-----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, KmcjYV7fbjTVmsBioa1TnG8v+WVdw44NYBdfa4n7O4cysIhZeufoDL9NDulR5DLV +qmVsmNrtLLiNMflMiBHPA== 0000077326-96-000020.txt : 19961008 0000077326-96-000020.hdr.sgml : 19961008 ACCESSION NUMBER: 0000077326-96-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960823 FILED AS OF DATE: 19961007 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: 96640068 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 23, 1996 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 1,459,817 shares, $1 par value, was outstanding at August 23, 1996 PENOBSCOT SHOE COMPANY CONDENSED BALANCE SHEET (In thousands)
August 23, 1996 November 24, 1995 (Unaudited) (Note (a)) CURRENT ASSETS: Cash & Cash Equivalents $ 379 $1,301 Marketable Securities 3,219 3,271 Refundable income taxes - - Accounts receivable 3,157 3,492 Inventories (Note 2) 4,118 3,054 Other current assets 520 341 _______ _______ TOTAL CURRENT ASSETS $11,393 $11,459 PROPERTY AND EQUIPMENT, AT COST: Buildings $1,412 $1,413 All Other 725 1,617 Less accumulated depreciation and amortization 1,933 2,660 _______ _______ NET PROPERTY AND EQUIPMENT $204 $369 _______ _______ TOTAL ASSETS $11,598 $11,828 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Accounts payable $609 $791 Other current liabilities 458 496 _______ _______ TOTAL CURRENT LIABILITIES $1,067 $1,287 DEFERRED INCOME TAXES $146 $146 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 7,898 7,667 Add net unrealized gain on available- for-sale securities (Note (b)) 233 356 Less treasury stock at cost 73,225 and 50,925 shares; 389 270 NET SHAREHOLDERS' EQUITY _______ _______ (Note 3) $10,384 $10,395 TOTAL LIABILITIES AND SHARE- _______ _______ HOLDERS' EQUITY $11,598 $11,828 ======= ======= Note: (a) The balance sheet at November 24, 1995, 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 23, 1996 25, 1995 23, 1996 25, 1995 Net Sales $3,865 $3,872 $11,114 $9,447 Cost and operating expenses: Cost of sales 2,697 2,587 7,610 6,282 Selling and administrative expenses 996 1,130 3,179 3,233 _______ _______ _______ _______ Operating income (loss) 172 156 325 (68) Other income 154 65 423 260 _______ _______ _______ _______ Income before income taxes 327 221 748 192 Income taxes 131 88 297 72 _______ _______ _______ _______ Net income $196 $133 $451 $120 ======= ======= ======= ======= Per Common Share: Net income $0.13 $0.09 $0.31 $0.08 Dividends 0.05 0.05 0.15 0.15 Average number of common shares outstanding 1,461,833 1,482,117 1,472,605 1,482,117 See notes to the condensed financial statements.
PENOBSCOT SHOE COMPANY STATEMENT OF CASH FLOWS For Nine months Ended August 23, 1996 and August 25, 1995 (In thousands)
1996 1995 Cash flows from operating activities: Net cash provided (used) by operating activities $(633) ($311) Cash flows from investing activities: Proceeds from sale of assets 67 0 Capital expenditures (16) (12) _______ _______ Net cash provided (used) by investing activities 51 (12) Cash flows from financing activities: Dividends paid (221) (222) Purchase of treasury stock (119) 0 Net cash provided (used) by _______ _______ financing activities (340) (222) Net increase (decrease) in _______ _______ cash and cash equivalents (922) (546) Cash and cash equivalent at beginning of period 1,301 1,308 Cash and cash equivalent at _______ _______ end of period $ 379 $ 762 ======= ======= Supplemental Disclosure of Cash Flow Information Cash paid during the period for: Interest $0 $0 Income taxes 444 117
PENOBSCOT SHOE COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED FINANCIAL STATEMENTS The condensed balance sheet as of August 23, 1996 the statements of income for the third quarter periods ended August 23, 1996 and August 25, 1995, 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 23, 1996 and for the other periods presented. The results of operations for the period ended August 23, 1996 are not necessarily indicative of operating results for the full year. 2. INVENTORIES Inventories are summarized as follows (in thousands):
8/23/96 11/24/95 8/25/95 FIFO Cost: finished shoes $4,815 $3,355 $4,079 shoes in process 0 22 72 raw materials 43 232 310 _______ _______ _______ $4,857 $3,609 $4,461 Excess of FIFO cost over LIFO inventory value (739) (555) (930) _______ _______ _______ $4,118 $3,054 $3,020 ======= ======= =======
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 23, 1996, shareholders' equity changed due to net income of $451,000, dividends declared of $ 221,000, purchases of treasury stock of $119,000 and a decrease of $123,000 resulting from a decrease in the 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 23, 1996, Penobscot Shoe Company had working capital of approximately $10,326,000 versus approximately $10,172,000 at November 24, 1995, an increase of $154,000. The ratio of current assets to current liabilities at August 23, 1996, was 10.7 to 1, compared to 8.9 to 1, at November 24, 1995. The statement of cash flows for the nine months ended August 23, 1996, shows a decrease of $922,000 in cash and cash equivalents since November 24, 1995. The Company's operations used $633,000 since November 24, 1995, primarily due to seasonal fluctuations in inventory. The Company's quarterly dividend amounted to a use of $221,000 during the period, purchases of treasury shares used $119,000 and capital expenditures for equipment amounted to a further use of $16,000. Proceeds from the sale of machinery and equipment provided $67,000 since November 24, 1995. The decreases in accounts receivable and accounts payable, and the increases in inventories and other current assets since November 24, 1995, were all the result of ordinary fluctuations. The changes in property and equipment and the related accumulated depreciation accounts resulted from the closure of the Company's plant in Old Town, Maine. The majority of the equipment and machinery from that plant were sold or disposed of during the quarter, resulting in the reduction in net property and equipment since November 24, 1995. 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 23, 1996, were $3,865,000, about equal to sales of $3,872,000 in the same period last year. Net income for the current quarter was $196,000, or $.13 per share, compared to net income of $133,000, or $.09 per share, in the corresponding quarter last year. For the nine months year-to-date, net sales were $11,114,000, up 18% from $9,447,000 a year ago. Net income for the year-to-date period was $451,000, or $.31 per share, versus net income of $120,000, or $.08 per share, last year. During the third quarter the Company ceased production at its plant on Gilman Falls Avenue in Old Town, Maine. The closure was in response to a decline in the portion of the product line that had been assembled in Old Town. A restructuring charge of approximately $150,000, pre-tax, was taken as a result of this closure. Cost of sales was 69.8% of net sales in the third quarter compared to 66.8% a year ago resulting in gross profit margins of 30.2% and 33.2% in the 1996 and 1995 quarters, respectively. The majority of the decline in gross profit margin from last year was a result of the restructuring charge discussed previously. Without the impact of that charge, the gross profit margin in the current quarter would have been 32.9%. Selling and administrative costs in the third quarter were approximately 12 % lower than last year. Lower advertising, commissions, and selling expenses were a result of both timing and efficiencies realized in selling efforts. Other income in the current quarter was enhanced by a favorable settlement of litigation, which amounted to $100,000, pre-tax. This litigation against our insurance carrier was related to the issue of insurance coverage arising out of a case settled two years ago. The sales growth of Trotters during the first nine months of 1996 has been based largely on a stronger retail environment than a year ago and on increased distribution of the brand. Future growth will be dependent upon a continuation of these same two factors. 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 undersigned thereunto duly authorized. Penobscot Shoe Company _________________________ (Registrant) Date: October 7, 1996 Paul Hansen _________________________ By: Paul Hansen President and Chief Executive Officer Date: October 7, 1996 David L. Keane _________________________ By: David L. Keane Vice President/Finance and Administration EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD 10-Q
5 1000 9-MOS NOV-29-1996 AUG-23-1996 379 3,219 3,157 (596) 4,118 11,393 2,137 1,933 11,598 1,067 0 1,533 0 0 8,851 11,598 11,114 11,114 7,610 10,789 0 0 (423) 748 297 451 0 0 0 451 .31 .31
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