-----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, IFduI0L7aDlCM/A2jbocqhDsbunO+uFsGBsMzS5yYfsNnyapfmz1ZQqSI9s3awiC Es9plgabFYKSYuHklePKvw== 0000950168-96-000258.txt : 19960216 0000950168-96-000258.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950168-96-000258 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960213 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPEIZMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000092827 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY (NO METALWORKING MACHINERY) [3550] IRS NUMBER: 560901212 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08544 FILM NUMBER: 96516498 BUSINESS ADDRESS: STREET 1: P O BOX 31215 CITY: CHARLOTTE STATE: NC ZIP: 28231 BUSINESS PHONE: 7043723751 MAIL ADDRESS: STREET 1: P O BOX 31215 CITY: CHARLOTTE STATE: NC ZIP: 28231 10-Q 1 SPEIZMAN 10-Q #42003.1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 - ------------------------------------------------------------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 30, 1995 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 No. 0-8544 SPEIZMAN INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 56-0901212 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 508 West Fifth St. 28202 Charlotte, North Carolina (Zip Code) (Address of principal executive offices) (704) 372-3751 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Outstanding at Class of Common Stock February 7, 1995 Par value $.10 per share 3,208,599 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES INDEX
Page No. PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Condensed Balance Sheets................................................. 3 - 4 Consolidated Condensed Statements of Operations....................................... 5 Consolidated Condensed Statements of Cash Flows....................................... 6 Notes to Consolidated Financial Statements............................................ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................... 8 - 10 PART II. OTHER INFORMATION: Item 6. Exhibits and reports on Form 8-K (a) Reports on Form 8-K............................................................... 11 (b) Exhibit 11. Computation of Net Income (Loss) per Share........................... 12
Page 2 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
December 30, July 1, 1995 1995 (Unaudited) ASSETS CURRENT: Cash and cash equivalents $ 1,804,207 $ 2,436,859 Accounts receivable, less allowances of $173,028 and $207,158 10,129,436 16,078,683 Inventories 10,543,605 13,428,014 Prepaid expenses and other current assets 2,242,950 2,458,355 ___________ ___________ TOTAL CURRENT ASSETS 24,720,198 34,401,911 ___________ ___________ PROPERTY AND EQUIPMENT: Leasehold improvements 550,684 543,874 Machinery and equipment 1,311,795 876,565 Furniture, fixtures and transportation equipment 763,750 834,187 ___________ __________ Total 2,626,229 2,254,626 Less accumulated depreciation and amortization (1,436,617) (1,440,688) ___________ _________ NET PROPERTY AND EQUIPMENT 1,189,612 813,938 ___________ __________ OTHER 626,494 488,609 $26,536,304 $35,704,458 ========== ==========
See accompanying notes to consolidated financial statements. Page 3 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
December 30, July 1, 1995 1995 (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 6,989,016 $15,056,927 Customers' deposits 1,139,496 884,881 Accrued expenses 222,067 833,886 Current maturities of long-term debt 10,351 13,190 __________ __________ TOTAL CURRENT LIABILITIES 8,360,930 16,788,884 LONG-TERM DEBT 135,166 133,629 _________ __________ TOTAL LIABILITIES 8,496,096 16,922,513 _________ __________ STOCKHOLDERS' EQUITY: Common stock - par value $.10; authorized 6,000,000 shares; issued 3,236,199 shares 323,620 323,620 Additional paid-in capital 12,459,965 12,459,965 Retained earnings 5,360,281 6,097,426 Foreign currency translation adjustment (3,861) 731 __________ __________ Total 18,140,005 18,881,742 Treasury stock, at cost, 27,600 common shares (99,797) (99,797) __________ __________ TOTAL STOCKHOLDERS' EQUITY 18,040,208 18,781,945 __________ __________ $26,536,304 $35,704,458 ========== ==========
See accompanying notes to consolidated financial statements. Page 4 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended ---------------------------- ------------------------ 12-30-95 12-31-94 12-30-95 12-31-94 (13 Weeks) (13 Weeks) (13 Weeks) (26 Weeks) ---------- --------- ---------- ---------- REVENUES $ 9,123,704 $ 17,251,361 $17,462,554 $ 29,671,854 --------- ---------- ---------- ---------- COSTS AND EXPENSES: Cost of sales 8,267,912 15,107,089 15,863,583 26,311,120 Selling expenses 1,015,167 911,105 1,937,430 1,772,377 General and administrative expenses 384,940 451,094 754,702 777,046 --------- ---------- ---------- ---------- Total costs and expenses 9,668,019 16,469,288 18,555,715 28,860,543 --------- ---------- ---------- ---------- (554,315) 782,073 (1,093,161) 811,311 NET INTEREST EXPENSE (INCOME) (21,208) 3,673 (3,016) (7,574) --------- ---------- ---------- ---------- INCOME (LOSS) BEFORE TAXES ON INCOME (523,017) 778,400 (1,090,145) 818,885 TAXES (BENEFIT) ON INCOME (165,000) 262,500 (353,000) 277,000 --------- ---------- ---------- ---------- NET INCOME (LOSS) $ (358,107) $ 515,900 $ (737,145) $ 541,885 NET INCOME (LOSS) PER SHARE $ (.11) $ .16 $ (.23) $ .17 === === === === Weighted average number of common and equivalent shares 3,244,835 3,269,190 3,277,935 3,280,618
See accompanying notes to consolidated financial statements. Page 5 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) ----------- For the Six Months Ended --------------------------- 12/30/95 12/31/94 (26 Weeks) (26 Weeks) ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (737,145) $ 541,885 Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation and amortization 84,894 87,928 Provision for inventory obsolescence 100,000 100,000 Foreign currency translation adjustment (4,592) (1,779) (Increase) decrease in: Accounts receivable 5,949,247 309,230 Inventories 2,784,409 (2,420,013) Prepaid expenses and deposits 215,405 (441,735) Other assets (137,885) 67,084 Increase (decrease) in: Accounts payable (8,067,911) 765,557 Customers' deposits 254,615 (2,660) Accrued expenses (611,819) (286,293) ---------- --------- Net cash used in operating activities (170,782) (1,280,796) ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - leased equipment ( 434,630) - Capital expenditures - other equipment ( 31,821) (193,998) Disposition of property and equipment 5,883 29,691 ---------- --------- Net cash used in investing activities (460,568) (164,307) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt (1,302) (81,454) ---------- --------- Issuance of common stock for stock options - 1,653 Minority interest in subsidiary - 2,000 ---------- --------- Net cash provided by (used in) financing activities (1,302) (77,801) ---------- --------- NET INCREASE (DECREASE) IN CASH (632,652) (1,522,904) CASH AT BEGINNING OF PERIOD 2,436,859 5,433,664 ---------- --------- CASH AT END OF PERIOD $ 1,804,207 $ 3,910,760 ========= ========= Supplemental Disclosures: Cash paid during period for: Interest $ 64,046 $ 57,477 Income taxes 106,929 23,519
See accompanying notes to consolidated financial statements. Page 6 SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Management Statement re Adjustments In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present the Registrant's financial position, the results of operations and changes in cash flow for the periods indicated. The accounting policies followed by the Registrant are set forth on page F-6 of the Registrant's Form 10-K for the fiscal year ended July 1, 1995, which is incorporated by reference. Note 2. Inventories Inventories consisted of the following:
December 30, July 1, 1995 1995 ------------ ---------- (unaudited) Machines $ 7,279,578 $10,106,300 Parts and supplies 3,264,027 3,321,714 ---------- ---------- Total $ 10,543,605 $13,428,014 ========== ==========
Note 3. Taxes on Income Taxes on income are allocated to interim periods on the basis of an estimated annual effective tax rate. Note 4. Net Income Per Share Net income per share is computed by dividing net income by the average number of common and common equivalent shares outstanding during the period. Common equivalent shares include those common shares which are issuable upon the exercise of stock options, when dilutive, net of shares assumed to have been repurchased with the proceeds. Page 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company's revenues are generated primarily from its distribution of textile equipment, principally knitting machines, to manufacturers of textile products and, to a lesser extent, from the sale of parts used in such equipment and from the sale of used textile equipment. RESULTS OF OPERATIONS Revenues in the Company's second fiscal quarter ended December 30, 1995 declined by approximately $8.1 million or 47.1%. Major elements of this decline are hosiery equipment sales which were down $6.9 million and sweater and trim equipment sales which were down $1.6 million. The decline in hosiery equipment sales appears to be related to poor retail sales of garments in the fall and winter season of 1995. The decline in sweater and trim equipment appears to be related to the same poor retail environment coupled with the general decline in the consumption of sweaters. In the six months ended December 30, 1995, the Company's revenues declined by $12.2 million or 41.2%. Major elements in that decline are hosiery equipment sales which were down $10.0 million and sweater and trim equipment sales which were down $3.4 million. Both declines reflect the same poor retail environments which affected the second quarter performance. Cost of sales as a percentage of revenues in the Company's fiscal 1996 second quarter which ended December 30 increased to 90.6% from 87.6% in the same quarter of last year. Service expenses, a component of cost of sales, accounted for most of this unfavorable shift. Service expenses between the second quarter of the current year and the second quarter of last year declined by about 5.4%; however, as a percent of the reduced revenues, service expenses increased by 2.4% quarter to quarter. In the year-to-date, cost of sales as a percentage of revenues increased to 90.8% as compared to 88.7% in the same period of last year. Service expenses as a component of cost of sales remained constant between the two six-month periods at $1.0 million, accounting for 2.4% of the overall unfavorable shift of 2.1%. Selling expenses in the second quarter increased by $104,000 as compared to the second quarter of last year. Material elements of this overall increase occurred in sales salaries, travel expenses, consulting fees and rental and space costs. These increases were partially offset by decreases in salespersons' commissions and in letter of credit expenses. In the year-to-date, selling expenses increased by $165,000 in fiscal 1996 as compared to the same period of last year. The Company's United Kingdom subsidiary accounted for $47,000 of this increase. Elements similar to the quarterly elements accounted for this change in the Company's year-to-date selling expenses. General and administrative expenses in the current quarter declined by about $66,000. The quarterly decrease relates to reductions in executive bonuses and in bad debt provisions. In the year-to-date, general and administrative expenses declined by about $22,000 as compared to the same period of last year. This reflects decreases in executive bonuses and in bad debt provisions. (No executive bonuses were accrued in either of the current periods.) Page 8 Interest expense is shown net of interest income. The favorable shift of about $25,000 in the latest quarter results from a $27,000 increase in interest income, as compared to the second quarter of last year. OUTLOOK Late in the Company's current second quarter, the sock industry served by the Company began to demonstrate some improvement. Demand for Lonati single cylinder athletic sock machines with patterning capability increased strongly. The Company is not certain as to how long this surge in demand will continue. Demand for double cylinder and dial rib socks made on other machines sold by the Company remains sluggish. The sweater manufacturing industry in the United States and in the United Kingdom continues to display substantial weakness. In August 1995, the Company became the U.S. distributor for Orizio Paolo, S.p.A., an Italian manufacturer of circular fabric knitting machines. The Company formed a new division to market these machines which are used to manufacture tee-shirt fabric and other knitted fabric. This new division has recorded sales of $1.2 million of this type of equipment since it was formed. LIQUIDITY AND CAPITAL RESOURCES At December 30, 1995, the Company's working capital position was approximately $16.4 million, down about $1.2 million from that same position at the end of the prior fiscal year, July 1, 1995. The Company's current ratio at December 30 is 2.96 to 1 as compared to 2.05 to 1 at July 1, 1995. Operating activities used about $171,000 in cash in the six months ended December 30, 1995. They used $1.3 million in the same period of last year. In the current period, this requirement reflects a $8.7 million reduction in payables and accruals, largely offset by a $5.9 million reduction in receivables and a $2.8 million reduction in inventories. Investing activities used about $461,000 in the current year-to-date as compared to about $164,000 in the first six months of last year. This increase reflects about $435,000 in hosiery equipment inventory which the Company leased in the current period to customers. Overall, net cash declined by about $633,000 in the current six-month period. In the same period of last year, net cash declined about $1.5 million. The Company presently has no material commitments for capital expenditures and does not anticipate incurring such commitments in the balance of fiscal 1996. SEASONALITY AND OTHER FACTORS There are certain seasonal factors that may affect the Company's business. Traditionally, manufacturing businesses in Italy close for the month of August, and the Company's customers close for one week in Page 9 July. Consequently, no shipments or deliveries, as the case may be, of machines distributed by the Company that are manufactured in Italy are made during these periods in the Company's first quarter. In addition, manufacturing businesses in Italy generally close for two weeks in December, during the Company's second quarter. Fluctuations in customer orders or other factors may cause quarterly variations in net revenues from year to year. EFFECTS OF INFLATION AND CHANGING PRICES Management believes that inflation has not had a material effect on the Company's operations. A substantial portion of the Company's machine and spare part purchases are denominated and payable in Italian lira. Currency fluctuations of the lira could result in substantial price level changes and therefore impede or promote import/export sales and substantially impact profits. However, to reduce exposure to adverse foreign currency fluctuations during the period from customer orders to payment for goods sold, the Company enters into forward foreign exchange contracts. The Company is not able to assess the quantitative effect that such currency fluctuations could have upon the Company's operations. There can be no assurance that fluctuations in foreign currency exchange rates will not have a significantly adverse effect on future operations. Page 10 PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K (a) No reports on Form 8-K were filed by the Registrant during or applicable to the period reported here. (b) Exhibit 11. - Computation of Net Income (Loss) Per Share Page 11 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. SPEIZMAN INDUSTRIES, INC. (Registrant) Date: February 13, 1995 /s/ Robert S. Speizman --------------------- ---------------------- Robert S. Speizman President Date: February 13, 1995 /s/ Josef Sklut --------------------- ---------------------- Josef Sklut Vice President-Finance (Chief Financial Officer) Page 12 EX-11 2 EXHIBIT 11 Exhibit 11 NET INCOME (LOSS) PER SHARE The following table presents the information needed to compute primary income per common share:
(Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended -------------------------- ------------------------ 12/30/95 12/31/94 12/30/95 12/31/94 (13 Weeks) (13 Weeks) (26 Weeks) (26 Weeks) --------- --------- ---------- ---------- Net income (loss) $(358,107) $ 515,900 $ (737,145) $ 541,885 Weighted average shares outstanding 3,236,199 3,236,199 3,236,199 3,236,199 Less: Treasury Shares (27,600) (27,600) (27,600) (27,600) Add: Assumed exercise of options reduced by the number of shares purchased with proceeds 36,236 60,591 69,336 72,019 --------- ---------- ---------- ----------- Adjusted weighted average of shares outstanding 3,244,835 3,269,190 3,277,935 3,280,618 ========= ========= ========= ========= Net income (loss) per share $ (.11) $ .16 $ (.23) $ .17 --------- ---------- ---------- -----------
EX-27 3 EXHIBIT 27
5 6-MOS JUN-29-1996 JUL-02-1995 DEC-30-1995 1,804,207 0 10,302,464 173,028 10,543,605 24,720,198 2,626,229 1,436,617 26,536,304 8,360,930 0 323,620 0 0 17,716,588 26,536,304 17,462,554 17,462,554 15,863,583 18,555,715 0 0 (3,016) (1,090,145) (353,000) (737,145) 0 0 0 (737,145) (0.23) (0.23)
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