-----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, U+UQ12ImizCRm71Azmr6XyQr2owgTDN2+qFIJ9MmPUAaPLYhKXro6aQTOKXLYHnx 0O7MJHRGlnSrVg8LpLQVrw== 0000039917-97-000006.txt : 19970815 0000039917-97-000006.hdr.sgml : 19970815 ACCESSION NUMBER: 0000039917-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 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: 1934 Act SEC FILE NUMBER: 001-04506 FILM NUMBER: 97659836 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 June 30, 1997 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 June 30, 1997 Common Stock (no par value) 5,069,892 shares PART I. - FINANCIAL INFORMATION GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED 06/30/97 06/30/96 ------------ ------------- Net sales $ 29,568,000 $ 37,218,000 Cost of sales 22,088,000 28,085,000 ------------- ------------- Gross margin on sales 7,480,000 9,133,000 Selling and administrative expenses 5,095,000 6,265,000 Interest on capitalized leases 35,000 31,000 Interest income (705,000) (580,000) ------------ ------------ Earnings before provision for income taxes 3,055,000 3,417,000 Provision for income taxes 1,222,000 1,350,000 ------------ ------------ Net earnings $ 1,833,000 $ 2,067,000 ============ ============ Earnings per share data: Earnings per share $ 0.36 $ 0.41 Average common shares outstanding 5,070,000 5,070,000 Dividends paid per share $ 0.20 $ 0.20
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
NINE MONTHS ENDED 06/30/97 06/30/96 ------------ ------------- Net sales $ 98,172,000 $ 97,124,000 Cost of sales 74,457,000 75,542,000 ------------ ------------ Gross margin on sales 23,715,000 21,582,000 Selling and administrative expenses 16,068,000 16,099,000 Interest on capitalized leases 87,000 90,000 Interest income (2,089,000) (1,896,000) ------------ ------------ Earnings before provision for income taxes 9,649,000 7,289,000 Provision for income taxes 3,838,000 2,879,000 ------------ ------------ Net earnings $ 5,811,000 $ 4,410,000 ============ ============ Earnings per share data: Earnings per share $ 1.14 $ 0.87 Average common shares outstanding 5,070,000 5,070,000 Dividends paid per share $ 0.80 $ 0.80
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
06/30/97 9/30/96 ------------ ------------- ASSETS Current Assets: Cash and cash equivalents $ 6,582,000 $ 20,587,000 U.S. Government securities - short-term 9,937,000 12,568,000 Accounts receivable, less estimated uncollectibles of $510,000 at 06/30/97 and $514,000 at 9/30/96 16,033,000 26,041,000 Inventories 43,620,000 28,639,000 Other current assets 3,792,000 5,558,000 ------------ ------------ Total current assets 79,964,000 93,393,000 U.S. Government Securities - long-term 23,951,000 7,003,000 Property, plant and equipment, less accumulated depreciation and amortization 13,357,000 14,915,000 Other assets 4,806,000 4,236,000 ------------ ------------ TOTAL $ 122,078,000 $ 119,547,000 ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 6,015,000 $ 4,609,000 Accrued liabilities 11,784,000 11,321,000 Federal and state income taxes payable 663,000 1,572,000 Current portion of capitalized leases 124,000 124,000 ------------ ------------ Total current liabilities 18,586,000 17,626,000 ============ ============ Capitalized lease obligations, net of current portion 2,813,000 2,937,000 Deferred income taxes 2,783,000 2,843,000 ------------ ------------ Shareholders' Equity: Preferred stock ($10 par value) 500,000 shares authorized; none issued Common stock (no par value) 15,000,000 shares authorized; 5,069,892 issued at 06/30/97 and 9/30/96 2,535,000 2,535,000 Additional paid-in-capital 5,821,000 5,821,000 Retained earnings 89,540,000 87,785,000 ------------ ------------ Total shareholders' equity 97,896,000 96,141,000 ------------ ------------ TOTAL $ 122,078,000 $ 119,547,000 ============ ============
GARAN, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED 06/30/97 06/30/96 ------------ ------------- Cash Flows From Operating Activities: Net earnings $ 5,811,000 $ 4,410,000 Adjustments to reconcile net cash Provided by Operating Actitivies: Depreciation and amortization 2,244,000 2,630,000 Provision for losses on accounts receivable 61,000 23,000 Deferred income taxes (60,000) 60,000 Changes in assets and liabilities: U.S. Government Securities - short-term 1,376,000 9,948,000 Accounts receivable 9,947,000 (711,000) Inventories (14,981,000) (12,149,000) Other current assets 1,766,000 (2,222,000) Accounts payable 1,406,000 (2,094,000) Accrued liabilities 463,000 241,000 Income taxes payable (909,000) 417,000 Other assets (570,000) 516,000 ------------ ------------ Net Cash provided by Operating Activities 6,554,000 1,069,000 ------------ ------------ Cash Flows From Investing Activities: Sale of U.S. Gov't securities - long-term 6,028,000 0 Purchase of U.S. Gov't securi- ties - long-term (21,721,000) 0 Additions to property plant and equipment (821,000) (3,035,000) Proceeds from sales of property, plant and equipment 135,000 282,000 ------------ ------------ Net Cash used for Investing Activities (16,379,000) (2,753,000) ------------ ------------ Cash Flows From Financing Activities: Payment of dividends (4,056,000) (4,056,000) Repayment of capitalized lease obligations (124,000) (119,000) ------------ ------------ Net Cash used for Financing Activities (4,180,000) (4,175,000) ------------ ------------ Net decrease in Cash and Cash Equivalents (14,005,000) (5,859,000) Cash and Cash Equivalents At Beginning of Period 20,587,000 8,649,000 ----------- ----------- Cash and Cash Equivalents At End of Period $ 6,582,000 $ 2,790,000 ============ ============ Supplemental Disclosures Cash Paid During The Period For: Interest $ 87,000 $ 90,000 Income taxes 4,350,000 3,432,000 ============ ============
GARAN, INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) 1. In the opinion of management, all adjustments necessary to a fair statement of the results of operations have been reflected. 2. Earnings per share are calculated on the basis of the weighted average number of common shares outstanding during the period. 3. Inventories consist of the following:
06/30/97 09/30/96 ------------ ------------- Raw Materials $ 6,955,000 $ 3,115,000 Work in process 7,375,000 6,837,000 Finished Goods 29,290,000 18,687,000 ----------- ------------ $ 43,620,000 $ 28,639,000 =========== ============
ITEM 2. GARAN, INCORPORATED AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION At June 30, 1997, working capital was $61,543,000, a decrease of $14,224,000 from September 30, 1996, working capital of $75,767,000. The decrease was primarily a result of reinvesting short-term U.S. Government Securities into higher-yielding long-term U.S. Government Securities, which are not included in working capital. Shareholders' equity at June 30, 1997, was $97,896,000, or $19.30 book value per share, as compared to $96,141,000, or $18.96 book value per share, at September 30, 1996. RESULTS OF OPERATIONS Three and Nine Month Periods Ended June 30, 1997, and June 30, 1996. Net sales for the third quarter of fiscal 1997 were $29,568,000 compared to $37,218,000 for the same period last year. Net earnings for the third quarter were $1,833,000, equal to $0.36 per share, compared to $2,067,000, or $0.41 per share, last year. The third quarter of fiscal 1996 included, approxi- mately $9,500,000 in sales related to the Disney animated film "The Hunchback of Notre Dame". This was non-recurring business and accounts for the decline in sales in the current quarter from the comparable quarter last year. Net sales for the first nine months of fiscal 1997 were $98,172,000 compared to $97,124,000 for the same period last year. Net earnings for the nine month period were $5,811,000, equal to $1.14 per share, compared to $4,410,000, or $0.87 per share, for the same period last year. Gross margin for the three month period ended June 30, 1997, was $7,480,000, or 25.3% of net sales, compared to $9,133,000, or 24.5% of net sales, for the comparable period last year. Gross margin for the nine months ended June 30, 1997, was $23,715,000, or 24.2% of net sales, compared to $21,582,000, or 22.2% of net sales, for the comparable period last year. The increase in gross margin was due primarily to improvements in manufacturing efficiency and absorption of overhead. Selling and administrative expenses for the three months ended June 30, 1997, were $5,095,000, or 17.2% of net sales, as compared to $6,265,000, or 16.8% of net sales, for the comparable period last year. The selling and administra- tive expenses dollar cost decrease for the three-month period occurred in royalty expenses. Royalty expenses are variable and relate to sales volume of sports and Disney licensed products. The non-recurring business decline in sales related to Disney animated films accounted for the decline in royalty expense for the three-month period. Selling and administrative expenses for the nine-months ended June 30, 1997, were $16,068,000 or 16.4% of net sales, as compared to $16,099,000, or 16.6% of net sales, for the comparable period last year. Selling and administrative expenses for the nine-month period ended June 30, 1997, were comparable to the same period last year as a decrease in royalty expenses related to sports and Disney animated films licenses was offset by an increase in our information system costs. These increases are related to improvements to internal operating systems and development and implementation of systems related customer service. ITEM 6. Exhibits and Reports on Form 8-K. a. Exhibits NONE b. Reports on Form 8-K No reports have been filed on Form 8-K during the quarter ended June 30, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on it's 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: August 13, 1997
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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 9-MOS SEP-30-1997 SEP-30-1997 APR-01-1997 OCT-01-1996 JUN-30-1997 JUN-30-1997 6,582,000 6,582,000 9,937,000 9,937,000 16,543,000 16,543,000 510,000 510,000 43,620,000 43,620,000 79,964,000 79,964,000 33,231,000 33,231,000 19,874,000 19,874,000 122,078,000 122,078,000 18,586,000 18,586,000 2,813,000 2,813,000 2,535,000 2,535,000 0 0 0 0 95,361,000 95,361,000 122,078,000 122,078,000 29,568,000 98,172,000 29,568,000 98,172,000 22,088,000 74,457,000 22,088,000 74,457,000 0 0 0 0 35,000 87,000 3,055,000 9,649,000 1,222,000 3,838,000 0 0 0 0 0 0 0 0 1,833,000 5,811,000 0.36 1.14 0 0
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