-----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, tD9P9th8ZzsW88C6NzYM04wuCjPLptclUe0AUE6yho9R4pkr3LJ1VynSXdvgesGV 0j31/8ZSxOo1pJCm4YUGmg== 0000793500-95-000006.txt : 19950814 0000793500-95-000006.hdr.sgml : 19950814 ACCESSION NUMBER: 0000793500-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SANITARY SUPPLY CO CENTRAL INDEX KEY: 0000793500 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 311079482 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14827 FILM NUMBER: 95561406 BUSINESS ADDRESS: STREET 1: 225 E FIFTH STREET 2: 2900 CHEMED CENTER CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137626500 MAIL ADDRESS: STREET 1: 255 E FIFTH STREET STREET 2: 2900 CHEMED CENTER CITY: CINCINNATI STATE: OH ZIP: 45202 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1995 Commission File Number 0-14827 NATIONAL SANITARY SUPPLY COMPANY - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 31-1079482 - ------------------------------------------------------------------------------ (State or other jurisdiction of (IRS Employer Identification incorporation of organization) No.) 2900 Chemed Center, 255 E. 5th St., Cincinnati, OH 45202-4729 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (513) 762-6500 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) 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 (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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Amount Date - ----- ------ ---- Common Stock 6,080,624 Shares July 31, 1995 $1 Par Value Page 1 of 10 NATIONAL SANITARY SUPPLY COMPANY Index
Page No. Part I. Financial Information: -------- Item 1. Financial Statements: Consolidated Balance Sheet-- June 30, 1995 and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . 3 Consolidated Statement of Income-- Three and six months ended June 30, 1995 and 1994. . . . . . . . . . . . . . . . . . . 4 Consolidated Statement of Cash Flows-- Six months ended June 30, 1995 and 1994. . . . . . . . . . . . . . . . . . . 5 Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . 7 Part II. Other Information: Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . 8 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 9
Page 2 of 10 Part I. Financial Information Item 1. Financial Statements NATIONAL SANITARY SUPPLY COMPANY CONSOLIDATED BALANCE SHEET (Unaudited)
March 31, December 31, (thousands, except share data) 1995 1994 - ----------------------------------- ---------- ------------ ASSETS Current assets: Cash and cash equivalents $ 1,640 $ 1,713 Accounts receivable, less allowances (1995- $1,665; 1994- $1,428) 40,690 41,655 Inventories 29,157 28,344 Deferred income taxes 2,045 1,831 Prepaid expenses and other current assets 1,634 1,527 ---------- ----------- Total current assets 75,166 75,070 Properties and equipment, at cost, less accumulated depreciation 21,858 21,851 Goodwill, less accumulated amortization 26,252 26,650 Other assets 919 501 ---------- ----------- Total assets $ 124,195 $ 124,072 ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 23,935 $ 21,538 Accrued liabilities 13,807 12,552 Loans payable to Chemed Corporation 8,573 13,721 Current portion of notes to Chemed Corporation 1,000 1,000 ---------- ----------- Total current liabilities 47,315 48,811 Notes to Chemed Corporation 16,000 16,000 Deferred income taxes 464 441 Other noncurrent liabilities 1,136 1,259 ---------- ----------- Total liabilities 64,915 66,511 ---------- ----------- Stockholders' equity: Preferred stock - 1,000,000 shares authorized, $1 par value (none issued) - - Common stock - 7,000,000 shares authorized, $1 par value (issued: 1995- 6,505,088 shares; 1994- 6,396,756 shares) 6,506 6,397 Paid-in capital 26,344 25,312 Retained earnings 30,036 28,695 Treasury stock, at cost (1995- 431,962 shares; 1994- 373,783 shares) (3,606) (2,843) ---------- ----------- Total stockholders' equity 59,280 57,561 ---------- ----------- Total liabilities and stockholders' equity $ 124,195 $ 124,072 ========== =========== The accompanying notes are an integral part of the financial statements.
Page 3 of 10 NATIONAL SANITARY SUPPLY COMPANY CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, --------------------- --------------------- (thousands, except per share data) 1995 1994 1995 1994 - ---------------------------------- ---------- ---------- ---------- ---------- Sales $ 85,571 $ 76,975 $ 166,364 $ 148,435 Cost of sales 58,942 52,860 114,273 102,059 ---------- ---------- ---------- ---------- Gross profit 26,629 24,115 52,091 46,376 ---------- ---------- ---------- ---------- Expenses and other income: Operating expenses 23,535 21,459 46,796 42,015 Amortization of goodwill 218 219 436 437 Chemed Corporation interest 625 600 1,287 1,145 Other income, net (120) (82) (167) (199) ---------- ---------- ---------- ---------- Total expenses and other income 24,258 22,196 48,352 43,398 ---------- ---------- ---------- ---------- Income before income taxes 2,371 1,919 3,739 2,978 Income taxes 1,001 815 1,610 1,300 ---------- ---------- ---------- ---------- Net income $ 1,370 $ 1,104 $ 2,129 $ 1,678 ========== ========== ========== ========== Earnings per share $ 0.23 $ 0.19 $ 0.35 $ 0.28 ========== ========== ========== ========== Cash dividends paid per share $ 0.065 $ 0.060 $ 0.130 $ 0.120 ========== ========== ========== ========== Average shares outstanding 6,073 5,961 6,062 5,949 ========== ========== ========== ========== The accompanying notes are an integral part of the financial statements.
Page 4 of 10 NATIONAL SANITARY SUPPLY COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, ---------------------- (thousands of dollars) 1995 1994 - ---------------------------------------------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,129 $ 1,678 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,704 1,584 Amortization of goodwill and deferred charges 602 656 Deferred income tax provision (176) (263) Provision for losses on accounts receivable 522 393 Changes in operating assets and liabilities, excluding amounts acquired in business combinations: (Increase)/decrease in accounts receivable 443 (1,112) (Increase)/decrease in inventories (813) 1,855 Increase in other assets (304) (332) Increase in accounts payable 2,397 1,760 Increase/(decrease) in other liabilities 1,155 (1,315) --------- --------- Net cash provided by operating activities 7,659 4,904 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Business combinations (52) (434) Capital expenditures (1,770) (5,154) Other 58 152 --------- --------- Net cash used for investing activities (1,764) (5,436) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from/(payments on) loans payable to Chemed Corporation (5,148) 2,892 Principal payments on other long-term debt (23) (22) Dividends paid (788) (714) Proceeds from/(purchase of) common stock (9) 375 --------- --------- Net cash provided by/(used for) financing activities (5,968) 2,531 Increase/(decrease) in cash and cash equivalents (73) 1,999 Cash and cash equivalents at beginning of period 1,713 1,110 --------- --------- Cash and cash equivalents at end of period $ 1,640 $ 3,109 ========= ========= The accompanying notes are an integral part of the financial statements.
Page 5 of 10 NATIONAL SANITARY SUPPLY COMPANY Notes to Consolidated Financial Statements (unaudited) NOTE A. The accompanying unaudited financial statements have been prepared in accordance with Rule 10-01 of SEC Regulation S-X. Consequently, they do not include all the disclosures required under generally accepted accounting principles for complete financial statements. However, in the opinion of the management of National Sanitary Supply Company ("National"), the financial statements presented herein contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position, the results of operations and cash flows of National and its subsidiaries for the periods indicated. For additional information concerning the accounting policies of National, refer to the consolidated financial statements included in the 1994 Annual Report on Form 10-K filed with the SEC on March 28, 1995. NOTE B. Cash equivalents include highly liquid investments with maturities of three months or less when purchased. NOTE C. Earnings per common share are computed on the basis of the weighted average number of shares of common stock outstanding during the respective periods. The dilution that would result from shares issuable under National's 1986, 1988 and 1995 Stock Incentive Plans is not material. Page 6 of 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - --------------------- National Sanitary Supply Company's sales for the second quarter ended June 30, 1995 were $85,571,000, an 11% increase over sales of $76,975,000 in the second quarter of 1994. Net income for the second quarter of 1995 was $1,370,000, a 24% increase over net income of $1,104,000 in the prior-year second quarter. Earnings per share of $.23 for the second quarter of 1995 increased 21% over earnings per share of $.19 in the comparable prior-year quarter. Most locations throughout the National system experienced volume increases resulting from enhanced sales and marketing efforts such as a new full-line product catalog and focused promotional programs. Price increases also helped fuel sales growth during the second quarter. The gross profit margin for the second quarter 1995 decreased .2% point reflecting the impact of cost increases which National has not yet passed on to its customers. Operating expenses as a percentage of sales in the second quarter of 1995 decreased .4% point primarily reflecting the impact of relatively small increases in most fixed expenses such as facility cost and administrative personnel cost. For the six months ended June 30, 1995, National sales of $166,364,000 increased 12% over sales of $148,435,000 in the comparable period of 1994. Net income for the first half of 1995 was $2,129,000, a 27% increase over the prior year first half net income of $1,678,000. Earnings per share were $.35 for the first six months of 1995 compared with $.28 for the first six months of 1994. The sales improvement for the first half of 1995 reflects increased sales at most locations aided by improved pricing primarily in the plastic and paper product categories. The gross profit margin for the first six months of 1995 was relatively unchanged. Operating expenses as a percentage of sales for the first half of 1995 declined .2% point reflecting the continued emphasis on cost containment. The effective tax rate declined from 43.7% during the first half of 1994 to 43.1% during the first half of 1995, primarily due to higher profits in states with lower tax rates and spreading the same year-to-year level of non tax-deductible goodwill over more income. Looking ahead, management is optimistic about National's sales and profit growth for the remainder of the year. Liquidity and capital resources - ------------------------------- The increase in accounts payable at June 30, 1995 compared with December 31, 1994 primarily reflects the timing of certain inventory purchases and scheduled payments. Management believes that National's cash flow from operations and other sources of liquidity are sufficient for its needs. Page 7 of 10 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders. (a) National Sanitary Supply held its annual meeting of stockholders on May 15, 1995. (b) The names of directors elected at this annual meeting are as follows: Edward L. Hutton W. Dwight Jackson Paul C. Voet Charles O. Lane Robert B. Garber Sandra E. Laney Arthur J. Bennert, Jr. Kevin J. McNamara James A. Cunningham Timothy S. O'Toole Naomi C. Dallob D. Walter Robbins, Jr. Charles H. Erhart, Jr. Gary H. Sander Neal Gilliatt Jerome E. Schnee Will J. Hoekman Kenneth F. Vuylsteke Thomas C. Hutton (c) The stockholders then ratified the selection by the Board of Directors of Price Waterhouse LLP as independent accountants for the Company and its consolidated subsidiaries for the year 1995: 5,577,880 votes were cast in favor of the proposal, 6,000 votes were cast against it, 1,612 votes abstained, and zero (0) were broker non-votes. The stockholders then adopted a resolution ratifying the approval and adoption of the 1995 Stock Incentive Plan by the Board of Directors: 5,535,442 votes were cast in favor of the resolution, 20,064 votes were cast against it, 700 votes abstained and 29,286 were broker non-votes. With respect to the election of directors, the number of votes cast for each nominee was as follows:
Votes Votes Votes For Against Withheld _________ _______ ________ Edward L. Hutton 5,584,480 1,012 10 Paul C. Voet 5,584,490 1,002 -0- Robert B. Garber 5,583,990 1,502 500 Arthur J. Bennert, Jr. 5,584,490 1,002 -0- James A. Cunningham 5,584,280 1,212 210 Naomi C. Dallob 5,584,490 1,002 -0- Charles H. Erhart, Jr. 5,583,790 1,702 700 Neal Gilliatt 5,584,290 1,202 200 Will J. Hoekman 5,584,490 1,002 -0- Thomas C. Hutton 5,584,290 1,202 200 W. Dwight Jackson 5,584,239 1,253 251 Charles O. Lane 5,583,990 1,502 500 Sandra E. Laney 5,584,280 1,212 210 Kevin J. McNamara 5,584,490 1,002 -0- Timothy S. O'Toole 5,584,490 1,002 -0- D. Walter Robbins, Jr. 5,584,280 1,212 210 Gary H. Sander 5,584,490 1,002 -0- Jerome E. Schnee 5,584,290 1,202 200 Kenneth F. Vuylsteke 5,584,490 1,002 -0-
Page 8 of 10 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits --------
SK 601 Exhibit No. Ref. No. Description Page No. - ----------- -------- ----------- -------- 1 (11) Statement re: E-1 Computation of Earnings Per Share 2 (27) Financial Data Schedule E-2
(b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed during the quarter ended June 30, 1995. 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. National Sanitary Supply Company -------------------------------- (Registrant) Date August 11, 1995 By /s/Paul C. Voet ------------------ ---------------------------------- Paul C. Voet President and Chief Executive Officer Date August 11, 1995 By /s/Gary H. Sander ------------------ ---------------------------------- Gary H. Sander Vice President, Treasurer and Chief Financial Officer Page 9 of 10 EX-11 2 EXHIBIT 11 NATIONAL SANITARY SUPPLY COMPANY COMPUTATION OF EARNINGS PER SHARE (a) (UNAUDITED)
Three Months Ended Six Months Ended (thousands, except per share data) June 30, June 30, - ---------------------------------- -------------------- ------------------- 1995 1994 1995 1994 ------- ------- ------- ------- Computation of Earnings Per Common and Common Equivalent Share Net Income $ 1,370 $ 1,104 $ 2,129 $ 1,678 ======= ======= ======= ======= Average Number of Shares of Common Stock Outstanding 6,073 5,961 6,062 5,949 Incremental Effect of Unexercised Stock Options 75 104 81 106 ------- ------- ------- ------- Average Number of Shares of Common Stock and Common Stock Equivalents Outstanding 6,148 6,065 6,143 6,055 ======= ======= ======= ======= Earnings per Common and Common Equivalent Share $ 0.22 $ 0.18 $ 0.35 $ 0.28 ======= ======= ======= ======= Computation of Earnings Per Common Share Assuming Full Dilution Net Income $ 1,370 $ 1,104 $ 2,129 $ 1,678 ======= ======= ======= ======= Average Number of Shares of Common Stock Outstanding 6,073 5,961 6,062 5,949 Incremental Effect of Unexercised Stock Options 76 111 82 109 ------- ------- ------- ------- Average Number of Shares of Common Stock Assuming Full Dilution 6,149 6,072 6,144 6,058 ======= ======= ======= ======= Earnings Per Common Share Assuming Full Dilution $ 0.22 $ 0.18 $ 0.35 $ 0.28 ======= ======= ======= ======= (a) This calculation is submitted in accordance with the Securities Exchange Act of 1934. Because the incremental effect of unexercised stock options results in dilution of less than 3%, the per share data presented in the consolidated statement of income excludes the impact of common stock equivalents.
E-1 Page 10 Of 10 EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995 FOR NATIONAL SANITARY SUPPLY COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000793500 NATIONAL SANITARY SUPPLY CO 1,000
6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 1,640 0 37,550 (1,665) 29,157 75,166 41,949 (20,091) 124,195 47,315 16,000 6,506 0 0 52,774 124,195 166,364 166,364 114,273 114,273 0 522 1,287 3,739 1,610 2,129 0 0 0 2,129 .35 .35
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