-----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, DfG1yG4H4bHZoHMumj7rm5Hpyb1dojWlioyCR1wGe4MckNxgjwmZJyReEUMC5G7K pr8E8dVB3QgBYiP7oxS6oA== 0000950123-95-002264.txt : 19950814 0000950123-95-002264.hdr.sgml : 19950814 ACCESSION NUMBER: 0000950123-95-002264 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 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: 95561820 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 & CO., INC. - FORM 10-Q 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 ........... June 30, 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 AUGUST 5, 1995 ----- ----------------------------- Common stock, $.10 stated value 21,533,376
2 RUSS BERRIE AND COMPANY, INC. INDEX
PAGE PART I - FINANCIAL INFORMATION NUMBER Item 1. Financial Statements Consolidated Balance Sheet as of June 30, 1995 and December 31, 1994 3 Consolidated Statement of Income for the three-month and six-month periods ended June 30, 1995 and 1994 4 Consolidated Statement of Cash Flows for the six-month periods ended June 30, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11
(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 JUNE 30, DECEMBER 31, 1995 1994 -------- ------------ Current assets Cash and cash equivalents $ 35,266 $ 42,758 Short-term investments - 5,203 Accounts receivable, trade, net 50,240 55,474 Merchandise inventories 78,885 67,052 Prepaid expenses and other current assets 4,526 4,229 Deferred income taxes 14,184 14,176 -------- -------- Total current assets 183,101 188,892 Property, plant and equipment - net 25,478 25,298 Goodwill and other intangible assets - net 34,714 35,913 Other assets 5,242 4,723 -------- -------- Total assets $248,535 $254,826 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 5,401 $ 6,972 Accrued expenses 22,382 24,795 Accrued restructuring costs 3,369 4,527 Accrued income taxes - 144 -------- -------- Total current liabilities 31,152 36,438 Shareholders' equity Common stock; $.10 stated value; authorized 50,000,000 shares; issued 23,988,189 at June 30, 1995 and 23,953,530 at December 31, 1994 2,399 2,395 Additional paid-in capital 38,312 37,875 Retained earnings 215,882 218,103 Foreign currency translation adjustments (1,353) (2,128) Treasury stock, at cost (2,454,813 shares at June 30, 1995 and December 31, 1994) (37,857) (37,857) -------- -------- Total shareholders' equity 217,383 218,388 -------- -------- Total liabilities and shareholders' equity $248,535 $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) (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 1995 1994 1995 1994 ------- ------- -------- -------- Net sales $74,263 $57,546 $154,381 $121,713 Cost of sales 38,676 32,233 78,000 63,794 Selling, general and administrative expense 35,865 31,666 71,708 63,198 Investment and other income-net 453 782 1,181 1,346 ------- ------- -------- -------- Income (loss) before income taxes 175 (5,571) 5,854 (3,933) Provision (benefit) for for income taxes 21 (2,244) 1,617 (1,628) ------- ------- -------- -------- Net income (loss) $ 154 $(3,327) $ 4,237 $ (2,305) ======= ======= ======== ======== Net income (loss) per share $ 0.01 $( 0.16) $ 0.20 $ (0.11) ======= ======= ======== ========
The accompanying notes are an integral part of the consolidated financial statements. (4) 5 RUSS BERRIE AND COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (DOLLARS IN THOUSANDS)
(UNAUDITED) SIX MONTHS ENDED JUNE 30, 1995 1994 ---- ---- Cash flows from operating activities: Net income (loss) $ 4,237 $(2,305) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,067 2,411 Amortization of intangible assets 1,499 897 Provision for bad debts 3,759 3,324 Loss (gain) on sale of assets and other, net (37) 343 Changes in assets and liabilities Accounts receivable 1,475 2,732 Inventories (11,833) 4,137 Prepaid expenses (297) (558) Goodwill and other intangible assets (300) (1,188) Other assets (519) (1,522) Accounts payable (1,570) (825) Accrued expenses (2,405) 267 Accrued restructuring costs (1,159) (440) Accrued and deferred income taxes (160) (2,193) ------- ------- Total adjustments (9,480) 7,385 ------- ------- Net cash provided by (used in) operating activities (5,243) 5,080 Cash flows from investing activities: Decrease (increase) in short-term investments 5,203 (638) Proceeds from sale of fixed assets 199 218 Capital expenditures (2,408) (1,115) ------- ------- Net cash provided by (used in) investing activities 2,994 (1,535) Cash flows from financing activities: Common stock transactions 440 519 Dividends (6,458) (6,431) ------- ------- Net cash (used in) financing activities (6,018) (5,912) Effect of exchange rate changes on cash and cash equivalents 775 628 ------- ------- Net (decrease) in cash and cash equivalents (7,492) (1,739) Cash and cash equivalents at beginning of period 42,758 51,478 ------- ------- Cash and cash equivalents at end of period $35,266 $49,739 ======= ======= Cash paid during the period for: Interest $ 130 $ 44 Income taxes $ 1,768 $ 565
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 and six-month periods ended June 30, 1995 were 21,530,000 and 21,520,000 shares, respectively, compared to the three and six-month periods ended June 30, 1994 of 21,446,000 and 21,440,000 shares, respectively. Employee stock option plans did not have a material dilutive effect on the earnings per share calculation. NOTE 3 Cash dividends of $3,229,850 ($.15 per share) were paid on June 7, 1995 to shareholders of record of the Company's Common Stock on May 22, 1995. Cash dividends of $6,457,813 ($.15 per share per quarter) were paid in the six-month period ended June 30, 1995. Cash dividends of $3,216,323 ($.15 per share) were paid on June 7, 1994 to shareholders of record of the Company's Common Stock on May 20, 1994. Cash dividends of $6,430,884 ($.15 per share per quarter) were paid in the six-month period ended June 30, 1994. (6) 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations for the Six Months Ended June 30, 1995 Consolidated net sales for the six months ended June 30, 1995 were $154,381,000 compared to $121,713,000 for the six months ended June 30, 1994. This represents an increase of 26.8%. Included in the results for the six months ended June 30, 1995 are the net sales of $18,809,000 achieved by OddzOn Products, Inc., which was acquired in October 1994. Net sales for Cap Toys, Inc. of $38,640,000 for the six months ended June 30, 1995 compares to $34,698,000 for the six months ended June 30, 1994, an increase of 11.4%. Excluding the net sales of Cap Toys, Inc. and OddzOn Products, Inc., consolidated net sales for the six months ended June 30, 1995 were $96,932,000 compared to $87,015,000 for the six months ended June 30, 1994, an increase of 11.4%. Cost of sales was 50.5% of net sales for the six months ended June 30, 1995 compared to 52.4% of net sales for the same period in 1994. This decrease can be attributed to the components of cost of sales that are fixed costs which were absorbed by the higher sales volume during the six-month period ended June 30, 1995. Selling, general and administrative expense was $71,708,000 or 46.4% of net sales for the six months ended June 30, 1995 compared to $63,198,000 or 51.9% of net sales for the six months ended June 30, 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 six months ended June 30, 1995 (approximately $7,400,000). Investment and other income of $1,181,000 for the six months ended June 30, 1995 compares to $1,346,000 for the six months ended June 30, 1994. The provision for income taxes of $1,617,000 for the six months ended June 30, 1995 compares to an income tax benefit of $1,628,000 in the same period in the prior year. Net income for the six months ended June 30, 1995 of $4,237,000 compares to a net loss of $2,305,000 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 RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1995 Consolidated net sales for the three months ended June 30, 1995 were $74,263,000 compared to $57,546,000 for the three months ended June 30, 1994, an increase of $16,717,000 or 29.0%. Included in the results for the three months ended June 30, 1995 are the net sales of $11,082,000 achieved by OddzOn Products, Inc. which was acquired in October 1994. Net sales of Cap Toys, Inc. of $22,489,000 for the three months ended June 30, 1995 compares to $21,366,000 for the three months ended June 30, 1994, an increase of 5.3%. Excluding the net sales of Cap Toys, Inc. and OddzOn Products, Inc., consolidated net sales for the three months ended June 30, 1995 were $40,692,000 compared to $36,180,000 for the three months ended June 30, 1994, an increase of 12.5%. Cost of sales was 52.1% of net sales for the three months ended June 30, 1995 compared to 56.0% for the same period in 1994. This decrease can be attributed in part to lower import duties on certain of the Company's products. In addition, certain components of cost of sales are fixed costs which were absorbed by the higher sales volume in the three months ended June 30, 1995. Selling, general and administrative expense was $35,865,000 or 48.3% of net sales for the three months ended June 30, 1995 compared to $31,666,000 or 55.0% of net sales for the three months ended June 30, 1994, an increase of $4,199,000 or 13.3%. 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 June 30, 1995 (approximately $4,200,000). Investment and other income of $453,000 for the three months ended June 30, 1995 compares to $782,000 for the three months ended June 30, 1994. Net income for the three months ended June 30, 1995 of $154,000 compares to a net loss of $3,327,000 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. (8) 9 LIQUIDITY AND CAPITAL RESOURCES At June 30, 1995, the Company had cash, cash equivalents and short-term investments of $35,266,000 compared to $47,961,000 at December 31, 1994. This decrease can be attributed to the increase in merchandise inventories as a result of the seasonal sales levels that the Company has historically experienced during the third and fourth quarters. The Company has signed a letter of intent to sell all of the net operating assets of its Papel/Freelance, Inc. subsidiary. The proceeds generated from the sale will be used for general corporate purposes. The Company anticipates that this transaction will be completed before December 31, 1995. Working capital requirements during the six months ended June 30, 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. (9) 10 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K b) During the quarter ended June 30, 1995, no reports on Form 8-K were filed. (10) 11 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) 8/11/95 By s/Paul Cargotch - -------- ----------------------------- Date Paul Cargotch Vice President - Finance and Chief Financial Officer (11) 12 EXHIBIT INDEX ------------- EXHIBIT 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 35,266 0 56,960 6,720 78,885 183,101 53,682 28,204 248,535 31,152 0 2,399 0 0 214,984 248,535 154,381 154,381 0 78,000 0 0 0 5,854 1,617 0 0 0 0 4,237 0.20 0.20
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