-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mj6Zv1AmI5m84UM4KjMNJLMHL/FDBWUYDz/0hUrJOh6SkLxHLQnSY1Ehyzf0jdrA S1Bo68lpBKNaDkQGcweOOg== 0000108018-95-000007.txt : 19951020 0000108018-95-000007.hdr.sgml : 19951020 ACCESSION NUMBER: 0000108018-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950831 FILED AS OF DATE: 19951013 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: WOLF HOWARD B INC CENTRAL INDEX KEY: 0000108018 STANDARD INDUSTRIAL CLASSIFICATION: 2330 IRS NUMBER: 750847571 STATE OF INCORPORATION: TX FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06775 FILM NUMBER: 95580353 BUSINESS ADDRESS: STREET 1: 3809 PARRY AVE CITY: DALLAS STATE: TX ZIP: 75226-1753 BUSINESS PHONE: 2148239941 MAIL ADDRESS: STREET 1: 3809 PARRY AVE CITY: DALLAS STATE: TX ZIP: 75226 10-Q 1 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 August 31, 1995 Commission file number 1-6775 HOWARD B. WOLF, INC. (Exact name of registrant as specified in its charter) Texas 75-0847571 (State of incorporation) (IRS Employer Identification No.) 3809 Parry Avenue, Dallas, Texas 75226-1753 (Address of principal executive offices) (Zip Code) (214) 823-9941 (Telephone number) 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 . Common stock, par value $.33-1/3 per share: 1,056,191 shares outstanding as of October 13, 1995 INDEX Page Number PART I. FINANCIAL INFORMATIONM Item 1. Financial Statements Consolidated Statements of Operations and Retained Earnings Three months ended August 31, 1995 and August 31, 1994 (Unaudited) 3 Consolidated Balance Sheets August 31, 1995 (Unaudited) and May 31, 1995 4 Consolidated Statments of Cash Flows Three months ended August 31, 1995 and August 31, 1994 (Unaudited) 5 Notes to Consolidated Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 & 8 PART II. OTHER INFORMATION Item 9. Exhibits and Reports on Form 8-K 9 Part I. FINANCIAL INFORMATION Item 1. Financial Statement HOWARD B. WOLF, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETIANED EARNINGS (Unaudited) Three Months Ended August 31, 1995 1994 Net sales $3,789,539 $3,592,856 Cost and expenses: Cost of sales 2,537,607 2,363,984 Selling, general and administrative expenses 903,984 914,754 Provision for bad debt expense 22,500 22,500 3,464,091 3,301,238 325,448 291,618 Other income 9,832 23,266 Interest income 2,209 9,682 Interest expense (11,907) (6,999) Income before federal income tax 325,582 317,567 Provision for federal income tax (114,395) (111,203) Net income 211,187 206,364 Retained earnings - beginning of year 4,540,170 4,067,839 Cash dividends (84,495) (73,933) Retained earnings - end of year $4,666,862 $4,200,270 Average number of shares outstanding 1,056,191 1,056,191 Net income per share $0.20 $0.20 Cash dividends per share $0.08 $0.07 See notes to consolidated financial statements.
HOWARD B. WOLF, INC. August 31, May 31, 1995 1995 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 969,871 $1,375,569 Accounts receivable (net) 1,953,889 1,984,284 Inventories 3,999,000 4,024,860 Prepaid expenses 130,265 106,630 Deferred federal income tax benefit 182,000 183,000 Total current assets 7,235,025 7,674,343 Property, plant and equipment 2,270,521 2,113,701 Less accumulated depreciation and amortization (1,188,133) (1,155,133) 1,082,388 958,568 Property, plant and equipment not used in operations, less accumulated depreciation 109,009 114,288 Other assets 48,835 48,835 $8,475,257 $8,796,034 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,092,256 $1,277,763 Accrued compensation 146,024 155,739 Accrued taxes 78,350 56,449 Other accrued liabilities 95,984 363,769 Federal income tax payable 20,293 25,656 Total current liabilities 1,432,907 1,879,376 Deferred federal income tax 81,000 82,000 Shareholders' equity: Common stock, par value $.33-1/3; 3,000,000 shares authorized, 1,081,191 shares issued 360,400 360,400 Additional paid-in capital 2,034,088 2,034,088 Retained earnings 4,666,862 4,540,170 Less common stock in treasury, at cost, 25,000 shares (100,000) (100,000) 6,961,350 6,834,658 $8,475,257 $8,796,034 Note: The consolidated balance sheet at May 31, 1995 has been taken from the audited financial statements. See notes to consolidated financial statements.
HOWARD B. WOLF, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended August 31, 1995 1994 Cash flows from operating activities: Net income $211,187 $206,364 Adustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 38,279 32,280 Provision for losses on accounts receivable 22,500 22,500 Decrease in deferred federal income tax credit (1,000) - Net changes in assets and liabilities (Increase) decrease in accounts receivable 7,895 (389,698) Decrease in inventories 25,860 32,995 (Increase) decrease in prepaid expenses (23,635) 22,170 Decrease in accounts payable and accrued liabilities (441,106) (645,977) (Increase) decrease in deferred federal income tax benefit 1,000 (9,500) Increase (decrease) in federal income tax payable (5,363) 117,893 Net cash used in operating activities (164,383) (610,973) Cash flow from investing activities: Additions to property, plant and euqipment (156,820) (70,625) Net cash used in investing activities (156,820) (70,625) Cash flow from financing activities: Cash dividends paid (84,495) (73,933) Net cash used in financing activities (84,495) (73,933) Net decrease in cash and cash equivalents (405,698) (755,531) Cash and cash equivalents at beginning of period 1,375,569 1,790,060 Cash and cash equivalents at end of period $ 969,871 $1,034,529 See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The consolidated balance sheet as of August 31, 1995 the consolidated statements of operations and the consolidated statements of cash flows for the three-month periods ended August 31, 1995 and 1994 have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at August 31, 1995 and 1994 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statement be read in conjunction with the financial statements and notes thereto included in the Company's May 31, 1995 annual report to shareholders. The results of operations for the three-month period ended August 31, 1995 are not necessarily indicative of the operating results for the full year ending May 31, 1996. August 31, 1995 May 31, 1995 Cash and cash equivalents consist of: Cash $ 890,355 $ 412,670 Money market funds 79,516 134,075 Matured funds at factor - 828,824 $ 969,871 $ 1,375,569 Allowances for collection losses and discounts are: Collection losses $ 102,734 $ 88,128 Discounts 9,800 9,682 $ 112,534 $ 97,810 Inventories consist of: Raw materials $1,479,490 $ 1,381,292 Work-in-process 752,050 984,509 Finished goods 1,767,460 1,659,059 $3,999,000 $ 4,024,860 Accumulated depreciation on property, plant and equipment not used in operations is: $ 352,425 $ 347,146 Provision for federal income tax detail is: Current tax expense $ 114,395 $ 479,758 Deferred tax benefit - 49,000 $ 114,395 $ 430,758 Cash flow information: Cash payments for interest $ 11,907 $ 32,161 Cash payments for federal income taxes $ 119,758 $ 460,000 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES Working capital at August 31, 1995 was $5,802,118, an increase of $7,157 from May 31, 1995. Cash and cash equivalents decreased $405,698 during the three- month period ended August 31, 1995. Cash was used to fund normal working capital requirements, including acquisition of property, plant and equipment additions, payment of dividends and payment of matured accounts payable and accrued liabilities. Accounts receivable increased $30,395 primarily due to the timing of shipments during the quarter. Inventories decreased $25,860, or approximately one percent. Accounts payable and accrued liabilities decreased $441,106 primarily due to payment of normal maturities and accrued expenses during the three-month period. The current ratio at August 31, 1995 is 5 to 1 (4 to 1 at May 31, 1995). Total liabilities to assets equals eighteen percent (twenty-two percent at May 31, 1995). The Company factors its accounts receivable with a commercial factor on a matured basis. (Funds are remitted by the factor upon maturity of the invoices, plus a set number of collection days). The factor establishes a credit line per customer on a non-recourse basis. Credit extended by the company in excess of the credit line is factored on a recourse basis. Capital acquisition and improvement expenditures totaled $156,820 during the three-month period ended August 31, 1995. It is estimated that approximately $100,000 additional capital expenditures will be made over the next three quarters, consisting primarily of equipment and improvements to existing facilities. Funding will come from cash flows generated through operating activities. No significant disposition of equipment occurred during the three- month period ended August 31, 1995. It is expected that the Dallas facility shown as property, plant and equipment not used in operations will be sold for approximately $250,000 during the next three-month period. The Company does not offer a retirement plan nor offer post retirement or employment benefits. Accordingly, there will be no impact on the Company due to SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" and SFAS 112, "Employers' Accounting for Post Employment Benefits". Based on current operations and internally generated cash flows, management believes that adequate resources will be available to meet current and future liquidity requirements. RESULTS OF OPERATIONS August 31, 1995 first quarter net sales increased approximately five and one- half percent compared to the first quarter of the previous year. The increase resulted primarily from a slightly stronger product demand and a broadened market base. Cost of sales, as a percentage relationship to net sales, increased approximately one and two-tenths of one percentage point from the first quarter last year. The percentage increase resulted primarily from higher manufacturing costs and sales allowances. Selling, general and administrative expenses decreased approximately one-and seven-tenths of one percentage point as a percentage relationship to net sales compared to last year's first quarter. The percentage decrease resulted primarily from higher net sales. The provision for bad debt expense was $22,500, the same as 1994. Other income decreased approximately fifty-eight percent from the first quarter last year, resulting primarily from a decrease in rental income from property not used in operations. Interest income decreased approximately seventy-seven percent compared to the first quarter of the previous year due primarily to lower average cash balances. Interest expense, compared to last year's first quarter, was approximately seventy percent higher. The increase resulted primarily from higher factor interest charges on recourse accounts receivable. The federal income tax provision effective tax rate of 35.1 percent differs from the statutory rate (34 percent) as a result of nondeductible life insurance premiums, nondeductible portion of meals, accelerated depreciation, capitalization of certain expenses in inventories and the difference between the doubtful account reserve and writeoff, Part II. OTHER INFORMATION Item 9. No reports on Form 8-K were filed during the three-month period ended August 31, 1995. 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. HOWARD B. WOLF, INC. Eugene K. Friesen /s Eugene K. Friesen Senior Vice-President and Treasurer Howard B. Wolf /s Howard B. Wolf Chairman October 13, 1995 EX-27 2
5 1,000 3-MOS MAY-31-1996 AUG-31-1995 970 0 1954 0 3999 7235 2271 1188 8475 1433 0 360 0 0 6601 8475 3790 3799 2538 3464 0 0 10 326 114 212 0 0 0 212 .20 .20
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