-----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, I8p00SDh3GurJCyRK3hyYy1mJZEgmtE/NX7cqUvMeIXTtK2qFv/aOGAtxn176eIx sQ4TsivoXTihJ5LLpBQlTg== 0000898430-95-002314.txt : 19951205 0000898430-95-002314.hdr.sgml : 19951205 ACCESSION NUMBER: 0000898430-95-002314 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANTHONY INDUSTRIES INC CENTRAL INDEX KEY: 0000006720 STANDARD INDUSTRIAL CLASSIFICATION: 3949 IRS NUMBER: 952077125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04290 FILM NUMBER: 95591049 BUSINESS ADDRESS: STREET 1: 4900 S EASTERN AVE STREET 2: SUITE 200 CITY: LOS ANGELES STATE: CA ZIP: 90040 BUSINESS PHONE: 2137242800 MAIL ADDRESS: STREET 1: 4900 S EASTERN AVE STREET 2: SUITE 200 CITY: LOS ANGELES STATE: CA ZIP: 90040 FORMER COMPANY: FORMER CONFORMED NAME: ANTHONY POOLS INC DATE OF NAME CHANGE: 19720317 10-Q 1 10-Q FOR SEPTEMBER 30 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report under Section 13 of the Securities Exchange Act of 1934 For the Quarter Ended September 30, 1995 Commission File No. 1-4290 ANTHONY INDUSTRIES, INC. (exact name of registrant as specified in its charter) DELAWARE 95-2077125 (State of Incorporation) (I.R.S. Employer Identification No.) 4900 South Eastern Avenue Los Angeles, California 90040 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (213) 724-2800 Former name, former address and former fiscal year, if changed since last report: Not applicable 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X - Indicate the number of shares outstanding of each of the issuer's classes of common stock as of October 31, 1995. Common Stock, par value $1 16,527,731 Shares 1 FORM 10-Q QUARTERLY REPORT PART -- 1 FINANCIAL INFORMATION Item 1. Financial Statements STATEMENTS OF CONSOLIDATED INCOME (condensed) (In thousands except for per share figures) (Unaudited)
Three months Nine months ended September 30 ended September 30 --------------------- --------------------- 1995 1994(a) 1995 1994(a) -------- --------- ------- ------- Net sales $156,282 $127,863 $460,719 $369,363 Cost of products sold 114,911 93,387 341,670 271,735 -------- -------- -------- -------- Gross profit 41,371 34,476 119,049 97,628 Selling expenses 18,297 15,763 53,028 45,229 General and administrative expenses 11,760 9,905 37,720 33,002 -------- -------- -------- -------- Operating income 11,314 8,808 28,301 19,397 Interest expense 1,929 1,937 7,476 5,205 Other (income) (446) (101) (1,232) (1,194) -------- -------- -------- -------- Income before taxes 9,831 6,972 22,057 15,386 Provision for income taxes 3,245 2,440 7,020 5,385 -------- -------- -------- -------- NET INCOME $ 6,586 $ 4,532 $ 15,037 $ 10,001 ======== ======== ======== ======== PER SHARE Net Income $.40 $.38 $1.09 $.84 Cash dividend $.11 $.105 $.33 $.315 Average shares outstanding 16,598 11,910 13,831 11,910
(a) Shares and per share figures have been retroactively adjusted for the 5% stock dividend paid in December 1994. See notes to consolidated condensed financial statements. 2 CONSOLIDATED BALANCE SHEETS (condensed)
September 30 December 31 1995 1994 (Unaudited) ------------ ----------- (thousands) Assets ------ Current Assets Cash and cash equivalents $4,043 $7,700 Accounts receivable, less allowances of $9,037 in 1995 and $8,425 in 1994 143,647 111,154 Inventories Finished goods 89,721 66,900 Work in process 12,529 8,788 Raw materials 31,760 32,216 -------- -------- 134,010 107,904 Less LIFO reserve 6,903 6,162 -------- -------- 127,107 101,742 Deferred taxes 4,905 7,928 Prepaid expenses and other current assets 5,086 4,324 -------- -------- Total current assets 284,788 232,848 Property, Plant and Equipment 145,431 131,459 Less allowance for depreciation 86,436 79,095 -------- -------- 58,995 52,364 Intangibles, principally goodwill 17,434 15,825 Other 3,198 3,377 -------- -------- Total assets $364,415 $304,414 ======== ========
See notes to consolidated condensed financial statements. 3 CONSOLIDATED BALANCE SHEETS (condensed)
September 30 December 31 1995 1994 (Unaudited) ------------ ----------- (thousands) Liabilities and Shareholders' Equity ------------------------------------ Current Liabilities Bank loans $ 50,534 $ 18,341 Accounts payable 29,016 26,858 Accrued payroll and related 19,582 18,697 Other accruals 20,349 15,788 Current portion of long-term debt 372 2,918 -------- -------- Total current liabilities 119,853 82,602 Long-Term Debt 53,619 109,921 Deferred Taxes 12,414 12,895 Shareholders' Equity Preferred Stock $1 par value, authorized 12,500,000 shares, none issued Common Stock, $1 par value, authorized $40,000,000 shares, issued shares -- 16,993,375 in 1995 and 12,322,851 in 1994 16,993 12,323 Additional paid-in capital 130,223 66,973 Retained earnings 39,100 28,994 Employee Stock Ownership Plan and stock option loans (4,211) (3,937) Treasury shares at cost, 481,059 shares (4,189) (4,189) Cumulative translation adjustments 613 (1,168) -------- -------- Total Shareholders' Equity 178,529 98,996 -------- -------- Total Liabilities and Shareholders' Equity $364,415 $304,414 ======== ========
See notes to consolidated condensed financial statements. 4 STATEMENTS OF CONSOLIDATED CASH FLOWS (condensed)
(Unaudited) Nine months ended September 30 --------------------------- 1995 1994 --------------------------- (thousands) Operating Activities Net income $ 15,037 $ 10,001 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 8,166 7,409 Deferred taxes 2,513 1,142 Changes in operating assets and liabilities: Increase in accounts receivable (31,993) (15,604) Increase in inventories (24,055) (15,282) Increase in prepaid expense and other current assets (615) (2,498) Increase in accounts payable 1,329 3,704 Increase in payroll, taxes and other accruals 5,165 5,333 --------- -------- Net cash used in operating activities (24,453) (5,795) --------- -------- Investing Activities Property, plant & equipment expenditures (13,984) (7,561) Disposals of property, plant & equipment 183 310 Other items, net (341) 705 --------- -------- Net cash used in investing activities (14,142) (6,546) Financing Activities Borrowings under long-term debt and revolving lines of credit 9,000 16,666 Payments of long-term debt and revolving lines of credit (68,558) (3,692) Dividends paid (4,931) (3,708) Net proceeds from stock offering 67,234 Net increase in short-term bank loans 32,193 2,282 --------- -------- Net cash provided by financing activities 34,938 11,548 --------- -------- Net decrease in cash and cash equivalents (3,657) (793) Cash and cash equivalents at beginning of year 7,700 5,860 --------- -------- Cash and cash equivalents at end of period $ 4,043 $ 5,067 ========= ======== Supplemental disclosure of cash flow information: Interest paid $ 5,651 $ 4,001 Income taxes paid 4,478 4,243 --------- -------- $ 10,129 $ 8,244 ========= ========
See notes to consolidated condensed financial statements. 5 NOTE 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 with the instructions to Form 10-Q and Article 10 of Regulations S-X. 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 normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and nine month period ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the Consolidated Financial Statements and Notes to Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. NOTE 2 - Summary of Significant Accounting Policies The Company maintains its books using a 52/53 week year ending on the last Sunday of December. For purposes of the consolidated financial statements, the year-end is stated as December 31. The year ended 1994 consisted of 52 weeks and each of the quarters consisted of 13 weeks. The year ended December 31, 1995 will consist of 53 weeks with the additional week included in the first quarter ended March 31, 1995. NOTE 3 - Borrowings The $85 million credit facility and the $40 million 364-day unsecured revolving short-term facility are subject to an agreement which, among other things, restricts amounts available for payment of cash dividends by the Company. As of September 30, 1995, retained earnings of $10.6 million were free of such restrictions. NOTE 4 - Stock Offering On June 1, 1995, the Company completed its previously announced public offering of 4.6 million primary shares of its common stock. The net proceeds of $67.2 million were used to reduce amounts outstanding under the $85 million credit facility ("Credit Facility"). The Company may reborrow amounts repaid under the Credit Facility for general corporate purposes, which may include the financing of product sales growth, the development of new products and strategic acquisitions. On a proforma basis, assuming the offering had been completed on January 1, 1994, earnings per share were 40 cents for the 1995 third quarter versus 31 cents for the year earlier quarter and 98 cents for the 1995 nine month period versus 71 cents for the corresponding year-ago period. 6 ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations A. Comparative Third Quarter Results of Operations Net sales for the quarter ended September 30, 1995 increased 22.2% to $156.3 million compared to $127.9 in the corresponding 1994 quarter. Third quarter 1995 net income rose 45.3% to a record $6.6 million from $4.5 million in the third quarter of 1994. Earnings per share, reflecting the completion on June 1, 1995 of the Company's public offering of 4.6 million shares, advanced to $.40 per share from $.38 per share in the year-ago quarter. Net Sales. In the sporting goods and other recreational products group, net sales increased 26.4% to $109.1 million in the 1995 quarter compared to $86.3 million in 1994. Leading the improvement was a rise in sales of K2 Exotech in- line skates, primarily in the international markets, and of K2 snowboards worldwide. The continued popularity of the ProFlex full-suspension mountain bike line also boosted sales. Stearns and Shakespeare fishing tackle contributed to the quarter's sales growth with increased shipments of flotation gear and new fishing tackle products. Dana Design backpacks, a 1995 acquisition, also contributed to the higher sales reported. In the industrial products group, net sales increased 13.5% to $47.2 million in the third quarter of 1995 compared to $41.6 million in the comparable period of 1994. The increase in sales was mainly attributable to growth of filament wound and ornamental poles, military radio antenna shipments and paperweaving monofilaments. Gross profit. Gross profit increased 20.0% to $41.4 million, or 26.5% of net sales, in the third quarter of 1995 as compared to $34.5 million, or 27.0% of net sales, in the third quarter of 1994. The decline of gross profit as a percentage of net sales was largely due to the cost of increasing the production capacity of the rapidly growing line of Shakespeare fiberglass light poles. Costs and Expenses. In the third quarter of 1995, selling expenses increased 16.1% to $18.3 million from $15.8 million in the same quarter of 1994, due to increased sales volume; however, as a percentage of net sales, selling expenses decreased to 11.7% from 12.3%. General and administrative expenses increased 18.7% to $11.8 million in the third quarter of 1995 compared to $9.9 million in the year-earlier period reflecting higher development spending and the inclusion of the 1995 acquisitions of Dana Design and Wilderness Experience. As a percentage of net sales, general and administrative expenses decreased to 7.5% from 7.7%. Operating Income. Operating income improved by 28.5% to $11.3 million, or 7.2% of net sales, in the third quarter of 1995 compared to $8.8 million or 6.9% of net sales, in the comparable 1994 period. The percentage increase was due to lower selling, general and administrative expenses as a percentage of net sales, which was partially offset by the reduction in gross profit margin percentage. 7 Interest Expense. Interest expense in the third quarter of 1995 was comparable to the third quarter of 1994. Average borrowings declined $16.3 million resulting in $0.3 million of reduced interest expense offset by an increase of $0.3 million reflecting higher rates. B. Comparative Nine-Month Results of Operations Net sales for the nine months ended September 30, 1995 increased $91.4 million to $460.7 million as compared with the prior year period. Net income of $15.0 million, or 1.09 cents a share, increased from the $10.0 million, or 84 cents a share reported in 1994. Net Sales. In the sporting goods and other recreational products group, net sales increased 28.4% to $311.4 million from $242.6 million in the 1994 period. The improvement was mainly attributable to worldwide shipments of K2 Exotech in- line skates and snowboards and sales of Shakespeare fishing rods, reels and kits and combos. Other factors contributing to the sales increase were shipments of Proflex full-suspension mountain bikes and Girvin accessories, which significantly improved from the prior year period, new product introductions at Stearns and Hilton Active Apparel, which largely accounted for the sales increases in those businesses, and Dana Design, a recently acquired backpack business. The industrial products group reported sales of $149.3 million, up 17.7% from prior year's total of $126.8 million. The increase in sales was due to gains in residential and industrial building products and fiberglass utility and light poles and paperweaving monofilaments. Gross Profit. Gross profit improved 21.9% to $119.0 million in the first nine months of 1995 compared to $97.6 million in the corresponding year-ago period, although as a percentage of net sales it decreased to 25.8% from 26.4% a year ago. Increased costs of recycled corrugated scrap paper, only partially offset by price increases, and costs of increasing the production capacity of the Shakespeare fiberglass light poles unfavorably impacted the 1995 gross profit percentage. Costs and Expenses. Selling expenses increased 17.2%, to $53.0 million for the 1995 nine month period from $45.2 million in the same period in 1994, although as a percentage of net sales they declined to 11.5% from 12.2%. General and administrative expenses increased 14.3% to $37.7 million for the nine months ended September 30, 1995 compared to $33.0 million in the same prior year period, although as a percentage of net sales they also declined to 8.2% from 8.9%. Operating Income. Operating income increased by 45.9% to $28.3 million, or 6.1% of net sales, in the nine months ended September 30, 1995 compared to $19.4 million, or 5.3% of net sales, in the comparable 1994 period. The percentage increase resulted from reduced selling, general and administrative expenses as a percentage of sales and volume-related earnings increases in many of the Company's businesses. Interest Expense. Interest expense increased by $2.3 million in the nine months ended September 30, 1995 from the year-ago period. Higher average borrowings of $18.6 million accounted for $1.1 million of the increase and higher interest rates accounted for the remainder. 8 The higher average borrowings were required to finance the seasonal working capital requirements in support of the higher sales volume. Income Taxes. The provision for income taxes for the nine months ended September 30, 1995 reflects a credit resulting from a first quarter $0.3 million foreign tax settlement. C. Financial Condition The Company's operations used $24.5 million of cash during the nine month period ended September 30, 1995 whereas the comparable period of 1994 used cash of $5.8 million. The increase in use of cash for the current period was due primarily to financing higher levels of accounts receivable and inventories arising from the growth of new seasonal products and the recent acquisitions of Dana Design and Wilderness Experience. Net cash used for investment activities increased to $14.1 million in the first nine months of 1995 from $6.5 million in the first nine months of 1994. The increase in cash used in the 1995 period is attributable to capital expenditures to increase manufacturing capacity and improve manufacturing efficiencies, principally in the industrial products group, and the purchases of the Dana Design and Wilderness Experience businesses. Net cash provided by financing activities during the nine month period ended September 30, 1995 was $34.9 million as compared with $11.5 million in the nine month period a year ago. The increase in cash was due to new proceeds from the stock offering that was completed on June 1, 1995 which were applied to repayments of long-term debt plus an increase in short-term seasonal borrowings. The Company anticipates its remaining cash needs in 1995 will be provided from operations and borrowings under its $85 million Credit Line and $40 million Short-Term Facility and from other existing credit lines. 9 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended September 30, 1995. 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. ANTHONY INDUSTRIES, INC. (registrant) Date: November 10, 1995 /s/ BERNARD I. FORESTER ------------------------------- B.I. Forester Chairman and Chief Executive Date: November 10, 1995 /s/ JOHN J. RANGEL ------------------------------- John J. Rangel Senior Vice President - Finance 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1995 SEP-30-1995 4,043 0 152,684 (9,037) 127,107 284,788 145,431 86,436 364,415 119,853 0 16,993 0 0 161,536 364,415 460,719 461,951 341,670 341,670 89,368 1,380 7,476 22,057 7,020 15,037 0 0 0 15,037 1.09 1.08
-----END PRIVACY-ENHANCED MESSAGE-----