-----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, Swk/ZwmNLzpwcbr2H4rKJukyhx4c67T2AISv3jXYuEg/v25niphjEsGBAMttk5CK rmPReXrXPrQOK2UZdNCu0g== 0000039917-98-000006.txt : 19980514 0000039917-98-000006.hdr.sgml : 19980514 ACCESSION NUMBER: 0000039917-98-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GARAN INC CENTRAL INDEX KEY: 0000039917 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 135665557 STATE OF INCORPORATION: VA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04506 FILM NUMBER: 98618872 BUSINESS ADDRESS: STREET 1: 350 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10118 BUSINESS PHONE: 2125632000 MAIL ADDRESS: STREET 1: 350 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10118 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1998 Commission File No 1-4506 GARAN, INCORPORATED (Exact name of registrant as specified in its charter) VIRGINIA 13-5665557 (State of Incorporation) (I.R.S. Employer Identification No.) 350 Fifth Avenue, New York, NY 10118 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 563-2000 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 than 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 close of the period covered by this report. Class Outstanding March 31, 1998 Common Stock (no par value) 5,123,094 shares PART I. - FINANCIAL INFORMATION GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED 3/31/98 3/31/97 ____________ _____________ Net sales $ 41,098,000 $ 37,611,000 Cost of sales 31,197,000 28,458,000 ____________ ____________ Gross margin on sales 9,901,000 9,153,000 Selling and administrative expenses 5,632,000 5,597,000 Interest on capitalized leases 29,000 27,000 Interest income (817,000) (689,000) ___________ ___________ Earnings before provision for income taxes 5,057,000 4,218,000 Provision for income taxes 2,035,000 1,677,000 ___________ ___________ Net earnings $ 3,022,000 $ 2,541,000 =========== =========== Earnings per share data: Earnings per share - Basic $ 0.59 $ 0.50 - Diluted $ 0.59 $ 0.50 Average common shares outstanding- Basic 5,090,000 5,070,000 - Diluted 5,129,000 5,070,000 Dividends paid per share $ 0.20 $ 0.20
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
SIX MONTHS ENDED 3/31/98 3/31/97 ____________ _____________ Net sales $ 78,809,000 $ 68,604,000 Cost of sales 60,091,000 52,369,000 ____________ ____________ Gross margin on sales 18,718,000 16,235,000 Selling and administrative expenses 11,094,000 10,973,000 Interest on capitalized leases 56,000 52,000 Interest income (1,614,000) (1,384,000) ___________ ___________ Earnings before provision for income taxes 9,182,000 6,594,000 Provision for income taxes 3,686,000 2,616,000 ___________ ___________ Net earnings $ 5,496,000 $ 3,978,000 =========== =========== Earnings per share data: Earnings per share - Basic $ 1.08 $ 0.78 - Diluted $ 1.07 $ 0.78 Average common shares outstanding- Basic 5,090,000 5,070,000 - Diluted 5,129,000 5,070,000 Dividends paid per share $ 0.80 $ 0.60
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
3/31/98 9/30/97 ____________ _____________ ASSETS Current Assets: Cash and cash equivalents $ 5,472,000 $ 8,660,000 U.S. Government securities - short-term 22,562,000 16,223,000 Accounts receivable, less estimated uncollectibles of $518,000 at 3/31/98 and $510,000 at 9/30/97 21,386,000 31,092,000 Inventories 42,700,000 33,731,000 Other current assets 4,209,000 4,308,000 Total current assets 96,329,000 94,014,000 U.S. Government Securities - Long-term 18,131,000 19,853,000 Property, plant and equipment, less accumulated depreciation and amortization 13,867,000 13,470,000 Other assets 4,895,000 5,049,000 TOTAL $ 133,222,000 $ 132,386,000 ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 8,079,000 $ 6,589,000 Accrued liabilities 14,724,000 16,434,000 Federal and state income taxes payable 1,838,000 2,454,000 Current portion of capitalized leases 130,000 130,000 Total current liabilities 24,771,000 25,607,000 Capitalized lease obligations, net of current portion 2,203,000 2,807,000 Deferred income taxes 3,126,000 3,186,000 Shareholders' Equity: Preferred stock ($10 par value) 500,000 shares authorized; none issued Common stock (no par value) 15,000,000 shares authorized; issued 5,123,094 at 3/31/98 and 5,069,892 at 9/30/97 2,562,000 2,535,000 Additional paid-in-capital 6,698,000 5,821,000 Retained earnings 93,862,000 92,430,000 Total shareholders' equity 103,122,000 100,786,000 TOTAL $ 133,222,000 $ 132,386,000 ============ ============
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED 3/31/98 3/31/97 ____________ _____________ Cash Flows From Operating Activities: Net earnings $ 5,496,000 $ 3,978,000 Non cash items included in earnings: Depreciation and amortization 1,481,000 1,550,000 Provision for losses on accounts receivable 10,000 51,000 Deferred income taxes (60,000) 33,000 Changes in assets and liabilities: U.S. Government Securities - Short-term (3,877,000) (2,297,000) Accounts receivable 9,696,000 2,585,000 Inventories (8,969,000) (3,117,000) Other current assets 99,000 771,000 Accounts payable 1,490,000 ( 265,000) Accrued liabilities (1,710,000) ( 428,000) Income taxes payable (616,000) ( 37,000) Other assets 154,000 (561,000) Net Cash Flows From Operating Activities 3,194,000 2,263,000 Cash Flows From Investing Activities: ____________ ____________ Sale of U.S. Gov't securities - Long-term 4,054,000 6,028,000 Purchase of U.S. Gov't securi- ties - Long-term (4,794,000) (14,650,000) Additions to property, plant, and equipment (1,878,000) (576,000) Proceeds from sales of property, plant, and equipment 0 11,000 Net Cash Flows From Investing Activities (2,618,000) ( 9,187,000) ____________ ______________ Cash Flows From Financing Activities: Payment of dividends (4,064,000) (3,042,000) Repayment of capitalized lease obligations (604,000) (44,000) Proceeds from sale of common stock 904,000 0 Net Cash Flows From Financing Activities (3,764,000) (3,086,000) Decrease in Cash and Cash Equivalents (3,188,000) (10,010,000) Cash and Cash Equivalents At Beginning of Period 8,660,000 20,587,000 Cash and Cash Equivalents At End of Period $ 5,472,000 $ 10,577,000 ============ ============ Supplemental Disclosures Cash Paid During The Period For: Interest $ 56,000 $ 52,000 Income taxes 4,470,000 2,680,000 ============ ============
GARAN, INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1998 (UNAUDITED) 1. In the opinion of management, all adjustments necessary to a fair statement of the results of operations have been reflected. 2. Basic and diluted earnings per share, which are calculated on the basis of the weighted average number of common shares outstanding during the period in accordance with the provisions of the Statements of Financial Accounting Standards No. 128, are as follows: 1998 1997 ---------------------------- ------------------------------ Income Shares Per Share Income Shares Per Share Basic EPS $5,496,000 5,090,000 $1.08 $3,978,000 5,070,000 $0.78 ========= ======== Effect of dilutive options 39,000 -------------------- -------------------- $5,496,000 5,129,000 $1.07 $3,978,000 5,070,000 $0.78 ============================= ============================== 3. Inventories consist of the following:
3/31/98 09/30/97 ____________ _____________ Raw Materials $ 7,579,000 $ 6,697,000 Work in Process 6,890,000 6,921,000 Finished Goods 28,231,000 20,113,000 ___________ ____________ $42,700,000 $ 33,731,000 =========== ============
ITEM 2. GARAN, INCORPORATED AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements included in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report contain "forward-looking statements" based upon management's expectations and beliefs concerning future events impacting the registrant. Actual results of operations or financial condition may differ because of business conditions in the apparel industry generally, competition, the addition or loss of significant customers or personnel, the timing of orders placed by the registrant's customers, and such other risk factors as may be identified from time to time in the registrant's filings with the Securities and Exchange Commission. FINANCIAL CONDITION At March 31, 1998, working capital was $71,558,000, an increase of $3,151,000 from working capital at September 30, 1997 of $68,407,000. The increase was due primarily to a decrease in accounts receivable and government securities maturing in less than one year net of a seasonal increase in inventory. Shareholders' equity at March 31, 1998, was $103,122,000, or $20.13 book value per share, as compared to $100,786,000, or $19.88 book value per share, at September 30, 1997. RESULTS OF OPERATIONS Three and Six Month Periods Ended March 31, 1998, and March 31, 1997. Net sales for the second quarter of fiscal 1998 were $41,098,000, compared to $37,611,000, for the same period in fiscal 1997. Net earnings for the second quarter were $3,022,000, equal to $0.59 per share, compared to $2,541,000, or $0.50 per share, in fiscal 1997. Net sales for the first six months of fiscal 1998 were $78,809,000, compared to $68,604,000 in fiscal 1997. Net earnings for the six month period were $5,496,000, equal to $1.08 per share, compared to $3,978,000, or $0.78 per share, in fiscal 1997. The increase in net sales for both periods was primarily a result of an increase in total units shipped. Gross margin for the three months ended March 31, 1998, was $9,901,000, or 24.1% of net sales, compared to $9,153,000, or 24.3% of net sales, for the comparable period in fiscal 1997. Gross margin for the six months ended March 31, 1998, was $18,718,000, or 23.8% of net sales, compared to $16,235,000 or 23.7% of net sales, for the comparable period in fiscal 1997. The dollar increase in gross margin was due primarily to the increased sales volume. Selling and administrative expenses for the three months ended March 31, 1998, were $5,632,000, or 13.7% of net sales, as compared to $5,597,000, or 14.9% of net sales, for the comparable period in fiscal 1997. Selling and administrative expenses for the six months ended March 31, 1998, were $11,094,000, or 14.1% of net sales, as compared to $10,973,000, or 16.0% of net sales, for the comparable period in fiscal 1997. Because the dollar value remained constant, the decrease in selling and administrative expenses as a percentage of net sales was the result of increased sales volume. PART II. - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K. a. Exhibits Exhibit 27. Financial Data Schedule b. Reports on Form 8-K No reports have been filed on Form 8-K during the quarter ended March 31, 1998. 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. GARAN, INCORPORATED BY:Seymour Lichtenstein Seymour Lichtenstein Principal Executive Officer BY:William J. Wilson William J. Wilson Principal Financial Officer DATE: May 13, 1998 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENTS OF EARNINGS AND BALANCE SHEETS OF GARAN, INCORPORATED AND SUBSIDIARIES ANNEXED HERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000039917 GARAN, INCORPORATED 3-MOS 6-MOS SEP-30-1998 SEP-30-1998 JAN-1-1998 OCT-1-1997 MAR-31-1998 MAR-31-1998 5,472,000 5,472,000 22,562,000 22,562,000 21,904,000 21,904,000 518,000 518,000 42,700,000 42,700,000 96,329,000 96,329,000 34,017,000 34,017,000 20,150,000 20,150,000 133,222,000 133,222,000 24,771,000 24,771,000 2,203,000 2,203,000 2,562,000 2,562,000 0 0 0 0 100,560,000 100,560,000 133,222,000 133,222,000 41,098,000 78,809,000 41,098,000 78,809,000 31,197,000 60,091,000 31,197,000 60,091,000 0 0 0 0 29,000 56,000 5,057,000 9,182,000 2,035,000 3,686,000 0 0 0 0 0 0 0 0 3,022,000 5,496,000 .59 1.08 .59 1.07
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