<PAGE>
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 28, 1998
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 1-13970
CHROMCRAFT REVINGTON, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 35-1848094
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1100 North Washington Street, Delphi, IN 46923
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(Address, including zip code, of Registrant's principal executive offices)
(765) 564-3500
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(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: 5,642,345 shares of the
Company's Common Stock, $.01 par value, were outstanding as of April 27, 1998.
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TABLE OF CONTENTS
Page Number
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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 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 <PAGE>
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Part I. Financial Information
-----------------------------
Item 1. Financial Statements
<TABLE>
<CAPTION>
Consolidated Statements of Earnings (unaudited)
Chromcraft Revington, Inc.
(In thousands, except per share data)
Three Months Ended
-------------------------
March 28, March 29,
1998 1997
--------- ---------
<S> <C> <C>
Sales $ 60,802 $ 59,469
Cost of sales 45,488 45,128
--------- ---------
Gross margin 15,314 14,341
Selling, general and administrative expenses 8,217 7,843
--------- ---------
Operating income 7,097 6,498
Interest expense, net 153 318
--------- ---------
Earnings before income tax expense 6,944 6,180
Income tax expense 2,771 2,472
--------- ---------
Net earnings $ 4,173 $ 3,708
========= =========
Earnings per share of common stock
Basic $ .74 $ .65
========= =========
Diluted $ .71 $ .63
========= =========
Shares used in computing earnings per share
Basic 5,668 5,742
========= =========
Diluted 5,857 5,912
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3 <PAGE>
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<TABLE>
<CAPTION>
Condensed Consolidated Balance Sheets (unaudited)
Chromcraft Revington, Inc.
(In thousands)
March 28, March 29, December 31,
1998 1997 1997
--------- --------- ---------
Assets
------
<S> <C> <C> <C>
Cash and cash equivalents $ - $ - $ -
Accounts receivable 32,097 30,563 26,905
Inventories 34,478 33,227 35,172
Deferred income taxes and other assets 2,916 3,706 2,974
--------- --------- ---------
Current assets 69,491 67,496 65,051
Property, plant and equipment, net 37,191 39,229 37,445
Intangibles and other assets 23,493 23,378 23,648
--------- --------- ---------
Total assets $ 130,175 $ 130,103 $ 126,144
========= ========= =========
Liabilities and Stockholders' Equity
------------------------------------
Accounts payable $ 8,517 $ 9,305 $ 8,450
Accrued liabilities 16,771 16,833 12,670
--------- --------- ---------
Current liabilities 25,288 26,138 21,120
Revolving credit facility 6,000 17,500 9,000
Deferred income taxes and other liabilities 5,187 4,832 5,118
--------- --------- ---------
Total liabilities 36,475 48,470 35,238
--------- --------- ---------
Stockholders' equity
Common stock and capital in excess of par value 18,009 21,049 19,388
Retained earnings 75,691 60,584 71,518
--------- --------- ---------
Total stockholders' equity 93,700 81,633 90,906
--------- --------- ---------
Total liabilities and stockholders' equity $ 130,175 $ 130,103 $ 126,144
========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4 <PAGE>
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<TABLE>
<CAPTION>
Condensed Consolidated Statements of Cash Flows (unaudited)
Chromcraft Revington, Inc.
(In thousands)
Three Months Ended
-------------------------
March 28, March 29,
1998 1997
--------- ---------
<S> <C> <C>
Operating Activities
Net earnings $ 4,173 $ 3,708
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation and amortization 1,113 1,100
Deferred income taxes (153) 489
Changes in assets and liabilities, net
Accounts receivable (5,192) (779)
Inventories 694 (831)
Accounts payable and accrued liabilities 4,168 (387)
Other 227 37
--------- ---------
Cash provided by operating activities 5,030 3,337
--------- ---------
Investing Activities
Capital expenditures (651) (637)
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Cash used in investing activities (651) (637)
--------- ---------
Financing Activities
Payments under revolving credit facility (3,000) (2,700)
Proceeds from stock options exercised 92 -
Repurchase and cancellation of stock (1,471) -
--------- ---------
Cash used in financing activities (4,379) (2,700)
--------- ---------
Net change in cash and cash equivalents - -
Cash and cash equivalents at beginning of period - -
--------- ---------
Cash and cash equivalents at end of period $ - $ -
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5 <PAGE>
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Notes to Condensed Consolidated Financial Statements (unaudited)
Chromcraft Revington, Inc.
Note 1. 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 three month period ended
March 28, 1998 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1998.
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, 1997.
Note 2. Shares Used in Computing Earnings per Share
Weighted average shares used in the calculation of diluted earnings
per share included dilutive potential common shares (stock options)
of approximately 189,000 and 170,000 for the three month periods ended
March 28, 1998 and March 29, 1997, respectively.
Note 3. Inventories
Inventories consisted of the following:
(In thousands)
------------------------------------
March 28, March 29, December 31,
1998 1997 1997
-------- -------- --------
Raw materials $ 12,445 $ 10,916 $ 11,033
Work in process 6,565 5,510 5,810
Finished goods 17,126 18,185 19,880
-------- -------- --------
Inventories at FIFO cost 36,136 34,611 36,723
LIFO reserve (1,658) (1,384) (1,551)
-------- -------- --------
$ 34,478 $ 33,227 $ 35,172
======== ======== ========
6 <PAGE>
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Note 4. Accrued Liabilities
Accrued liabilities consisted of the following:
(In thousands)
------------------------------------
March 28, March 29, December 31,
1998 1997 1997
-------- -------- --------
Employee benefit plans $ 3,863 $ 3,654 $ 3,999
Income taxes payable 2,663 1,998 -
Salaries, wages and commissions 2,235 2,046 1,497
Vacation and holiday pay 1,744 1,916 1,234
Workers' compensation plans 1,225 1,265 1,268
Advertising and promotion 1,220 1,605 978
Other accrued liabilities 3,821 4,349 3,694
-------- -------- --------
$ 16,771 $ 16,833 $ 12,670
======== ======== ========
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
The following table sets forth the results of operations of Chromcraft
Revington, Inc. (the "Company") for the three months ended March 28, 1998
and March 29, 1997 expressed as a percentage of sales.
Three Months Ended
----------------------
March 28, March 29,
1998 1997
-------- --------
Sales 100.0 % 100.0 %
Cost of sales 74.8 75.9
-------- --------
Gross margin 25.2 24.1
Selling, general and
administrative expenses 13.5 13.2
-------- --------
Operating income 11.7 10.9
Interest expense, net .3 .5
-------- --------
Earnings before income tax expense 11.4 10.4
Income tax expense 4.5 4.2
-------- --------
Net earnings 6.9 % 6.2 %
======== ========
Three Months Ended March 28, 1998 Compared to Three Months Ended March 29, 1997.
- - --------------------------------------------------------------------------------
Sales
Consolidated sales for the first quarter of 1998 increased 2.2% to
$60,802,000 from $59,469,000 for the prior year period. Increased
shipments of occasional, dining and bedroom furniture were partially
offset by lower shipments of upholstered furniture, which was due, in
part, to the elimination of low margin and non-profitable products at
the Company's Cochrane Furniture subsidiary.
Sales order backlog at March 28, 1998 was higher as compared to the
year ago level.
7 <PAGE>
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Cost of Sales
Cost of sales as a percentage of sales was 74.8% for the quarter ended
March 28, 1998 as compared to 75.9% for the quarter ended March 29, 1997.
The percentage decrease was primarily attributable to the elimination
of low margin and non-profitable products at Cochrane Furniture.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of sales
were 13.5% for the first quarter of 1998 as compared to 13.2% for the
same period last year. The increase in selling, general and administrative
expenses as a percentage of sales for the three months ended March 28,
1998 as compared to the prior year quarter was primarily due to an
unfavorable product sales mix.
Interest Expense, Net
Interest expense during the first three months of 1998 was $153,000 as
compared to $318,000 during the same period last year. The decrease
in interest expense was primarily due to lower average bank borrowings.
Income Tax Expense
The Company's effective tax rate was 39.9% for the three months ended
March 28, 1998 and 40.0% for the three months ended March 29, 1997.
The slight reduction in the Company's effective tax rate was due to
lower state income taxes.
Liquidity and Capital Resources
The operating activities of the Company provided $5,030,000 of cash
for the three months ended March 28, 1998 as compared to $3,337,000
for the three months ended March 29, 1997. The increase in cash
generated from operating activities during the first quarter of 1998
as compared to the prior year period was due, in part, to higher
earnings and a decrease in working capital investment.
Working capital at March 28, 1998 increased by $272,000 as compared to
working capital at year end 1997. Total current assets increased
$4,440,000 from year end 1997, primarily due to an increase in accounts
receivable, due, in part, to higher sales. Total current liabilities
increased $4,168,000, primarily due to an increase in accrued income
taxes and compensation related accruals.
Capital expenditures for the quarter ended March 28, 1998 were
$651,000 as compared to $637,000 during the year ago period. The
Company expects capital expenditures to be approximately $4,500,000
for the year ending December 31, 1998.
Financing activities used $4,379,000 of cash during the three months
ended March 28, 1998 as compared to $2,700,000 for the prior year
period. Cash used in financing activities during the first quarter of
8 <PAGE>
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1998 was primarily used to reduce bank indebtedness under a revolving
credit facility and to acquire shares of the Company's common stock
under a stock repurchase plan. During the first three months of 1998,
the Company retired 45,823 shares of common stock purchased for
$1,471,000. For the year earlier period, cash used in financing
activities was used to repay bank indebtedness under the Company's
revolving credit facility. At March 28, 1998, the Company had unused
capacity under its bank revolving credit facility, after reduction for
outstanding letters of credit, of $52,176,000.
Part II. Other Information
--------------------------
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: May 7, 1998 /s/ Frank T. Kane
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Frank T. Kane
Vice President - Finance
(Duly Authorized Officer and
Chief Financial Officer)
9 <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1998 JAN-01-1997 JAN-01-1996
<PERIOD-END> MAR-28-1998 MAR-29-1997 DEC-31-1996
<CASH> 0 0 0
<SECURITIES> 0 0 0
<RECEIVABLES> 33,747 32,225 31,565
<ALLOWANCES> 1,650 1,662 1,781
<INVENTORY> 34,478 33,227 32,396
<CURRENT-ASSETS> 69,491 67,496 66,868
<PP&E> 70,504 69,122 68,485
<DEPRECIATION> 33,313 29,893 28,987
<TOTAL-ASSETS> 130,175 130,103 129,942
<CURRENT-LIABILITIES> 25,288 26,138 26,525
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 56 57 57
<OTHER-SE> 93,644 81,576 77,868
<TOTAL-LIABILITY-AND-EQUITY> 130,175 130,103 129,942
<SALES> 60,802 59,469 175,899
<TOTAL-REVENUES> 60,802 59,469 175,899
<CGS> 45,488 45,128 128,217
<TOTAL-COSTS> 53,705 52,971 152,452
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 153 318 221
<INCOME-PRETAX> 6,944 6,180 23,226
<INCOME-TAX> 2,771 2,472 9,290
<INCOME-CONTINUING> 4,173 3,708 13,936
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 4,173 3,708 13,936
<EPS-PRIMARY> .74 .65<F1> 2.43<F1>
<EPS-DILUTED> .71 .63<F1> 2.37<F1>
<FN>
<F1>The earnings per share amounts have been restated to comply with
Statement of Financial Accounting Standards No. 128, "Earnings per Share."
</FN>
</TABLE>
