SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
| þ | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended April 30, 2003
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 0-24026
MAXWELL SHOE COMPANY INC.
(Exact name of registrant as specified in its charter)
| Delaware |
04-2599205 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) | |
| 101 Sprague Street PO Box 37 Hyde Park (Boston), MA |
02137-0037 | |
| (Address of principal executive offices) |
(Zip code) |
(617) 364-5090
(Registrant’s telephone number, including area code)
None
(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 (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 þ No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No ¨
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Shares of common stock outstanding at June 10, 2003:
| Class A |
14,725,231 | |
| Class B |
None |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MAXWELL SHOE COMPANY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited In Thousands—except per share amounts)
| April 30, 2003 |
October 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
79,482 |
|
$ |
70,518 |
| ||
| Accounts receivable, trade (net of allowance for doubtful accounts and discounts of $1,019 in 2003 and $955 in 2002) |
|
40,909 |
|
|
40,729 |
| ||
| Inventory, net |
|
17,403 |
|
|
18,311 |
| ||
| Prepaid expenses |
|
1,073 |
|
|
596 |
| ||
| Prepaid income taxes |
|
208 |
|
|
1,721 |
| ||
| Deferred income taxes |
|
1,469 |
|
|
1,469 |
| ||
| Total current assets |
|
140,544 |
|
|
133,344 |
| ||
| Property and equipment, net |
|
3,311 |
|
|
3,928 |
| ||
| Trademarks, net |
|
14,462 |
|
|
14,462 |
| ||
| Other assets |
|
1 |
|
|
15 |
| ||
| $ |
158,318 |
|
$ |
151,749 |
| |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
2,234 |
|
$ |
724 |
| ||
| Accrued expenses |
|
5,774 |
|
|
8,512 |
| ||
| Total current liabilities |
|
8,008 |
|
|
9,236 |
| ||
| Long-term deferred income taxes |
|
1,939 |
|
|
1,939 |
| ||
| Stockholders’ equity: |
||||||||
| Class A common stock, par value $.01, 20,000 shares authorized, 14,725 shares outstanding in 2003, 14,517 shares outstanding in 2002 |
|
147 |
|
|
145 |
| ||
| Additional paid-in capital |
|
51,583 |
|
|
50,609 |
| ||
| Deferred compensation |
|
(691 |
) |
|
(966 |
) | ||
| Retained earnings |
|
97,332 |
|
|
90,786 |
| ||
| Total stockholders’ equity |
|
148,371 |
|
|
140,574 |
| ||
| $ |
158,318 |
|
$ |
151,749 |
| |||
1
MAXWELL SHOE COMPANY INC.
STATEMENTS OF INCOME
(Unaudited–In Thousands Except Per Share Amounts)
| Three Months Ended April 30, |
Six Months Ended April 30, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Net sales |
$ |
57,791 |
|
$ |
54,259 |
|
$ |
103,505 |
|
$ |
92,921 |
| ||||
| Cost of sales |
|
41,497 |
|
|
38,827 |
|
|
74,799 |
|
|
67,139 |
| ||||
| Gross profit |
|
16,294 |
|
|
15,432 |
|
|
28,706 |
|
|
25,782 |
| ||||
| Operating expenses: |
||||||||||||||||
| Selling |
|
4,898 |
|
|
5,362 |
|
|
8,675 |
|
|
8,236 |
| ||||
| General and administrative |
|
4,830 |
|
|
5,010 |
|
|
9,780 |
|
|
9,620 |
| ||||
|
|
9,728 |
|
|
10,372 |
|
|
18,455 |
|
|
17,856 |
| |||||
| Operating income |
|
6,566 |
|
|
5,060 |
|
|
10,251 |
|
|
7,926 |
| ||||
| Other expenses (income) |
||||||||||||||||
| Interest income, net |
|
(198 |
) |
|
(195 |
) |
|
(457 |
) |
|
(445 |
) | ||||
| Other, net |
|
(93 |
) |
|
(207 |
) |
|
(203 |
) |
|
(208 |
) | ||||
|
|
(291 |
) |
|
(402 |
) |
|
(660 |
) |
|
(653 |
) | |||||
| Income before income taxes |
|
6,857 |
|
|
5,462 |
|
|
10,911 |
|
|
8,579 |
| ||||
| Income taxes |
|
2,744 |
|
|
1,783 |
|
|
4,365 |
|
|
2,938 |
| ||||
| Net income |
$ |
4,113 |
|
$ |
3,679 |
|
$ |
6,546 |
|
$ |
5,641 |
| ||||
| Net income per share |
||||||||||||||||
| Basic |
$ |
.28 |
|
$ |
.27 |
|
$ |
.45 |
|
$ |
.41 |
| ||||
| Diluted |
$ |
.27 |
|
$ |
.25 |
|
$ |
.43 |
|
$ |
.38 |
| ||||
| Shares used to compute net income per share: |
||||||||||||||||
| Basic |
|
14,719 |
|
|
13,761 |
|
|
14,667 |
|
|
13,617 |
| ||||
| Diluted |
|
15,134 |
|
|
14,820 |
|
|
15,101 |
|
|
14,666 |
| ||||
2
MAXWELL SHOE COMPANY INC.
STATEMENTS OF CASH FLOW
(Unaudited–In Thousands)
| Six Months Ended April 30, |
||||||||
| 2003 |
2002 |
|||||||
| Operating activities |
||||||||
| Net income |
$ | 6,546 | $ | 5,641 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
895 | 977 | ||||||
| Deferred income taxes |
— | (113 | ) | |||||
| Doubtful accounts provision |
125 | 126 | ||||||
| Deferred compensation |
275 | 161 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(305 | ) | 3,461 | |||||
| Inventory |
908 | 4,630 | ||||||
| Prepaid expenses |
(477 | ) | (607 | ) | ||||
| Prepaid income taxes |
1,513 | — | ||||||
| Other assets |
14 | 39 | ||||||
| Accounts payable |
1,510 | 1,211 | ||||||
| Income taxes payable |
— | (414 | ) | |||||
| Accrued expenses |
(2,738 | ) | 468 | |||||
| Net cash provided by operating activities |
8,266 | 15,580 | ||||||
| Investing activities |
||||||||
| Purchases of property and equipment |
(278 | ) | (471 | ) | ||||
| Net cash used by investing activities |
(278 | ) | (471 | ) | ||||
| Financing activity |
||||||||
| Proceeds from exercise of stock option |
976 | 1,209 | ||||||
| Net cash provided by financing activities |
976 | 1,209 | ||||||
| Net increase in cash and cash equivalents |
8,964 | 16,318 | ||||||
| Cash and cash equivalents at beginning of period |
70,518 | 58,256 | ||||||
| Cash and cash equivalents at end of period |
$ | 79,482 | $ | 74,574 | ||||