-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, b4JKZVF8tJUiAihHuJLKbi36pPZ96WYY9Ap3k9XgQFpDtk9SwnvNj22um1GtUF0Z KqI2ytX/5SSiL7L9fsvbpg== 0000034136-95-000004.txt : 19950419 0000034136-95-000004.hdr.sgml : 19950419 ACCESSION NUMBER: 0000034136-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950304 FILED AS OF DATE: 19950418 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAB INDUSTRIES INC CENTRAL INDEX KEY: 0000034136 STANDARD INDUSTRIAL CLASSIFICATION: KNITTING MILLS [2250] IRS NUMBER: 132581181 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05901 FILM NUMBER: 95529456 BUSINESS ADDRESS: STREET 1: 200 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2122799000 MAIL ADDRESS: STREET 1: 200 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10016 10-Q 1 QUARTERLY REPORT OF FAB INDUSTRIES, INC. Form 10-Q Quarterly Report 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 4, 1995_____ Commission file number _________________1-5901_______________ _____________________Fab Industries, Inc.________________________ (Exact name of registrant as specified in its charter) _____________Delaware__________ _____13-2581181_______ (State or other jurisdiction of (I. R. S. Employer) incorporation or organization) Identification No.) ___200 Madison Avenue, New York, N.Y.____ __10016___ (Address of principal executive offices) (Zip Code) ______________(212) 592-2700_______________________ (Registrant's telephone number, including area code) ________________________N/A_______________________ (Former name, former address and former fiscal year; if changed since last report) 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__________ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: _______CLASS_____________ _Shares Outstanding at Apr 17, 1995_ Common stock, $.20 par value 6,020,191 FAB INDUSTRIES, INC. AND SUBSIDIARIES TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE Item 1 Consolidated Statements of Income 13 Weeks ended Mar. 4, 1995 and February 26, 1994 3 Consolidated Balance Sheets (Asset Section) Mar. 4, 1995 and December 3, 1994 4 Consolidated Balance Sheets (Liability Section) Mar. 4, 1995 and December 3, 1994 5 Consolidated Statements of Stockholders Equity 13 Weeks ended Mar. 4, 1995 6 Consolidated Statements of Cash Flows 13 Weeks ended Mar. 4, 1995 and February 26, 1994 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis and Financial Condition and Results of Operations 12 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 15 SIGNATURES 16 (2) FAB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE 13 WKS. ENDED --------------------------- MARCH 4, 1995 FEB. 26, 1994 ----------------------------- (Unaudited) (Unaudited) Net sales $41,433,000 $40,584,000 Cost of goods sold 35,324,000 32,909,000 ------------- ------------- Gross profit 6,109,000 7,675,000 Selling, general and administrative expenses 3,971,000 4,411,000 ------------- ------------- Operating income 2,138,000 3,264,000 ------------- ------------- Other income (expense): Interest and dividend income 949,000 862,000 Interest expense (19,000) (28,000) Net gain (loss) on investment securities (45,000) 6,000 ------------- ------------- Total other income 885,000 840,000 ------------- ------------- Income before taxes 3,023,000 4,104,000 Taxes on income 1,045,000 1,480,000 ------------- ------------- Net Income $1,978,000 $2,624,000 ============= ============= Earnings per share of common stock and $0.33 $0.42 common stock equivalents Weighted average number of shares of common stock and common stock equivalents 6,002,244 6,214,724 See notes to consolidated financial statements. (3) FAB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS A S S E T S ------------- AS OF ----------------------------- MARCH 4, 1995 DEC. 3, 1994 -------------- ------------- (Unaudited) Current assets: Cash and short-term investments (Note 2) $2,202,000 $11,143,000 Investment securities available-for-sale (Note 3) 6,017,000 6,181,000 Investment securities held-to-maturity (Note 3) 13,368,000 12,604,000 Accounts receivable-net of allowance of $1,050,000 and $950,000 for doubtful accounts 30,576,000 32,590,000 Inventories (Note 4) 34,405,000 29,994,000 Deferred income taxes 98,000 274,000 Other current assets 2,337,000 2,355,000 ------------- ------------- Total current assets 89,003,000 95,141,000 ------------- ------------- Investment securities held-to-maturity, due after one year (Note 3) 30,643,000 33,873,000 Property, plant and equipment - at cost 100,459,000 99,008,000 Less: Accumulated depreciation 68,531,000 67,076,000 -------------- ------------- 31,928,000 31,932,000 Other assets 2,381,000 2,187,000 ------------- ------------- $153,955,000 $163,133,000 ============= ============= See notes to consolidated financial statements. (4) FAB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS L I A B I L I T I E S A N D -------------------------------- S T O C K H O L D E R S' E Q U I T Y -------------------------------------- AS OF ----------------------------- MARCH 4, 1995 DEC. 3, 1994 --------------- ------------- (Unaudited) Current liabilities: Accounts payable $11,904,000 $14,289,000 Corporate income and other taxes 1,657,000 2,014,000 Payable to broker (purchase of treasury stock) 0 3,798,000 Accrued payroll and related expenses 1,432,000 4,787,000 Dividends payable 962,000 963,000 Other current liabilities 155,000 412,000 ------------- ------------- Total current liabilities 16,110,000 26,263,000 ------------- ------------- Obligations under capital leases - net of current maturities 718,000 731,000 Other noncurrent liabilities 1,718,000 1,469,000 Deferred income taxes 4,992,000 5,137,000 ------------- ------------- Total liabilities 23,538,000 33,600,000 ------------- ------------- Stockholders' equity 130,417,000 129,533,000 ------------- ------------- $153,955,000 $163,133,000 ============= ============= See notes to consolidated financial statements. (5) FAB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE 13 WEEKS ENDED MARCH 4, 1995
Loan to Common Stock * Employee Net Unearned Treasury Stock ------------- Additional Stock Unrealized Restricted --------------------- Number of Paid-in Retained Ownership Holding Stock Number of Total Shares Amount Capital Earnings Plan Gain(loss)Compensation Shares Cost ----- -------------------------------- ------------ ----------- ------------------------------ ------------ Balance at Dec.3,1994 $129,533,000 6,493,494 $1,298,000 $5,214,000 $147,154,000 ($9,487,000)($314,000) ($552,000)(474,704)($13,780,000) Net income 1,978,000 1,978,000 Cash dividends, $.16 per share (962,000) (962,000) Exercise of stock options 349,000 22,000 5,000 344,000 Purchase of treasury stock (835,000) (26,671) (835,000) Compensation under restricted stock plan 81,000 81,000 Net unrealized holding gain on investment securities available-for-sale, net of taxes 273,000 273,000 ------------ ------------------- ---------- ------------ ------------ --------- --------- -------- ------------ Balance at Mar.4,1995 $130,417,000 6,515,494 $1,303,000 $5,558,000 $148,170,000 ($9,487,000) ($41,000) ($471,000)(501,375)($14,615,000) (Unaudited) ============ ========= ========== ========== ============ ============ ========= ========= ======== =============
* Common stock .20 par value - 15,000,000 shares authorized. Preferred stock $1.00 par value - 2,000,000 shares authorized, none issued. See notes to consolidated financial statements. FAB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 13 WKS ENDED ---------------------------------- MARCH 4, 1995 FEB.26, 1994 --------------- ---------------- (Unaudited) (Unaudited) OPERATING ACTIVITIES: Net Income $1,978,000 $2,624,000 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts 100,000 100,000 Depreciation and amortization 1,455,000 1,349,000 Deferred income taxes (156,000) (5,000) (Gain) loss on investment securities 45,000 (6,000) Compensation under restricted stock plan 81,000 78,000 Decrease (increase) in: Accounts receivable 1,914,000 7,236,000 Inventories (4,411,000) (3,348,000) Other current assets 18,000 268,000 Other assets (194,000) (208,000) Increase (decrease) in: Accounts payable (2,385,000) (1,655,000) Accruals and other liabilities (3,734,000) (3,190,000) --------------- ---------------- Net cash provided by (used in) operating activities (5,289,000) 3,243,000 --------------- ---------------- INVESTING ACTIVITIES: Purchases of property, plant and equipment (1,450,000) (935,000) Proceeds from sales of investment securities 3,171,000 1,723,000 Acquisition of investment securities (127,000) (712,000) --------------- ---------------- Net cash used in investing activities 1,594,000 76,000 --------------- ---------------- FINANCING ACTIVITIES: Purchase of treasury stock (4,633,000) (914,000) Dividends paid (962,000) (3,983,000) Exercise of stock options 349,000 53,000 --------------- ---------------- Net cash used in financing activities (5,246,000) (4,844,000) --------------- ---------------- (Decrease) in cash and cash equivalents (8,941,000) (1,525,000) Cash and cash equivalents, at beginning of year 11,143,000 10,348,000 --------------- ---------------- Cash and cash equivalents, at end of period $2,202,000 $8,823,000 =============== ================ See notes to consolidated financial statements. (7) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the 13 weeks ended March 4, 1995 are not necessarily indicative of the results that may be expected for the entire year ended December 2, 1995. The balance sheet at December 3, 1994 has been derived from the audited balance sheet at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 3, 1994. 2. Cash and cash equivalents consist of the following (in thousands): March 4, 1995 December 3, 1994 ---------- ----------- (Unaudited) Cash $1,048 $1,490 Tax-free short-term debt instruments 1,154 9,653 ---------- -------- $2,202 $11,143 ========== ======== 3. Investment Securities: At March 4, 1995 and December 3, 1994, investment securities available-for-sale consist of the following (in thousands): Net Unrealized March 4, 1995 (Unaudited) Cost Holding Loss Fair Value - ---------------------------- ------ ---------------- ------------ Equities $6,085 ($68) $6,017 ====== ===== ====== Net Unrealized December 3, 1994 Cost Holding Loss Fair Value ------------------- ------ ---------------- ------------ Equities $6,709 ($528) $6,181 ====== ========= ====== (8) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Investment Securities: - Continued At March 4, 1995, the carrying value and estimated fair values of investment securities held-to-maturity are as follows (in thousands, Unaudited):
Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value ---- ---------- ------- ------- U.S. Government Securities $65 $0 $0 $65 Corporate Bonds 5,896 (193) 5,703 Tax exempt obligations 38,050 179 (248) 37,981 ----- ----- ------ ------ $44,011 $179 ($441) $43,749 ===== ===== ====== ====== At December 3, 1994, the carrying value and estimated fair values of investment securities held-to-maturity were as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value ---- ---------- ------- ------- U.S. Government Securities $69 $0 $0 $69 Corporate Bonds 5,800 8 (346) 5,462 Tax exempt obligations 40,608 18 (617) 40,009 ----- ----- ----- ------ $46,477 $26 ($963) $45,540 ===== ===== ===== =======
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Inventories: The Company's inventories are valued at the lower of cost or market. Cost is determined principally by the last-in,first-out (LIFO) method with the remainder being determined by the first-in, first-out(FIFO) method. Because the inventory valuation under the LIFO method is based upon an annual determination of inventory levels and costs as of the fiscal year-end, the interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs. March 4, 1995 December 3, 1994 -------- ----------- (Unaudited) Raw Materials $14,813,000 $12,817,000 Work in process 9,702,000 7,908,000 Finished goods 9,890,000 9,269,000 -------- ---------- Total $34,405,000 $29,994,000 ======== ========== Approximate percentage of inventories valued under LIFO valuation 65% 66% ======== ======= Excess of FIFO valuation over LIFO valuation $7,060,000 $7,010,000 ======= ====== MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations First Quarter 1995 Compared to 1994 Net sales for the first fiscal quarter of 1995 were $41,433,000 as compared to $40,584,000 in 1994, an increase of 2.1%. Overall Company shipments and bookings during the quarter were on a comparable level with last year although divisional product mix was less favorable. March 1995 sales were ahead by approximately 10% from year-ago levels. Gross profit for the quarter declined to 14.8% from 18.9%. A less favorable product mix together with increases in certain raw material prices exerted downward pressures on profit margins. In addition, plant operations were also adversely impacted by the current product mix as operating rates at certain related manufacturing facilities declined from year-ago levels. The comparative effect of changes in LIFO inventory reserves for the quarter was negligible. Selling, general and administrative expenses declined by $440,000, and as a percentage of sales to 9.6% from 10.9%. The decline relates primarily to lower incentive-based compensation and fringe benefits. Interest and dividend income rose by 10% in the quarter to $949,000 as higher rates more than offset lower average balances of income-producing investments. The market value of the Company's investment securities increased by $1,135,000 in the quarter. However, under the recently adopted Statement of Financial Accounting Standards No. 115 (SFAS 115), this gain is not reflected in the accompanying Statement of Income. The effective income tax rate for the current quarter was 34.5% as against 36.1% in 1994. The decline was primarily attributable to the fact that tax exempt interest represents a higher percentage of pre-tax income than in the comparative 1994 period. As a result of these aforementioned factors, net income declined to $1,978,000 from $2,624,000. Earnings per share, which are based upon the weighted average number of shares outstanding (6,002,244 vs. 6,214,724), were $0.33 as compared to $0.42. There was no stock option related dilution in either comparative quarter. Liquidity and Capital Resources The Company's principal source of funds is expected to be cash flow generated from operations. Operating activities used cash of $5,289,000 for the 13 weeks ended March 4, 1995 whereas such activities provided cash of $3,243,000 in the comparative 1994 period. Of this change, approximately $5,300,000 related to comparative declines in accounts receivable. Capital expenditures for the three months were $1,450,000 as against $935,000 in the 1994 period. The Company purchased additional high speed knitting machines for two of its knitting mills to increase manufacturing efficiencies and reduce unit costs. During the first quarter, the Company repurchased 26,671 shares of its Common Stock at an average price of $31.30. In addition, the Company paid $3,798,000 for shares which were repurchased in the fourth quarter of 1994. The Company intends to continue to purchase its shares of Common Stock from time-to-time as market conditions warrant and price criteria are met. The Company declared a quarterly dividend of $0.16 per share, payable March 10, 1995, to stockholders of record as of February 23, 1995. Stockholders' equity rose to $130,417,000, or $21.69 per share, from $129,533,000, or $21.52 per share, at the previous year-end December 3, 1994, and $126,167,000, or $20.35 per share at the end of the comparative 1994 first quarter. Management believes that the current financial position of the Company is more than adequate to internally fund any future expenditures to maintain, modernize and expand its manufacturing facilities, pay dividends and make acquisitions of textile related businesses if criteria relating to indebtedness, market expansion and existing management are met. PART II. OTHER INFORMATION --------------------- Item 6. Exhibits and Reports on Form 8-K ------------------- (a) Exhibits: No exhibits are filed herewith except for Exhibit 27 which is filed with EDGAR filing only. Exhibit Description of Exhibit ----- -------------- 3.1 Restated Certificate of Incorporation incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended November 27, 1993 (the "1993 10-K" 3.2 Amended and Restated By-laws of the Registrant, incorporated by reference to Exhibit 3.2 to the 1993 10-K. 3.3 Certificate of Amendment of Restated Certificate of Incorporation incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 3, 1994. 4.1 Specimen of Common Stock Certificate, incorporated by reference to Exhibit 4-A to Registration Statement No. 2-30163, filed November 4, 1968. 4.2 Rights Agreement dated as of June 6, 1990 between the Registrant and Manufacturers Hanover Trust Company, as Rights Agent, which includes as Exhibit A the form of Rights Certificate and Exhibit B the Summary of Rights to purchase Common Stock, incorporated by reference to Exhibit 4.2 to the 1993 10-K. 4.3 Amendment to the Rights Agreement between the Registrant and Manufacturers Hanover Trust Company, dated as of May 24,1991, incorporated by reference to Exhibit 4.3 to the 1993 10-K. 27 Financial Data Schedule pursuant to Article 5 of Regulation S-X filed with EDGAR filing only. (b) Reports on Form 8-K: The Registrant did not file any Current Reports on Form 8-K during the quarter ending March 04, 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. Dated: April 17,1995 FAB INDUSTRIES, INC. By:___s/Howard Soren/_______ Howard Soren, Vice President and Treasurer By:____s/David A. Miller/______ David A. Miller, Controller and Chief Accounting Officer (17) EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 3-MOS DEC-02-1995 MAR-04-1995 2,202 50,028 31,626 1,050 34,405 89,003 100,459 68,531 153,955 16,110 718 1,303 0 0 129,114 153,955 41,433 41,433 35,324 35,324 3,971 100 19 3,023 1,045 1,978 0 0 0 1,978 0.33 0.33
-----END PRIVACY-ENHANCED MESSAGE-----