-----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, YPcoNXZnXt1l95vhOKxs/uv/3Pg4RvAIEQKybMjM6c1kC+bHicNSIixDldQRVHhg qVjSe/5oQuI5NJcTBsuVPA== 0000950123-94-000924.txt : 19940526 0000950123-94-000924.hdr.sgml : 19940526 ACCESSION NUMBER: 0000950123-94-000924 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUSS BERRIE & CO INC CENTRAL INDEX KEY: 0000739878 STANDARD INDUSTRIAL CLASSIFICATION: 3942 IRS NUMBER: 221815337 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08681 FILM NUMBER: 94528559 BUSINESS ADDRESS: STREET 1: 111 BAUER DR CITY: OAKLAND STATE: NJ ZIP: 07436 BUSINESS PHONE: 2013379000 MAIL ADDRESS: STREET 2: 111 BAUER DRIVE CITY: OAKLAND STATE: NJ ZIP: 07436 FORMER COMPANY: FORMER CONFORMED NAME: BERRIE RUSS & CO INC DATE OF NAME CHANGE: 19920703 10-Q 1 RUSS BERRIE AND COMPANY, INC., 3/31/94 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ........... March 31, 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 ..................................................1-8681 RUSS BERRIE AND COMPANY, INC. ............................................................................... (Exact name of registrant as specified in its charter) New Jersey 22-1815337 ............................................................................... (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 111 Bauer Drive, Oakland, New Jersey 07436 ............................................................................... (Address of principal executive offices) (Zip Code) (201) 337-9000 ............................................................................... (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 ... Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS OUTSTANDING AT MAY 10, 1994 ----- --------------------------- Common stock, $.10 stated value 21,441,905 2 RUSS BERRIE AND COMPANY, INC. INDEX PAGE PART I - FINANCIAL INFORMATION NUMBER Item 1. Financial Statements Consolidated Balance Sheet as of March 31, 1994 and December 31, 1993 3 Consolidated Statement of Income for the three-month periods ended March 31, 1994 and 1993 4 Consolidated Statement of Cash Flows for the three-month periods ended March 31, 1994 and 1993 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 (2) 3 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS RUSS BERRIE AND COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Dollars in Thousands)
(UNAUDITED) ASSETS MARCH 31, DECEMBER 31, - - ------ --------- ------------ 1994 1993 ---- ---- Current assets Cash and cash equivalents $ 47,177 $ 51,478 Short-term investments 31,896 31,421 Accounts receivable, trade, net 49,537 46,899 Merchandise inventories 60,679 66,110 Prepaid expenses and other current assets 5,294 5,005 Deferred income taxes 12,169 12,169 --------- --------- Total current assets 206,752 213,082 Property, plant and equipment - net 27,511 28,133 Goodwill and other intangible assets - net 16,239 16,420 Other assets 1,611 1,480 --------- --------- Total assets $ 252,113 $ 259,115 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current liabilities Accounts payable 4,419 5,235 Accrued expenses 19,282 23,171 Accrued restructuring costs 5,893 6,283 Accrued income taxes 803 392 --------- --------- Total current liabilities 30,397 35,081 Shareholders' equity Common stock; $.10 stated value; authorized 50,000,000 shares; issued 23,896,718 at March 31, 1994 and 23,876,274 at December 31, 1993 2,389 2,388 Additional paid-in capital 37,032 36,840 Retained earnings 223,457 225,650 Foreign currency translation adjustments (3,305) (2,987) Treasury stock, at cost (2,454,813 shares at March 31, 1994 and December 31, 1993) (37,857) (37,857) --------- --------- Total shareholders' equity 221,716 224,034 --------- --------- Total liabilities and shareholders' equity $ 252,113 $ 259,115 ========= =========
The accompanying notes are an integral part of the consolidated financial statements. (3) 4 RUSS BERRIE AND COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Dollars in Thousands except per share data)
(UNAUDITED) THREE MONTHS ENDED MARCH 31, ------------------- 1994 1993 -------- -------- Net sales $ 64,167 $ 96,310 Cost of sales 31,561 37,735 Selling, general and administrative expense 31,532 38,866 Investment and other income-net 564 858 -------- --------- Income before income taxes 1,638 20,567 Provision for income taxes 616 6,933 -------- --------- Net income $ 1,022 $ 13,634 ======== ========= Net income per share $ 0.05 $ 0.62 ======== =========
The accompanying notes are an integral part of the consolidated financial statements. (4) 5 RUSS BERRIE AND COMPANY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Thousands)
(UNAUDITED) THREE MONTHS ENDED MARCH 31, ------------------- 1994 1993 -------- -------- Cash flows from operating activities: Net income $ 1,022 $ 13,634 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,168 1,371 Amortization of intangible assets 427 250 Provision for bad debts 651 1,147 Gain for sale of assets and other, net (2) (53) Changes in assets and liabilities Accounts receivable (3,289) 3,464 Inventories 5,431 10,938 Prepaid expenses (289) (706) Goodwill and other intangible assets (246) - Other assets (131) 110 Accounts payable (816) (1,982) Accrued expenses (3,889) (8,322) Accrued restructuring costs (390) (315) Accrued income taxes 411 2,518 --------- --------- Total adjustments (964) 8,420 --------- --------- Net cash provided by operating activities 58 22,054 Cash flows from investing activities: Increase in short-term investments (475) (500) Proceeds from sale of fixed assets 147 87 Capital expenditures (691) (1,289) --------- --------- Net cash (used in) investing activities (1,019) (1,702) Cash flows from financing activities: Payment of long-term debt - (3,000) Common stock transactions 193 2,675 Transactions in treasury shares - (19,237) Dividends (3,215) (3,213) --------- --------- Net cash (used in) financing activities (3,022) (22,775) Effect of exchange rate changes on cash and cash equivalents (318) (78) --------- --------- Net (decrease) in cash and cash equivalents (4,301) (2,501) Cash and cash equivalents at beginning of period 51,478 62,285 --------- --------- Cash and cash equivalents at end of period $ 47,177 $ 59,784 ========= ========= Cash paid during the period for: Interest $ 7 239 Income taxes $ 205 4,318
The accompanying notes are an integral part of the consolidated financial statements. (5) 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented and are of a normal recurring nature. Results for interim periods are not necessarily an indication of results to be expected for the year. NOTE 2 The weighted average number of shares outstanding during the three-month periods ended March 31, 1994 and 1993 were 21,434,316 and 21,984,169 shares, respectively. Employee stock option plans did not have a material dilutive effect on the earnings per share calculation. NOTE 3 Cash dividends of $3,214,561 ($.15 per share) were paid on March 18, 1994 to shareholders of record of the Company's Common Stock on March 4, 1994. Cash dividends of $3,213,042 ($.15 per share) were paid in the three-month period ended March 31, 1993. NOTE 4 All numbers of common shares, except shares authorized, and per share data throughout the consolidated financial statements have been restated to reflect a three-for-two common stock split effective April 1, 1993. (6) 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations for the Three Months Ended March 31, 1994 Consolidated net sales for the three months ended March 31, 1994 were $ 64,167,000 compared to $96,310,000 for the three months ended March 31, 1993. This represents a decrease of $ 32,143,000 or 33.4%. The decrease can be attributed to a lower level of sales of Troll products compared to the prior year. During the three-month period ended March 31, 1994, net sales of Troll products were approximately $3,457,000 or 5.4% of net sales. Net sales of these products during the three-month period ended March 31, 1993 were $44,414,000 or 46.1% of net sales. Included in the results for the three months ended March 31, 1994 are the net sales of $13,332,000 achieved by Cap Toys, Inc. which was acquired in October 1993. Cost of sales was 49.2% of net sales for the three months ended March 31, 1994 compared to 39.2% for the same period in 1993. This increase can be attributed primarily to the higher gross profit margins on sales of Troll products during the three-month period ended March 31, 1993 and the effects of the reduction of the selling price of certain of the Company's products in August 1993. In addition, certain components of cost of sales are fixed costs which were absorbed by the higher sales volume in the three months ended March 31, 1993. Also contributing to the increase is the lower gross margins achieved by Cap Toys, Inc. compared to the Company's other sales and distribution channels. Selling, general and administrative expense was $31,532,000 or 49.1% of net sales for the three months ended March 31, 1994 compared to $38,866,000 or 40.4% of net sales for the three months ended March 31, 1993, a decrease of $7,334,000 or 18.9%. This decrease can be primarily attributed to a decrease in expenses required to support lower sales levels (approximately $6,700,000), cost reductions associated with the restructuring program implimented during 1993 of closing and consolidating distribution centers and administrative functions ($2,400,000) and to lower expenses related to the Company's consumer advertising program (approximately $1,100,000). Partially offsetting these decreases is the inclusions of the selling, general and administrative expenses of Cap Toys, Inc. for the three months ended March 31, 1994. Investment and other income of $ 564,000 for the three months ended March 31, 1994 compares to $858,000 for the three months ended March 31, 1993. This decrease can be primarily attributed to decreased investment income relative to the Company's short-term investment portfolio resulting from lower investment returns and lower investment balances. (7) 8 The provision for income taxes as a percentage of income before taxes for the three months ended March 31, 1994 was 37.6% of net sales compared to 33.7% in the same period in the prior year. Net income for the three months ended March 31, 1994 of $ 1,022,000 compares to net income of $13,634,000 for the same period last year. The decrease in net income can be attributed to the decrease in net sales, partially offset by the decrease in selling, general and administrative expense. Liquidity and Capital Resources At March 31, 1994, the Company had cash, cash equivalents and short-term investments of $79,073,000 compared to $82,899,000 at December 31, 1993. Working capital requirements during the three months ended March 31, 1994 were met entirely through internally generated funds. The Company remains in a highly liquid position and believes that the resources available from operations and bank lines of credit are sufficient to meet the foreseeable requirements of its business. (8) 9 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K b) During the quarter ended March 31, 1994, no reports on Form 8-K were filed. (9) 10 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. RUSS BERRIE AND COMPANY, INC. ----------------------------- (Registrant) 5/12/94 By s/Paul Cargotch - - ---------------- ------------------------------ Date Paul Cargotch Vice President - Finance and Chief Financial Officer (10) -----END PRIVACY-ENHANCED MESSAGE-----