-----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, YA2b1A5qZvHJO/cUva1xusaHPzLEJJShyMSYBw/RoargFDCFe6W9pw1wjeub89N4 DVB4j4ey4V/TqpeFHDclaA== 0000769208-94-000004.txt : 19941116 0000769208-94-000004.hdr.sgml : 19941116 ACCESSION NUMBER: 0000769208-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAIR CORP/DE/NEW CENTRAL INDEX KEY: 0000769208 STANDARD INDUSTRIAL CLASSIFICATION: 3634 IRS NUMBER: 111950030 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08919 FILM NUMBER: 94559121 BUSINESS ADDRESS: STREET 1: 150 MILFORD RD CITY: EAST WINDSOR STATE: NJ ZIP: 08520 BUSINESS PHONE: 6094261300 MAIL ADDRESS: STREET 1: 150 MILFORD ROAD CITY: EAST WINDSOR STATE: NJ ZIP: 08520 FORMER COMPANY: FORMER CONFORMED NAME: CONAIR ACQUISITION CORP DATE OF NAME CHANGE: 19850805 - -----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, mEqXJQbGOtZrUGlIB1AEsWf2iAI8hKplxmHn/nydhHkmv0YZ8O9k6V2iu5COMnZD E7uVTOid3MY356IVOI0KGw== 0000769208-94-000004.txt : 19941116 0000769208-94-000004.hdr.sgml : 19941116 ACCESSION NUMBER: 0000769208-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAIR CORP/DE/NEW CENTRAL INDEX KEY: 0000769208 STANDARD INDUSTRIAL CLASSIFICATION: 3634 IRS NUMBER: 111950030 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08919 FILM NUMBER: 94559121 BUSINESS ADDRESS: STREET 1: 150 MILFORD RD CITY: EAST WINDSOR STATE: NJ ZIP: 08520 BUSINESS PHONE: 6094261300 MAIL ADDRESS: STREET 1: 150 MILFORD ROAD CITY: EAST WINDSOR STATE: NJ ZIP: 08520 FORMER COMPANY: FORMER CONFORMED NAME: CONAIR ACQUISITION CORP DATE OF NAME CHANGE: 19850805 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Form 10Q QUARTER REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1994 Commission File 1-8919 CONAIR CORPORATION (Exact name of registrant as specified on its charter) Delaware 11-1950030 (State or other jurisdiction of (I.R.S. Identification Number) Incorporation or organization) 150 Milford Road, East Windsor, NJ 08520 (Address of principal executive (Zip Code) offices) Registrant's telephone number including area code (609) 426-1300 Not Applicable Former name, former address and former fiscal year, if changed since last year Indicate by check mark whether this 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 Common Stock $100.00 par value Authorized Shares 5,000 Issued and Outstanding Shares as of October 31, 1994 2,814 CONAIR CORPORATION AND SUBSIDIARIES I N D E X PAGE NO. PART I FINANCIAL INFORMATION Item 1: Financial Statements Consolidated Balance Sheets September 30, 1994 (Unaudited), December 31, 1993 and September 30, 1993 (Unaudited) -1- Consolidated Statements of Operations Three months ended September 30, 1994 and 1993 (Unaudited) -2- Consolidated Statements of Operations Nine months ended September 30, 1994 and 1993 (Unaudited) -3- Consolidated Statements of Cash Flows Nine months ended September 30, 1994 and 1993 (Unaudited) -4- Notes to Consolidated Financial Statements (Unaudited) -5- Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations -6- PART II OTHER INFORMATION Item 6: Exhibits and Reports on Form 8K -8- CONAIR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except number of shares) ASSETS 9/30/94 12/31/93 9/30/93 CURRENT ASSETS (Unaudited) Note (Unaudited) Cash, including cash equivalents of $5,134, $4,096 and $3,801, respectively.......................... $ 11,673 $ 15,856 $ 9,475 Accounts receivable, net of allowance for doubtful accounts of $1,417, $1,337 and $1,493, respectively....... 101,915 70,244 88,514 Inventories (Note 2)................... 134,375 85,416 105,609 Prepaid expenses....................... 1,241 1,753 2,497 Deferred income taxes.................. 2,850 2,885 3,213 252,054 176,154 209,308 PROPERTY, PLANT AND EQUIPMENT - AT COST Net of accum. depreciation & amort..... 64,599 44,685 44,350 INVESTMENTS AND OTHER ASSETS Investments in affiliated companies.... 444 1,141 1,039 Excess of cost over net assets of acquired companies.................... 71,163 73,829 74,462 Deferred expenses and other assets..... 12,769 14,309 13,670 84,376 89,279 89,171 $401,029 $310,118 $342,829 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other current liabilities........................... $ 71,561 $ 41,014 $ 51,746 Income taxes........................... 9,549 6,756 6,808 Current portion of long-term debt...... 3,625 3,625 2,063 Notes payable.......................... 32,000 - 25,000 116,735 51,395 85,617 OTHER LIABILITIES Long-term debt......................... 99,541 87,575 92,844 Deferred income taxes.................. 20,977 19,511 18,041 120,518 107,086 110,885 STOCKHOLDERS' EQUITY Convertible preferred stock, $1.00 par value: 5 5 5 Authorized 10,000 shares Issued and outstanding - 5,000 shares Common stock, $100 par value: Authorized - 5,000 shares Issued and outstanding - 2,814 shares 281 281 281 Reduction for ESOP loan guarantee...... (5,000) (5,000) (5,000) Additional paid-in capital............. 7,633 7,633 7,633 Cumulative translation adjustments..... 72 129 123 Retained earnings...................... 160,785 148,589 143,285 163,776 151,637 146,327 $401,029 $310,118 $342,829 NOTE: The balance sheet at December 31, 1993, has been taken from the audited financial statements at that date. CONAIR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended September 30, 1994 and 1993 (in thousands) 1994 1993 NET SALES............................... $157,197 $132,108 COSTS AND EXPENSES: Cost of goods sold.................... 108,813 90,686 Selling, general and administrative....................... 34,438 31,758 143,251 122,444 INCOME BEFORE INTEREST.................. 13,946 9,664 INTEREST: Interest expense...................... 2,201 1,967 Interest income....................... (53) (21) 2,148 1,946 INCOME BEFORE INCOME TAXES.............. 11,798 7,718 Income tax provision.................. 4,395 3,163 NET INCOME ............................. $ 7,403 $ 4,555 CONAIR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine months ended September 30, 1994 and 1993 (in thousands) 1994 1993 NET SALES............................... $369,832 $309,567 COSTS AND EXPENSES: Cost of goods sold.................... 252,080 208,956 Selling, general and administrative....................... 91,339 83,227 343,419 292,183 INCOME BEFORE INTEREST.................. 26,413 17,384 INTEREST: Interest expense...................... 5,816 5,561 Interest income....................... (119) (64) 5,697 5,497 INCOME BEFORE INCOME TAXES.............. 20,716 11,887 Income tax provision.................. 8,076 5,212 NET INCOME.............................. $ 12,640 $ 6,675 CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine months ended September 30, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income ................................. $ 12,640 $ 6,675 Adjustments to reconcile net income to net cash used in operating activities: Depreciation............................... 5,324 4,893 Amortization of goodwill................... 1,869 1,899 Amortization of deferred expenses and other assets..................................... 1,540 921 Undistributed earnings of affiliates....... (431) (18) Deferred income taxes...................... 1,501 1,343 Tax benefit on dividends paid to ESOP...... 131 - Other...................................... (57) (47) Changes in operating assets and liabilities: Accounts receivable....................... (31,671) (30,452) Inventories............................... (48,959) (27,065) Prepaid expenses.......................... 512 90 Accounts payable and other current liabilities....................... 30,547 17,134 Income taxes.............................. 2,793 2,779 Net cash used in operating activities........ (24,261) (21,848) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment.. (25,238) (5,705) Investment in joint venture................. (575) Net proceeds from sale of affiliate......... 2,500 (23,313) (5,705) CASH FLOWS FROM FINANCING ACTIVITIES: Increase in short-term debt................. 32,000 25,000 Increase in long-term debt.................. 20,000 11,500 Reduction of long-term debt................. (8,034) (18,651) Dividends .................................. (575) (375) 43,391 17,474 DECREASE IN CASH AND CASH EQUIVALENTS........ (4,183) (10,079) CASH AND CASH EQUIVALENTS, January 1,................................. 15,856 19,554 CASH AND CASH EQUIVALENTS, September 30............................... $ 11,673 $ 9,475 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the nine months for: Interest................................... $ 5,842 $ 5,264 Income taxes............................... $ 3,651 $ 1,090 CONAIR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. FINANCIAL STATEMENTS The accompanying financial information is submitted in response to the requirements of Form 10Q and does not purport to be financial statements prepared in accordance with generally accepted accounting principles. Therefore, they do not include all disclosures which might be associated with such financial statements. In the opinion of management, this includes all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of the results for the interim periods presented. September 30, 1993 financial statements have been reclassified to conform to current presentation. 2. INVENTORIES Inventories are summarized as follows: Sept. 30, Dec. 31, Sept. 30, 1994 1993 1993 Components and raw materials $ 16,196 $11,441 $ 14,053 Finished goods 118,179 73,975 91,556 $134,375 $85,416 $105,609 3. PURCHASE OF BUILDING On March 15, 1994, the Company acquired its Stamford, Connecticut executive office facility from Leandro P. Rizzuto, President and sole common stockholder of the Company. The purchase price of $20,000,000 was determined based on an independent appraisal. A ten-year unsecured loan in the amount of $20,000,000 was obtained by the Company on the above date to finance this transaction. The interest rate on this new loan is 7%. Principal repayments on this loan begin on June 1, 1996 with the payment of $625,000 and variable sums are due semi- annually on June 1 and December 1 until a final payment of $4,000,000 at maturity on February 28, 2004. The Company leased back to Leandro P. Rizzuto a portion of the facility for a period of 99 years subject to the Company's option, for a period of 10 years, to buy back the lease rights. The option price for the Company to repurchase the lease rights is $4,000,000 for the first five years, escalating to $6,400,000 over the remaining five years. The initial option price was determined based on an independent appraisal. 4. INVESTMENT IN AFFILIATED COMPANIES On July 1, 1994, the Company purchased from Leandro P. Rizzuto, President and sole stockholder of the Company, his 50% interest in Rusk, Inc. at his cost of $575,000. This investment is accounted for under the equity method. Rusk, Inc. is a marketer of upscale, professional only hair care products. On August 16, 1994, the Company sold its 50% interest in Farouk Systems, Inc. and Farouk International for $2,500,000 in cash. This investment was accounted for under the equity method and the gain on the sale of this investment was not material. CONAIR CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SALES Net sales in the third quarter and first nine months of 1994 increased 19% and 19.5%, respectively over the comparable periods in 1993. The increases in the third quarter and the first nine months of 1994 were primarily due to increases in most product categories as well as the sales of Southwestern Bell Freedom Phone Products which were not sold during the first quarter of 1993. GROSS MARGINS Gross margins for the third quarter and first nine months of 1994 were 30.8% and 31.8% of net sales, respectively. Gross margins for the third quarter and first nine months of 1993 were 31.3% and 32.5% of net sales, respectively. The variances in gross margins are primarily due to product mix. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses in the third quarter and first nine months of 1994 were 21.9% and 24.7% of net sales, respectively. Selling, general and administrative expenses in the third quarter and first nine months of 1993 were 24.0% and 26.9% of net sales, respectively. The declines resulted from the fixed and semi-variable nature of certain costs in this category. INTEREST Interest expense has increased as compared to the same periods last year due to an increase in the Company's long-term debt. INCOME TAXES The effective income tax rate varied in the third quarter and first nine months of 1994 as compared to the same periods in 1993 primarily due to the amortization of the excess cost of investments over net assets acquired, not deductible for tax purposes. CONAIR CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Company's working capital was $135,319,000 at September 30, 1994 and the current ratio was 2.2 to 1. The Company's cash balance was $11,673,000, short- term borrowings were $32,000,000 and long-term debt was $99,541,000 at September 30, 1994. The Company believes its capital resources are adequate to finance normal growth and service the Company's debt obligations. At September 30, 1994, the Company had short-term lines of credit with banks in the United States and abroad aggregating $89,400,000, which includes $25,000,000 available for the period June 1 to November 30 to finance its seasonal business needs. On March 15, 1994, the Company acquired its Stamford, Connecticut executive office facility from Leandro P. Rizzuto, President and sole common stockholder of the Company. The purchase price of $20,000,000 was determined based on an independent appraisal. A ten-year unsecured loan in the amount of $20,000,000 was obtained by the Company on the above date to finance this transaction. The interest rate on this new loan is 7%. Principal repayments on this loan begin on June 1, 1996 with the payment of $625,000 and variable sums are due semi- annually on June 1 and December 1 until a final payment of $4,000,000 at maturity on February 28, 2004. The Company leased back to Leandro P. Rizzuto a portion of the facility for a period of 99 years subject to the Company's option, for a period of 10 years, to buy back the lease rights. The option price for the Company to repurchase the lease rights is $4,000,000 for the first five years, escalating to $6,400,000 over the remaining five years. The initial option price was determined based on an independent appraisal. CONAIR CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6: Exhibits and Reports on Form 8K (b) The Company was not required to file reports on Form 8K during the quarter ended September 30, 1994. CONAIR CORPORATION AND SUBSIDIARIES SIGNATURE 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. CONAIR CORPORATION (Registrant) November 11, 1994 /s/ Leandro P. Rizzuto (Date) By: Leandro P. Rizzuto Chairman of the Board and President November 11, 1994 /s/ Patrick P. Yannotta (Date) By: Patrick P. Yannotta Sr. Vice President-Finance November 11, 1994 /s/ James A. Porcelli (Date) By: James A. Porcelli Corporate Controller - -----END PRIVACY-ENHANCED MESSAGE----- -----END PRIVACY-ENHANCED MESSAGE-----