-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FiCADd+iEpAUl/WVDM3W8+7f30kjAAbp+UPYFhCLq42NSlcG3ytgE923EmJpvyRx rerqKvbaVXQySAfrEFPdxA== 0000077326-95-000010.txt : 19951006 0000077326-95-000010.hdr.sgml : 19951006 ACCESSION NUMBER: 0000077326-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950825 FILED AS OF DATE: 19951005 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENOBSCOT SHOE CO CENTRAL INDEX KEY: 0000077326 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 010139580 STATE OF INCORPORATION: ME FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05548 FILM NUMBER: 95578759 BUSINESS ADDRESS: STREET 1: 450 NORTH MAIN ST CITY: OLD TOWN STATE: ME ZIP: 04468 BUSINESS PHONE: 2078274431 MAIL ADDRESS: STREET 1: PENOBSCOT SHOE CO STREET 2: P O BOX 545 CITY: OLD TOWN STATE: ME ZIP: 04468 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended August 25, 1995 Commission File No. 1-5548 Penobscot Shoe Company (Exact name of registrant as specified in its charter) Maine (State or other jurisdiction of incorporation or organization) 01-0139580 (IRS Employer identification no.) 450 North Main Street, Old Town Maine (Address of principal executive offices) 04468 (Zip code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Registrant's telephone number, including area code: (207) 827-4431 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, and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ Common stock of 1,482,117 shares, $1 par value, was outstanding at August 25, 1995 PENOBSCOT SHOE COMPANY CONDENSED BALANCE SHEET (In thousands)
August 25, 1995 November 25, 1994 (Unaudited) (Note (a)) CURRENT ASSETS: Cash & Cash Equivalents $ 762 $1,308 Marketable Securities 3,090 2,556 Refundable income taxes 52 52 Accounts receivable 3,162 3,690 Inventories (Note 2) 3,532 2,469 Other current assets 665 490 _______ _______ TOTAL CURRENT ASSETS $11,262 $10,565 PROPERTY AND EQUIPMENT, AT COST: Buildings $1,412 $1,409 All Other 1,604 1,594 Less accumulated depreciation and amortization 2,639 2,542 _______ _______ NET PROPERTY AND EQUIPMENT $377 $461 _______ _______ TOTAL ASSETS $11,639 $11,026 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Accounts payable $676 $530 Other current liabilities 508 467 _______ _______ TOTAL CURRENT LIABILITIES $1,184 $997 DEFERRED INCOME TAXES $344 $131 SHAREHOLDERS' EQUITY: Common stock, $1 par value: authorized 2,000,000 shares: issued 1,533,042 $1,533 $1,533 Capital in excess of par value 1,109 1,109 Retained earnings 7,423 7,526 Add net unrealized gain on available-for-sale securities (Note (b)) 316 na Less treasury stock at cost 50,925 shares; 270 270 NET SHAREHOLDERS' EQUITY _______ _______ (Note 3) $10,111 $9,898 TOTAL LIABILITIES AND SHARE- _______ _______ HOLDERS' EQUITY $11,639 $11,026 ======= ======= Note: (a) The balance sheet at November 25, 1994, has been derived from the audited financial statements at that date. (b) The Company adopted Statement of Accounting Standard No. 115 "Accounting for Certain Investments in Debt and Equity Securities" effective November 26, 1994. See notes to the condensed financial statements.
PENOBSCOT SHOE COMPANY STATEMENT OF INCOME (In thousands, except per share amounts) (Unaudited)
For the For the Third Quarter Ended Nine Months Ended ____________________ ____________________ August August August August 25, 1995 26, 1994 25, 1995 26, 1994 Net Sales $3,872 $4,090 $9,447 $10,745 Cost and operating expenses: Cost of sales 2,587 2,571 6,282 7,122 Selling and administrative expenses 1,130 1,070 3,233 3,195 _______ _______ _______ _______ Operating income (loss) 156 449 (68) 428 Other income 65 (261) 260 (97) _______ _______ _______ _______ Income before income taxes 221 188 192 332 Income taxes 88 73 72 125 _______ _______ _______ _______ Net income $133 $115 $120 $207 ======= ======= ======= ======= Per Common Share: Net income $0.09 $0.08 $0.08 $0.14 Dividends declared 0.05 0.05 0.15 0.15 Average number of common shares outstanding 1,482,117 1,482,117 1,482,117 1,480,025 See notes to the condensed financial statements.
PENOBSCOT SHOE COMPANY STATEMENT OF CASH FLOWS For Nine Months Ended August 25, 1995 and August 26, 1994 (In thousands)
1995 1994 Cash flows from operating activities: Net cash provided (used) by operating activities $ (311) $(654) Cash flows from investing activities: Proceeds from sale of assets 0 0 Capital expenditures (12) (24) _______ _______ Net cash provided (used) by investing activities (12) (24) Cash flows from financing activities: Dividends paid (222) (222) Purchase of treasury stock 0 21 Net cash provided (used) by _______ _______ financing activities (222) (202) Net increase (decrease) in _______ _______ cash and cash equivalents (546) (880) Cash and cash equivalent at beginning of period 1,308 1,514 Cash and cash equivalent at _______ _______ end of period 762 634 ======= ======= Supplemental Disclosure of Cash Flow Information Cash paid during the period for: Interest $0 $0 Income taxes 117 118
PENOBSCOT SHOE COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED FINANCIAL STATEMENTS The condensed balance sheet as of August 25, 1995, the statements of income for the third quarter and nine-month periods ended August 25, 1995 and August 26, 1994, and the condensed statements of cash flows for the nine-month periods then ended have been prepared by the Company, without audit. In the opinion of management, all necessary adjustments, which include normal recurring adjustments, have been made to present fairly the financial position, results of operations, and cash flows at August 25, 1995 and for the other periods presented. The results of operations for the period ended August 25, 1995 are not necessarily indicative of operating results for the full year. 2. INVENTORIES Inventories are summarized as follows (in thousands):
8/25/95 11/25/94 8/26/94 FIFO Cost: finished shoes $4,079 $2,825 $4,116 shoes in process 72 35 22 raw materials 310 302 558 _______ _______ _______ $4,461 $3,162 $4,696 Excess of FIFO cost over LIFO inventory value (930) (693) (973) _______ _______ _______ $3,532 $2,469 $3,723 ======= ======= =======
The Company uses the LIFO method because it more realistically reflects operating results by charging current costs against current revenues. 3. SHAREHOLDERS' EQUITY During the nine months ended August 25, 1995, shareholders' equity changed due to the net income of $120,000, dividends declared of $222,000 and an increase of $316,000 resulting from the inclusion of a net unrealized gain on available-for-sale securities held by the Company. Effective November 26, 1994, the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", necessitating the inclusion of this net unrealized gain on the balance sheet. PENOBSCOT SHOE COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS Liquidity and Capital Resources: At August 25, 1995, Penobscot Shoe Company had working capital of approximately $10,078,000 versus approximately $9,568,000 at November 25, 1994, an increase of $510,000. The ratio of current assets to current liabilities at August 25, 1995, was 9.5 to 1, compared to 10.6 to 1, at November 25, 1994. The statement of cash flows for the nine months ended August 25, 1995, shows a decrease of $546,000 in cash and cash equivalents since November 25, 1994. The Company's operations used $311,000 since November 25, 1994, primarily due to seasonal fluctuations in inventory. The Company's quarterly dividend amounted to a use of $222,000 during the period and capital expenditures for equipment amounted to a further use of $12,000 during the period. The increases in the Company's inventory, other current assets and accounts payable, as well as the decrease in accounts receivable since November 25, 1994, were the result of ordinary fluctuations. Management believes that Penobscot Shoe Company remains financially well structured to consider a variety of financing options should the need arise and will make choices depending on economic conditions at the time. Options available include conversion of marketable securities held by the Company into cash and cash equivalents. The Company also has an established line of credit with a major bank available for direct borrowing at the prime rate should the need arise. Results of Operations: Net sales for the third quarter ended August 25, 1995 were $3,872,000, down 5% from $4,090,000 in the same quarter last year. Net income for the current quarter was $133,000, or $.09 per share, up from $115,000, or $.08 per share, a year ago. For the nine months year-to-date net sales were $9,447,000, down 12% from $10,745,000 in 1994. Net income for the current year-to-date period was $120,000, or $.08 per share, compared to $207,000, or $.14 per share, last year. Last year's third quarter earnings were significantly reduced by provision for a non-recurring after-tax charge of $170,000 related to the settlement of litigation. Earnings for the 1994 quarter were $.19 per share before this non- recurring event, compared to the current quarter's reported earnings of $.09 per share. PENOBSCOT SHOE COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS Results of Operations: (continued) The 5% drop in net sales in the third quarter compared to last year was due to fewer pairs of footwear shipped in the quarter. This volume reduction was reflective of the continuing weakness in the retail environment. Cost of sales was 67% of net sales in the third quarter compared to 63% a year ago resulting in gross profit margins of 33% and 37% in the 1995 and 1994 quarters, respectively. The lower gross margin was a result of timing and largely offset the comparatively higher margins reported in the second quarter. The increase in overhead expenses versus a year ago reflects increased investment in selling and marketing efforts. Other income (expense) in the third quarter of 1995 was $65,000, pre-tax, compared to ($261,000), pre-tax, a year ago. Last year's expense was due the non-recurring charge mentioned earlier in this analysis. As reported last quarter, the weakness in the retail marketplace will continue to stress the Company's margins for the balance of fiscal 1995 compared to last year. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27. Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K have been filed during the last quarter of the period covered by this report. 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 under- signed thereunto duly authorized. Penobscot Shoe Company _________________________ (Registrant) Date: October 4, 1995 Paul Hansen _________________________ By: Paul Hansen President and Chief Executive Officer Date: October 4, 1995 David L. Keane _________________________ By: David L. Keane Vice President/Finance and Administration EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1000 9-MOS NOV-24-1995 AUG-25-1995 762 3,090 3,579 (550) 3,532 11,262 3,016 2,639 11,639 1,528 0 1,533 0 0 8,578 11,639 9,447 9,447 6,282 3,233 0 0 (260) 192 72 120 0 0 0 120 .08 .08 -----END PRIVACY-ENHANCED MESSAGE-----