-----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, WRSJEYBDY301mCOAVLjohS/pqcJ7bEwgY2SpzbQUmzyd3ZJs52p3C9WKiNLkQXq5 uQSXh1xZT2YDfD8U//l0/A== 0000950123-95-001434.txt : 19950516 0000950123-95-001434.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950123-95-001434 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUSS BERRIE & CO INC CENTRAL INDEX KEY: 0000739878 STANDARD INDUSTRIAL CLASSIFICATION: DOLLS & STUFFED TOYS [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: 95539256 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. 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, 1995 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 8, 1995 ----- -------------------------- Common stock, $.10 stated value 21,532,332
2 RUSS BERRIE AND COMPANY, INC. INDEX
PAGE PART I - FINANCIAL INFORMATION NUMBER Item 1. Financial Statements Consolidated Balance Sheet as of March 31, 1995 and December 31, 1994 3 Consolidated Statement of Income for the three-month periods ended March 31, 1995 and 1994 4 Consolidated Statement of Cash Flows for the three-month periods ended March 31, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 and 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, ------ 1995 1994 ------------- ------------ Current assets Cash and cash equivalents $ 38,311 $ 42,758 Short-term investments - 5,203 Accounts receivable, trade, net 60,815 55,474 Merchandise inventories 70,940 67,052 Prepaid expenses and other current assets 5,246 4,229 Deferred income taxes 14,176 14,176 -------- -------- Total current assets 189,488 188,892 Property, plant and equipment - net 25,315 25,298 Goodwill and other intangible assets - net 35,242 35,913 Other assets 5,208 4,723 -------- -------- Total assets $255,253 $254,826 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current liabilities Accounts payable $ 6,045 $ 6,972 Accrued expenses 23,517 24,795 Accrued restructuring costs 3,738 4,527 Accrued income taxes 1,362 144 -------- -------- Total current liabilities 34,662 36,438 Shareholders' equity Common stock; $.10 stated value; authorized 50,000,000 shares; issued 23,980,563 at March 31, 1995 and 23,953,530 at December 31, 1994 2,398 2,395 Additional paid-in capital 38,216 37,875 Retained earnings 218,958 218,103 Foreign currency translation adjustments (1,124) (2,128) Treasury stock, at cost (2,454,813 shares at March 31, 1995 and December 31, 1994) (37,857) (37,857) -------- -------- Total shareholders' equity 220,591 218,388 -------- -------- Total liabilities and shareholders' equity $255,253 $254,826 ======== ========
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, ------------------ 1995 1994 ------ ------ Net sales $80,118 $64,167 Cost of sales 39,324 31,561 ------ ------- ------- Gross profit 40,794 32,606 Selling, general and administrative expense 35,843 31,532 Investment and other income-net 728 564 ------- ------- Income before income taxes 5,679 1,638 Provision for income taxes 1,596 616 ------- ------- Net income $ 4,083 $ 1,022 ======= ======= Net income per share $ 0.19 $ 0.05 ======= =======
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, ----------------- 1995 1994 ---- ---- Cash flows from operating activities: Net income $ 4,083 $ 1,022 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,054 1,168 Amortization of intangible assets 745 427 Provision for accounts receivable reserves 1,879 651 Loss on sale of assets and other, net (125) (2) Changes in assets and liabilities Accounts receivable (7,220) (3,289) Inventories (3,889) 5,431 Prepaid expenses (1,017) (289) Goodwill and other intangible assets (74) (246) Other assets (485) (131) Accounts payable (927) (816) Accrued expenses (1,278) (3,889) Accrued restructuring costs (789) (390) Accrued and deferred income taxes 1,218 411 ------- ------- Total adjustments (10,908) (964) ------- ------- Net cash provided by (used in) operating activities (6,825) 58 Cash flows from investing activities: Decrease (increase) in short-term investments 5,203 (475) Proceeds from sale of fixed assets 95 147 Capital expenditures (1,040) (691) ------- ------- Net cash provided by (used in) investing activities 4,258 (1,019) Cash flows from financing activities: Common stock transactions 344 193 Dividends (3,228) (3,215) ------- ------- Net cash (used in) financing activities (2,884) (3,022) Effect of exchange rate changes on cash and cash equivalents 1,004 (318) ------- ------- Net (decrease) in cash and cash equivalents (4,447) (4,301) Cash and cash equivalents at beginning of period 42,758 51,478 ------- ------- Cash and cash equivalents at end of period $38,311 $47,177 ======= ======= Cash paid during the period for: Interest $ 22 $ 7 Income taxes $ 378 $ 205
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, 1995 and 1994 were 21,510,957 and 21,434,316 shares, respectively. Employee stock option plans did not have a material dilutive effect on the earnings per share calculation. NOTE 3 Cash dividends of $3,227,963 ($.15 per share) were paid on March 17, 1995 to shareholders of record of the Company's Common Stock on March 3, 1995. Cash dividends of 3,214,561 ($.15 per share) were paid in the three- month period ended March 31, 1994. (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, 1995 Consolidated net sales for the three months ended March 31, 1995 were $80,118,000 compared to $64,167,000 for the three months ended March 31, 1994. This represents an increase of $15,951,000 or 24.9%. Included in the results for the three months ended March 31, 1995 are the net sales of $7,727,000 achieved by OddzOn Products, Inc. which was acquired in October 1994. Net sales of Cap Toys, Inc. of $16,151,000 for the three months ended March 31, 1995 compares to $13,332,000 for the three months ended March 31, 1994, an increase of 21.1%. The increase in net sales of Cap Toys, Inc. is a result of the continued strong performance of its major product lines and improved availability of certain inventory in 1995 as compared to 1994. Excluding the net sales of Cap Toys, Inc. and OddzOn Products, Inc., consolidated net sales for the three months ended March 31, 1995 were $56,240,000 compared to $50,835,000 for the three months ended March 31, 1994, an increase of 10.6%. This increase can be primarily attributed to the positive response in the marketplace to newly introduced gift products. Cost of sales were 49.1% of net sales for the three months ended March 31, 1995 compared to 49.2% for the same period in 1994. Selling, general and administrative expense was $35,843,000 or 44.7% of net sales for the three months ended March 31, 1995 compared to $31,532,000 or 49.1% of net sales for the three months ended March 31, 1994. The increase in selling, general and administrative expense can be attributed to the inclusion of the selling, general and administrative expense of OddzOn Products, Inc. for the three months ended March 31, 1995 (approximately $3,100,000) and the increase in the selling, general and administrative expense of Cap Toys, Inc. (approximately $1,900,000). The increase at Cap Toys, Inc. is primarily due to an increase in advertising expense related to an expanded advertising program in 1995 compared to 1994, and certain increased expenses required to support the accelerated rate of growth that Cap Toys, Inc. has experienced since its acquisition in 1993. Investment and other income of $728,000 for three months ended March 31, 1995 compares to $564,000 for the three months ended March 31, 1994. This increase can be primarily attributed to foreign currency exchange gains related to intercompany loan transactions. The provision for income taxes as a percentage of income before taxes for the three months ended March 31, 1995 was 28.1% compared to 37.6% in the same period in the prior year. This decrease can be primarily attributed to lower tax provisions related to certain foreign subsidiaries. Net income for the three months ended March 31, 1995 of $4,083,000 compares to net income of $1,022,000 for the same period last year. The increase in net income can be attributed to the increase in net sales, partially offset by the increase in selling, general and administrative expense. (7) 8 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995, the Company had cash, cash equivalents of $38,311,000 compared to cash, cash equivalents and short-term investments of $47,961,000 at December 31, 1994. Working capital requirements during the three months ended March 31, 1995 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, 1995, 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) 5/10/95 By s/ Paul Cargotch - -------- ----------------------------- Date Paul Cargotch Vice President - Finance and Chief Financial Officer (10) 11 EXHIBIT INDEX ------------- Exhibit No. Description - ------- ----------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 38,311 0 67,850 7,035 70,940 189,488 53,035 27,720 255,253 34,662 0 2,398 0 0 218,193 255,253 80,118 80,118 0 39,324 0 0 0 5,679 1,596 0 0 0 0 4,083 0.19 0.19
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