-----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, ni8nDKupkzhQ5rZE2A8pe02ps66m4CLRzSCQoRxt6wgt8Fkm7zyaj1EVxgr2rM1Z zS50C7HpHNoKbuR60RGutw== 0000769208-95-000012.txt : 19950531 0000769208-95-000012.hdr.sgml : 19950531 ACCESSION NUMBER: 0000769208-95-000012 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950526 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAIR CORP/DE/NEW CENTRAL INDEX KEY: 0000769208 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 111950030 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08919 FILM NUMBER: 95542728 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/A 1 NOTE: THIS 10Q/A IS BEING FILED DUE TO THE ILLEGIBILITY OF THE ORIGINAL 10Q AND ALL DATA AND INFORMATION ARE IDENTICAL TO THE ORIGINAL FILING. SECURITIES AND EXCHANGE COMMISSION Washington, D. C. Form 10Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 1995 Commission File 1-8919 CONAIR CORPORATION (Exact name of registrant as specified on its charter) Delaware 11-1950030 (State of other jurisdiction of Incorporation (I.R.S. Identification Number) or organization) 150 Milford Road, East Windsor, NJ 08520 (Address of principal executive offices) (Zip Code) 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 April 28, 1995 2,814 CONAIR CORPORATION AND SUBSIDIARIES INDEX PART I FINANCIAL INFORMATION Item 1: Financial Statements Condensed Consolidated Balance Sheets March 31, 1994 (Unaudited), December 31, 1994 and March 31, 1995 (Unaudited) -1- Condensed Consolidated Statements of Operations Three months ended March 31, 1994 and 1995 (Unaudited) -2- Condensed Consolidated Statements of Cash Flows Three months ended March 31, 1994 and 1995 (Unaudited) -3- Notes to Condensed Consolidated Financial Statements (Unaudited) -4- 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 8-K -9- CONAIR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands except share information) ASSETS 3/31/94 12/31/94 3/31/95 CURRENT ASSETS (Unaudited) Note (Unaudited) Cash, including cash equivalents of $3,687, $17,176 and $4,575, respectively $ 4,546 $23,702 $ 8,421 Accounts receivable, net 62,845 80,616 81,548 Inventories (Note 2) 105,788 104,220 141,206 Prepaid expenses 1,298 1,610 2,571 Deferred income taxes 2,885 2,040 2,406 177,362 212,188 236,152 PROPERTY, PLANT AND EQUIPMENT, Net 64,669 66,992 76,223 INVESTMENT AND OTHER ASSETS Investments in affiliated companies 1,026 464 304 Excess of cost over net assets of acquired companies 73,196 70,575 96,573 Deferred expenses and other assets 13,693 12,485 13,242 87,915 83,524 110,119 $329,946 $362,704 $422,494 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other current liabilities $ 48,107 $50,649 $ 71,502 Income taxes 4,079 8,611 5,568 Current portion of long-term debt 3,625 6,275 7,406 Notes payable - Banks - - 5,412 55,811 65,535 89,888 OTHER LIABILITIES Long-term debt 101,115 100,405 133,052 Deferred income taxes 19,860 21,310 21,858 120,975 121,715 154,910 STOCKHOLDERS' EQUITY Convertible preferred stock, $1.00 par value: Authorized 10,000 shares Issued and outstanding - 5,000 shares 5 5 5 Common stock, $100.00 par value; Authorized - 5,000 shares; Issued and outstanding - 2,814 281 281 281 Reduction for ESOP loan guarantee (5,000) - - Additional paid-in capital 7,633 7,633 7,633 Cumulative translation adjustments 130 (18) 653 Retained earnings 150,111 167,553 169,124 153,160 175,454 177,696 $329,946 $362,704 $422,494 NOTE: The balance sheet at December 31, 1994, has been taken from the audited financial statements at that date. See notes to the condensed consolidated financial statements. CONAIR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended March 31, 1994 and 1995 (in thousands) (unaudited) 1994 1995 NET SALES $95,575 $113,826 COST AND EXPENSES: Cost of goods sold 63,761 75,367 Selling, general and administrative 27,401 32,735 91,162 108,102 INCOME FROM OPERATIONS 4,413 5,724 INTEREST: Interest expense 1,598 2,323 Interest income (51) (124) 1,547 2,199 INCOME BEFORE INCOME TAXES 2,866 3,525 Income tax provision 1,263 1,579 NET INCOME $1,603 $1,946 See notes to the condensed consolidated financial statements. CONAIR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three months ended March 31, 1994 1995 CASH FLOW FROM OPERATING ACTIVITIES: Net income $1,603 $ 1,946 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 1,655 1,916 Amortization of goodwill 633 663 Amortization of deferred expenses and other assets 616 655 Deferred income taxes 349 379 Tax benefit on dividends paid to ESOP 44 - Other, net 116 147 Changes in operating assets and liabilities, net of acquisition: Accounts receivable 7,399 12,716 Inventories (20,372) (21,224) Prepaid expenses 455 (153) Accounts payable and other current liabilities 7,093 3,413 Income taxes (2,677) (4,256) (3,086) (3,798) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (21,639) ( 4,155) Cost of acquisition, net of cash acquired - (34,315) (21,639) (38,470) CASH FLOW FROM FINANCING ACTIVITIES: Increase in short-term debt - 765 Increase in long-term debt 20,000 27,000 Reduction of long-term debt (6,460) (589) Dividends declared (125) (375) 13,415 26,801 EFFECT OF EXCHANGE RATE CHANGES ON CASH - 186 DECREASE IN CASH AND CASH EQUIVALENTS (11,310) (15,281) CASH AND CASH EQUIVALENTS, January 1, 15,856 23,702 CASH AND CASH EQUIVALENTS, March 31, $ 4,54 $ 8,421 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the quarter for: Interest $ 1,417 $ 2,125 Income taxes $ 3,547 $ 4,985 Acquisition of a business: Fair value of assets acquired $ - $39,277 Cash Paid $ - $34,315 Liabilities assumed $ - $ 4,962 See notes to the condensed consolidated financial statements. CONAIR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED 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, as they do not include all disclosures which might be associated with such financial statements. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of the results for the interim periods presented. 2. INVENTORIES Inventories are summarized as follows: March 31, December 31, March 31, 1994 1994 1995 Components and raw materials $ 12,676 $ 12,728 $ 16,117 Finished goods 93,112 91,492 125,089 $ 105,788 $104,220 $141,206 3.ACQUISITION On February 18, 1995, the Company acquired 100% of the share capital of Babyliss S.A. ("Babyliss") for approximately $38,000,000 which purchase price is subject to a maximum downward adjustment of approximately $4,000,000 based on the terms of the agreement. Babyliss is a manufacturer and marketer of personal care appliance products principally in France, the United Kingdom, Germany, Belgium, the Netherlands and Spain. Through its distributors, Babyliss products are also marketed in Scandinavia and several non-European markets including North America, Africa and East Asia. In connection with this acquisition, the Company increased its bank revolving credit line by $37,500,000. This additional debt has mandatory principal repayments of $5,000,000 on December 15, 1996; $7,500,000 on December 15, 1997; $10,000,000 on each of December 15, 1998 and December 15, 1999 and $5,000,000 on March 15, 2000. The interest rate on this facility is variable and is subject to change based on the leverage and operating performance of the Company. Approximately, $5,200,000 of additional costs are expected to be incurred relating to the acquisition of Babyliss which includes the buyout of minority interest shareholders of several subsidiaries of Babyliss. This acquisition will be accounted for by the purchase method of accounting. The excess of the purchase price over the estimated fair value of the net assets acquired of approximately $25,700,000 will be amortized on a straight line basis over 30 years. The purchase price allocation is based on preliminary estimates of the fair value of the net assets acquired and is subject to adjustment as additional information becomes available. 4. PROPERTY, PLANT AND EQUIPMENT On February 28, 1995, the Company exercised its option to purchase the portion of its Stamford, Connecticut executive office facility leased to Leandro P. Rizzuto. The Company intends to pay the option price of $4,000,000 with $1,012,000 in cash and $2,988,000 through the sale to Mr. Rizzuto of its facility in Phoenix, Arizona. The selling price of the Phoenix, Arizona facility is based on an independent appraisal. The Company will lease the Phoenix, Arizona facility from Mr. Rizzuto until the construction of its new facility in Glendale, Arizona is completed. The monthly lease payments are based on an independent appraisal. This transaction was completed on May 11, 1995. CONAIR CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following table summarizes net sales of each of the Company's product groups for the three months ended March 31, 1994 and 1995. Three Months Ended March 31, 1994 1995 Product Group (in thousands) Personal Care Appliances $36,769 $ 51,877 Consumer Electronics 24,305 25,194 CUISINART Products 11,782 13,726 Toiletries and Professional Salon Products 22,719 23,029 $95,575 $113,826 The following table sets forth for the three months ended March 31, 1994 and 1995 certain consolidated statements of operations data expressed as a percentage of net sales: Three Months Ended March 31, 1994 1995 Net sales 100.0% 100.0% Cost of goods sold 66.7 66.2 Gross profit 33.3 33.8 Selling, general and administrative 28.7 28.8 Operating income 4.6 5.0 Interest expense 1.7 2.0 Interest income ( .1) ( .1) Income before income taxes 3.0 3.1 Income tax provision 1.3 1.4 Net income 1.7 1.7 SALES Net sales for the quarter ended March 31, 1995 increased by 19.1% to $113,826,000 from $95,575,000 in the comparable period of 1994. The Company's personal care appliance products accounted for approximately 83% of this increase. Foreign sales increased approximately 157% principally due to the inclusion of sales of Babyliss and REVLON products which were not sold in the first quarter of 1994. Domestic personal care appliance sales increased approximately 25% primarily due to sales of CONAIR brand hot air curling irons which were not sold in the first quarter of 1994 and increased sales of private label hair dryers. Sales of consumer electronics increased approximately 4% in the first quarter of 1995. Sales of Southwestern Bell FREEDOM PHONE products increased approximately 10% primarily due to increased unit sales of existing products. Sales of other consumer electronics products decreased by approximately 3% primarily due to lower average selling prices on corded phones which was partially offset by higher unit sales of cordless phones. Sales of CUISINART products increased approximately 16% in the first quarter of 1995 primarily due to increased sales of cookware. Sales of toiletries and professional salon products were essentially unchanged in the first quarter of 1995 compared to the first quarter of 1994. CONAIR CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GROSS MARGINS Gross margins increased as a percentage of net sales to 33.8% in the quarter ended March 31, 1995 from 33.3% for the comparable period in 1994. This increase was primarily due to changes in the mix of the products sold by the Company, specifically a 41% increase in the sales of personal care appliance products which have relatively higher gross profit margins, compared to a 5% increase in sales of all of the Company's other products. Higher gross margins on sales of CUISINART products also contributed to the improvement in gross margins. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses remained essentially unchanged as a percentage of sales at 28.8% for the quarter ended March 31, 1995 compared to 28.7% for the comparable period in the prior year, but increased by 19.5% to $32,735,000 in the quarter ended March 31, 1995 from $27,401,000 in the first quarter of 1994. The increase of $5,334,000 was primarily due to selling, general and administrative expenses of Babyliss, which were not included in expenses for the first quarter of 1994, increases in variable expenses to support the increase in sales of other products and increases in advertising and promotional expenses. INTEREST The Company's interest expense of $2,323,000 in the quarter ended March 31, 1995 increased from $1,598,000 in the first quarter of 1994. The increase of $725,000 was primarily due to an increase in the Company's long-term debt primarily to finance the purchase of its executive office facility and the acquisition of Babyliss. INCOME TAXES The Company's effective income tax rate remained essentially unchanged at 44.8% in the quarter ended March 31, 1995 as compared to 44.1% in the corresponding 1994 quarter. CONAIR CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995, the Company's working capital was $146,264,000 and its current ratio was 2.6 to 1. The Company's cash balance was $8,421,000 and long-term debt was $133,052,000 at March 31, 1995. Capital expenditures during 1994 and anticipated capital expenditures during 1995 are higher than in previous years because of certain real estate acquisitions and improvements. Capital expenditures were $29,546,000 in 1994, $20,000,000 of which represents the purchase price of the Company's executive office facility in Stamford, Connecticut. Net capital expenditures for 1995 are anticipated to be approximately $17,000,000, of which approximately $7,000,000 is for the completion of the Company's warehouse and distribution facility in Glendale, Arizona and $1,012,000 is for the exercise of the Company's option to purchase lease rights in its executive office facility in Stamford, Connecticut from Leandro P.Rizzuto, which took place on May 11, 1995 as noted in Note 4 to the condensed consolidated statements. Historically, approximately 60% of the Company's sales and 70% of its operating profit are achieved in the second half of the year. The Company relies on short-term bank debt to finance its seasonal operating needs which result in a build-up of receivables and inventory during the first nine months of each year with a substantial reduction in receivables, inventories and bank credit during the fourth quarter. As of March 31, 1995, the Company had short-term lines of credit aggregating $81,500,000, which do not include an additional $25,000,000 available for the period May 15 to November 30 to finance its seasonal business needs. In addition, the Company had a long-term revolving credit line of $58,500,000, of which $20,500,000 was unutilized at March 31, 1995. This revolving credit line includes an increase, in connection with the Babyliss acquisition, of $37,500,000. This additional debt has mandatory principal repayments of $5,000,000 on December 15, 1996, $7,500,000 on December 15, 1997, $10,000,000 on each of December 15, 1998 and December 15, 1999 and $5,000,000 on March 15, 2000. The interest rate on this facility is variable and is subject to change based on the leverage and operating performance of the Company. As a result of the Company's acquisition of Babyliss, the Company has developed a hedging program designed to hedge firm purchase commitments of goods and services denominated in foreign currencies. Effects of Inflation The Company believes that the relatively moderate rate of inflation over the past few years has not had a significant impact on the Company's results of operation. CONAIR CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6: Exhibits and Reports on Form 8-K (b) On March 6, 1995 the Company filed Form 8K in connection with its acquisition of Babyliss. 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) (Date) By: Leandro P. Rizzuto Chairman of the Board and President (Date) By: Patrick P. Yannotta Sr. Vice President Finance (Date) By: James A. Porcelli Vice President Corporate Controller EX-27 2
5 3-MOS 3-MOS MAR-31-1995 MAR-31-1994 MAR-31-1995 MAR-31-1994 8,421,000 4,546,000 845,000 340,000 81,548,000 62,845,000 1,708,000 1,416,000 141,206,000 105,788,000 236,152,000 177,362,000 128,868,000 101,290,000 52,645,000 36,621,000 422,494,000 329,946,000 89,888,000 55,811,000 145,870,000 104,740,000 281,000 281,000 0 0 5,000 5,000 177,410,000 152,874,000 422,494,000 329,946,000 113,826,000 95,575,000 113,826,000 95,575,000 75,367,000 63,761,000 108,102,000 91,162,000 0 0 112,000 112,000 2,323,000 1,598,000 3,525,000 2,866,000 1,579,000 1,263,000 1,946,000 1,603,000 0 0 0 0 0 0 1,946,000 1,603,000 0 0 0 0
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