-----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, SkdxmmJoB9XH+tcPHmGmS33jWU5iisdfEYU+YQhtvaVaYWxMtdx4QK36raL1Vyry et/Vfd+febqOsXR8v7MO4A== 0000108018-97-000013.txt : 19971015 0000108018-97-000013.hdr.sgml : 19971015 ACCESSION NUMBER: 0000108018-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971014 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: WOLF HOWARD B INC CENTRAL INDEX KEY: 0000108018 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 750847571 STATE OF INCORPORATION: TX FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06775 FILM NUMBER: 97695126 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, 1997 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 $0.33 1/3 per share: 1,056,191 shares outstanding as of October 14, 1997 HOWARD B. WOLF, INC. INDEX Page Number PART 1. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Operations and Retained Earnings for the three-month periods ended August 31, 1997 and August 31, 1996 (Unaudited).................. 3 Consolidated Balance Sheets August 31, 1997 (Unaudited) and May 31, 1997 4 Consolidated Statements of Cash Flows for the three-month periods ended August 31, 1997 and August 31, 1996 (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 8 Part 1. FINANCIAL INFORMATION Item 1. Financial Statement HOWARD B. WOLF, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Unaudited) Three Months Ended August 31, 1997 1996 Net sales $3,680,093 $3,630,878 Cost and expenses: Cost of sales 2,381,043 2,412,723 Selling, general and administrative expenses 1,026,994 949,568 Provision for bad debt expense 22,500 22,500 Income from operations 249,556 246,087 Other income 15,539 14,419 Interest income 10,135 7,215 Interest expense (9,770) (8,671) Income before federal income tax 265,460 259,050 Provision for federal income tax (95,264) (92,336) Net income 170,196 166,714 Retained earnings - beginning of period 5,369,844 5,074,237 Cash dividends (84,495) (84,495) Retained earnings - end of period $5,455,545 $5,156,456 Average number of shares outstanding 1,056,191 1,056,191 Net income per share $.16 $.16 Cash dividends per share $.08 $.08 See notes to consolidated financial statements.
HOWARD B. WOLF, INC. CONSOLIDATED BALANCE SHEETS ASSETS August 31, May 31, 1997 1997 (Unaudited) (Audited) Current assets: Cash and cash equivalents $1,587,963 $1,921,415 Accounts receivable (net) 2,379,835 2,415,244 Inventories 3,742,670 3,815,653 Prepaid expenses 204,023 160,994 Deferred federal income tax benefit 223,000 214,000 Total current assets 8,137,491 8,527,306 Property, plant and equipment 2,388,490 2,360,038 Less accumulated depreciation and amortization (1,431,205) (1,389,205) 957,285 970,833 Property, plant and equipment not used in operations,less accumulated depreciation 2,718 2,718 Other assets 51,097 51,097 $9,148,591 $9,551,954 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $1,192,584 $1,772,987 Federal income tax payable 131,974 40,635 Total current liabilities 1,324,558 1,813,622 Deferred federal income tax 74,000 74,000 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 5,455,545 5,369,844 Less common stock in treasury, at cost, 25,000 shares (100,000) (100,000) 7,750,033 7,664,332 $9,148,591 $ 9,551,954 Note: The consolidated balance sheet at May 31, 1997 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, 1997 1996 Cash flows from operating activities: Net income $ 170,196 $ 166,714 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 42,000 39,000 Provision for losses on accounts receivable 22,500 22,500 Changes in deferred federal income tax (9,000) (59,000) Net changes in operating assets and liabilities-- Accounts receivable 12,910 (234,486) Inventories 72,983 234,366 Prepaid expenses (43,030) 35,446 Accounts payable and accrued liabilities (580,403) (410,891) Federal income tax payable 91,339 125,014 Net cash used in operating activities (220,505) (81,337) Cash flow from investing activities: Additions to property, plant and equipment (28,452) (34,037) Net cash used in investing activities (28,452) (34,037) Cash flows from financing activities: Cash dividends paid (84,495) (84,495) Net cash used in financing activities (84,495) (84,495) Net decrease in cash and cash equivalents (333,452) (199,869) Cash and cash equivalents at beginning of period 1,921,415 1,261,987 Cash and cash equivalents at end of period $ 1,587,963 $ 1,062,118 See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The consolidated balance sheet as of August 31, 1997, the consolidated statements of operations and the consolidated statements of cash flows for the three - month periods ended August 31, 1997 and 1996 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 as of and for the periods ended August 31, 1997 and 1996 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 statements be read in conjunction with the financial statements and notes thereto included in the Company's May 31, 1997 annual report to shareholders. The results of operations for the three-month period ended August 31, 1997 are not necessarily indicative of the operating results for the full year ending May 31, 1998. August 31, 1997 May 31, 1997 (Unaudited) (Audited) Cash and cash equivalents consist of: Cash $ 1,121,155 $ 945,759 Money market funds 229,225 400,162 Matured funds at factor 237,583 575,494 $1,587,963 $1,921,415 Allowances for collection losses and discounts are: Collection losses $ 115,021 $ 116,228 Discounts 18,027 15,703 $ 133,048 $ 131,931 Inventories consist of: Raw materials $ 1,001,440 $ 1,237,574 Work-in-process 966,367 1,043,457 Finished goods 1,774,863 1,534,622 $ 3,742,670 $ 3,815,653 Accumulated depreciation on property, plant and equipment not used in operations is: $ 134,287 $ 134,287 Accounts payable and accrued liabilities consist of: Accounts payable - trade $ 862,610 $ 1,241,286 Accrued compensation 181,910 410,148 Accrued taxes 116,957 76,795 Other accrued liabilities 31,107 44,758 $ 1,192,584 $ 1,772,987 Provision for federal income tax detail is: Current tax expense $ 104,264 $ 411,491 Deferred tax benefit (9,000) (41,000) $ 95,264 $ 370,491 Cash flow information: Cash payments for interest $ 9,770 $ 29,675 Cash payments for federal income taxes $ 12,925 $ 351,854 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES Working capital at August 31, 1997 was $6,812,933, an increase of $99,249 from May 31, l997. Cash and cash equivalents decreased approximately seventeen percent during the three-month period ended August 31, 1997. Cash was used to fund normal working capital requirements, including aquisition of property, plant and equipment additions, payment of dividends and payment of matured accounts payable and accrued liabilities. Accounts receivable decreased approximately one percent primarily due to the timing of shipments during the quarter. Inventories decreased approximately two percent. Accounts payable and accrued liabilities decreased approximately thirty-two percent primarily due to payment of normal maturities and accrued expenses during the three-month period. The current ratio at August 31, 1997 is 6 to 1 (5 to 1 at May 31, 1997). Total liabilities to assets equals fifteen percent (twenty percent at May 31, 1997). 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 $28,452 during the three-month period ended August 31, 1997. It is estimated that approximately $170,000 additional capital expenditures will be made over the next three quarters, consisting primarily of equipment, improvements to existing facilities and outlet mall store fixtures and leasehold improvements. Funding will come from cash flows generated through operating activities. No significant disposition of equipment occurred during the three- month period ended August 31, 1997. The Company does not offer a retirement plan nor offer post retirement or employment benefits. Accordingly, there will be no impact on th 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, 1997 first quarter net sales increased approximately one percent compared to the first quarter of the previous year. The increase resulted primarily from a slightly stronger product demand. Cost of sales, as a percentage relationship to net sales, decreased approximately one and eight-tenths of one percentage point from the first quarter last year. The percentage decrease resulted primarily from slightly lower raw material costs and a more favorable product sales mix. Selling, general and administrative expenses increased approximately one and eight-tenths of one percentage point as a relationship to net sales compared to last year's first quarter. The percentage increase resulted primarily from higher sales and marketing expenses. The provision for bad debt expense was $22,500, the same as for 1996. Other income increasd approximately eight percent from the first quarter last year, resulting primarily from rental income from property not used in operations. Interest income increased approximately forty percent compared to the first quarter of the previous year due primarily to higher average cash balances. Interest expense, compared to last year's first quarter, was approximately thirteen percent higher. The increase resulted primarily from factor interest charges on recourse accounts receivable. The federal income tax provision effective tax rate of thirty five and nine tenths (35.9) percent differs from the statutory rate of thirty four (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 write-offs. Part II. OTHER INFORMATION Item 9. No reports on Form 8-K were filed during the three-month period ended August 31, 1997. 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. /s/ Eugene K. Friesen Eugene K. Friesen Senior Vice President and Treasurer (Chief Accounting Officer) /s/ Howard B. Wolf Howard B. Wolf Chairman of the Board October 14, 1997 EX-27 2
5 1,000 3-MOS MAY-31-1998 AUG-31-1997 1,588 0 2,380 0 3,743 8,137 2,388 1,431 9,149 1,326 0 0 0 360 7,390 9,149 3,680 3,706 2,381 3,431 0 0 10 265 95 170 0 0 0 170 .16 .16
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