-----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, HdeD+tchShZIQrBJX6DLCz2j2p61onRh0BnSNdb7/o3g4EHnh/MrjGpdQrZhrB6v 2ktRS3Wh+hTJLiRpEqT5gQ== 0000077326-97-000015.txt : 19970708 0000077326-97-000015.hdr.sgml : 19970708 ACCESSION NUMBER: 0000077326-97-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970530 FILED AS OF DATE: 19970707 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: 97636576 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 May 30, 1997 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 1,387,891 shares, $1 par value, was outstanding at May 30, 1997 PENOBSCOT SHOE COMPANY CONDENSED BALANCE SHEET (In thousands)
May 30, 1997 November 29, 1996 (Unaudited) (Note (a)) CURRENT ASSETS: Cash & Cash Equivalents $1,191 $ 548 Marketable Securities 3,448 3,299 Accounts receivable 1,856 3,319 Inventories (Note 2) 4,033 4,036 Other current assets 572 433 _______ _______ TOTAL CURRENT ASSETS $11,100 $11,635 PROPERTY AND EQUIPMENT, AT COST: Buildings $ 1,432 $ 1,417 All Other 524 368 Less accumulated depreciation and amortization 1,629 1,584 _______ _______ NET PROPERTY AND EQUIPMENT $ 327 $ 201 _______ _______ TOTAL ASSETS $11,427 $11,836 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Accounts payable $ 475 $ 503 Other current liabilities 366 740 _______ _______ TOTAL CURRENT LIABILITIES $ 841 $ 1,243 DEFERRED INCOME TAXES $ 99 $ 99 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 8,189 8,234 Add net unrealized gain on available-for-sale securities (Note (b)) 436 355 Less treasury stock at cost 145,151 and 137,877 shares; 780 737 NET SHAREHOLDERS' EQUITY _______ _______ (Note 3) $10,487 $10,494 TOTAL LIABILITIES AND SHARE- _______ _______ HOLDERS' EQUITY $11,427 $11,836 ======= ======= Note: (a) The balance sheet at November 29, 1996, 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 Second Quarter Ended Six Months Ended May May May May 30, 1997 24, 1996 30, 1997 24, 1996 Net Sales $2,439 $3,024 $6,541 $7,249 Cost and operating expenses: Cost of sales 1,594 2,073 4,367 4,913 Selling and administrative expenses 984 1,034 2,130 2,184 ______ _______ _______ _______ Operating income (140) (83) 44 152 Other income 45 131 107 269 ______ _______ _______ _______ Income before income taxes (95) 48 151 421 Income taxes (40) 17 57 166 _______ _______ _______ _______ Net income $ (55) $ 31 $ 94 $ 255 ======= ======= ======= ======= Per Common Share: Net income $ (0.04) $ 0.02 $ 0.07 $ 0.17 Dividends 0.05 0.05 0.10 0.10 Average number of common shares outstanding 1,388,864 1,474,265 1,391,989 1,478,169 See notes to the condensed financial statements.
PENOBSCOT SHOE COMPANY STATEMENT OF CASH FLOWS For Six Months Ended May 30, 1997 and May 24, 1996 (In thousands)
1997 1996 Cash flows from operating activities: Net cash provided (used) by operating activities $ 996 $1,074 Cash flows from investing activities: Proceeds from sale of assets 0 0 Capital expenditures (170) (14) _______ _______ Net cash provided (used) by investing activities (170) (14) Cash flows from financing activities: Dividends paid (139) (148) Purchase of treasury stock (44) (63) Net cash provided (used) by _______ _______ financing activities (183) (211) Net increase (decrease) in _______ _______ cash and cash equivalents 643 849 Cash and cash equivalent at beginning of period 548 1,301 Cash and cash equivalent at _______ _______ end of period $1,191 $ 2,150 ======= ======= Supplemental Disclosure of Cash Flow Information Cash paid during the period for: Interest $ 0 $ 0 Income taxes 384 432
PENOBSCOT SHOE COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. CONDENSED FINANCIAL STATEMENTS The condensed balance sheet as of May 30, 1997, the statements of income for the second quarter ended May 30, 1997 and May 24, 1996, and the condensed statements of cash flows for the six-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 May 30, 1997 and for the other periods presented. The results of operations for the period ended May 30, 1997 are not necessarily indicative of operating results for the full year. 2. INVENTORIES Inventories are summarized as follows (in thousands):
5/30/97 11/29/96 5/24/96 FIFO Cost: finished shoes $4,156 $4,465 $3,630 shoes in process 0 0 4 raw materials 17 20 215 _______ _______ _______ $4,173 $4,485 $3,849 Excess of FIFO cost over LIFO inventory value (140) (449) (728) _______ _______ _______ $4,033 $4,036 $ 3,121 ======= ======= =======
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 six months ended May 30, 1997, shareholders' equity changed due to the net income of $94,000, dividends declared of $139,000, treasury stock purchases of $44,000 and an increase of $81,000 resulting from an increase 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 unrealized gain on the balance sheet. PENOBSCOT SHOE COMPANY MANAGEMENT DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS Liquidity and Capital Resources: At May 30, 1997, Penobscot Shoe Company had working capital of approximately $10,259,000 versus approximately $10,392,000 at November 29, 1996, a decrease of $133,000. The ratio of current assets to current liabilities at May 30, 1997, was 13.2 to 1, compared to 9.4 to 1, at November 29, 1996. The statement of cash flows for the six months ended May 30, 1997, shows an increase of $643,000 in cash and cash equivalents since November 29, 1996. The Company's operations provided $996,000 since November 29, 1996, primarily due to seasonal fluctuations in accounts receivable. The Company's quarterly dividend amounted to a use of $139,000 during the period and capital expenditures for equipment amounted to a further use of $170,000 during the period. The decrease in the Company's accounts receivable and other current liabilities and the increase in other current assets since November 29, 1996, were the result of ordinary fluctuations. The increase in property and equipment reflects the purchase of new data processing equipment and software, and the upgrading of existing equipment. 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 second quarter ended May 30, 1997, were $2,439,000, down 19% from $3,024,000 last year. A net loss of $55,000, or $.04 per share, was incurred in the second quarter compared to net income of $31,000, or $.02 per share, in the corresponding quarter last year. The current quarter's net income benefited from a LIFO gain of approximately $41,000, or $.03 per share. Last year the second quarter did not include a LIFO gain. In the second quarter last year, gains from the sales of securities contributed approximately $45,000, or $.03 per share, to net income. This year such gains were insignificant. For the six months year-to-date, net sales were $6,541,000, down 10% from $7,249,000 a year ago. Net income for the year-to-date period was $94,000, or $.07 per share, versus $255,000, or $.17 per share last year. The current year-to-date period has benefited from LIFO gains totaling approximately $157,000, or $.11 per share. In fiscal 1996, no LIFO gains were realized in the first half of the year. For the six months year-to-date periods, gains from the sales of securities amounted to approximately $6,000, or less than $.01 per share, and $93,000, or $.06 per share, in 1997 and 1996 respectively. The decrease in second quarter net sales compared to last year was due to volume factors. The poor winter boot season that affected the first quarter was followed by unseasonable weather in much of the country resulting in weak demand for Spring merchandise. Accordingly, reorders for Spring 97 merchandise lagged behind a year ago comparatives throughout the quarter. Higher returns and allowances, due largely to returns of winter boots, further reduced the sales volume compared to a year ago. Improved sales during the second half of the year will be contingent on a strengthened retail environment. Cost of sales was 65.4% in the second quarter compared to 68.6% a year ago, resulting in gross profit margins of 34.6% and 31.4% in the 1997 and 1996 quarters, respectively. The current period includes a pre-tax LIFO liquidation gain of $69,000. Without the LIFO gain, the gross profit margin in the second quarter would have been 31.8%. No LIFO liquidation gain was realized in the first half of last year. The LIFO liquidation gain is the result of reductions in the inventory originally assembled in our Old Town, Maine factory. That factory was closed in August 1996, and since that date LIFO gains have been recognized quarterly as the remaining domestically assembled inventory is liquidated. The inventory sourced from overseas locations is accounted for as a separate LIFO inventory pool that was not affected by the factory closure. Selling and administrative costs in the second quarter were down approximately 5% from a year ago. Most of this decrease was due to costs variable on sales. 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: June 27, 1997 Paul Hansen _________________________ By: Paul Hansen President and Chief Executive Officer Date: June 27, 1997 David L. Keane _________________________ By: David L. Keane Vice President/Finance and Administration EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR 10-Q
5 1000 6-MOS NOV-28-1997 MAY-30-1997 1,191 3,448 2,359 (503) 4,033 11,100 1,956 1,629 11,427 841 0 1,533 0 0 9,298 11,427 6,541 6,541 4,367 6,497 0 0 0 151 57 94 0 0 0 94 .07 .07
-----END PRIVACY-ENHANCED MESSAGE-----