-----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, INvI84Z4Yn5+Uz5orefOXk8xpCFQBhhH8inkhuKa6VNPwnx6z7rMGEVy4bMS4KUB Ig7ROcspvnrDS5u5xutWuQ== 0000950135-95-002361.txt : 19951119 0000950135-95-002361.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950135-95-002361 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST YEARS INC CENTRAL INDEX KEY: 0000055698 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PLASTIC PRODUCTS [3080] IRS NUMBER: 042149581 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07024 FILM NUMBER: 95590429 BUSINESS ADDRESS: STREET 1: ONE KIDDIE DR CITY: AVON STATE: MA ZIP: 02322-1171 BUSINESS PHONE: 5085881220 MAIL ADDRESS: STREET 1: ONE KIDDIE DR CITY: AVON STATE: MA ZIP: 02322-1171 FORMER COMPANY: FORMER CONFORMED NAME: KIDDIE PRODUCTS INC DATE OF NAME CHANGE: 19920703 10-Q 1 THE FIRST YEARS INC. 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For The Quarter Ended SEPTEMBER 30, 1995 - -------------------------------------------------------------------------------- Commission file number 0-7024 - -------------------------------------------------------------------------------- THE FIRST YEARS INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-2149581 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Kiddie Drive, Avon, Massachusetts 02322-1171 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (508) 588-1220 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (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 . --- --- The number of shares of Registrant's common stock outstanding on October 31, 1995 was 2,256,405. 2 THE FIRST YEARS INC. INDEX ----- PART I - FINANCIAL INFORMATION: Condensed Balance Sheets Page 1 Condensed Statements of Income 2 Condensed Statements of Cash Flows 3 Notes to Condensed Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - OTHER INFORMATION Other information 6 SIGNATURES 6
3 THE FIRST YEARS INC. Condensed Balance Sheets ASSETS
September 30, December 31, 1995 1994 ---- ---- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $629,714 $2,329,041 Accounts receivable, net 14,530,108 9,266,235 Inventories 15,127,500 10,413,835 Prepaid insurance, taxes, etc. 533,874 295,921 Current deferred taxes 624,500 624,500 ---------- ---------- Total current assets 31,445,696 22,929,532 ---------- ---------- PROPERTY, PLANT, AND EQUIPMENT: Land 167,266 167,266 Building 3,737,861 3,737,861 Machinery and molds 6,103,732 5,413,075 Furniture and equipment 3,117,860 2,986,905 ---------- ---------- Total 13,126,719 12,305,107 Less accumulated depreciation 7,129,055 6,381,854 ---------- ---------- Property, plant, and equipment-net 5,997,664 5,923,253 ---------- ---------- TOTAL ASSETS $37,443,360 $28,852,785 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $133,333 $133,333 Short-term borrowings 3,400,000 0 Accounts payable and accrued expenses 7,875,459 5,332,871 Federal and state income taxes payable 124,700 218,500 ---------- --------- Total current liabilities 11,533,492 5,684,704 ---------- --------- LONG-TERM DEBT-Less portion due currently 133,334 233,334 ---------- --------- DEFERRED INCOME TAXES 584,800 584,800 ---------- --------- STOCKHOLDERS' EQUITY: Common stock 225,641 225,043 Paid-In capital 157,629 98,194 Retained earnings 24,808,464 22,026,710 ---------- ---------- Total stockholders' equity 25,191,734 22,349,947 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $37,443,360 $28,852,785 ========== ==========
See accompanying notes to condensed financial statements. Page 1 4 THE FIRST YEARS INC. Condensed Statements of Income (Unaudited)
Three Months Ended Nine Months Ended September 30 September 30 --------------------- ----------------------- 1995 1994 1995 1994 ---- ---- ---- ---- INCOME: Net sales $19,628,352 $13,593,810 $55,506,878 $40,663,171 Interest 1,922 22,124 13,488 39,701 ---------- ---------- ---------- ---------- Total income 19,630,274 13,615,934 55,520,366 40,702,872 ---------- ---------- ---------- ---------- COSTS AND EXPENSES: Cost of products sold 11,757,707 7,266,623 32,731,171 22,475,067 Selling, general, and administrative expenses 6,078,890 4,794,866 17,414,767 14,039,385 Interest expense 51,879 5,457 100,122 19,050 ---------- ---------- ---------- ---------- Total costs and expenses 17,888,476 12,066,946 50,246,060 36,533,502 ---------- ---------- ---------- ---------- INCOME BEFORE TAXES ON INCOME 1,741,798 1,548,988 5,274,306 4,169,370 PROVISION FOR TAXES ON INCOME 696,700 644,500 2,109,700 1,640,300 --------- ---------- --------- --------- NET INCOME $1,045,098 $ 904,488 $3,164,606 $2,529,070 ========= ========= ========= ========= EARNINGS PER SHARE $0.45 $0.40 $1.36 $1.12 ==== ==== ==== ==== AVERAGE NUMBER OF SHARES OUTSTANDING 2,344,142 2,248,260 2,335,153 2,248,260 ========= ========= ========= ========= CASH DIVIDENDS PAID PER SHARE $0.00 $0.00 $0.17 $0.17 ==== ==== ==== ====
See accompanying notes to condensed financial statements. Page 2 5 THE FIRST YEARS INC. Condensed Statements of Cash Flows for the Nine Months Ended September 30, (Unaudited)
1995 1994 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $3,164,606 $2,529,070 Adjustments to reconcile net income to net cash provided by (used for) operations: Depreciation 747,201 630,869 Provision for doubtful accounts 73,009 61,051 Gain on disposal of equipment (200) (9,926) Increase (decrease) arising from working capital items: Accounts receivable (5,336,882) (2,652,030) Inventories (4,713,665) (720,850) Prepaid insurance, taxes, etc. (237,953) (228,746) Accounts payable and accrued expenses 2,542,588 840,672 Federal and state income taxes - net (93,800) 432,500 ---------- ---------- Net cash provided by (used for) operating activities (3,855,096) 882,610 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property, plant, and equiment (821,412) (967,342) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (382,852) (382,204) Common stock issued under stock option plans 60,033 0 Net proceeds from short-term borrowings 3,400,000 0 Repayment of industrial revenue bonds (100,000) (100,000) ---------- ---------- Net cash provided by (used for) financing activities 2,977,181 (482,204) ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,699,327) (566,936) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,329,041 2,712,267 ---------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $629,714 $2,145,331 ========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $100,122 $19,050 ========== ========== Income taxes $2,203,500 $1,207,800 ========== ==========
See accompanying notes to condensed financial statements. Page 3 6 THE FIRST YEARS INC. NOTES TO CONDENSED FINANCIAL STATEMENTS 1. Amounts in the accompanying balance sheet as of December 31, 1994 are condensed from the Company's audited balance sheet as of that date. All other condensed financial statements are unaudited but, in the opinion of the Company, contain all normal and recurring adjustments necessary to present fairly the financial position as of September 30, 1995, and the results of operations and cash flows for the periods ended September 30, 1995 and 1994. 2. The Company has 15,000,000 and 7,500,000 shares of $.10 par value common stock with 2,256,405 and 2,250,430 shares issued and outstanding as of September 30, 1995 and December 31, 1994, respectively. On May 3, 1995 the Board of Directors authorized a $.17 per share annual cash dividend payable on June 1, 1995 to holders of record at the close of business on May 15,1995. 3. Earnings per share of common stock are computed on the basis of the average number of shares and common share equivalents outstanding during each quarter. Equivalents had no material effect on the computation for the three and nine months ended September 30, 1994. Fully diluted and primary earnings per share were the same for the three and nine months ended September 30, 1995. 4. The results of operations for the three and nine month periods ended September 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. 5. During 1995, the Company borrowed various amounts up to $3,400,000 under unsecured lines of credit totaling $15,000,000 available from banks. As of September 30, 1995 a balance of $3,400,000 remains outstanding which bears interest at 8.7%. No other short-term borrowings were incurred by the Company during 1994 or the first nine months of 1995. Page 4 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales for the first nine months of 1995 were $55,507,000, an increase of $14,844,000 or 36.5% as compared to $40,663,000 for the comparable period last year. The increase was due to new product introductions and expanded retail distribution in domestic and foreign markets. Net sales particularly benefited from the introduction of newly licensed "Winnie the Pooh" products and the introduction of new products that have a higher average selling prices than products previously offered by the Company. Cost of products sold for the first nine month of 1995 was $32,731,000, an increase of $10,256,000 or 45.6% , as compared to $22,475,000 for the comparable period last year. As a percentage of net sales, cost of products sold for the first nine months of 1995 increased to 59.0% from 55.3% in the comparable period of 1994. The increase was due to increased sales of higher-priced, lower margin items, licensing fees, and air freight shipments from overseas production facilities incurred primarily in the first three months of the period. The continued effect of these factors, along with increased cost of products due to raw material price increases, is expected to result in some further decline in gross profit margins for the balance of 1995. Selling, general, and administrative expenses for the first nine months of 1995 were $17,415,000, an increase of $3,376,000 or 24.0% as compared to $14,039,000 over such expenses for the first nine months of 1994. The increase resulted primarily from costs related to increased sales volume. As a percentage of net sales, selling, general, and administrative expenses for the first nine months of 1995 decreased to 31.4% from 34.5% for the comparable period in 1994. The decrease reflects the economies of scale provided by higher volume of business. Income tax expense as a percentage of pretax income increased to 40.0% from 39.3% in the comparable period in 1994. Liquidity and Capital Resources Net working capital increased by $2,667,000 in the first nine months primarily due to profitable operations. Net accounts receivable increased by $5,264,000 primarily as a result of increased sales and inventories increased by $4,714,000 to meet continued demand for the Company's product. Cash decreased by $1,699,000 primarily resulting from increases in accounts receivable and inventories which were partially offset by increases in accounts payable, accrued expenses, and short-term borrowings. Unsecured lines of credit of $15,000,000, which are subject to annual renewal, are available from banks. Amounts outstanding under these lines are payable upon demand by the banks. During 1995, the Company borrowed various amounts up to $3,400,000 of which $3,400,000 remained outstanding as of September 30, 1995. The Company did not incur any other short-term borrowings during 1994 or during the first nine months of 1995. Page 5 8 PART II - OTHER INFORMATION Items 1 through 5 - Not Applicable Item 6: Exhibits and Reports on Form 8-K (a) Not Applicable (b) No reports on Form 8-K have been filed during the past quarter covered by this report. 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. THE FIRST YEARS INC. -------------------- Registrant Date 11/13/95 /s/ Benjamin Peltz ----------------- --------------------------- Benjamin Peltz, Senior Vice President and Treasurer, Duly Authorized Officer and Principal Financial Officer Page 6 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF THE FIRST YEARS, INC. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 U.S. DOLLARS 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1 629,714 0 14,715,108 185,000 15,127,500 31,445,696 13,126,719 7,129,055 37,443,360 11,533,492 133,334 225,641 0 0 24,966,093 37,443,360 55,506,878 55,520,366 32,731,171 50,145,938 0 0 100,122 5,274,306 2,109,700 3,164,606 0 0 0 3,164,606 1.36 1.36
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