<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
----------------
OR
[ ] 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 0-10583
-------
- --------------------------------------------------------------------------------
FUQUA ENTERPRISES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-1988043
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ATLANTIC CENTER, SUITE 5000
1201 W. PEACHTREE STREET, N.W., ATLANTA, GEORGIA 30309
------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 404-815-2000
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 the latest practicable date. As of April 30, 1997, there
were 4,478,847 shares of Common Stock, Par Value $2.50 per share outstanding.
<PAGE> 2
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
- March 31, 1997 and December 31, 1996
Condensed Consolidated Statements of Income
- for three months ended March 31, 1997 and March 31, 1996
Condensed Consolidated Statements of Cash Flows
- for three months ended March 31, 1997 and March 31, 1996
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Forms 8-K
(i)
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,271 $ 4,616
Receivables
Trade accounts, less allowance of $250 (1996, $250) . . . . . . . . . . . . . 41,467 33,871
Lease receivables, less allowance of $350 (1996, $350) . . . . . . . . . . . 681 1,147
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,023 42,059
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . 4,080 2,620
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,256 3,477
-------------------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,778 87,790
-------------------------
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 50,749 48,927
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . (16,554) (15,166)
-------------------------
Net Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . 34,195 33,761
-------------------------
Intangible assets, less accumulated amortization of $793 (1996, $399) . . . . . 37,747 20,014
Lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,703 3,503
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,328 1,408
-------------------------
Total Assets of Continuing Operations . . . . . . . . . . . . . . . . . . . 172,751 146,476
Total Assets of Discontinued Operations . . . . . . . . . . . . . . . . . . 3,969 4,935
-------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $176,720 $ 151,411
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
1
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands, except share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . $ 28,840 $ 29,992
Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,644 1,453
-------------------------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 33,484 31,445
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,614 30,686
-------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,098 62,131
-------------------------
Stockholders' equity
Preference stock, $1 par value:
authorized 8,000,000 shares; none issued . . . . . . . . . . . . . . . . . - -
Common stock, $2.50 par value:
authorized 20,000,000 shares; issued 4,523,669
shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,309 11,309
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . 24,847 24,847
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,313 53,971
-------------------------
91,469 90,127
Treasury stock, at cost: 44,822 shares . . . . . . . . . . . . . . . . . . . . (847) (847)
-------------------------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . 90,622 89,280
-------------------------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . . $176,720 $ 151,411
-------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars and shares in thousands, except per share data)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, March 31,
1997 1996
-------- ---------
<S> <C> <C>
REVENUES:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,621 $ 30,500
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 670
-------------------------
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,671 31,170
-------------------------
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,577 25,062
Selling, general and administrative expenses . . . . . . . . . . . . . . . . 8,373 3,148
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593 333
-------------------------
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 53,543 28,543
-------------------------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 2,128 2,627
INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786 1,027
-------------------------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,342 $ 1,600
=========================
Per share:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .30 $ .36
Common shares and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . 4,545 4,500
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash used in continuing operations . . . . . . . . . . . . . . . . . . . $ (7,342) $ (1,244)
Net cash provided by (used in) discontinued operations . . . . . . . . . . . 966 (1,131)
-------------------------
Net Cash Used In All Operations . . . . . . . . . . . . . . . . . . . . . (6,376) (2,375)
-------------------------
INVESTING ACTIVITIES
Sales of available for sale investments . . . . . . . . . . . . . . . . . . . - 10,517
Purchases of available for sale investments . . . . . . . . . . . . . . . . . - (20,341)
Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . (455) (477)
Cash acquired in business acquisition . . . . . . . . . . . . . . . . . . . . 1,058 -
Total from discontinued operations . . . . . . . . . . . . . . . . . . . . . - (165)
-------------------------
Net Cash Provided By (Used In) Investing Activities . . . . . . . . . . . 603 (10,466)
-------------------------
FINANCING ACTIVITIES
Net decrease in notes payable . . . . . . . . . . . . . . . . . . . . . . . . - (1,814)
Payment of long-term liabilities . . . . . . . . . . . . . . . . . . . . . . (572) (250)
Additional long-term liabilities . . . . . . . . . . . . . . . . . . . . . . 6,000 1,830
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . - 967
Acquired shares for treasury . . . . . . . . . . . . . . . . . . . . . . . . - (827)
-------------------------
Net Cash Provided By (Used In) Financing Activities . . . . . . . . . . 5,428 (94)
-------------------------
Increase (Decrease) in Cash and Cash Equivalents
Continuing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . (418) (11,639)
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 (1,296)
Cash and Cash Equivalents, Beginning of Period . . . . . . . . . . . . . . . . 4,616 29,000
-------------------------
Cash and Cash Equivalents, End of Period . . . . . . . . . . . . . . . . . . . $ 4,271 $ 16,065
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 7
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
- --------------------------------------------------------------------------------
1. CORPORATE DEVELOPMENT ACTIVITIES:
On April 3, 1996, Fuqua acquired the medical products operations of Lumex,
Inc. (the "Lumex Division") from Cybex International, Inc. (formerly Lumex,
Inc., the "Seller"). The purchase price for the Lumex Division was $40.7
million subject to a final adjustment as provided in the asset sale agreement.
The final purchase price adjustment is in dispute and is being resolved through
arbitration. Fuqua submitted its initial position statement to the arbitrator
in March 1997, which claimed that net assets at the closing date were
overstated by $9.3 million. In March 1997, Fuqua gave notice to the Seller to
preserve Fuqua's indemnification rights provided in the asset sale agreement.
On April 18, 1997, the Seller obtained an interim stay of the arbitration
proceedings, pending a hearing on May 9, 1997. On May 9, 1997, the New York
County Supreme Court vacated its stay of the arbitration proceedings and
directed Fuqua and the Seller to proceed to arbitration forthwith.
In April 1996, Fuqua's Leather Operations, through a joint venture, acquired
an interest in a tannery in the People's Republic of China. As a result, the
Leather Operations produce leather in China and market the products throughout
China and Southeast Asia. The investment provides an additional channel of
distribution for certain grades of the Leather Operations' production.
On February 26, 1997, Fuqua acquired 100% of the outstanding common stock
and warrants of Prism Enterprises, Inc. ("Prism"). Prism, whose 1996 net
sales were $12.0 million, is a manufacturer of therapeutic heat and cold packs
for medical and consumer uses and vacuum systems for obstetrical and other
applications. Prism's operating facilities are located in San Antonio, Texas
and Rancho Cucamonga, California. The purchase price was $19.5 million and was
financed with borrowings under Fuqua's Revolving Credit Facility. Based on the
preliminary allocation of purchase price, the excess purchase price over the
net assets acquired of $16.2 million was assigned to goodwill and is being
amortized on a straight-line basis over 30 years.
The results of operations of the Lumex Division are included in the
Condensed Consolidated Financial Statements for the three months ended March
31, 1997. The results of operations of Prism are included in the Condensed
Consolidated Financial Statements for the period from acquisition date,
February 26, 1997, through March 31, 1997. The following pro forma summary
presents Fuqua's consolidated results from operations as if these acquisitions
had occurred on the first day of each of the respective three month periods.
These pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of what would have occurred had the acquisitions
actually been made as of that date or the results which may occur in the
future.
<TABLE>
<CAPTION>
Three months ended March 31, 1997 1996
(Dollars in thousands)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $57,494 $45,907
Net income (loss) 1,439 (3,098)
Net income (loss) per share .32 (.69)
</TABLE>
2. PER SHARE CALCULATIONS:
Per share calculations are based on the average number of shares outstanding
plus common stock equivalents. Common stock equivalents include the effect of
options granted to key employees under Fuqua's Stock Option Plans. Fully
diluted per share calculations are not significantly different from those
reported.
5
<PAGE> 8
3. INVENTORIES:
Inventories consisted of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
(Dollars in thousands) 1997 1996
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finished goods $14,953 $16,238
Work in progress 12,379 12,338
Raw materials and supplies 15,691 13,483
------- -------
$43,023 $42,059
======= =======
</TABLE>
4. SUPPLEMENTAL CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(Dollars in thousands) 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest payments $ 483 $ 431
------- -------
Income tax payments $ 240 $ 113
------- -------
Issuance of debt in connection with business acquisition $ 19,500 $ -
------ --------
</TABLE>
5. CAPITAL STOCK:
On March 19, 1997, Fuqua granted options under Fuqua's 1995 Long-Term
Incentive Plan to various employees aggregating 75,500 shares at an exercise
price of $22.125 which equaled the market price at the date of grant. During
the first three months of 1997, there were no options exercised and Fuqua
acquired no shares of common stock for its treasury. During the first three
months of 1996, options for 80,000 shares of common stock were exercised at
$8.50-9.50 per share. Also, during the first three months of 1996, Fuqua
acquired 43,827 shares of common stock for its treasury at a total cost of
$827,000.
--------------------
The unaudited condensed consolidated financial statements reflect all
adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, necessary for a fair presentation of the results for the interim
periods. It is suggested that these unaudited condensed consolidated financial
statements be read in conjunction with the consolidated financial statements
and notes thereto included in Fuqua's 1996 Annual Report on Form 10-K.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Acquisitions: On April 3, 1996, Fuqua acquired the medical products
operations of Lumex, Inc. (the "Lumex Division") from Cybex International, Inc.
(formerly Lumex, Inc., the "Seller"). The purchase price for the Lumex
Division was $40.7 million subject to a final adjustment as provided in the
asset sale agreement. The final purchase price adjustment is in dispute and is
being resolved through arbitration. Fuqua submitted its initial position
statement to the arbitrator in March 1997, which claimed that the net assets at
the closing date were overstated by $9.3 million. In March 1997, Fuqua gave
notice to the Seller to preserve Fuqua's indemnification rights provided in the
asset sale agreement. On April 18, 1997, the Seller obtained an interim stay
of the arbitration proceedings, pending a hearing on May 9, 1997. On May 9,
1997, the New York County Supreme Court vacated its stay of the arbitration
proceedings and directed Fuqua and the Seller to proceed to arbitration
forthwith.
In April 1996, Fuqua's Leather Operations, through a joint venture, acquired
an interest in a tannery in the People's Republic of China. As a result, the
Leather Operations produce leather in China and market the products throughout
China and Southeast Asia. The investment provides an additional channel of
distribution for certain grades of the Leather Operations' production.
On February 26, 1997, Fuqua acquired 100% of the outstanding common stock
and warrants of Prism Enterprises, Inc. ("Prism"). Prism, whose 1996 net
sales were $12.0 million, is a manufacturer of therapeutic heat and cold packs
for medical and consumer uses and vacuum systems for obstetrical and other
applications. Prism's operating facilities are located in San Antonio, Texas
and Rancho Cucamonga, California. The purchase price was $19.5 million and was
financed with borrowings under Fuqua's Revolving Credit Facility. Based on the
preliminary allocation of purchase price, the excess purchase price over the
net assets acquired of $16.2 million was assigned to goodwill and is being
amortized on a straight-line basis over 30 years.
Medical Products Operations: Net sales in the first quarter of 1997 were
$24,403,000 as compared to $7,630,000 in the first quarter of 1996. The cost
of sales increased from $5,498,000 in the first quarter of 1996 to $17,186,000
in the first quarter of 1997. Selling, general and administrative costs
increased from $1,418,000 in the first quarter of 1996 to $5,669,000 in the
first quarter of 1997. The increases in net sales, cost of sales and selling,
general and administrative costs are due principally to the acquisitions of the
Lumex Division and Prism which are included in the results of the first quarter
of 1997, but not in the comparable quarter of 1996.
Inventories at March 31, 1997 were $16,872,000 as compared to $5,038,000 at
March 31, 1996 and $17,279,000 at December 31, 1996 and accounts receivable at
March 31, 1997 were $19,752,000 as compared to $5,030,000 at March 31, 1996 and
$16,870,000 at December 31, 1996. The increases in inventories and accounts
receivable are due principally to the acquisitions of the Lumex Division and
Prism.
Capital expenditures for the Medical Products Operations were $537,000 in
the first quarter of 1997 as compared to $116,000 in the first quarter of 1996.
Depreciation and amortization expense for the first quarter of 1997 was
$964,000 as compared to $134,000 in the first quarter of 1996.
Leather Operations: Net sales of the Leather Operations increased
$8,348,000 or 36.5% in the first quarter of 1997 versus the comparable period
of 1996, principally as a result of increased quantity of leather sold. Sales
to foreign customers represented 45.5% of net sales in the first quarter of
1997 as compared to 25.0% of net sales in the first quarter of 1996.
The profit margin decreased to 5.9% of sales in the first quarter of 1997
from 10.6% in the comparable period of 1996, primarily due to unfavorable
changes in hide costs in 1997 which could not be passed on to customers.
Selling, general and administrative expenses increased $270,000 or 15.6% in
the first quarter of 1997 compared to the first quarter of 1996, representing
6.4% of net sales as compared to 7.6% a year ago. The increase in selling,
7
<PAGE> 10
general and administrative expenses in the first quarter of 1997 was
principally due to increased selling expenses associated with higher levels of
foreign sales.
Accounts receivable were higher, $21,715,000 at March 31, 1997, as compared
to $15,803,000 at December 31, 1996, due principally to seasonal factors.
During the first quarter of 1997, inventories increased 5.5%, from $24,780,000
at December 31, 1996 to $26,151,000 at March 31, 1997.
Capital expenditures for the Leather Operations were $280,000 in the first
quarter of 1997, and are expected to be approximately $2,131,000 for the entire
year of 1997. Depreciation expense for the Leather Operations in the first
quarter of 1997 was $399,000 as compared to $424,000 in the comparable period
of 1996.
Corporate Office Operations: Investment income in the first quarter of 1997
was $50,000 as compared to $670,000 in the comparable period of 1996. The
decrease in investment income in 1997 reflects the lower levels of invested
funds as a result of business acquisitions.
Interest expense in the first quarter of 1997 was $593,000 as compared to
$333,000 in the comparable period of 1996 reflecting higher interest costs and
fees associated with a larger amount of outstanding debt arising from the
acquisition of the Lumex Division and Prism.
General and Administrative expenses for corporate office activities were
$704,000 in the first quarter of 1997 as compared to $852,000 in the comparable
period of 1996. The decrease resulted mainly from costs and expenses
associated with 1996 corporate development activities as compared to such
activities in the first quarter of 1997.
Recent Pronouncements: 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, Fuqua 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. Since Fuqua does
not have a significant amount of common stock equivalents, the impact of
Statement No. 128 on the calculation of earnings per share for the three months
ended March 31, 1997 and March 31, 1996 is not material.
Recent Developments: The Union of Needletrades, Industrial and Textile
Employees, AFL-CIO (the "Union") has filed a representation petition with the
National Labor Relations Board ("NLRB") with respect to Fuqua's Leather
Operations in Hartland, Maine. A secret ballot election to be conducted by the
NLRB is tentatively scheduled for June 6, 1997. If a majority of voting
employees in the bargaining unit vote in favor of the Union, management will be
obligated to comply with all Federal laws associated with collective bargaining
and to attempt to negotiate, in good faith, a collective bargaining agreement
with the Union. Management is currently unable to predict the outcome of this
election or its potential impact, if any, on the Leather Operations.
LIQUIDITY AND CAPITAL RESOURCES:
At March 31, 1997, Fuqua had $4,271,000 in cash and cash equivalents and
$47,000,000 in borrowing capacity under Fuqua's Revolving Credit Facility.
Management believes that Fuqua has adequate resources and borrowing capacity to
meet its obligations when due and to pursue its corporate development
activities.
Certain matters included herein may constitute "forward-looking statements"
within the meaning of Federal securities laws. These forward looking
statements reflect management's current expectations and are based upon
currently available data. Actual results are subject to future events, risks
and uncertainties, such as competition, inflation, timing of capital
expenditures and other risk factors, which could materially impact performance
from that expressed or implied in these statements.
8
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
On April 3, 1996, Fuqua acquired the medical products operations of Lumex,
Inc. (the "Lumex Division") from Cybex International, Inc. (formerly Lumex,
Inc., the "Seller"). The purchase price for the Lumex Division was $40.7
million, subject to a final purchase price adjustment as provided in the asset
sale agreement. The final purchase price adjustment is in dispute and is being
resolved through arbitration. Fuqua submitted its initial position statement
to the arbitrator in March 1977, which claimed that net assets at the closing
date were overstated by $9.3 million. In March 1997, Fuqua gave notice to the
Seller to preserve Fuqua's indemnification rights provided in the asset sale
agreement. On April 18, 1997, the Seller, obtained an interim stay of the
arbitration proceedings pending a hearing on May 9, 1997. On May 9, 1997, the
New York County Supreme Court vacated its stay of the arbitration proceedings
and directed Fuqua and the Seller to proceed to arbitration forthwith.
The nature of Fuqua's business results in claims or litigation which
management believes to be routine and incidental to Fuqua's business. Fuqua
maintains insurance in such amounts and with such coverages and deductibles as
management believes are reasonable and prudent, although in certain actions,
plaintiffs request damages that may not be covered by insurance. Management
does not believe that the outcome of any such pending claims and litigation
will have an adverse material effect upon Fuqua's results of operations or
financial condition, although no assurance can be given as to the ultimate
outcome of any such claim or litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of stockholders held on May 3, 1997, the stockholders
re-elected all the nominees as listed in the Proxy Statement, dated March 28,
1997, to the Board of Directors.
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
J. B. Fuqua 4,211,270 shares 5,663 shares
J. Rex Fuqua 4,210,670 shares 6,263 shares
W. Clay Hamner 4,211,070 shares 5,863 shares
Frank W. Hulse IV 4,211,270 shares 5,663 shares
Lawrence P. Klamon 4,211,270 shares 5,663 shares
Richard C. Larochelle 4,211,270 shares 5,663 shares
Gene J. Minotto 4,211,270 shares 5,663 shares
Clark L. Reed, Jr. 4,210,170 shares 6,763 shares
D. Raymond Riddle 4,211,270 shares 5,663 shares
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Listing of Exhibits
11 Statement of Computation of Earnings Per Share
27 Financial Data Schedule (for SEC use only) Article 5
(b) Reports on Form 8-K
In February 1997, Fuqua filed a Form 8-K related to the acquisition
of Prism Enterprises, Inc. In March 1997, Fuqua filed a Form 8-K/A, Amendment
No. 2 amending its April 3, 1996 filing on Form 8-K related to the acquisition
of the Lumex Division.
9
<PAGE> 12
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.
FUQUA ENTERPRISES, INC.
REGISTRANT
s/s Brady W. Mullinax, Jr.
-----------------------------------------------
Brady W. Mullinax, Jr., Vice President-Finance,
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer
and Executive Officer duly authorized to sign
on behalf of the registrant)
Date: May 14, 1997
10
<PAGE> 1
EXHIBIT 11
FUQUA ENTERPRISES, INC.
NUMBER OF SHARES USED IN COMPUTING EARNINGS
PER SHARE MARCH 31, 1997
PRIMARY EARNINGS PER SHARE:
TREASURY STOCK METHOD:
<TABLE>
<CAPTION>
NUMBER OF
TRADING TOTAL TOTAL
MONTH DAYS HIGH LOW
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
January 22 $ 525.125 $ 520.750
February 19 459.875 456.500
March 20 452.125 448.000
-- ----------- ----------
61 $ 1,437.125 $1,425.250 $2,862.375
== =========== =========== ==========
AVERAGE: $2,862.375 divided by 61 divided by 2 = $23.462
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
OPTIONS OPTION
OUTSTANDING SHARES PRICE EXTENSION
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5,000 9.500 47,500
121,400 21.250 2,579,750
25,000 20.375 509,375
5,000 21.000 105,000
15,000 20.625 309,375
4,000 18.625 74,500
150,000 20.500 3,075,000
100,000 18.375 1,837,500
75,500 22.125 1,670,438
------- -----------
Total 500,900 $10,208,438
======= ===========
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Average Price (above) $ 23.462
----------
Total Option Extension Divided by Average Price 435,103
Options Outstanding 500,900
----------
Common Stock Equivalents 65,797
Average Shares Outstanding (see page 2) 4,478,847
----------
Use for Primary Earnings Per Share 1st Quarter 4,544,644
----------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-continued-
1
<PAGE> 2
FULLY DILUTED EARNINGS PER SHARE:
AVERAGE NUMBER OF SHARES OUTSTANDING:
<TABLE>
<CAPTION>
BEGINNING ENDING NUMBER SHARES
DATE DATE OF DAYS OUTSTANDING EXTENSION
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1-1-97 1-31-97 31 4,478,847 138,844,257
2-1-97 2-28-97 28 4,478,847 125,407,716
3-1-97 3-31-97 31 4,478,847 138,844,257
-- -----------
90 403,096,230
== ===========
Average Number of Shares Outstanding:
First Quarter (Extension Divided by Number of Days) 4,478,847
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FIRST
QUARTER
-------
<S> <C>
Closing Price - 3-31-97 $ 22.750
----------
Total Option Extension (from page 1) Divided by Closing Price 448,723
Options Outstanding 500,900
----------
Common Stock Equivalents 52,177
Average Shares Outstanding (from above) 4,478,847
----------
Fully Diluted Shares 4,531,024
Less Primary Shares (from page 1) 4,544,644
----------
Additional Shares (13,620)
----------
Percentage (.30%)
(Note: Anti-dilutive or less than 3.0%; no fully diluted presentation required.)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1997 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,271
<SECURITIES> 0
<RECEIVABLES> 42,148
<ALLOWANCES> (600)
<INVENTORY> 43,023
<CURRENT-ASSETS> 97,778
<PP&E> 50,749
<DEPRECIATION> (16,554)
<TOTAL-ASSETS> 176,720
<CURRENT-LIABILITIES> 33,484
<BONDS> 52,614
0
0
<COMMON> 11,309
<OTHER-SE> 79,313
<TOTAL-LIABILITY-AND-EQUITY> 176,720
<SALES> 55,621
<TOTAL-REVENUES> 55,671
<CGS> 44,577
<TOTAL-COSTS> 52,950
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 57
<INTEREST-EXPENSE> 593
<INCOME-PRETAX> 2,128
<INCOME-TAX> 786
<INCOME-CONTINUING> 1,342
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,342
<EPS-PRIMARY> .30
<EPS-DILUTED> 0
</TABLE>
