UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended ________________March_31,_1995___________________
Commission file number _________________________0-3037__________________________
___________________________WILLIAM_H._SADLIER,_INC._____________________________
(Exact name of registrant as specified in its charter)
__________New_York________________ __________13-5363840____________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
_____9_Pine_Street,_New_York,_New_York_____________________10005-1002___________
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code ____(212)_227-2120___________
_________________________________Not_Applicable_________________________________
Former name, former address and former fiscal year, if changed since last
report.
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
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 April 30, 1995.
Common stock, par value $0.25 per share: 894,296 shares outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
WILLIAM H. SADLIER, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
__________March_31,_________ December_31,
____1995_____________1994___ ____1994____
(Unaudited) (Note)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 336,514 $ 54,335 $ 871,515
Accounts receivable 1,037,882 975,706 2,185,333
Refundable income taxes 1,593,000 1,513,000 -
Inventories:
Bound books and merchandise 2,479,956 2,039,661 1,652,782
Sheet stock and work in process 61,092 103,776 55,657
Paper ____616,859_ ____117,830_ _____79,895_
3,157,907 2,261,267 1,788,334
Prepaid expenses 303,461 336,149 333,035
Deferred income taxes ____645,200_ ____650,200_ ____645,200_
Total current assets 7,073,964 5,790,657 5,823,417
Fixed assets--net 1,139,553 1,205,483 1,163,009
Deferred pre-publication costs 6,757,577 5,171,156 6,801,832
Other assets ____782,128_ ____673,471_ ____751,927_
$15,753,222 $12,840,767 $14,540,185
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current portion of long-term debt $ 100,000 $ - $ 100,000
Notes payable--banks 3,600,000 1,800,000 -
Accounts payable 1,805,451 1,134,860 986,436
Accrued royalties 40,306 65,358 1,082,481
Other liabilities and
accrued expenses ____701,738_ ____675,536_ ____868,837_
Total current liabilities 6,247,495 3,675,754 3,037,754
Long-term debt 275,000 - 300,000
Deferred income taxes 41,800 32,900 41,800
Shareholders' equity:
Common shares 225,000 225,000 225,000
Retained earnings __8,995,660_ __8,938,846_ _10,967,364_
9,220,660 9,163,846 11,192,364
Less treasury shares, at cost ____(31,733) ____(31,733) ____(31,733)
__9,188,927_ __9,132,113_ _11,160,631_
$15,753,222 $12,840,767 $14,540,185
============ ============ ============
<FN>
Note: The balance sheet at December 31, 1994 has been taken from the audited
financial statements at that date and condensed.
</TABLE>
<TABLE>
<CAPTION>
WILLIAM H. SADLIER, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
Three months ended
___________March_31,__________
_____1995____ _____1994____
<S> <C> <C>
Net sales $ 844,959 $ 810,910
Operating costs and expenses:
Manufacturing, royalty and amortization 818,173 762,341
Editorial and distribution 1,014,175 1,031,060
Selling, general and administrative ___2,443,542_ ___2,529,112_
___4,275,890_ ___4,322,513_
Operating loss (3,430,931) (3,511,603)
Other income (expense):
Interest income 515 7,965
Other income 16,015 835
Interest expense _____(45,303) _____(16,741)
_____(28,773) ______(7,941_
Loss before income taxes (3,459,704) (3,519,544)
Credit for income taxes __(1,488,000) __(1,513,000)
Net loss (1,971,704) (2,006,544)
Retained earnings at beginning of period __10,967,364_ __10,945,390_
Retained earnings at end of period $ 8,995,660 $ 8,938,846
============= =============
Loss per common share $ (2.21) $ (2.23)
============= =============
Average common shares outstanding 894,296 899,046
============= =============
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<TABLE>
<CAPTION>
WILLIAM H. SADLIER, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
___________March_31,__________
_____1995____ ____1994_____
<S> <C> <C>
CASH FLOW USED IN OPERATIONS:
Cash used in operations $_(3,516,210) $_(3,809,481)
CASH FLOW USED IN INVESTING ACTIVITIES:
Proceeds from sale of short-term investments - 695,880
Capital expenditures (28,046) (49,479)
Prepublication cost expenditures (565,745) (585,941)
Purchase of textbook series ________-____ ____(360,000)
Cash used in investing activities ____(593,791) ____(299,540)
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit 3,600,000 1,800,000
Repayment of long-term debt (25,000) -
Purchase of treasury shares ________-____ _____(25,000)
Cash provided by financing activities ___3,575,000_ ___1,775,000_
Decrease in cash and cash equivalents (535,001) (2,334,021)
Cash and cash equivalents at beginning of period _____871,515_ ___2,388,356_
Cash and cash equivalents at end of period $ 336,514 $ 54,335
============= =============
OTHER CASH FLOW INFORMATION:
Depreciation and amortization $ 661,503 $ 629,259
============= =============
</TABLE>
WILLIAM H. SADLIER, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Condensed Consolidated Financial Statements
The condensed consolidated balance sheets as of March 31, 1995 and 1994,
and both the condensed consolidated statements of operations and retained
earnings and the condensed consolidated statements of cash flows for the three-
month periods then ended have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and changes in cash flows for both periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and related notes included in the Company's Annual Report for the
year ended December 31, 1994.
2. Seasonality
Historically, educational publishing has been subject to the seasonality
associated with the educational year, resulting in a concentration of sales in
the third calendar quarter. Therefore, the results of operations for the three
months ended March 31, 1995 should not necessarily be considered indicative of
the results for the year ending December 31, 1995.
Item 2. Management's_Discussion_and_Analysis_of_Financial_Condition
and_Results_of_Operations
Results_of_Operations
In the three months ended March 31, 1995, net sales were higher than in the
comparable period of 1994. New_Progress_in_Mathematics and the Parish Edition
of Coming_to_Faith accounted for most of the increase.
Manufacturing costs were higher due primarily to paper prices which increased
substantially in the latter part of 1994. The Company expects to offset most
of the higher costs for paper during 1995 by reasonably increasing the prices
it charges for its products. With the completion of the revisions of two major
series, editorial expenses declined in the first three months of 1995.
Promotional expenses related to those series also decreased from 1994 levels.
In addition, general and administrative expenses were lower in 1995.
Interest expense increased in 1995 due to higher levels of borrowing and higher
interest rates, while interest income decreased because of a reduction in funds
available for investment. Other income rose in the three months ended
March 31, 1995, the result of an increase in cash discounts.
The credits for income taxes in 1995 and 1994 were based on the effective tax
rates estimated for each full year.
Liquidity_and_Capital_Resources
Cash and cash equivalents at March 31, 1995 increased by $282,000 from the
March 31, 1994 level. Working capital decreased by $1,288,000 from the
comparable date in 1994, primarily due to greater prepublication cost and
editorial expenditures in the year ended December 31, 1994. These expenditures
were incurred to complete the revisions of New_Progress_in_Mathematics and the
Parish Edition of Coming_to_Faith, and to begin the revision of the Catholic
School Edition of Coming_to_Faith. Because of the reduced availability of
paper in 1995, the Company purchased significantly more paper for inventory
than it normally does to ensure an adequate supply for its printing
requirements.
Cash flow provided by operations has generally been sufficient to finance
investment in new products, equipment and facilities, dividends paid to
shareholders and the repayment of short-term bank borrowing. Management
believes this will continue to be true in 1995.
The Company maintains lines of credit with its banks, under which $9,000,000
was available at March 31, 1995. Each year, because of the seasonality
associated with educational publishing, the Company must draw on its lines of
credit. During the latter part of each year, such borrowing is repaid and
excess funds are available for investment in cash equivalents and short-term
securities at March 31, 1995 and 1994, such short-term borrowing amounted to
$3,600,000 and $1,800,000, respectively.
PART_II.__OTHER_INFORMATION
All items required hereunder have been omitted because they are inapplicable
or would result in negative answers.
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.
_WILLIAM_H._SADLIER,_INC._
(Registrant)
__May_12,_1995__ By: /s/_Frank_S._Dinger___________________
(Date) Frank S. Dinger
Chairman of the Board and
Chief Operating Officer
__May_12,_1995__ By: /s/_Henry_E._Christel_________________
(Date) Henry E. Christel
Vice President, Treasurer
Principal Financial Officer
