-----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, ra0E7YqRtRW1gJYNt7i1bA60PM0N6hbgBkIfio0pd/TXeUTBSvb3lv6zQIF9+oZY MJNFgXFcKiW/VyCVHbVCYg== 0000923500-95-000039.txt : 19950614 0000923500-95-000039.hdr.sgml : 19950614 ACCESSION NUMBER: 0000923500-95-000039 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950613 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAILEY CORP CENTRAL INDEX KEY: 0000753237 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133229215 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09411 FILM NUMBER: 95546793 BUSINESS ADDRESS: STREET 1: 700 LAFAYETTE RD STREET 2: P O BOX 307 CITY: SEABROOK STATE: NH ZIP: 03874 BUSINESS PHONE: 6034743011 MAIL ADDRESS: STREET 2: 700 LAFAYETTE RD CITY: SEABROOK STATE: NH ZIP: 03874 FORMER COMPANY: FORMER CONFORMED NAME: EDUTECH VENTURES INC DATE OF NAME CHANGE: 19860205 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 April 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 1-9411 BAILEY CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-3229215 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 700 Lafayette Road, P.O. Box 307, Seabrook, NH 03874 (Address of principal executive offices) (Zip Code) (603) 474-3011 (Registrant's telephone number, including area code) 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 ____ - ------------------------------------------------------------------------------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. As of June 10, 1995, the number of shares of $.10 par value per share common stock outstanding was 5,353,558. PART 1. - FINANCIAL INFORMATION. ITEM 1. FINANCIAL STATEMENTS The condensed consolidated financial statements included herein have been prepared by Bailey Corporation (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, the Company believes that the disclosures made herein are adequate to make the information presented not misleading. It is recommended that these condensed statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1994. In the opinion of the Company all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Bailey Corporation and Subsidiaries as of April 30, 1995, the results of their operations for the three and nine months ended April 30, 1995 and May 1, 1994, and the cash flows for the nine months then ended, have been included. - ------------------------------------------------------------------------------- BAILEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) APRIL 30, 1995 and JULY 31, 1994 (in thousands, except share and per share data) Apr 30 Jul 31 1995 1994 ------ ------ ASSETS Current assets: Cash $ 810 $ 201 Restricted cash 500 500 Accounts receivable 21,344 19,809 Inventories: Raw materials 7,640 7,433 Work-in-process 2,314 2,480 Finished goods 4,003 3,548 Tooling 6,951 2,039 ------- ------- Total inventories 20,908 15,500 ------- ------- Prepaid expenses and other current assets 2,078 1,419 Deferred income taxes 1,142 1,142 ------- ------- Total current assets 46,782 38,571 Property, plant and equipment, net 46,671 43,240 Other assets, net 10,599 9,910 ------- ------- $104,052 $91,721 ======== ======= - ---------------------------------------------------------------------------------------------------- ___LIABILITIES AND STOCKHOLDERS' EQUITY___ Current liabilities: Bank overdraft $ 3,535 $ 321 Short-term debt 5,424 3,846 Current portion of long-term debt 2,640 1,690 Accounts payable 25,170 18,554 Accrued liabilities and other current liabilities 4,604 6,468 Income taxes payable 494 126 -------- ------- Total current liabilities 41,867 31,005 Long-term debt, less current portion 34,622 35,438 Other long-term liabilities 2,043 2,104 Deferred income taxes 2,574 2,574 -------- ------- Total liabilities $ 81,106 $71,121 -------- ------- Stockholders' equity: Common stock 539 538 Additional paid-in capital 13,612 13,587 Retained earnings 9,364 6,781 Minimum pension liability adjustment (306) (306) Treasury stock (263) - -------- ------- Total stockholders' equity 22,946 20,600 -------- ------- $104,052 $91,721 ======== =======
- ------------------------------------------------------------------------------ BAILEY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1995 AND MAY 1, 1994 (in thousands, except share and per share data) Three Months Ended Nine Months Ended Apr 30 May 01 Apr 30 May 01 1995 1994 1995 1994 ------ ------ ------ ------ Net sales $47,729 $30,677 $133,963 $84,233 ------- ------- -------- ------- Cost and expenses: Cost of products sold 41,931 25,843 115,946 71,383 Selling, general and administrative 3,834 2,736 10,921 6,823 ------- ------- ------- ------- Operating income 1,964 2,098 7,096 6,027 ------- ------- ------- ------- Interest expense (net) 969 406 2,721 1,267 ------- ------- ------- ------- Income before income taxes 995 1,692 4,375 4,760 Provision for income taxes 407 798 1,792 2,059 ------- ------- ------- ------- Net income $ 588 $ 894 $ 2,583 $ 2,701 ======= ======= ======= ======= Net income per common share: Primary $ .11 $ .16 $ .47 $ .51 Fully diluted $ .11 $ .16 $ .46 $ .50 Weighted average shares outstanding: Primary 5,443,000 5,525,000 5,448,000 5,344,000 Fully diluted 6,468,000 5,604,000 6,473,000 5,497,000
- ------------------------------------------------------------------------------- BAILEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) FOR THE NINE MONTHS ENDED APRIL 30, 1995 AND MAY 1, 1994 Nine Months Ended Apr 30 May 01 1995 1994 ------ ------ Cash flows from operating activities: Net income $2,583 $ 2,701 ------ ------- Adjustments to reconcile net income to cash used in operating activities: Depreciation and amortization 3,986 2,207 Gain on disposal of property, plant and equipment - 18 Deferred income taxes - 511 Gain on early payment of debt - (165) Change in assets and liabilities net of effects of acquisitions: Increase in accounts receivable (1,535) (3,414) Increase in inventories (5,408) (2,724) (Increase) decrease in prepaid expenses and other current assets (659) 175 Increase in other assets - net (756) (1,002) Increase in accounts payable 6,616 1,824 Decrease in accrued liabilities and other current liabilities (1,864) (272) Increase (decrease) in income taxes payable 368 (863) Decrease in other liabilities (61) (386) ------ ------ Net cash used in operating activities 3,270 (1,390) ------ ------ - ------------------------------------------------------------------------------------------------- Cash flows from investing activities: Capital expenditures (5,977) (2,920) ------ ------ Net cash used in investing activities (5,977) (2,920) ------ ------ Cash flows from financing activities: Increase (decrease) in short-term debt (including bank overdrafts), net 4,792 (1,074) Payments on long-term debt and capital leases (1,239) (5,168) Purchase of treasury stock (263) - Proceeds from issuance of common stock - 10,597 Proceeds from exercise of stock options 26 451 ------ ------ Net cash provided by financing activities 3,316 4,806 ------ ------ Net increase in cash 609 496 Cash, beginning of period 201 256 ------ ------- Cash, end of period $ 810 $ 752 ====== ======= Cash paid for: Interest $2,158 $ 1,182 Income taxes 1,131 2,495 Supplemental disclosures: Gain on debt extinguishment $ - $ 165 Assets acquired under capitalized leases 1,373 210
- ------------------------------------------------------------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: THIRD QUARTER FISCAL 1995 VS THIRD QUARTER FISCAL 1994 Net sales for the third quarter ended April 30, 1995 increased $17.0 million, or 55.4%, to $47.7 million compared to $30.7 million in the third quarter of fiscal 1994. The increased sales are net of certain planned price decreases that took effect earlier in the fiscal year. Contributing to the sales increase was $14.8 million of sales of the product lines acquired in the July 1994 purchase of assets of Premix/E.M.S. Inc. (the "Premix/EMS Acquisi- tion"), plus $3.8 million of new products introduced since the beginning of the fiscal year and a $1.9 million increase in sales of certain products carried over from the prior year. These increases were offset by a $1.3 million period- to-period sales decrease related to certain other carry-over products, and the elimination of $2.2 million of sales related to the Tempo/Topaz program which phased out during the latter half of fiscal 1994. Although sales increased in the third quarter of fiscal 1995 compared to fiscal 1994, third quarter sales nevertheless reflected a softening of customer product schedules and delayed new product launches during the period. As a result, net sales in the fiscal quarter ended April 30, 1995 were approxi- mately seven percent lower than the sales volume planned and expected for the period. Gross profit in the third quarter ended April 30, 1995 increased $964,000, or 19.9%, to $5.79 million compared to $4.83 million in the third quarter of fiscal 1994. The increase was primarily due to higher sales volume compared to the same period of the prior year. As a percentage of net sales, however, gross profit for the third quarter declined to 12.1% from 15.8% in the third quarter of the prior year. Contributing to the contraction of gross margin were the aforementioned price decreases, changes in the product mix toward components with lower gross margins including the product lines acquired in the Premix/EMS Acquisition, certain raw material cost increases that took effect during the quarter and costs associated with product launches that were subject to customer delays. Selling, general and administrative expenses in the third quarter ended April 30, 1995 increased $1.1 million, or 40.1%, to $3.8 million compared to $2.7 million in the third quarter of fiscal 1994. The increase was attribu- table to planned increases in engineering, design and program management acti- vities and the inclusion this year of the operations acquired in the Premix/EMS Acquisition. As a percentage of net sales, selling, general and administrative expenses were 8.0% in the third quarter compared to 8.9% in the third quarter of fiscal 1994. The higher percentage in the prior year third quarter was due to a one-time charge of $300,000 taken in the period related to settlement of alleged non-compliance with hazardous waste handling regulations. Interest expense for the third quarter ended April 30, 1995 increased $563,000, or 139%, to $969,000 compared to $406,000 in the third quarter of fiscal 1994. The increase was attributable to the inclusion this year of interest on additional debt that resulted from the Premix/EMS Acquisition and a higher average level of borrowing under the Company's revolving line- of-credit. The Company's effective tax rate was 41% in the third fiscal quarter of 1995 compared to 47% in the third fiscal quarter of 1994. The higher effective tax rate in the prior year third fiscal quarter was due to the aforementioned one-time charge that was non-deductible for tax purposes resulting in a sub- stantial increase in the effective tax rate for the period. Net income in the third quarter ended April 30, 1995 declined $306,000, or 34.2%, to $588,000 compared to $894,000 in the third quarter of the prior year. As a percentage of net sales, net income in the third quarter of fiscal 1995 decreased to 1.2% compared to 2.9% in the third quarter of fiscal 1994. Net income per fully diluted share declined $.05, or 31.3%, to $.11 in the third quarter of fiscal 1995. Fully diluted share amounts reflect a 15.4% increase in shares outstanding calculated on a weighted average of 6,468,000 shares outstanding in the fiscal 1995 period compared to 5,604,000 in the same period of the prior year. The increase in weighted average shares is primarily due to shares related to the conversion feature of the Company's 8% Convertible Debenture issued as partial consideration for the Premix/EMS Acquisition. FIRST NINE MONTHS FISCAL 1995 VS FIRST NINE MONTHS FISCAL 1994 Net sales in the nine months ended April 30, 1995 increased $49.7 million, or 59.0%, to $133.9 million compared to $84.2 million in the first nine months of fiscal 1994. The increased sales are net of planned price decreases that were effected during the period. The sales increase was made up of $43.3 million of sales of the product lines acquired in the Premix/EMS Acquisition, plus $5.7 million of new products introduced since the beginning of the fiscal year, and a $9.0 million increase in sales of certain products carried over from the prior year. These increases were offset by a $1.0 million period-to- period sales decrease related to certain other carry-over products and the elimination of $7.3 million of sales related to the Tempo/Topaz program which phased out during the latter half of the prior fiscal year. Gross profit for the nine months ended April 30, 1995 increased $5.2 million, or 40.2%, to $18.0 million compared to $12.8 million in the fiscal 1994 nine months. The increase was due in most part to the higher sales volume this year compared to the corresponding period last year. Gross profit as a percentage of net sales in the first nine months of fiscal 1995 declined to 13.4% from 15.3% in the same period of the prior year. This contraction of gross margin is attributable to price decreases that took effect during the first nine months, changes in product mix toward components with lower gross margins including the product line acquired in the Premix/EMS Acquisition, raw material cost increases that took effect during the period and the stretch- ing out of certain product launch costs caused by customer production delays. Selling, general and administrative expenses in the nine months ended April 30, 1995 increased $4.1 million, or 60.1%, to $10.9 million compared to $6.8 million in the fiscal 1994 nine months. The increase reflects planned addi- tions to engineering, design and program management activities and additions resulting from the Premix/EMS Acquisition. As a percentage of net sales, selling, general and administrative expenses were 8.2% in the first nine months compared to 8.1% in the same period of the prior year. Interest expense in the nine months ended April 30, 1995 increased $1.45 million or 115%, to $2.72 million compared to $1.27 million in the 1994 fiscal nine months. The increase was attributable to the addition of the Premix/EMS Acquisition debt and a higher average level of borrowing under the Company's revolving line-of-credit. The Company's effective tax rate was 41% in the first nine months of fiscal 1995 compared to 43% in the first nine months of the period year. The higher rate for the period last year was due to the aforementioned one-time charge in the third quarter that was non-deductible for tax purposes. Net income for the nine months ended April 30, 1995 decreased $118,000, or 4.4% to $2.6 million ($.46 per fully diluted share) compared to $2.7 million ($.50 per fully diluted share) in the same period of the prior year. Fully diluted per share amounts reflect a 17.8% increase in shares outstanding cal- culated on a weighted average of 6,473,000 shares outstanding in the fiscal 1995 nine months compared to 5,497,000 shares outstanding in the same period of fiscal 1994. The increased shares are related to the aforementioned 8% Con- vertible Debenture. LIQUIDITY AND CAPITAL RESOURCES During the first nine months of fiscal 1995 ended April 30, 1995 cash flow - - defined as the sum of net income plus depreciation and amortization - totaled $6.6 million while capital expenditures, including assets acquired under capitalized leases, totaled $7.4 million. Also, during the first nine months, increased levels of operating activi- ties resulted in increased investments in working capital assets, primarily accounts receivable and tooling inventories. The tooling inventory increase was associated with development of molds and secondary equipment for new pro- duct programs to be launched later in the fiscal year. These investments were funded primarily by utilization of the line-of- credit available under the Company's bank credit agreement, increases in accounts payable, and lease financing. During the first nine months, in accordance with a previously announced share re-purchase plan, the Company bought back 40,000 shares of its $.10 par value common stock at an average purchase price of $6.574 per share. Addi- tional purchases may be made from time to time in the future consistent with the judgment of the Company as to market conditions and the availability of funds for this purpose. Considering funds currently available, expected cash flow from operations and the availability of credit under bank credit and leasing facilities, the Company anticipates sufficient financial resources to meet its requirements for at least the next twelve months. - ------------------------------------------------------------------------------- PART II. - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On November 15, 1994, Judge Stephen McAuliffe of the United States District Court for the District of New Hampshire entered a judgment in favor of the Company in VICKI MATCH SUNA AND LORI ROSEN V. BAILEY CORPORATION, granting the Company's motion to dismiss the action. The plaintiffs have since filed a motion to vacate the judgment, reopen the case, amend the complaint and add additional defendants. The Company has opposed this motion, and the court has not issued a decision. With respect to other legal proceedings, reference is made to the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1994, filed with the Securities and Exchange Commission on October 31, 1994. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit Index is set forth below. (b) None. - -------------------------------------------------------------------------------- ___EXHIBIT INDEX___
_EXHIBIT_ _TITLE_ _METHOD OF FILING_ _No._ 11.1 Computation of Net Income Per Share Filed herewith (included in Condensed Consolidated Statements of Operations for the three months ended April 30, 1995 and May 1, 1994) 27.1 Financial Data Schedule Filed herewith
- ------------------------------------------------------------------------------- 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 thereto duly authorized. ___BAILEY CORPORATION___ Registrant Date: June 13, 1995 ___Leonard J. Heilman___ Executive Vice President-- Finance and Administration, Treasurer and Assistant Secretary (principal financial and accounting officer) EX-27 2 EXHIBIT 27 (FDS) FILED WITH FORM 10-Q
5 This schedule contains summary financial information extracted from S.E.C. Form 10-Q for the quarterly period ended April 30, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JUL-31-1994 AUG-01-1994 APR-30-1995 810 0 22,197 (853) 20,908 46,782 64,515 (17,844) 104,052 41,867 34,622 539 0 0 22,407 104,052 133,963 133,963 115,946 126,867 0 0 2,721 4,375 1,792 2,583 0 0 0 2,583 .47 .46
-----END PRIVACY-ENHANCED MESSAGE-----