<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
Commission file number 1-13970
CHROMCRAFT REVINGTON, INC.
(Exact name of Registrant as specified in its charter)
Delaware 35-1848094
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1100 North Washington Street, Delphi, IN 46923
(Address of Registrant's principal executive offices)
(317) 564-3500
(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 filing requirements for the past 90 days.
Yes X No
The number of shares outstanding for each of the
Registrant's classes of common stock as of the latest
practicable date:
Outstanding at
Class August 1, 1996
Common Stock, $.01 Par Value 5,740,273
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Table of Contents
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits 10
Signatures 10
2 <PAGE>
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings (unaudited)
Chromcraft Revington, Inc.
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------- ---------------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales $ 39,922 $ 36,620 $ 82,213 $ 73,220
Cost of sales 28,909 27,129 59,554 53,382
-------------- -------------- -------------- --------------
Gross margin 11,013 9,491 22,659 19,838
Selling, general and
administrative expenses 5,680 4,939 11,479 9,821
-------------- -------------- -------------- --------------
Operating income 5,333 4,552 11,180 10,017
Interest income (expense), net 19 (98) (5) (42)
-------------- -------------- -------------- --------------
Earnings before income
tax expense 5,352 4,454 11,175 9,975
Income tax expense 2,141 1,804 4,470 4,040
-------------- -------------- -------------- --------------
Net earnings $ 3,211 $ 2,650 $ 6,705 $ 5,935
============== ============== ============== ==============
Earnings per share
of common stock $ .55 $ .45 $ 1.14 $ 1.01
============== ============== ============== ==============
Average common shares
and equivalents outstanding 5,884 5,867 5,884 5,860
============== ============== ============== ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3 <PAGE>
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Condensed Consolidated Balance Sheets (unaudited)
Chromcraft Revington, Inc.
(In thousands)
<TABLE>
<CAPTION>
June 29, July 1, December 31,
Assets 1996 1995 1995
---------- -------------- -------------- --------------
<S> <C> <C> <C>
Cash and cash equivalents $ 652 $ - $ -
Accounts receivable 21,537 16,832 18,370
Inventories 18,405 17,797 19,928
Deferred income taxes and other assets 1,562 1,785 1,173
-------------- -------------- --------------
Current assets 42,156 36,414 39,471
Property, plant and equipment, net 22,839 20,700 22,627
Intangibles and other assets 23,384 23,862 23,727
-------------- -------------- --------------
Total assets $ 88,379 $ 80,976 $ 85,825
============== ============== ==============
Liabilities and Stockholders' Equity
----------------------------------------
Accounts payable $ 5,505 $ 6,052 $ 7,568
Accrued liabilities 9,312 8,480 9,983
-------------- -------------- --------------
Current liabilities 14,817 14,532 17,551
Revolving credit facility - 5,685 1,500
Deferred income taxes and other liabilities 2,901 3,016 2,992
-------------- -------------- --------------
Total liabilities 17,718 23,233 22,043
-------------- -------------- --------------
Stockholders' equity
Common stock and capital in excess of par value 21,016 20,842 20,842
Retained earnings 49,645 36,901 42,940
-------------- -------------- --------------
Total stockholders' equity 70,661 57,743 63,782
-------------- -------------- --------------
Total liabilities and stockholders' equity $ 88,379 $ 80,976 $ 85,825
============== ============== ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4 <PAGE>
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Condensed Consolidated Statements of Cash Flows (unaudited)
Chromcraft Revington, Inc.
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
------------------------------------
June 29, July 1,
1996 1995
-------------- --------------
Operating Activities
<S> <C> <C>
Net earnings $ 6,705 $ 5,935
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation and amortization 1,685 1,831
Deferred income taxes (124) (215)
Changes in assets and liabilities, net
Accounts receivable (3,167) (296)
Inventories 1,523 2,056
Other current assets (297) (749)
Accounts payable and accrued liabilities (2,734) (2,188)
Other (274) 117
-------------- --------------
Cash provided by operating activities 3,317 6,491
-------------- --------------
Investing Activities
Capital expenditures (1,587) (1,900)
Disposal of property, plant and equipment 248 -
Investment in acquired company - (8,350)
Funds held in escrow - (3,000)
-------------- --------------
Cash used in investing activities (1,339) (13,250)
-------------- --------------
Financing Activities
Borrowings (payments) under revolving credit facility (1,500) 5,685
Refinance acquired company indebtedness - (1,190)
Proceeds from stock options exercised 174 186
-------------- --------------
Cash provided (used) in financing activities (1,326) 4,681
-------------- --------------
Net change in cash and cash equivalents 652 (2,078)
Cash and cash equivalents at beginning of period - 2,078
-------------- --------------
Cash and cash equivalents at end of period $ 652 $ -
============== ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
5 <PAGE>
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Notes to Condensed Consolidated Financial Statements (unaudited)
Chromcraft Revington, Inc.
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statement presentation.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended
June 29, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Registrant's annual report on
Form 10-K for the year ended December 31, 1995.
Note B - Average Common Shares and Equivalents Outstanding
Average common shares used in the calculation of earnings per share
included common stock equivalents (stock options) of approximately
147,000 and 140,000 shares for the three months ended June 29, 1996
and July 1, 1995, respectively, and 150,000 and 137,000 shares for the
six months ended June 29, 1996 and July 1, 1995, respectively.
Note C - Inventories
The components of inventories consisted of the following:
<TABLE>
<CAPTION>
(In thousands)
----------------------------------------------------
June 29, July 1, December 31,
1996 1995 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Raw materials $ 4,982 $ 5,413 $ 5,905
Work-in-process 4,041 3,338 3,926
Finished goods 11,026 10,104 11,459
-------------- -------------- --------------
Inventories at FIFO cost 20,049 18,855 21,290
LIFO reserve (1,644) (1,058) (1,362)
-------------- -------------- --------------
$ 18,405 $ 17,797 $ 19,928
============== ============== ==============
</TABLE>
6 <PAGE>
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Note D - Accrued Liabilities
Accrued liabilities consisted of the following:
<TABLE>
<CAPTION>
(In thousands)
----------------------------------------------------
June 29, July 1, December 31,
1996 1995 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Employee benefit plans $ 3,091 $ 2,416 $ 2,949
Salaries, wages and commissions 1,128 991 1,199
Vacation and holiday compensation 813 749 928
Workers' compensation plans 893 936 1,002
Other accrued liabilities 3,387 3,388 3,905
-------------- -------------- --------------
$ 9,312 $ 8,480 $ 9,983
============== ============== ==============
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Three and Six Months Ended June 29, 1996 versus Three and Six Months
Ended July 1, 1995.
- - ---------------------------------------------------------------------
Chromcraft Revington, Inc. (the "Company") manufactures and sells
residential and commercial furniture through its wholly-owned
subsidiaries Chromcraft Corporation ("Chromcraft"), Peters-Revington
Corporation ("Peters-Revington") and Silver Furniture Co., Inc.
("Silver Furniture"). The following table sets forth the consolidated
results of operations for the three and six months ended June 29, 1996
and July 1, 1995 expressed as a percentage of sales.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------------- ---------------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 72.4 74.1 72.4 72.9
---------- ---------- ---------- ----------
Gross margin 27.6 25.9 27.6 27.1
Selling, general and
administrative expenses 14.2 13.5 14.0 13.4
---------- ---------- ---------- ----------
Operating income 13.4 12.4 13.6 13.7
Interest expense, net - .2 - .1
---------- ---------- ---------- ----------
Earnings before
income tax expense 13.4 12.2 13.6 13.6
Income tax expense 5.4 5.0 5.4 5.5
---------- ---------- ---------- ----------
Net earnings 8.0 % 7.2 % 8.2 % 8.1 %
========== ========== ========== ==========
</TABLE>
Operating results of Silver Furniture are included in the consolidated
financial statements of the Company since April 3, 1995, the
acquisition date.
7 <PAGE>
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Sales
Consolidated sales for the second quarter of 1996 increased 9.0% to
$39,922,000 from $36,620,000 for the second quarter of 1995. The
sales increase was due to higher sales at each of the Company's
subsidiaries. For the six months ended June 29, 1996, consolidated
sales increased 12.3% to $82,213,000 from $73,220,000 for the first
six months of 1995. The sales increase for the first half of 1996 as
compared to the year-earlier period was primarily due to the inclusion
of Silver Furniture's operating results. The Company's sales order
backlog entering the third quarter was higher than the year ago level.
Cost of Sales
Cost of sales as a percentage of sales was 72.4% for each of the three
and six month periods ended June 29, 1996 as compared to 74.1% and
72.9% for the three and six month periods ended July 1, 1995,
respectively. The cost percentage decrease for the second quarter was
primarily attributable to improved operating margins at Chromcraft
and Silver Furniture due, in part, to spreading fixed overhead costs
over a higher sales volume.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of sales
were 14.2% and 14.0% for the second quarter and six months ended June
29, 1996, respectively, as compared to 13.5% and 13.4% for the second
quarter and six months ended July 1, 1995, respectively. The cost
percentage increase for the three months ended June 29, 1996 as
compared to the prior year quarter was primarily due to higher selling
costs and an increase in corporate related costs. For the six months
ended June 29, 1996, the cost percentage increase as compared to the
prior year was due, in part, to the inclusion of Silver Furniture's
operating results.
Interest Income (Expense), Net
The Company earned interest income of $19,000 during the second
quarter of 1996 as compared to incurring interest expense of $98,000
during the second quarter a year ago. For the six months ended June
29, 1996, interest expense, net, was $5,000 as compared to $42,000 for
the first six months of 1995. The Company had no bank borrowings
during the second quarter of 1996 and excess cash was invested in
short-term investments.
Income Tax Expense
The Company's effective tax rate for the three and six month periods
ended June 29, 1996 was 40.0% as compared to 40.5% for the same
periods of 1995. The lower effective tax rate for 1996 was primarily
due to a decrease in state income taxes.
8 <PAGE>
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Liquidity and Capital Resources
The operating activities of the Company provided $3,317,000 of cash
for the first half of 1996, a decrease of $3,174,000 from the amount
provided in the year earlier period. The decrease in cash flow from
operating activities for 1996 was mainly as a result of an increase in
working capital investment, primarily in accounts receivable due to a
higher sales volume. Cash flow from higher earnings in 1996 as
compared to the prior year period partially offset the increase in
working capital investment.
The investing activities used $1,339,000 of cash during the first half
of 1996 as compared to $13,250,000 in the year ago period. The higher
investing activities in 1995 were primarily due to the purchase of
Silver Furniture for $8,350,000 in cash at the closing and the deposit
of $3,000,000 in a bank escrow account to fund conditional purchase
consideration.
Capital expenditures for the first six months of 1996 were primarily
used to increase finished goods warehouse capacity. For the full year
1996, the Company expects to spend approximately $3,500,000 on capital
expenditures as compared to $5,514,000 spent in 1995.
Cash used in financing activities for the six months ended June 29,
1996 was primarily used to repay bank indebtedness under the Company's
revolving credit facility. For the year earlier period, borrowings
under the revolving credit facility were used to finance the
acquisition of Silver Furniture.
For the first six months of 1996, the Company generated excess cash
flow of $652,000. The Company plans to retain cash in the business
for use in internal growth and acquisitions. At June 29, 1996, the
Company had no bank debt outstanding and approximately $57,800,000 in
availability under its bank revolving credit facility.
Part II. Other Information
----------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its annual meeting of stockholders on May 3,
1996.
(b) At the annual meeting, the holders of the common stock of the
Company elected seven directors to serve until the next annual
meeting of stockholders and until their successors are duly
elected and qualified. Set forth below are the votes cast for
each director.
Directors For Withheld
------------------- ----------- ----------
Bruce C. Bruckmann 5,202,280 41,235
David L Kolb 5,202,280 41,235
Larry P. Kunz 5,202,280 41,235
H. Martin Michael 5,202,280 41,235
M. Saleem Muqaddam 5,202,080 41,435
Michael E. Thomas 5,202,246 41,269
Warren G. Wintrub 5,202,280 41,235
9 <PAGE>
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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.
CHROMCRAFT REVINGTON, INC.
----------------------------
(Registrant)
Date: August 5, 1996 /s/ Frank T. Kane
- - ---------------------- ----------------------------
Frank T. Kane
Vice President - Finance
(Duly Authorized Officer and
Chief Financial Officer)
10 <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-29-1996
<CASH> 652
<SECURITIES> 0
<RECEIVABLES> 22,732
<ALLOWANCES> 1,195
<INVENTORY> 18,405
<CURRENT-ASSETS> 42,156
<PP&E> 51,247
<DEPRECIATION> 28,408
<TOTAL-ASSETS> 88,379
<CURRENT-LIABILITIES> 14,817
<BONDS> 0
0
0
<COMMON> 57
<OTHER-SE> 70,604
<TOTAL-LIABILITY-AND-EQUITY> 88,379
<SALES> 82,213
<TOTAL-REVENUES> 82,213
<CGS> 59,554
<TOTAL-COSTS> 71,033
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 11,175
<INCOME-TAX> 4,470
<INCOME-CONTINUING> 6,705
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,705
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.14
</TABLE>
