-----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, S2bX5VrZPUy97+yBUzLHiq9SfHCpr7/FkG6+Pidq+wnOEZekbU8ZOvi7cShLYeUp icpE3iFfcOSI20yrZ9gDvg== 0000950152-97-003631.txt : 19970508 0000950152-97-003631.hdr.sgml : 19970508 ACCESSION NUMBER: 0000950152-97-003631 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970507 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIY HOME WAREHOUSE INC CENTRAL INDEX KEY: 0000899595 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 382560752 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21768 FILM NUMBER: 97597256 BUSINESS ADDRESS: STREET 1: 5811 CANAL RD STE 180 CITY: VALLEY VIEW STATE: OH ZIP: 44125 BUSINESS PHONE: 2163285100 MAIL ADDRESS: STREET 1: 5811 CANAL ROAD STREET 2: SUITE 180 CITY: VALLEY VIEW STATE: OH ZIP: 44125 10-Q 1 DIY HOME WAREHOUSE 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number 0-21768 D.I.Y. Home Warehouse, Inc. --------------------------- (Exact name of registrant as specified in its charter) State of Ohio 38-2560752 (State of Incorporation) (I.R.S. Employer I.D. No.) 5811 Canal Road Valley View, Ohio 44125 (216) 328-5100 (Address of principal executive offices and telephone number) 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 Outstanding at March 29, 1997 - -------------------------- ----------------------------- Common Stock, no par value 7,633,859 2 DIY HOME WAREHOUSE, INC. INDEX PAGE NO. ----- -------- PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheet - March 29, 1997 and December 28, 1996.......................................... 3 Condensed Statement of Income - Three months Ended March 29, 1997 and March 30, 1996......................................... 4 Condensed Statement of Shareholders' Equity - Three Months Ended March 29, 1997............................................. 5 Condensed Statement of Cash Flows - Three Months Ended March 29, 1997 and March 30, 1996......................................... 6 Notes to Condensed Financial Statements.................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................. 8 - 9 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K........................... 10 - 11 2 3 PART I - FINANCIAL INFORMATION DIY HOME WAREHOUSE, INC. CONDENSED BALANCE SHEET
March 29, 1997 December 28, 1996 -------------- ----------------- Assets (Unaudited) Current assets: Cash and cash equivalents $703,793 $161,360 Accounts receivable, trade 103,808 51,812 Refundable federal income taxes -- 248,688 Merchandise inventories 49,686,175 38,462,125 Deferred income taxes 280,791 280,791 Prepaid expenses and other assets 1,601,919 850,113 ----------- ----------- Total current assets 52,376,486 40,054,889 ----------- ----------- Property and equipment, at cost 49,281,899 49,518,669 Less accumulated depreciation and amortization 10,997,164 10,186,763 ----------- ----------- Property and equipment, net 38,284,735 39,331,906 Other assets 547,556 577,442 ----------- ----------- Total assets $91,208,777 $79,964,237 =========== ========== Liabilities and Shareholders' Equity Current liabilities: Note payable, affiliate $900,000 $900,000 Current maturities of long-term debt 816,374 798,377 Accounts payable 18,249,828 12,278,455 Accrued expenses and other 4,736,781 5,189,499 ----------- ----------- Total current liabilities 24,702,983 19,166,331 ----------- ----------- Revolving credit 12,000,000 6,000,000 Long-term debt 15,815,000 16,030,953 Deferred income taxes 1,512,923 1,512,923 Shareholders' equity: Preferred stock, authorized 1,000,000 shares, none issued -- -- Common stock, no par value, authorized 10,000,000 shares, 7,633,859 and 7,630,685 shares outstanding as of March 29, 1997 and December 28, 1996, respectively 22,955,462 22,942,005 Retained earnings 14,222,409 14,312,025 ----------- ----------- Total shareholders' equity 37,177,871 37,254,030 ----------- ----------- Total liabilities and shareholders' equity $91,208,777 $79,964,237 =========== ===========
See accompanying notes to condensed financial statements. 3 4 DIY HOME WAREHOUSE, INC. CONDENSED STATEMENT OF INCOME (Unaudited)
For the three months ended March 29, March 30, 1997 1996 ----------- ----------- Net sales $39,652,011 $39,143,905 Cost of sales 27,990,581 28,378,802 ----------- ----------- Gross profit 11,661,430 10,765,103 Store operating, general and administrative expenses 11,501,540 10,370,512 ----------- ----------- Operating income 159,890 394,591 Other expense, net (311,782) (575,913) ----------- ----------- Loss before income taxes (151,892) (181,322) Income tax expense (benefit) (62,276) (72,531) ----------- ----------- Net loss $ (89,616) $ (108,791) =========== ============ Earnings (loss) per share $ (0.01) $ (0.01) =========== =========== Weighted average common shares outstanding 7,633,719 7,625,000 =========== ===========
See accompanying notes to condensed financial statements. 4 5 DIY HOME WAREHOUSE, INC. CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 29, 1997 (Unaudited)
Total Retained Shareholders' Shares Amount Earnings Equity --------- ----------- ----------- --------------- Balances at December 28, 1996 7,630,685 $22,942,005 $14,312,025 $37,254,030 Shares issued under the Retainer Stock Plan for Non-employee Directors 3,174 13,457 13,457 Net loss (89,616) (89,616) --------- ----------- ----------- ----------- Balances, March 29, 1997 7,633,859 $22,955,462 $14,222,409 $37,177,871 ========= =========== ============ ============
See accompanying notes to condensed financial statements. 5 6 DIY HOME WAREHOUSE, INC. CONDENSED STATEMENT OF CASH FLOWS (Unaudited)
For the three months ended March 29, 1997 March 30, 1996 -------------- -------------- Cash flows from operating activities: Net loss $ (89,616) $ (108,791) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 837,489 778,331 Shares issued under Retainer Stock Plan 13,457 -- Gain on sale of property (225,000) -- Changes in operating assets and liabilities: Accounts receivable, trade (51,996) 12,368 Refundable federal income taxes 248,688 -- Merchandise inventories (11,224,050) (10,700,240) Prepaid expenses and other assets (721,920) 52,617 Accounts payable 5,971,373 6,511,783 Accrued expenses and other current liabilities (452,718) (755,076) ----------- ----------- Net cash used in operating activities (5,694,293) (4,209,008) ----------- ----------- Cash flows from investing activities: Acquisition of property and equipment (371,464) (585,860) Proceeds from sale of property 806,146 -- ----------- ----------- Net cash provided by (used in) investing activities 434,682 (585,860) ----------- ----------- Cash flows from financing activities: Principal payments under capital lease obligations (34,271) (14,092) Proceeds from revolving credit 6,000,000 4,000,000 Principal payments of long-term debt (163,685) (142,357) ----------- ----------- Net cash provided by financing activities 5,802,044 3,843,551 ----------- ----------- Net increase (decrease) in cash and cash equivalents 542,433 (951,317) Cash and cash equivalents, beginning of period 161,360 1,468,897 ----------- ----------- Cash and cash equivalents, end of period $ 703,793 $ 517,580 =========== ===========
See accompanying notes to condensed financial statements. 6 7 D.I.Y. HOME WAREHOUSE, INC. Notes to Condensed Financial Statements (Unaudited) 1. Basis of Presentation: In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 29, 1997 and the results of operations and cash flows for the three months ended March 29, 1997 and March 30, 1996. The condensed financial statements should be read in conjunction with the financial statements and notes contained in the Company's Annual Report filed on Form 10-K. The results of operations for any interim period should not necessarily be considered indicative of the results of operations for the full year. 2. Earnings Per Share: Earnings per share are computed using the weighted average number of shares of common stock outstanding for the periods. Earnings per share have not been adjusted for the effect of stock options as the dilutive effect would be less than three percent for each period. 3. Sale of Property: In March 1997, the Company sold a parcel of property, resulting in net proceeds of approximately $806,000 and a net gain of $225,000. 4. Subsequent Event: In April 1997, the Company made a principal payment of $300,000 on the Note payable, affiliate to Edgemere Enterprise, Inc., an entity owed by the Company's majority shareholder. 7 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS - Three Months Ended March 29, 1997 Compared to Three Months Ended March 30, 1996 Net sales increased by approximately $508,000, or 1.3%, to $39,652,000 in the first quarter of fiscal 1997, from $39,144,000 in the first quarter of fiscal 1996. Gross profit increased by $896,000, or 8.3%, to $11,661,000 in the first quarter of fiscal 1997 from $10,765,000 in the first quarter of fiscal 1996. As a percentage of net sales, gross profit increased to 29.4% in the quarter ended March 29, 1997 compared to 27.5% in the comparable quarter of fiscal 1996. This increase is primarily due to comprehensive programs and initiatives underway aimed at improving margins, such as freight and logistics programs and enhanced information systems which provide tools to better manage this aspect of the business. Store operating, general and administrative expenses were $11,502,000 for the quarter ended March 29, 1997 compared to $10,371,000 for the quarter ended March 30, 1996. As a percentage of net sales, operating expenses increased to 29.0% in the first quarter of fiscal 1997 compared to 26.5% in the comparable quarter of fiscal 1996. Operating expenses in the first quarter of fiscal 1996 were favorably impacted by the reversal of bonus provisions as a result of a decision in that quarter to eliminate the discretionary store and management bonus provision which had been expensed in prior periods. Further, operating expenses in the first quarter of 1997 increased over the comparable quarter of 1996 as the result of general increases in certain expenses including rent, real estate tax and personal property assessments and insurance, among others. In addition, operating expenses in the quarter ended March 29, 1997 include expenses of new information systems implemented in the second half of fiscal 1996 which will provide long-term benefits to the Company. Other expense, net, decreased from $576,000 in the quarter ended March 30, 1996 to $312,000 in the quarter ended March 29,1997 due primarily to a $225,000 gain on the sale of a parcel of property in the first quarter of 1997 and a decrease in interest expense of $121,000 due to the benefits of reduced debt level as average amounts outstanding under the Revolving Credit Agreement were approximately $9.5 million and $15.5 million in the first quarters of fiscal 1997 and 1996, respectively. 8 9 OPERATIONS - Three Months Ended March 29, 1997 Compared to Three Months Ended March 30, 1996 LIQUIDITY AND CAPITAL RESOURCES During the three months ended March 29, 1997 and March 30, 1996, operating activities used net cash of $5,694,000 and $4,209,000, respectively. The use of cash from operating activities for the three months ended March 29, 1997 and March 30, 1996 included $11,224,000 and $10,700,000, respectively, to fund seasonal increases in inventories offset by an increase of $5,971,000 and $6,512,000, respectively, in accounts payable. Net cash provided by investing activities was $435,000 for the three months ended March 29, 1997, due primarily from the net proceeds of $806,000 from the sale of a parcel of property offset by cash used of $371,000 for the acquisition property and equipment. Net cash used in investing activities for the three months ended March 30,1996 was $586,000 relative to the acquisition of property and equipment. Net cash provided by financing activities was $5,802,000 and $3,844,000 for the three months ended March 29, 1997 and March 30, 1996, respectively, reflecting net borrowings primarily under the revolving credit facility. Management believes cash on hand, cash from operations and cash available through the Company's financing agreements will be sufficient to meet short-term and long term working capital requirements. OTHER This Quarterly Report on form 10-Q may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors. Accordingly, actual results may differ materially from those expressed in the forward-looking statements and the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. Important risk factors include, but are not limited to, the following: general economic conditions; consumer spending and debt levels; housing turnover; weather; impact on sales and margins from both existing and new competition; changes in operating expenses; changes in product mix; interest rates; changes in and the application of accounting policies and practices; adverse results in significant litigation matters; adverse state and federal regulations and legislation; the occurrence of extraordinary events including events and acts of nature or accidents; and the risks described from time to time in the Company's Securities and Exchange Commission filings. 9 10 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: A list of the exhibits required by Item 601 of Regulation S-K to be filed as a part of this Form 10-Q is shown on the "Exhibit Index" filed herewith. (b) Reports on Form 8-K: None 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. D.I.Y. HOME WAREHOUSE, INC. (Registrant) DATED: May 5, 1997 ----------- By: Marilyn A. Eisele ------------------------------------- Vice President - Administration and Finance, Chief Financial Officer 10 11 EXHIBIT INDEX Exhibit Number Description of Exhibit - ------ ---------------------- 11 Earnings Per Share: ------------------- 11.1 Computation of Earnings Per Share 27 Financial Data Schedule: ------------------------ 27.1 Financial Data Schedule for the quarter ended March 29, 1997 11 EX-11.1 2 EXHIBIT 11.1 1 EXHIBIT 11 EARNINGS PER SHARE 2 EXHIBIT 11.1 DIY HOME WAREHOUSE, INC. FORM 10-Q COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
Three Months Ended March 29, March 30, 1997 1996 ---- ---- Loss applicable to common shares $(89,616) $(108,791) ========= ========== Weighted average common shares outstanding for the period 7,633,719 7,625,000 Dilutive effect of exercise of stock options -- -- --------- --------- Weighted average common shares, assuming issuance of the above securities 7,633,719 7,625,000 ========= ========= Earnings per common share: Primary $(0.01) $(0.01) Fully diluted $(0.01) $(0.01)
EX-27 3 EXHIBIT 27
5 1,000 3-MOS JAN-03-1998 DEC-29-1997 MAR-29-1997 704 0 78 0 49,686 52,376 49,282 10,997 91,208 24,702 27,815 22,955 0 0 14,222 91,208 39,652 39,652 27,991 11,502 (248) 0 559 0 (62) (90) 0 0 0 (90) (0.01) (0.01)
-----END PRIVACY-ENHANCED MESSAGE-----