1996 and 1995, respectively.
NOTE E - On August 28, 1996, the Company acquired for cash, in a
purchase transaction, all of the outstanding stock of International
Jensen, Inc. ("Jensen") for a purchase price aggregating
approximately $55.6 million, plus approximately $4.5 million for
investment banker fees and other costs of the transaction. This
transaction was preceded by Jensen's sale of its original equipment
manufacturing business to a member of its management. The $15.9
million excess of the purchase price over the preliminary estimate
of the fair market value of the net assets acquired has been
recorded as goodwill, which is being amortized to operations over 20
years. Additionally, effective September 1, 1995, Recoton acquired,
in a purchase transaction, the capital stock of STD Holding, Ltd.
("STD") and certain assets of one of its subsidiaries.
The following presents, on an unaudited pro forma basis, the net sales,
net earnings and earnings per share of the Company as if the Jensen and
STD acquisitions had occurred on January 1, 1995. The information for
Jensen is based on its unaudited financial statements for the eight
month period ended August 31, 1996 and for the nine month period ended
November 30, 1995, after eliminating its original equipment
manufacturing operations and certain costs and expenses pertaining to
the acquisition which are unrelated to the operations acquired. The pro
forma information does not purport to be indicative of the results of
operations that would have occurred had the transactions taken place at
the beginning of the periods presented, nor is it indicative of the
expected future results of operations.
Nine Months Ended
SEPTEMBER 30,
1996 1995
(In Thousands, Except
Per Share Data)
Net sales $298,932 $282,946
======== ========
Net earnings (loss) $ (295)$ 4,796
======== ========
Earnings (loss) per share $(.03) $ .41
===== =====
The Company has negotiated a $120 million bridge loan with banks, under
which approximately $84.2 million is outstanding at September 30, 1996,
of which approximately $62.2 million was borrowed for the Jensen
acquisition, including the refinance of approximately $4.6 million of
Jensen's short-term debt assumed on the purchase. The Company intends to
refinance $75 million of the bridge loan into longer term debt in a
private placement, which is currently being negotiated with financial
institutions and institutional investors. The above pro forma operating
results are based on the terms of the loans currently being negotiated.
However, no assurance is given that such financing will be obtained on
the terms used for this presentation.
The consolidated balance sheet at September 30, 1996 includes Jensen's
assets acquired and liabilities assumed, based primarily on their
recorded book values. Such amounts are subject to revision upon the
determination of their individual fair values and any estimated costs to
eliminate duplicate facilities.
The balance sheet classification of the bank loans obtained and assumed
upon the acquisition of Jensen is based primarily on the payment terms
of the bridge loan obtained and is therefore subject to revision upon
the conclusion of its refinancing. The bridge loan provides for
borrowings of up to $120 million through December 26, 1996. Effective
December 26, 1996, any borrowings in excess of $95 million must be
repaid. The balance will then be comprised of a $50 million three year
revolving line of credit and, if not otherwise refinanced in a private
placement, a maximum term loan of $45 million which will be payable in
quarterly principal installments to December 26, 2000.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Comparison of the quarters ended September 30, 1996 and 1995 and the nine-month
periods ended September 30, 1996 and 1995:
RESULTS OF OPERATIONS
Net sales for the third quarter of 1996 increased by 55.8% to $86.8
million from $55.7 million in the same period in 1995. For the nine-month
periods, net sales increased by 42.9% to $193.2 million in 1996 from $135.2
million in 1995. The sales increase is primarily attributable to sales of the
InterAct, Performance and STD brands which were acquired by the Company in
September 1995 through the acquisition of STD Holding Limited ("STD") and sales
of the Advent, Jensen, Phase Linear, Mac Audio, Magnat, and NHT brands acquired
by the Company on August 28, 1996 through the acquisition of International
Jensen Incorporate (now known as Rocoton Audio Corporation, "RAC").
Gross profit for the third quarter of 1996 increased by approximately
$13.1 million as compared to the third quarter of 1995, and increased as a
percentage of net sales from 38.7% to 39.9%. Gross profit increased by
approximately $23.7 million in the first nine months of 1996 as compared to the
comparable period in 1995, and increased as a percentage of net sales from 37.7%
to 38.7%. The dollar increase is a result of increased sales volume, while the
percentage increase results from a more favorable product mix.
Selling, general and administrative expenses for the third quarter of 1996
increased by approximately $12.1 million as compared to the third quarter of
1995, and increased as a percentage of net sales from 28.6% to 32.2%. Selling,
general and administrative expenses increased in the first nine months of 1996
by $24.8 million, as compared to the comparable period in 1995, to $64.3
million, and increased as a percentage of net sales from 29.2% to 33.3%. The
increases were primarily due to the acquired operations of STD (in September
1995) and RAC (in August 1996), higher sales and marketing expenses in the weak
domestic market, the operations of Christie Design Corporation, which commenced
the manufacture and shipment of speakers in March 1996, increased research and
development expenses and expenses related to the Company's recently expanded
Lake Mary, Florida facilities.
Interest expense increased by approximately $1.1 million in the third
quarter of 1996 and by approximately $2.1 million in the first nine months of
1996 as compared to the comparable periods in 1995. The increases are primarily
attributable to the acquisition and operations of RAC in August 1996, the
acquisition and operations of STD in September 1995, and the financing of the
Company's new Lake Mary, Florida warehouse facility. Interest expense is
expected to increase substantially in the future as a result of the additional
debt incurred.
The effective income tax rate for the nine-month period ended September
30, 1996 decreased to 24.9% from 26.6% in 1995 as a result primarily of the high
proportion of income earned by the Company's subsidiaries in Hong Kong and
China, which is taxed at a maximum rate of 16.5%. The effective income tax rate
for the first nine months of 1996 may not be indicative of the effective income
tax rate for the year ending December 31, 1996 or thereafter because of changes
in the proportion of domestic and foreign taxable income which might occur, both
as a result of the Company's continuing operations, and the RAC acquisition.
Earnings per share were $.54 on both a primary and fully-diluted basis for
the nine months ended September 30, 1996 and $.36 on both a primary and
fully-diluted basis for the three months ended September 30, 1996. The 1996 per
share calculations were based on 11,660,000 (11,665,000 on a fully-diluted
basis) average common and common equivalent shares outstanding for the
nine-month period and 11,591,000 (on both a primary and fully-diluted basis) for
the three-month period. For the comparable nine months of 1995, earnings per
share were $.78 on a primary basis and $.76 on a fully-diluted basis. The 1995
per share calculations were based on 11,292,000 (11,522,000 on a fully-diluted
basis) average common and common equivalent shares outstanding. For the
comparable three months of 1995, earnings per share were $.36 on both a primary
and fully-diluted basis, based on 11,472,000 (11,605,000 on a fully-diluted
basis) average common and common equivalent shares outstanding. The increase in
average shares outstanding in 1996 primarily results from the 406,092 shares
issued as part of the STD acquisition in September 1995.
Statement of Financial Standards No. 123, "Accounting for Stock-Based
Compensation," became effective January 1, 1996. The Company has decided to
continue accounting for employee stock-based compensation under APB 25 rules, as
permitted under SFAS 123, but will disclose in its annual financial statement
for the year ending December 31, 1996 the pro forma effect on net income and
earnings per share as if it had adopted the new standard's alternative
accounting treatment.
LIQUIDITY AND CAPITAL RESOURCES
In August of 1996, the Company entered into a multi-bank $120 million
bridge facility that reduces after 120 days to a $50 million three-year
revolving credit facility and a $45 million four-year term loan. The bridge
facility was provided to accommodate the acquisition of RAC and to provide the
Company with the necessary facilities to finance its on-going operations. The
Company is presently in negotiations to complete a $75 million private
placement, the proceeds of which will be utilized to reduce current bank debt
and replace the $45 million term loan commitment. At September 30, 1996,
outstanding borrowings and letters of credit under the bridge loan facility were
$86.4 million.
At September 30, 1996, the Company had working capital of approximately
$125.7 million as compared to approximately $96.4 million at December 31, 1995.
The Company's working capital ratio, however, was 2.2 to 1 at September 30, 1996
as compared with 3.2 to 1 at December 31, 1995. The August 1996 acquisition of
RAC brought about a major change in the components of the Company's working
capital, and its working capital ratio, and is the primary reason for the $29.3
million net increase in working capital. Trade receivables of RAC accounted for
approximately $43.1 million of the $36.7 million net increase in overall
receivables, which was offset by a net decrease of approximately $6.4 million in
receivables applicable to the Company's other operations. Similarly, inventories
increased approximately $45.4 million, with RAC accounting for approximately
$37.1 million of that increase; the balance of the increase was due to seasonal
factors and projected increases in sales volume. Additionally, short-term bank
loans and the current portion of long-term debt as a whole increased
approximately $45.0 million, with RAC accounting for approximately $10.7 million
of that increase; the balance was necessary to finance the acquisition of RAC.
Accounts payable and accrued expenses increased approximately $20.2 million,
with RAC accounting for approximately $17.2 million; the balance was necessary
to support the increase in inventory.
In August 1994, the Board of Directors authorized the repurchase by the
Company of up to 500,000 outstanding Common Shares. In 1995, 42,366 shares were
repurchased for $.71 million; no shares were repurchased in the nine months
ended September 30, 1996. In June 1996, the Board of Directors authorized under
certain circumstances, the purchase from time to time of additional shares of
the Company's stock from certain officers. In July 1996, the Company purchased
65,000 shares of stock from an officer, for a total sales price of approximately
$1.154 million.
In April 1995, Recoton formed Christie Design Corporation, located in
Chatsworth, California. This wholly-owned subsidiary, which develops and markets
speaker products, commenced manufacturing and shipments in March 1996. Through
September 30, 1996, the Company has expended approximately $3.7 million of
start-up and capital costs for this subsidiary.
In September 1995, Recoton acquired STD, a Hong Kong-based international
manufacturer and marketer of multimedia and computer accessories, including
video game joysticks, controllers and accessories and computer speakers sold
under the InterAct, Performance and STD brand names. STD's operations are in
Hong Kong, the People's Republic of China and Maryland (U.S.A.). The total cost
of the purchase of $22.7 million was paid through a combination of cash and
406,092 Recoton Common Shares (valued at $8.3 million). The cash portion of the
purchase price was initially borrowed under existing bank lines of credit. In
December 1995, the Company obtained a five-year bank term loan to replace these
borrowings.
In August 1996, Recoton acquired RAC (then known as International Jensen
Incorporated), a leading marketer of home and automotive loudspeakers and
automotive electronics, for a total approximate cost of $60 million. The
transaction occurred by merger with a Recoton subsidiary, after the sale of
Jensen's original equipment manufacturing business to a third party.
The Company currently believes there is a limited exposure to loss due to
foreign currency risks in its foreign subsidiaries. The Hong Kong dollar has
been pegged to the U.S. dollar at an official exchange rate of HK$7.78 to
US$1.00. Historically, there have been no material fluctuations in the Hong
Kong/United States and the Hong Kong/Chinese exchange rates. However,
approximately $10 million of net assets are exposed to foreign currency exchange
fluctuations in Canada. Additionally, as a result of the RAC acquisition, the
Company estimates that approximately $35 million of net assets are exposed to
foreign currency exchange fluctuations in Western Europe.
The Company has no other material commitments for capital expenditures,
although it will continue to evaluate possible acquisitions which may be
attractive to the growth of the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
(a) DELAWARE LITIGATION REGARDING JENSEN.
Two separate actions are pending against Recoton and others in the courts
of the state of Delaware in connection with the merger (the "Merger") of Recoton
Acquisition Sub, Inc. into Jensen International Incorporated ("Jensen"): (i) IN
RE INTERNATIONAL JENSEN INCORPORATED SHAREHOLDERS LITIGATION (Chancery Court,
Delaware, Civil Action No. 14992) and (ii) EMERSON RADIO CORP. V. RAC, ROBERT G.
SHAW, DAVID G. CHANDLER, ROBERT H. JENKINS, NORMAN H. MCMILLAN, WILLIAM BLAIR
LEVERAGED CAPITAL FUND, L.P, RC ACQUISITION SUB, INC., RAC ACQUISITION CORP. AND
RECOTON CORPORATION (Chancery Court, Delaware, Civil Action No. 15130NC). For a
description of this litigation, see the Form 10-Q of Recoton for the period
ended June 30, 1996.
By Memorandum Opinion dated August 20, 1996, the Delaware Chancery Court
denied in its entirety the motion for a preliminary injunction by Emerson Radio
Corporation ("Emerson") and by certain stockholders of Jensen, which sought to
enjoin the Special Meeting of the stockholders of Jensen scheduled to take place
on August 28, 1996 to vote on the Merger.
(b) ILLINOIS LITIGATION REGARDING JENSEN MERGER.
An action is pending in the in Federal District Court in Chicago, Illinois,
which was commenced by Jensen against Emerson and its President for violations
of proxy solicitation rules and for breach of a confidentiality agreement with
Jensen (the "Confidentiality Agreement") in which Emerson has asserted
counterclaims and a third party complaint against Jensen, Robert Shaw and
Recoton alleging that Jensen and Mr. Shaw fraudulently induced Emerson to enter
into the Confidentiality Agreement and failed to negotiate with Emerson in good
faith, that Jensen and Mr. Shaw continued to mislead Emerson and negotiate in
bad faith, with Recoton and another party subsequently dismissed added as
alleged co-conspirators with respect to such continuing conduct and that Jensen
allegedly violated Section 14(a) of the Securities Act of 1934. RAC V. EMERSON
RADIO CORP. AND EUGENE DAVIS (U.S. District Court, Northern District of
Illinois, Eastern Division, No. 96C 2816). For a description of this litigation,
see the Form 10-Q of Recoton for the period ended June 30, 1996. By Memorandum
Opinion dated August 26, 1996, the District Court abstained from considering
Emerson's motion for a temporary restraining order and a preliminary injunction
in light of the proceedings in the Delaware Chancery Court. On October 22, 1996,
Emerson moved for leave to supplement its counterclaim and third-party complaint
to include an additional counterclaim against Jensen for breach of contract.
By Summons and Complaint of that same date, Recoton commenced an action
against Emerson in the Chicago District Court for Emerson's bad faith
interference in Recoton's acquisition of Jensen. RECOTON CORPORATION V. EMERSON
RADIO CORPORATION (U.S. District Court, Northern District of Illinois, Eastern
Division, No. 96 C 9602).
The parties in the two Chicago actions have been directed by the District
Court to file any motions to dismiss the pleadings by November 18, 1996 and the
Court has indicated that it will rule on any such motions by December 24, 1996.
Item 5. OTHER INFORMATION.
When used in this Form 10-Q and in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases and in oral
statements made with the approval of an authorized executive officer, the words
or phrases "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," "expect," "believe," "hope" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
such forward-looking statements, which speak only as of the date made.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(27) Financial Data Schedule
(b) Reports on Form 8-K: A report was filed on Forms 8-K during the
quarter ended September 30, 1996 dated August 28, 1996 describing under Item 2
the acquisition of RAC and related matters.
<PAGE>
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.
RECOTON CORPORATION
Date: November 13, 1996 /S/ STUART MONT
------------------------------ -
Stuart Mont, COO, CFO, Executive
Vice President-Operations, and
Secretary
Date: November 13, 1996 /S/ JOSEPH H. MASSOT
---------------------------------
Joseph H. Massot, Vice President,
Treasurer, Asst. Sec. and Principal
Accounting Officer
<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Statement of Financial Condition at September 30, 1996
(Unaudited) and the Condensed Consolidated Statement of Income for the Nine
Months Ended September 30, 1996 (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 10,189
<SECURITIES> 0
<RECEIVABLES> 95,644
<ALLOWANCES> 3,918
<INVENTORY> 111,949
<CURRENT-ASSETS> 234,295
<PP&E> 53,762
<DEPRECIATION> 23,777
<TOTAL-ASSETS> 305,220
<CURRENT-LIABILITIES> 108,633
<BONDS> 68,301
0
0
<COMMON> 2,516
<OTHER-SE> 124,075
<TOTAL-LIABILITY-AND-EQUITY> 305,220
<SALES> 193,243
<TOTAL-REVENUES> 193,445
<CGS> 118,485
<TOTAL-COSTS> 118,485
<OTHER-EXPENSES> 63,545
<LOSS-PROVISION> 734
<INTEREST-EXPENSE> 2,291
<INCOME-PRETAX> 8,390
<INCOME-TAX> 2,092
<INCOME-CONTINUING> 6,298
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,298
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
