<PAGE> 1
UNITED STATES
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 December 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission File Number: 0-25038
--------------------------------
THOMPSON PBE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4215913
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4553 GLENCOE AVENUE, SUITE 200
MARINA DEL REY, CALIFORNIA 90292
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 306-7112
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 as the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past ninety days.
YES X NO
----- -----
As of February 8, 1997, there were 8,645,084 shares of common stock
outstanding.
Total number of sequential pages: 13
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THOMPSON PBE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1996
---- ----
<S> <C> <C>
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 221 $ 482
Accounts receivable (net of allowances
of $1,081 and $1,018) . . . . . . . . . . . . . . . . 20,198 19,741
Inventory . . . . . . . . . . . . . . . . . . . . . . . 36,579 31,440
Prepaid expenses and other current assets . . . . . . 6,741 7,425
-------- --------
Total current assets . . . . . . . . . . . . . . . . . 63,739 59,088
Property and equipment, net . . . . . . . . . . . . . . . 7,773 7,430
Intangible assets, net . . . . . . . . . . . . . . . . . 61,931 57,403
Other assets . . . . . . . . . . . . . . . . . . . . . . 463 459
-------- --------
$133,906 $124,380
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and obligations . . . $ 7,358 $ 7,013
Accounts payable . . . . . . . . . . . . . . . . . . . 16,260 13,280
Accrued expenses and other current liabilities . . . . 8,332 8,546
-------- --------
Total current liabilities . . . . . . . . . . . . . . 31,950 28,839
Long-term debt and obligations . . . . . . . . . . . . . 50,858 44,307
-------- --------
Total liabilities . . . . . . . . . . . . . . . . . . 82,808 73,146
Commitments and contingencies . . . . . . . . . . . . . .
Stockholders' equity:
Common stock . . . . . . . . . . . . . . . . . . . . . 9 9
Additional paid-in capital . . . . . . . . . . . . . . 61,121 61,479
Accumulated deficit . . . . . . . . . . . . . . . . . . (10,032) (10,254)
-------- --------
Total stockholders' equity . . . . . . . . . . . . . . 51,098 51,234
-------- --------
$133,906 $124,380
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 3
THOMPSON PBE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------
1996 1995
---- ----
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . $47,768 $37,145
Cost of sales . . . . . . . . . . . . . . . . . . 30,573 23,199
------- -------
Gross profit . . . . . . . . . . . . . . . . . . 17,195 13,946
------- -------
Selling, general and administrative expenses . . 14,568 11,218
Depreciation . . . . . . . . . . . . . . . . . . 487 419
Amortization of intangible assets . . . . . . . . 707 483
Interest expense . . . . . . . . . . . . . . . . 1,047 344
------- -------
Total . . . . . . . . . . . . . . . . . . . 16,809 12,464
------- -------
Income before provision for income taxes . . . . 386 1,482
Provision for income taxes . . . . . . . . . . . 164 615
------- -------
Net income . . . . . . . . . . . . . . . . . . . $ 222 $ 867
======= =======
PER SHARE DATA:
Net income per common and common
equivalent share . . . . . . . . . . . . . . . $0.03 $0.10
Weighted average common and
common equivalent shares . . . . . . . . . . . 8,771 8,814
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
THOMPSON PBE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 222 $ 867
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . 1,194 902
Changes in deferred income taxes . . . . . . . . . . . . . . . 76
Changes in operating assets and liabilities (Note 4) . . . . . (1,722) (2,345)
------- --------
Net cash provided by (used for) operating activities . . . . . . (304) (500)
------- --------
Cash flows from investing activities:
Purchases of property and equipment . . . . . . . . . . . . . . . (717) (489)
Cash paid to acquire companies . . . . . . . . . . . . . . . . . (4,727) (2,658)
Increase in other assets . . . . . . . . . . . . . . . . . . . . (4) (130)
------- --------
Net cash used for investing activities . . . . . . . . . . . . . (5,448) (3,277)
------- --------
Cash flows from financing activities:
Net borrowings (repayments) under line of credit . . . . . . . . 1,557 1,118
Issuance of long-term debt . . . . . . . . . . . . . . . . . . . 5,349 2,833
Repayment of long-term obligations . . . . . . . . . . . . . . . (1,057) (34,048)
Repurchase of common stock . . . . . . . . . . . . . . . . . . . (426)
Net proceeds from issuance of common stock . . . . . . . . . . . 68 33,225
------- --------
Net cash provided by financing activities . . . . . . . . . . . . 5,491 3,128
------- --------
Net increase (decrease) in cash . . . . . . . . . . . . . . . . . (261) (649)
Cash, beginning of period . . . . . . . . . . . . . . . . . . . . 482 665
------- --------
Cash, end of period . . . . . . . . . . . . . . . . . . . . . . . $ 221 $ 16
======= ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
THOMPSON PBE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. GENERAL
The consolidated condensed financial statements include the accounts of
Thompson PBE, Inc. and its wholly-owned subsidiaries (collectively, the
"Company"). All significant intercompany balances and transactions have been
eliminated in consolidation. The interim consolidated condensed financial
statements are unaudited. In the opinion of management, such financial
statements include all adjustments, consisting of only normal recurring
entries, necessary for a fair presentation of the Company's financial position,
results of operations and cash flows. These consolidated condensed financial
statements and the accompanying notes should be read in conjunction with the
audited consolidated financial statements and the accompanying notes for the
fiscal year ended September 30, 1996 included in the Company's Annual Report on
Form 10-K. The results of operations for the three-month period presented is
not necessarily indicative of results that may be expected for the full year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Change of Fiscal Year - The Company changed its fiscal year end from
September 30 of each year to a 52/53 week fiscal year that ends on the Saturday
closest to September 30 of each year. The change became effective for the 1997
fiscal year which began on October 1, 1996 and which will end on September 27,
1997. For simplicity of presentation, the Company has described the fiscal
quarter ended December 28, 1996 as the three months ended December 31, 1996.
3. COMPUTATION OF EARNINGS PER SHARE
Net income per share information is computed using the weighted average
number of shares of common stock outstanding and dilutive common equivalent
shares from stock options and warrants using the treasury stock method. Under
this method, primary net income per share is computed as if options and
warrants were exercised at the beginning of the period (or at time of issuance,
if later) and as if the funds obtained thereby were used to purchase common
stock at the average fair value per common share during the period.
4. STATEMENTS OF CASH FLOWS
Increases (decreases) in operating cash flows arising from changes in
operating assets and liabilities, net of the effect of businesses acquired,
consist of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------
1996 1995
---- ----
<S> <C> <C>
Accounts receivable . . . . . . . . . . . . . . . . . . . . $ 312 $ 323
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . (4,702) (5,593)
Prepaid expenses and other current assets . . . . . . . . . 688 (679)
Accounts payable . . . . . . . . . . . . . . . . . . . . . 1,473 3,419
Accrued expenses and other current liabilities . . . . . . 507 185
------- -------
$(1,722) $(2,345)
======= ========
</TABLE>
Cash paid for interest during the three months ended December 31, 1996 and
1995, was $1,014,000 and $366,000, respectively.
5
<PAGE> 6
THOMPSON PBE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5. ACQUISITIONS OF COMPANIES
The Company acquired two business during the three months ended December
31, 1996. The businesses acquired, the date of acquisition and the geographic
locations of the acquired businesses are as follows:
<TABLE>
<S> <C> <C>
Northern California Division
- ----------------------------
J & M Paint Incorporated December 1996 San Leandro, California
Northeast Division
- -------------------
Auto Body Supply Corporation October 1996 Boston, Massachusetts
</TABLE>
The acquired companies operated 2 distribution sites prior to their acquisition
by the Company, with historical annual revenues totaling approximately $8
million.
6. LONG-TERM DEBT AND OBLIGATIONS
Long-term debt and obligations consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
---- ----
<S> <C> <C>
1995 Credit Agreement with Heller Financial, Inc., as
agent and lender . . . . . . . . . . . . . . . . . . . . . . . $43,849 $36,855
Obligations under various covenant not to
compete agreements . . . . . . . . . . . . . . . . . . . . . . 321 340
Notes payable to sellers and capital lease obligations . . . . . 14,046 14,125
------- -------
Total long-term debt and obligations . . . . . . . . . . . . . . 58,216 51,320
Less current portion of long-term debt and obligations . . . . . 7,358 7,013
------- -------
Total long-term debt and obligations, less current portion . . . $50,858 $44,307
======= =======
</TABLE>
At December 31, 1996 the Company had outstanding $43.8 million under its
credit agreement with Heller Financial, Inc. as agent and lender (the "1995
Credit Agreement"). Borrowings under the 1995 Credit Agreement are secured by
substantially all of the Company's assets, and such agreement contains
significant restrictive covenants which, among other things, require the
Company to maintain certain financial ratios and which limit capital
expenditures, the incurrence of indebtedness and the payment of cash dividends.
Certain of the financial covenant ratios and certain other provisions of the
1995 Credit Agreement were amended effective September 30, 1996. At December
31,1996 the Company was near the amended limit of several covenant ratios.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion should be read in conjunction with the unaudited
consolidated condensed financial statements and accompanying notes, included in
Part I - Item 1 of this Quarterly Report, and the audited consolidated
financial statements and accompanying notes and Management's Discussion and
Analysis of Financial Condition and Results of Operations for the year ended
September 30, 1996 contained in the Company's Annual Report on Form 10-K.
Information contained in this Report includes "forward-looking" statements
that are based largely on the Company's current expectations and are subject to
a number of risks and uncertainties. Forward-looking statements can be
identified by the use of forward-looking terminology such as "may," "will,"
"should," "expect," "anticipate," "estimate," "continue," "plans," "intends" or
other similar terminology. See Item 1., "Business --Business Risks." in the
Company's Annual Report on Form 10-K.
A key component of the Company's business strategy is to make add-on
acquisitions to augment its existing operations and to capitalize on
opportunities to enter new geographic markets. As described in Note 5 to the
Condensed Consolidated Condensed Financial Statements, the Company has
completed the acquisition of 2 businesses subsequent to September 30, 1996.
The businesses acquired had combined annual sales for their most recent fiscal
years of approximately $8.0 million. The Company's acquisition plan for 1997
is presently expected to focus on selective acquisitions in existing markets.
In the ordinary course of its business, the Company regularly evaluates, and
enters into negotiations relating to, potential acquisition opportunities. See
Note 5 to the Consolidated Condensed Financial Statements and "- Liquidity and
Capital Resources."
SEASONALITY AND OTHER VARIATIONS IN BUSINESS RESULTS
The Company's revenues and operating results have historically varied
substantially from quarter to quarter due to certain factors and the Company
expects certain of these fluctuations to continue. Among these factors have
been the timing of acquisitions, the promptness with which the Company
integrates acquired businesses, seasonal buying patterns of the Company's
customers, weather, and the timing of supplier price increases and other
incentive programs. Historically, sales have slowed in the fall and early
winter of each year largely due to weather and the reduced number of business
days during the holiday season. As a result, financial performance for the
Company's distribution sites is generally lower during the first and second
fiscal quarters than during the other quarters of the fiscal year. During the
December 1996 quarter, the impact of the holidays on automotive repair shops
was more pronounced than the Company's historical experience, including the
Company's experience in the December 1995 quarter. In addition, the location,
timing and structure of acquisitions may cause substantial fluctuations of
operating results from quarter to quarter. The Company's sales and operating
results also vary due to changes affecting the domestic wholesale aftermarket
for automotive paint and related supplies, such as the volume of warranty
repair work and the level of new and used car sales.
RESULTS OF OPERATIONS
Net sales. For the three months ended December 31, 1996, net sales
increased by $10.6 million, or 28.6%, to $47.8 million from the three months
ended December 31, 1995. The increase was attributable to net sales resulting
from acquisitions completed since December 31, 1995. Sales in existing
operations were down compared to the prior year period, with an increase in
sales in the California divisions more than offset by decreases in the
Southeast and Rocky Mountain divisions. See "- Seasonality and Other
Variations in Business Results."
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONT.)
Gross profit. Gross profit for the three months ended December 31, 1996
increased to $17.2 million from $13.9 million for the three months ended
December 31, 1995. Gross profit as a percentage of net sales of 36.0% for the
three months ended December 31, 1996 declined from gross profit as a percentage
of net sales of 37.5% for the three months ended December 31, 1995. The
decrease in gross margins is attributable primarily to increased discounts
granted to customers to meet competitive pressures. Based on published
industry data, the Company believes that the number of collision repair shops
has decreased approximately 5% in each of the last two years. Gross profit
margins may be adversely impacted in the future in connection with a continued
consolidation of collision repair shops in an environment in which distribution
remains fragmented. Gross profit may also vary from period to period as a
result of, among other factors, increased selling prices arising from vendor
price increases, discount and rebate programs of large suppliers to the Company
and fluctuations in discounts granted to large customers in certain geographic
markets in which the Company operates.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $3.4 million, or 29.9%, to $14.6 million
for the three months ended December 31, 1996 as compared to $11.2 million for
the three months ended December 31, 1995. For the three months ended December
31, 1996, selling, general and administrative expenses were 30.5% of net sales
as compared to 30.2% of net sales for the three months ended December 31, 1995.
The absolute increase in selling, general and administrative expenses reflects
the increase in costs necessary to support the Company's rapid growth through
its acquisition program. Selling, general and administrative expenses
increased slightly as a percentage of net sales in the three months ended
December 31, 1996 as compared to the year earlier period due to the effect of
an increase in operating costs without a corresponding percentage increase in
net sales, and the effect of higher operating costs as a percentage of revenues
in certain stores acquired since December 31, 1995 as compared to sites
existing in the year earlier period.
Depreciation and Amortization expense. Depreciation expense increased to
$487,000 in the three months ended December 31, 1996 from $419,000 in the three
months ended December 31, 1995. The increase in depreciation expense is
attributable to an increase in fixed assets related to the expanded operations
of the Company. Amortization expense for the three months December 31, 1996
increased to $707,000 from $483,000 for the three months ended December 31,
1995. These results reflect the net effect of an increase in amortization
expense relating to an increase in intangible assets and goodwill, arising from
the acquisition of businesses subsequent to December 31, 1995. Depreciation
and amortization expenses are expected to continue to increase from period to
period as a result of continued acquisition activity by the Company.
Interest expense. Interest expense increased to $1,047,000 for the three
months ended December 31, 1996 from $344,000 in the three months ended December
31, 1995. During the three months ended December 31, 1995, interest expense
reflected lower debt balances arising from the repayment of debt with the net
proceeds realized from the Company's public offering in October 1995. At
December 31, 1996, senior debt outstanding totaled $43.9 million, as compared
to $10.6 million at December 31, 1995. Interest expense in future periods
will be dependent upon fluctuations in outstanding debt balances, prevailing
interest rates and changes in the Company's ratio of senior debt to operating
cash flow. See "--Liquidity and Capital Resources."
Provision for income taxes. The provision for income taxes as a percentage
of income before income taxes increased to 42.5% for the three months ended
December 31, 1996 from 41.5% for the three months ended December 31, 1995. The
effect of nondeductible amortization of intangible assets arising from the
acquisition of the stock of certain acquired businesses in relation to the
Company's income before income taxes may result in fluctuations in the
Company's effective tax rate.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONT.)
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital resources have been significantly
impacted by acquisitions commencing with the initial acquisition of Thompson
Lacquer Company in May 1989. The Company historically has financed its
business activities and acquisitions principally through a combination of
secured, subordinated and seller-provided borrowings, augmented by internally
generated cash flow. In addition, the Company has financed certain of its
larger acquisitions partially through the issuance of equity securities.
The Company had working capital of $31.8 million at December 31, 1996. In
addition to working capital, the Company's principal source of liquidity was
the 1995 Credit Agreement, as amended, which provides for borrowings in an
aggregate amount not to exceed $70 million, consisting of (i) a revolving
credit facility of $18.0 million, limited to a borrowing base, (ii) a term loan
of $30.0 million, and (iii) an acquisition loan facility of $27.0 million.
Borrowings under the 1995 Credit Agreement are secured by substantially all of
the Company's assets and such agreement contains significant restrictive
covenants which require the Company to maintain certain financial ratios and
which limit, among other things, capital expenditures, the incurrence of
indebtedness and the payment of cash dividends.
Certain of the financial covenant ratios and certain other provisions of
the 1995 Credit Agreement were amended (the Third Amendment to Credit
Agreement) effective September 30, 1996. At December 31, 1996 the Company was
near the amended limit of several covenant ratios; failure to satisfy the
financial covenants under the 1995 Credit Agreement could result in a material
adverse affect on the Company's financial position and results of operations.
In the event that the Company does not meet the financial covenants contained
in the 1995 Credit Agreement in future periods, it is likely that the terms of
the Credit Agreement would be renegotiated, the outcome of which could result
in higher interest rates on debt outstanding under the 1995 Credit Agreement, a
reduction of amounts available under the agreement and other adverse changes in
the terms under which outstanding debt is repaid, which could be material.
As of December 31, 1996, the Company had available to borrow approximately
$7 million of revolving credit loans under the 1995 Credit Agreement. As of
December 31, 1996, the maximum amount available to borrow, in circumstances in
which the Company did not exceed financial covenant ratios contained with the
1995 Credit Agreement were acquisition loans of up to $23.7 million. However,
as noted above, the Company was near the limit of certain covenant ratios, and
accordingly, in the absence of increases in operating cash flow, future
borrowings may be restricted or may not be available.
On December 5, 1996, the Company announced that its Board of Directors had
approved a stock repurchase program of up to 500,000 shares of the Company's
Common Stock. This program does not obligate the Company to acquire any
particular amount of Common Stock, has no set time limit and may be suspended
at any time at the Company's discretion. Through December 16, 1996, the
Company had repurchased 63,700 shares at an average price of $6.69 per share
under the program. No further repurchases have been made and any further such
repurchases would, among other things, require the prior consent of the lenders
under the 1995 Credit Agreement, and there can be no assurance that the lenders
would grant such consent if requested. Accordingly, the Company can not
predict whether or when additional shares, if any, will be repurchased.
Cash used by operating activities was $304,000 for the three months ended
December 31, 1996 as compared to $500,000 for the year earlier period.
Although net income decreased by $645,000 during the three months ended
December 31, 1996 as compared to the year earlier period, an increase in
depreciation and amortization expense and a reduction in cash used for changes
in operating assets and liabilities resulted in operating activities using less
cash during the three months ended December 31, 1996 than in the year earlier
period.
The Company's investing activities used cash totaling $4.7 million to
acquire two businesses during the three months ended December 31, 1996, as
compared to a use of cash of $2.7 million to acquire businesses during the
three months ended December 31, 1995. In addition, the Company had capital
expenditures of $717,000 and $489,000 in the three months ended December 31,
1996 and 1995, respectively. Capital expenditures were primarily for
refurbishment of distribution sites, upgrades of computer systems and the
replacement of delivery vehicles.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONT.)
The Company's inventories at December 31, 1996 represented approximately
109 days' sales, as compared to 111 and 89 days' inventory on hand at December
31, 1995 and September 30, 1996, respectively. The increase in days'
inventory at December 31, 1996 as compared to September 30, 1996 is
attributable to large volume purchases of inventory from certain manufacturers
in advance of the effective date of price increases announced by such
manufacturers, and to the effect on inventory levels of seasonal volume buying
to maximize supplier discounts and rebates.
The Company's accounts payable at December 31, 1996 represented
approximately 63 days' purchases, compared to 68 days at December 31, 1995. As
a general matter, the Company's level of accounts payable is favorably impacted
by the Company's ability to take advantage of periodic supplier incentive
programs, which programs often extend the payment date beyond normal terms with
large volume purchases. Accounts payable levels are also impacted by vendor
programs allowing the Company additional price discounts for prompt payment of
purchases. Accounts payable levels will continue to vary from period to period
depending on which vendor payment programs are available. Although there can
be no assurance that such extended programs will be continued, they have been
commonplace in the Company's industry for many years and have been routinely
offered by each of its principal suppliers. If, however, these programs
changed or were terminated, the Company's liquidity requirements could change
materially.
Management of the Company presently believes that cash flow from
operations, together with present sources of liquidity and borrowing capacity
under its 1995 Credit Agreement, will be sufficient to support operations and
general business and liquidity requirements for at least the next twelve
months. The Company, in the ordinary course of its business, regularly
evaluates, and enters into negotiations relating to, potential acquisition
opportunities. To finance future acquisitions, the Company expects to utilize
its 1995 Credit Agreement, seller financing and cash flow from operations.
Depending on market conditions, the Company may also incur additional
indebtedness or issue equity securities. There can be no assurance that such
additional capital, if and when required, will be available on terms acceptable
to the Company, or at all.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED BUSINESS RISKS.
This Report contains certain forward-looking statements pertaining to,
among others things, the Company's future results of operations, growth plans,
sales, gross margin and expense trends, capital requirements, compliance with
contractual obligations and general business, industry and economic conditions
applicable to the Company. These statements are based largely on the Company's
current expectations and are subject to a number of risks and uncertainties.
Actual results could differ materially from these forward-looking statements.
In addition to the other risks described elsewhere in this Report, important
factors to consider in evaluating such forward-looking statements include
changes in external market factors, changes in the Company's business strategy
or an inability to execute its strategy due to changes in its industry or the
economy generally, the emergence of new or growing competitors and various
other competitive factors. These and certain other significant business risks
faced by the Company are discussed in additional detail under the caption Item
1., "Business -- Business Risks" in the Company's Annual Report on Form 10-K
for the 1996 fiscal year. In light of these risks and uncertainties, there can
be no assurance that the forward-looking statements contained or referred to in
this Report will in fact occur.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Sequential
Description Page Number
-------------------------------- -----------
<S> <C> <C>
Exhibit 11.1 Computation of Net Income per Common and Common
Equivalent Share. 13
-----------
</TABLE>
(b) REPORTS ON FORM 8-K
None.
11
<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.
THOMPSON PBE, INC.
(Registrant)
Date: February 10, 1997 Charles E. Barrantes
--------------------------------------
Charles E. Barrantes
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Michael O'Donovan
--------------------------------------
Michael O'Donovan
Vice President, Corporate Controller
(Principal Accounting Officer)
12
<PAGE> 13
Exhibit 11.1
THOMPSON PBE, INC.
COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31
------------------
1996 1995
---- ----
<S> <C> <C>
Common stock outstanding, beginning of period . . . . . . . . . 8,692,438 6,391,946
Issuance of common stock . . . . . . . . . . . . . . . . . . . 2,271,475
Repurchase of outstanding common stock . . . . . . . . . . . . (63,700)
Exercise of options . . . . . . . . . . . . . . . . . . . . . 11,616
--------- ---------
Common stock outstanding, end of period . . . . . . . . . . . . 8,640,354 8,663,421
========= =========
PER SHARE DATA:
Weighted average shares outstanding during the period,
assuming exercise of options and warrants . . . . . . . . . . 9,043,117 9,241,934
Shares assumed to be repurchased under the treasury stock
method at an assumed fair market value per share of $7.25
and $10.82 at December 31, 1996 and 1995 respectively . . . . . (272,232) (428,121)
--------- ---------
Total shares used in computing Historical Per Share data . . . . 8,770,885 8,813,813
========= =========
Net income (loss) available to
common stockholders . . . . . . . . . . . . . . . . . . . . . . $ 222 $ 867
====== ======
PER SHARE DATA:
Net income per common and common equivalent share . . . . . . . $0.03 $0.10
Weighted average common and
common equivalent shares . . . . . . . . . . . . . . . . . . . 8,771 8,814
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER
28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-28-1996
<CASH> 221
<SECURITIES> 0
<RECEIVABLES> 21,279
<ALLOWANCES> 1,081
<INVENTORY> 36,579
<CURRENT-ASSETS> 63,739
<PP&E> 14,709
<DEPRECIATION> (6,936)
<TOTAL-ASSETS> 133,906
<CURRENT-LIABILITIES> (31,950)
<BONDS> 0
0
0
<COMMON> (9)
<OTHER-SE> (51,091)
<TOTAL-LIABILITY-AND-EQUITY> (133,906)
<SALES> 47,768
<TOTAL-REVENUES> 47,768
<CGS> 30,573
<TOTAL-COSTS> 30,573
<OTHER-EXPENSES> 15,497
<LOSS-PROVISION> 265
<INTEREST-EXPENSE> 1,047
<INCOME-PRETAX> 386
<INCOME-TAX> 164
<INCOME-CONTINUING> 222
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 222
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
