-----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, CuCnvdmhhsFkUEDZ5dObQ8d1RcLsbq94o87aFbBTJyrm79A+wIf/Qw63yJUKX5zd 7krrFR2GtaXHIVQbVoex1Q== 0000054182-94-000025.txt : 19941121 0000054182-94-000025.hdr.sgml : 19941121 ACCESSION NUMBER: 0000054182-94-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JUSTIN INDUSTRIES INC CENTRAL INDEX KEY: 0000054182 STANDARD INDUSTRIAL CLASSIFICATION: 3140 IRS NUMBER: 750102185 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03041 FILM NUMBER: 94559090 BUSINESS ADDRESS: STREET 1: 2821 W 7TH ST CITY: FORT WORTH STATE: TX ZIP: 76107 BUSINESS PHONE: 8173365125 MAIL ADDRESS: STREET 1: 2821 W 7TH ST CITY: FORT WORTH STATE: TX ZIP: 76107 FORMER COMPANY: FORMER CONFORMED NAME: ACME PRESS BRICK CO DATE OF NAME CHANGE: 19820223 FORMER COMPANY: FORMER CONFORMED NAME: ACME BRICK CO DATE OF NAME CHANGE: 19690519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WORTH CORP DATE OF NAME CHANGE: 19680509 10-Q 1 SEP 1994 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 period ended September 30, 1994 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ ________________________ Commission file number 0-3041 IRS Employer Identification Number 75-0102185 JUSTIN INDUSTRIES, INC. (a Texas Corporation) 2821 West 7th Street Fort Worth, Texas 76107 Telephone: (817) 336-5125 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 issuers' classes of common stock, as of the latest practicable date: 27,210,395 shares of the Company's Common Stock ($2.50 par value) were outstanding as of November 3, 1994. ================================================================================ (Page 2) JUSTIN INDUSTRIES, INC. Index Page No. -------- PART I. FINANCIAL INFORMATION Financial Statements: Consolidated Balance Sheet September 30, 1994 and December 31, 1993 3 Consolidated Statement of Income Three Months and Nine Months Ended September 30, 1994 and 1993 4 Consolidated Statement of Shareholders' Equity Nine Months Ended September 30, 1994 and 1993 4 Consolidated Statement of Cash Flows Nine Months Ended September 30, 1994 and 1993 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION 9 SIGNATURE 9 All other schedules and compliance information called for by the instructions to Form 10-Q have been omitted since the required information is not present or not present in amounts sufficient to require submission. ================================================================================ (Page 3) JUSTIN INDUSTRIES, INC. CONSOLIDATED BALANCE SHEET In Thousands of Dollars
September 30, December 31, 1994 1993 --------------- -------------- (Unaudited) ASSETS - - ------ Current assets: Cash $ 4,483 $ 10,587 Accounts receivable, less allowance for doubtful accounts of $3,759 and $3,014, respectively 91,217 76,966 Inventories: Finished goods 130,760 103,261 Work-in-process 7,924 9,971 Raw materials 32,458 32,042 --------------- --------------- Total inventories 171,142 145,274 Income taxes 8,962 5,750 Prepaid expenses 2,589 1,517 Total current assets 278,393 240,094 Assets held for sale 5,523 5,523 Other assets 24,305 20,793 Property, plant, and equipment, at cost: Land 16,897 16,658 Buildings and equipment 203,809 196,575 Construction-in-progress 4,300 2,206 --------------- -------------- 225,006 215,439 Less accumulated depreciation 142,221 135,169 --------------- -------------- Net property, plant, and equipment 82,785 80,270 --------------- -------------- $ 391,006 $ 346,680 =============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ Current liabilities: Notes payable to banks $ 9,000 $ - Trade accounts payable 17,237 16,088 Accrued payroll items 12,829 7,702 Other accrued items 30,246 25,120 Dividends payable 1,088 1,086 Current portion of long-term debt 5,429 4,905 --------------- -------------- Total current liabilities 75,829 54,901 Long-term debt, less current portion 89,309 88,504 Deferred income taxes 14,429 14,472 Shareholders' equity: Voting preferred stock, $2.50 par value; 1,000,000 shares authorized - Series Two convertible, 100 shares issued and outstanding - - Common stock, $2.50 par value; 100,000,000 shares authorized, 27,869,888 shares issued 69,674 69,674 Capital in excess of par value 17,016 17,047 Retained earnings 130,337 108,038 Treasury stock, at cost, 668,713 and 713,402 shares, respectively (5,588) (5,956) --------------- -------------- Total shareholders' equity 211,439 188,803 --------------- -------------- $ 391,006 $ 346,680 =============== ============== See notes to consolidated financial statements.
================================================================================ (Page 4) JUSTIN INDUSTRIES, INC. CONSOLIDATED STATEMENT OF INCOME In Thousands of Dollars (Except Per Share Data)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------- ------------------------- 1994 1993 1994 1993 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) Net sales: Building materials $ 62,435 $ 49,338 $ 167,334 $ 135,198 Footwear 57,257 68,990 177,143 209,303 ----------- ----------- ----------- ----------- 119,692 118,328 344,477 344,501 Costs and expenses: Cost of goods sold 76,519 76,588 223,160 229,717 Selling, general, and administrative expenses 27,342 25,002 78,277 74,339 Interest expense 1,167 1,043 2,787 2,992 ----------- ----------- ----------- ----------- 105,028 102,633 304,224 307,048 ----------- ----------- ----------- ----------- Income before income taxes and cumulative effect on prior years of change in accounting for income taxes 14,664 15,695 40,253 37,453 Provision for income taxes 5,224 5,889 14,692 14,157 ----------- ----------- ----------- ----------- Income before cumulative effect on prior years of change in accounting for income taxes 9,440 9,806 25,561 23,296 Cumulative effect on prior years of change in accounting for income taxes - - - 1,106 ----------- ----------- ----------- ----------- Net income $ 9,440 $ 9,806 $ 25,561 $ 24,402 =========== =========== =========== =========== Earnings per share: Before cumulative effect on prior years of change in accounting for income taxes $ .34 $ .35 $ .92 $ .83 =========== =========== =========== =========== Net income $ .34 $ .35 $ .92 $ .87 =========== =========== =========== ===========
JUSTIN INDUSTRIES, INC. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY Nine Months Ended September 30, 1994 and 1993 In Thousands of Dollars (Except Per Share Data)
Capital In Preferred Common Excess of Retained Treasury ESOP Loan Stock Stock Par Value Earnings Stock Guarantee - - ---------------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- (Unaudited) Balance January 1, 1994 $ - $ 69,674 $ 17,047 $ 108,038 $ (5,956) $ - Net income - - - 25,561 - - Exercise of stock options - - (31) - 368 - Cash dividends declared ($.12 per share) - - - (3,262) - - ----------- ----------- ----------- ----------- ----------- ----------- Balance September 30, 1994 $ - $ 69,674 $ 17,016 $ 130,337 $ (5,588) $ - =========== =========== =========== =========== =========== =========== Balance January 1, 1993 $ - $ 34,837 $ 16,510 $ 110,072 $ (5,899) $ (250) Net income - - - 24,402 - - Issuance of 13,934,944 shares in connection with a 2-for-1 stock split effected in the form of a 100% stock dividend - 34,837 - (34,837) - - Exercise of stock options - - 528 - (181) - ESOP repayment of debt - - - - - 250 Cash dividends declared ($.12 per share) - - - (3,252) - - ----------- ----------- ----------- ----------- ----------- ----------- Balance September 30, 1993 $ - $ 69,674 $ 17,038 $ 96,385 $ (6,080) $ - =========== =========== =========== =========== =========== =========== See notes to consolidated financial statements.
================================================================================ (Page 5) JUSTIN INDUSTRIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS In Thousands of Dollars
Nine Months Ended September 30, ------------------------- 1994 1993 ---------- ---------- (Unaudited) Operating activities: Net income $ 25,561 $ 24,402 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 10,324 10,101 Provision for losses on accounts receivable 2,326 3,703 Gain on sale of property, equipment, and other assets (11) (572) Deferred federal income tax (43) 337 Cumulative effect of change in accounting principle - (1,106) Changes in assets and liabilities: Increase in accounts receivable (12,035) (16,132) Increase in inventories (17,538) (28,974) Increase in other current assets (4,020) (400) Increase in accounts payable and accrued expenses 8,093 16,821 Net increase in long-term assets and liabilities due to adoption of FAS 109 - 107 ---------- ---------- Net cash provided from operating activities 12,657 8,287 Investing activities: Proceeds from the sale of property, equipment, and other assets 556 2,441 Capital expenditures (11,307) (12,736) Increase (decrease) in other assets (1,165) 469 Acquisition of American Tile Supply, net of cash acquired (14,251) - ---------- ---------- Cash used in investing activities (26,167) (9,826) Financing activities: Additions to debt 32,500 29,000 Repayment of debt (22,171) (26,570) Dividends paid (3,260) (3,112) Exercise of stock options 337 347 ---------- ---------- Cash provided from (used in) financing activities 7,406 (335) ---------- ---------- Net decrease in cash (6,104) (1,874) Cash at beginning of period 10,587 2,393 ---------- ---------- Cash at end of period $ 4,483 $ 519 ========== ========== See notes to consolidated financial statements.
================================================================================ (Page 6) JUSTIN INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 1994 Summary of Significant Accounting Policies A summary of the company's significant accounting policies is presented on page 21 of its 1993 Annual Report to Shareholders. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the Annual Report to Shareholders when reviewing interim financial results. There has been no material change in the accounting policies followed by the company during 1994. In the opinion of management, the accompanying interim financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to present fairly the consolidated financial position, results of operations, cash flows, and shareholders' equity of Justin Industries, Inc. for interim periods. Long-Term Debt Certain loan agreements contain minimum requirements as to working capital, cash flow from operations, and tangible net worth and restrictions on redemption of outstanding stock and change in control of the company. As of September 30, 1994, the company was in compliance with all such requirements and restrictions. Earnings Per Share Earnings per share are based on the average number of shares of common stock outstanding during each period and such shares issuable upon assumed exercise of stock options, using the treasury stock method, adjusted for stock splits. The number of shares used in the calculation of earnings per share was 27,810,000 in 1994 and 27,982,000 in 1993. Acquisition Effective August 1, 1994, the Company purchased American Tile Supply Company and its related companies ("American Tile") for a total purchase price of approximately $16 million. American Tile distributes floor and wall tile primarily in Texas and has annual revenues of approximately $32,000,000. Eleven million dollars of the purchase price was financed through the Company's existing credit facilities. Subordinated notes were issued to the sellers for the remaining $5 million. ================================================================================ (Page 7) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales - Consolidated net sales for the third quarter of 1994 were $119.7 million versus $118.3 million for the same quarter in 1993, an increase of 1%. Consolidated net sales for the first nine months of 1994 of $344.5 million were about the same amount as the nine months ended September 30, 1993. Building Materials Segment Sales - Sales in the Building Materials segment for 1994's third quarter increased 26.6% to $62.4 million compared to the same quarter of 1993. For the nine months ended September 30, 1994, net sales increased 23.8% to $167.3 million compared to the same period in 1993. Each of the companies in the segment, Acme Brick Company ("Acme"), Featherlite Building Products Corporation ("Featherlite"), and Tradewinds Technologies, Inc. ("Tradewinds"), posted gains over the previous year. The acquisition of American Tile Supply Company ("American Tile") by Acme effective August 1, 1994 contributed approximately $6 million to revenues. Acme's brick and purchased products operations also realized increases in shipments and average selling prices compared to the one year ago periods. The planned expansion of American Tile's market area into Houston will provide the opportunity for continued growth in purchased products sales. Commercial construction activity in areas served by Featherlite is still ahead of last year's pace as indicated by improved concrete block and cut limestone sales levels. Tradewinds also posted increased revenues for the 1994 nine month period compared to the nine months ended September 30, 1993. Footwear Segment Sales - Total Footwear sales for the quarter ended September 30, 1994 declined 17% to $57.3 million from 1993's third quarter of $69 million. For the nine months ended September 30, 1994, revenues were 15.4% behind the same period a year ago. All three operations, Justin Boot Company, Nocona Boot Company and Tony Lama Company, Inc., experienced a slower third quarter in 1994. While the core market men's western boot and Chippewa lines continue to do well, sales in the fashion markets and women's lines have declined. The recent introduction of a new product called the Sport Lace-R, an athletic shoe constructed on a roper and lacer last, is expected to aid the segment's sales efforts in the coming quarters. Costs and Expenses - The consolidated ratio of cost of goods sold to sales improved to 63.9% in the third quarter of 1994 versus 64.7% in the same quarter of 1993. For the nine month periods ended September 30, 1993 and 1994, cost of goods sold to sales improved from 66.7% to 64.8%, respectively. Building Materials' ratio increased slightly from 57.4% in 1993's third quarter to 57.5% in the third quarter of 1994. While brick margins exceeded those of last year, American Tile's lower margins for purchased products contributed to the comparatively flat ratios for the quarter. During the first nine months of 1994, the ratio for Building Materials improved to 58.2% from 61.2% for the same period in 1993. The primary reasons for this improvement were higher average brick prices and greater unit sales and production volume at Acme. The ratios of cost of goods sold to sales in the Footwear business were 71% for the third quarter of 1994 versus 69.9% for the third quarter of 1993 and 71% for the nine month period in 1994 versus 70.2% for the nine months ended September 1993. Despite reduced sales levels in the Footwear segment, cost reduction measures have helped to support these ratios in 1994. Selling, general and administrative expenses increased to 22.8% of sales in the third quarter of 1994 compared to 21.1% in the third quarter of 1993. For the first nine months of 1994, such expenses were 22.7% of sales compared to 21.6% during the first nine months of 1993. The increases are primarily due to lower sales volumes in the Footwear segment. Beginning in the third quarter of 1994, programs to reduce general and administrative costs in the Footwear segment were initiated which include consolidation of various administrative and accounting functions. Completion of the consolidation process is expected to occur in late 1995. ================================================================================ (Page 8) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Interest expense increased 11.9% in the third quarter to $1,167,000 from $1,043,000 in the same three month period of 1993. The increase is attributable to higher average effective rates during the period. During the nine months ended September 30, 1994 compared to the same period in 1993, interest expense decreased $205,000 or 6.9%. This reduction is due to lower average debt levels during the 1994 nine month period compared to the same period in 1993. Debt increased in August 1994 due to the acquisition of American Tile. Provision for Income Taxes - The Company's provision for income tax was 35.6% of pre-tax income in the third quarter and 36.5% for the first nine months of 1994, which is the current estimated effective rate for the full year. During the same periods in 1993, rates of 37.5% and 37.8%, respectively, were estimated. FINANCIAL CONDITION AND LIQUIDITY At September 30, 1994, working capital amounted to $202.6 million versus $185.2 million at December 31, 1993. Cash decreased from $10.6 million at year- end 1993 to $4.5 million at the end of 1994's third quarter. During the first nine months of 1994, net cash of $12.7 million was provided from operations after usage for the seasonal increase in accounts receivable and inventories. Net cash advances of $10.3 million were provided under the company's credit facilities. Uses of cash during the 1994 nine month period include the acquisition of American Tile, purchase of capital equipment, and payment of cash dividends to shareholders. Total interest-bearing debt increased to $103.7 million from $93.4 million at year end 1993. However, the ratio of long-term debt-to-equity improved to .42 to 1 from .47 to 1 at year end. Borrowings should decrease during the next quarter as the height of the Footwear selling season comes into play. At September 30, 1994, unused credit facilities totaled $36 million, an amount well above the company's estimated requirements. Effective August 1, 1994, the Company purchased American Tile Supply and its related companies for a total purchase price of $16 million. Eleven million dollars of the purchase price was financed through the Company's existing credit facilities, while subordinated notes were issued to the sellers for the remaining $5 million. Cash dividends declared in the third quarter of 1994 and 1993 amounted to $.04 a share. During each of the nine month periods ended September 30 in 1994 and 1993, dividends were declared amounting to $.12 a share. ================================================================================ (Page 9) JUSTIN INDUSTRIES, INC. PART II: OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS The company is not presently involved in any lawsuits seeking damages relating to the normal conduct of its business that if adversely determined would have a material effect on the consolidated financial statements. ITEM 4 RESULTS OF VOTES OF SECURITY HOLDERS The information required by this item has been provided in the company's definitive proxy statement for its annual meeting of shareholders held March 18, 1994. ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K None SIGNATURE 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. JUSTIN INDUSTRIES, INC. S/RICHARD J. SAVITZ Richard J. Savitz Vice President-Finance/ Chief Financial Officer Dated this 10th day of November 1994. EX-27 2
5 This schedule contains summary financial information extracted from the September 30, 1994 Financial Statements included in the Company's Form 10-Q and is qualified in its entirety by reference to such Form 10-Q. 1,000 9-MOS DEC-31-1994 SEP-30-1994 4483 0 94976 3759 171142 278393 225006 142221 391006 75829 0 69674 0 0 141765 391006 344477 344477 223160 223160 78277 768 2787 40253 14692 25561 0 0 0 25561 .92 .92
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