1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: August 31, 1996 --------------- 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: 0-19450 OAKHURST COMPANY, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 25-1655321 - ------------------------ -------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 1001 SANTERRE DRIVE, GRAND PRAIRIE, TEXAS 75050 ----------------------------------------------- (Address of principal executive offices) (Zip Code) (972) 660-4499 ---------------------------------------------------- (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- (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 X No --- --- As of October 1, 1996, 3,201,144 shares of the Registrant's Common Stock, $0.01 par value per share, were issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE None
2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OAKHURST COMPANY, INC. AND SUBSIDIARIES <TABLE> <S> <C> Consolidated Balance Sheets at August 31, 1996 (unaudited) and February 29, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Consolidated Statements of Operations for the three month periods ended August 31, 1996 and August 31, 1995 (unaudited) . . . . . . . . . . . . . 4 Consolidated Statements of Operations for the six month periods ended August 31, 1996 and August 31, 1995 (unaudited) . . . . . . . . . . . . . 5 Consolidated Statement of Stockholders' Equity for the six months ended August 31, 1996 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . 6 Consolidated Statements of Cash Flows for the six month periods ended August 31, 1996 and August 31, 1995 (unaudited) . . . . . . . . . . 7 Notes to financial statements (unaudited) . . . . . . . . . . . . . . . . . 8 </TABLE> - 2 -
3 OAKHURST COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share data) <TABLE> <CAPTION> ASSETS August 31, February 29, 1996 1996 -------------- --------------- (Unaudited) <S> <C> <C> Current assets: Cash and cash equivalents....................................................... $ 196 $ 318 Trade accounts receivable, less allowance of $492 and $558, respectively........ 4,929 4,027 Commissions receivable.......................................................... 161 230 Other receivables............................................................... 315 564 Inventories..................................................................... 8,252 8,080 Deferred tax asset.............................................................. 75 145 Other........................................................................... 853 467 ------------- ------------- Total current assets.................................................. 14,781 13,831 ------------- ------------- Property and equipment, at cost................................................... 3,335 3,216 Less accumulated depreciation................................................... (1,346) (1,109) ------------- ------------- 1,989 2,107 ------------- ------------- Deferred tax asset, less valuation allowance of $46,800........................... 4,011 3,941 Excess of cost over net assets acquired, net...................................... 5,825 6,035 Other assets...................................................................... 476 203 ------------- ------------- 10,312 10,179 ------------- ------------- $ 27,082 $ 26,117 ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable................................................................ $ 6,196 $ 5,762 Note payable.................................................................... 105 - Accrued compensation............................................................ 322 369 Current maturities of long-term obligations..................................... 381 284 Current maturities of long-term obligations, related parties.................... 98 169 Net obligation of discontinued business segment-current portion................. 526 465 Other........................................................................... 393 600 ------------- ------------- Total current liabilities............................................. 8,021 7,649 ------------- ------------- Long-term obligations: Net obligation of discontinued business segment................................. 349 678 Long-term debt.................................................................. 7,084 5,179 Long-term debt, related parties................................................. 1,498 1,574 Other long-term obligations..................................................... 127 138 ------------- ------------- 9,058 7,569 ------------- ------------- Commitments and contingencies..................................................... Stockholders' equity: Preferred stock, par value $0.01; authorized 1,000,000 shares, none issued...... - - Common stock, par value $0.01 per share; authorized 14,000,000 shares; issued 3,201,144 and 3,195,235 shares, respectively.................. 32 32 Additional paid-in capital...................................................... 46,529 46,522 Deficit (Reorganized on August 26, 1989)........................................ (36,557) (35,654) Treasury stock, at cost, 207 common shares...................................... (1) (1) ------------- ------------- Total stockholders' equity............................................ 10,003 10,899 ------------- ------------- $ 27,082 $ 26,117 ============= ============= </TABLE> The accompanying notes are an integral part of these consolidated financial statements. -3-
4 OAKHURST COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar amounts in thousands, except per share data) (Unaudited) <TABLE> <CAPTION> THREE MONTHS THREE MONTHS ENDED ENDED AUGUST 31, AUGUST 31, 1996 1995 ---------- ---------- <S> <C> <C> Sales........................................................ $ 11,454 $ 13,517 Other income................................................. 89 151 ---------- ---------- 11,543 13,668 ---------- ---------- Cost of goods sold, including occupancy and buying expenses............................................ 8,877 10,690 Operating, selling and administrative expenses............... 2,741 2,945 Provision for doubtful accounts.............................. 21 205 Amortization of excess of cost over net assets acquired...... 111 125 Interest expense............................................. 218 182 ---------- ---------- 11,968 14,147 ---------- ---------- Net loss before income taxes................................. (425) (479) Income tax (expense) benefit................................. (7) 30 ---------- ---------- Net loss..................................................... $ (432) $ (449) ========== ========== Net loss per share........................................... $ (0.13) $ (0.14) ========== ========== Weighted average number of shares outstanding used in computing per share amount......................... 3,201,144 3,195,235 ========== ========== </TABLE> The accompanying notes are an integral part of these consolidated financial statements. -4-
5 OAKHURST COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar amounts in thousands, except per share data) (Unaudited) <TABLE> <CAPTION> SIX MONTHS SIX MONTHS ENDED ENDED AUGUST 31, AUGUST 31, 1996 1995 ---------- ---------- <S> <C> <C> Sales............................................ $ 22,346 $ 26,542 Other income..................................... 134 197 ---------- ---------- 22,480 26,739 ---------- ---------- Cost of goods sold, including occupancy and buying expenses................................ 17,357 20,828 Operating, selling and administrative expenses... 5,315 5,660 Provision for doubtful accounts.................. 51 267 Amortization of excess of cost over net assets acquired................................ 223 262 Interest expense................................. 422 377 ---------- ---------- 23,368 27,394 ---------- ---------- Net loss before income taxes..................... (888) (655) Income tax expense............................... (15) (9) ---------- ---------- Net loss......................................... $ (903) $ (664) ========== ========== Net loss per share............................... $ (0.28) $ (0.21) ========== ========== Weighted average number of shares outstanding used in computing per share amount............. 3,199,164 3,192,832 ========== ========== </TABLE> The accompanying notes are an integral part of these consolidated financial statements. -5-
6 OAKHURST COMPANY, INC. AND SUBSIDIARIES STATEMENT OF STOCKHOLDERS' EQUITY SIX MONTHS ENDED AUGUST 31, 1996 (Dollars in thousands) (Unaudited) <TABLE> <CAPTION> COMMON STOCK ADDITIONAL RETAINED TREASURY STOCK -------------------- PAID-IN EARNINGS ---------------- SHARES PAR VALUE CAPITAL (DEFICIT) SHARES COST -------------------- ---------- ------------ ----------------------- <S> <C> <C> <C> <C> <C> <C> Balances, February 29, 1996.......... 3,195,235 $ 32 $ 46,522 ($35,654) 207 ($1) Net loss for the period.............. (903) Stock award.......................... 5,909 * 7 --------- ----- ---------- ----------- ------- ------- Balances, August 31, 1996............ 3,201,144 $ 32 $ 46,529 ($36,557) 207 ($1) --------- ----- ---------- ----------- ------- ------- </TABLE> *Rounds to less than one thousand The accompanying notes are an integral part of these consolidated financial statements. -6-
7 OAKHURST COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (Unaudited) <TABLE> <CAPTION> SIX MONTHS SIX MONTHS ENDED ENDED AUGUST 31, AUGUST 31, 1996 1995 ----------------- ---------------- <S> <C> <C> Cash flows from operating activities: Net loss......................................................... $ (903) $ (664) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization.................................. 609 444 Loss on retirement of assets................................... 5 10 Stock awards................................................... 7 19 Other changes in operating assets and liabilities: Accounts receivable............................................ (852) 529 Inventories.................................................... (9) 977 Accounts payable............................................... 399 (1,223) Other.......................................................... (168) (175) ----------- ---------- Net cash used in operating activities of: Continuing operations............................................ (912) (83) Discontinued operations.......................................... (268) (273) ----------- ---------- Net cash used in operating activities.............................. (1,180) (356) ----------- ---------- Cash flows from investing activities: Additions to property and equipment.............................. (100) (216) Acquisition of a subsidiary, net of cash acquired................ (79) - Net change in the excess of cost over net assets acquired........ - (151) Other............................................................ (25) - ----------- ---------- Net cash used in investing activities.............................. (204) (367) ----------- ---------- Cash flows from financing activities: Net borrowings under revolving credit agreement.................. 2,038 1,275 Proceeds from issuance of long-term debt......................... 1,500 - Repayment of note payable........................................ - (258) Principal payments on long-term obligations...................... (2,052) (306) Deferred loan costs.............................................. (224) - ----------- ---------- Net cash provided by financing activities.......................... 1,262 711 ----------- ---------- Net decrease in cash and cash equivalents.......................... (122) (12) Cash and cash equivalents at beginning of period................... 318 314 ----------- ---------- Cash and cash equivalents at end of period......................... $ 196 $ 302 =========== ========== </TABLE> Supplemental schedule of non-cash investing and financing activities: Six months ended August 31, 1995: Capital lease obligations of $62 were incurred when the Company entered into three leases for new computer and warehouse equipment. Additional long-term debt of $100 was issued with a reduction of $13 to a current note payable upon finalization of an acquisition in the prior year. The accompanying notes are an integral part of these consolidated financial statements. -7-
8 OAKHURST COMPANY, INC. AND SUBSIDIARIES SIX MONTHS ENDED AUGUST 31, 1996 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. INTERIM FINANCIAL STATEMENTS Oakhurst Company, Inc. ("Oakhurst" or the "Company") was formed as a result of a merger transaction (the "merger") in fiscal 1992 between Steel City Products, Inc. ("SCPI") and an Oakhurst subsidiary. The merger resulted in a restructuring of SCPI such that it became a majority-owned subsidiary of Oakhurst. In accordance with the merger, Oakhurst owns 10% of the outstanding common stock of SCPI and all of SCPI's Series A Preferred Stock. The merger was structured such that the aggregate fair market value of SCPI's common stock and Series A Preferred Stock owned by Oakhurst would be approximately 90% of the aggregate fair market value of SCPI. Accordingly, Oakhurst controls approximately 90% of the voting power of SCPI. The accompanying financial statements reflect this control and include the accounts of SCPI. Oakhurst owns all of the outstanding capital stock of H&H Distributors, Inc., d/b/a Harry Survis Auto Centers, ("H&H"), of Dowling's Fleet Service Co., Inc. ("Dowling's") and of Puma Products, Inc. ("Puma"). In March 1995, Oakhurst formed Oakhurst Management Corporation ("OMC"), a wholly-owned subsidiary, to coordinate the provision of certain corporate administrative, legal, and accounting services to the Company and its subsidiaries. In March 1996, Dowling's acquired the outstanding capital stock of G&O Sales Company ("G&O") (see Note 2). The accompanying consolidated financial statements include the accounts of these subsidiaries, and all significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. All adjustments made are of a normal, recurring nature. While the Company believes that the disclosures presented herein are adequate to make the information not misleading, it is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements for the fiscal year ended February 29, 1996 ("fiscal 1996") as filed in the Company's Annual Report on Form 10-K. 2. DOWLING'S ACQUISITION OF A SUBSIDIARY On March 28, 1996, Dowling's acquired all of the outstanding capital stock of G&O, a radiator distributor based in Philadelphia, Pennsylvania. The purchase price of approximately $210,000 consisted of $105,000 in cash, with the balance in the form of a note payable to the seller. The note bears interest at 7%, and is due on the first anniversary of the acquisition date, together with interest thereon. The seller continues with G&O under a four year employment agreement. In connection with the acquisition, Dowling's entered into a non-competition agreement with the seller that provides for payments of $315,000 over a three year period, and for payments of 7.5% of the defined profits of G&O for the next four years. The non-compete agreement has been discounted using an imputed interest rate of 9.75%, and the related asset is being amortized over the life of the agreement, which is ten years. The acquisition did not have an impact on Oakhurst's earnings per share, and accordingly, pro forma information has not been presented. - 8 -
9 In connection with the acquisition, assets were acquired and liabilities were assumed as follows (in thousands): Fair value of assets acquired . $279 Liabilities assumed . . . . . . 67 ---- Net assets acquired . . . . $212 ==== 3. RECENTLY ISSUED ACCOUNTING STANDARD In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation". This statement is effective beginning in the Company's current fiscal year. The new standard defines a fair value method of accounting for stock options and similar equity instruments. Pursuant to the new standard, companies are encouraged, but not required, to adopt the fair value method of accounting for employee stock-based transactions. Companies are also permitted to continue to account for such transactions under Accounting Principles Board Opinion ("APBO") No. 25, "Accounting for Stock Issued to Employees", but would be required to disclose in a note to the financial statements pro forma net income and earnings per share as if the company had applied the new method of accounting. In the first quarter, the Company elected not to adopt the fair value method of accounting for employee stock-based transactions and will continue to account for such transactions under the provisions of APBO No. 25. - 9 -
10 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Oakhurst Company, Inc. ("Oakhurst" or "the Company"), a holding company, was formed as part of a merger transaction in July 1991, in which Steel City Products, Inc. ("SCPI") became a special, limited purpose, majority-owned subsidiary of Oakhurst. Management believes that the corporate structure resulting from the merger transaction will facilitate capital formation by Oakhurst while permitting Oakhurst and its subsidiaries to file consolidated tax returns so that both may utilize the tax benefits (including approximately $149 million of net operating loss carryforwards) attributable principally to SCPI. Through Oakhurst's ownership of SCPI, primarily in the form of preferred stock, Oakhurst retains the value of SCPI, and receives substantially all of the benefit of SCPI's operations through dividends on such preferred stock. Oakhurst's ownership of SCPI facilitates the preservation and utilization of SCPI's net operating loss carryforwards. Oakhurst, through SCPI and three wholly-owned subsidiaries, is primarily a distributor of products to the automotive after-market. Its largest business, which is conducted by SCPI under the trade name "Steel City Products", is mainly the distribution of automotive parts and accessories to independent retailers from a facility in Pittsburgh, Pennsylvania. Dowling's Fleet Service Co., Inc. ("Dowling's") is a New York-headquartered distributor of automotive radiators and related products. Puma Products, Inc. ("Puma") is a Texas-based distributor of after-market products to the light truck and van conversion industry. H&H Distributors, Inc., d/b/a Harry Survis Auto Centers ("H&H") is a Pittsburgh-based company that distributes and installs automotive accessories, including stereos, alarms and cellular phones. On March 28, 1996, Dowling's acquired all of the outstanding capital stock of G&O Sales Company, Inc. ("G&O"), also a distributor of radiators that is based in Philadelphia, Pennsylvania, with the intent of expanding into the greater Philadelphia market. The purchase price of approximately $210,000 consisted of $105,000 in cash, with the balance in the form of a note payable to the seller. The note bears interest at 7%, and is due on the first anniversary of the acquisition date, together with interest thereon. In connection with the acquisition, Dowling's entered into a non-competition agreement with the seller that provides for payments of $315,000 over a three year period, and for payments of 7.5% of certain defined profits of G&O for the next four years. The non-compete agreement has been discounted using an imputed discount rate of 9.75%, and the related asset is being amortized over the life of the agreement, which is ten years. The G&O acquisition did not have a material impact on Oakhurst's financial position. During the three months ended August 31, 1996, SCPI also began distributing pet supply products to certain of its customers. From time to time the information provided by the Company or statements made by its employees may contain so-called "forward looking" information that involves risks and uncertainties. In particular, statements contained in this Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations," which are not historical facts (including, but not limited to statements concerning anticipated sales, profit levels, customers and cash flows) are forward looking statements. The Company's actual future results may differ significantly from those stated in any forward looking statements. Factors that may cause such differences include, but are not limited to the factors discussed above as well as the accuracy of the Company's internal estimates of revenue and operating expense levels. Each of these factors and others are discussed from time to time in the Company's Securities and Exchange Commission filings. - 10 -
11 MATERIAL CHANGES IN FINANCIAL CONDITION In addition to cash derived from the operations of its four subsidiaries, Oakhurst's liquidity and financing requirements are determined principally by the working capital needed to support each subsidiary's level of business, together with the need for capital expenditures and the cash required to repay debt. Each subsidiary's level of working capital needs varies primarily with the amount of inventory carried, which can change seasonally, the size and timeliness of payment of receivables from customers, especially at the SCPI subsidiary which from time to time grants extended payment terms for seasonal inventory build-ups, and the amount of credit extended by suppliers. At August 31, 1996, Oakhurst's debt primarily consisted of (i) a credit facility with an institutional lender (the "Credit Facility"), which included a SCPI term loan with a balance of approximately $1.4 million, and borrowings of approximately $5.8 million under a revolving credit facility (the "Revolver"), (ii) debt in connection with the acquisitions of Puma, Dowling's and G&O, and (iii) notes payable with outstanding principal balances aggregating approximately $820,000 that were issued in connection with the settlement of certain contingent liabilities related to SCPI's former retail division. Oakhurst and its subsidiaries obtained the two year Credit Facility on March 28, 1996. The initial aggregate amount borrowed under the Revolver was approximately $4.2 million, which was used primarily to repay existing revolving debt. In connection with the new financing, Oakhurst and its subsidiaries incurred loan costs and fees of approximately $250,000. Oakhurst and its subsidiaries have available financing under the Revolver up to a maximum of $8 million, subject to defined levels of the subsidiaries' accounts receivable and inventories. Management believes that the Revolver will provide adequate funding for the Company's foreseeable working capital requirements, including seasonal fluctuations. At August 31, 1996, there had been no other material changes in the Company's financial condition from February 29, 1996, as discussed in Item 7 of the Company's Annual Report on Form 10-K for fiscal 1996. MATERIAL CHANGES IN RESULTS OF OPERATIONS In the current year, management expects SCPI's sales to be lower than in fiscal 1996. As part of a strategic evaluation of the business, SCPI has reduced expenses so as to mitigate negative cash flow from operations while new customers and product lines are sought. In the first half of the current year, SCPI's cash flow from continuing operations was positive, despite the lower sales levels, but not in amounts sufficient to satisfy all of SCPI's scheduled principal payments. There can be no assurance that SCPI can obtain enough new customers or sufficient levels of new business to return sales and profits to historical levels. The sales recovery at Dowling's is also expected to continue, and should partially offset the negative impact of lower sales by SCPI. THREE MONTHS ENDED AUGUST 31, 1996 COMPARED WITH THREE MONTHS ENDED AUGUST 31, 1995 Consolidated sales for the current year second quarter decreased by approximately $2.1 million, or by 15.3% when compared with the prior year. The decrease was primarily caused by the loss of two of SCPI's largest customers during the prior year. One customer was lost in October 1995 due to its bankruptcy, while the other changed its source of supply in January 1996. The decrease in sales in the current year second quarter attributable to these two customers aggregated $2.6 million. Sales of car alarms, stereo - 11 -
12 accessories and cruise control equipment decreased by $135,000 due to the lower retail demand, and cellular phone commissions also decreased by $93,000 because of fewer activations due to increased competition in this market. Sales of light truck and van aftermarket accessories decreased by $195,000, due primarily to the loss by Puma of two large converter customers in the prior year. Certain increases in sales partially offset the decreases described above. Sales of radiators and related products by Dowling's increased over the second quarter of the prior year by $475,000, representing an increase of approximately 13.5%, which is attributed to an improved competitive situation this year in Dowling's markets, an increase in market share, and the addition of the G&O facility in Philadelphia. The addition of new customers by SCPI and of new product lines by SCPI and H&H together accounted for $350,000 in new sales, and sales to SCPI's existing customers increased by approximately $120,000. Gross profits were $2.6 million, or 22.5% of sales, in the current year second quarter compared with $2.8 million, or 20.9% of sales, in the prior year period. Lower levels of sales by most of the subsidiaries contributed to lower profits of approximately $565,000, but this was partially offset by improved gross margins earned by most of the subsidiaries, most particularly H&H and Dowling's, and by an increase in sales attributable to Dowling's. The increased gross margin performance by the two subsidiaries was due to lower costs on certain product lines, and to the improved competitive situation in certain of Dowling's markets. Operating, selling and administrative expenses decreased by $204,000 when compared to the prior year, which primarily reflected management's efforts to reduce SCPI's expenses and work force in reaction to lower levels of sales. There was a decrease of $184,000 in the provision for doubtful accounts in the current year second quarter compared with the same period in the prior year, when SCPI recorded a provision for the expected bankruptcy of a large customer. SIX MONTHS ENDED AUGUST 31, 1996 COMPARED WITH SIX MONTHS ENDED AUGUST 31, 1995 Consolidated sales for the current year decreased by approximately $4.2 million, or by 15.8% when compared with the prior year. The decrease was primarily caused by the loss of two of SCPI's largest customers during the prior year, as previously discussed. These two customers accounted for a decrease in sales in the current year of approximately $6.1 million. Sales of car alarms, stereo accessories and cruise control equipment decreased by approximately $225,000 due to the lower retail demand, and cellular phone commissions also decreased by $305,000 because of a lower average commission rate this year combined with fewer activations due to increased competition in this market. Sales of light truck and van aftermarket accessories decreased by $395,000, due primarily to the loss by Puma of two large converter customers in the prior year. The addition of new customers by SCPI and of new product lines by it and by H&H together accounted for $1.5 million in new sales, partially offsetting the sales decreases. Sales of radiators and related products by Dowling's increased over the prior year by $1.6 million, representing an increase of almost 28%, which is attributed to an improved competitive situation this year in Dowling's markets, combined with favorable weather in the first quarter, an increase in market share, and the addition of the Philadelphia facility. Gross profits were approximately $5 million, or 22.3% of sales, in the current year compared with $5.7 million, or 21.5% of sales, in the prior year period. Lower levels of sales by most of the subsidiaries - 12 -
13 contributed to lower profits of approximately $1.3 million, but this was partially offset by improved gross margins earned by most of the subsidiaries, most particularly H&H and Dowling's, and by an increase in sales attributable to Dowling's. The increased gross margin performance by these two subsidiaries was principally due to lower costs on certain product lines, and to the improved competitive situation in certain of Dowling's markets. Operating, selling and administrative expenses decreased by $345,000 when compared to the prior year, which primarily reflected management's efforts to reduce expenses and its work force in reaction to lower levels of sales. There was a decrease of $216,000 in the provision for doubtful accounts compared with the prior year, when the Company recorded provisions for the bankruptcies of several customers, including one of SCPI's largest customers. - 13 -
14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are no material legal proceedings against the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On July 18, 1996, the Company held its Annual Meeting of Stockholders. The following matters were submitted to a vote of security holders: The election of one Class I director to serve for a term of three years and until his successor is elected and qualified. The results of the voting were as follows: <TABLE> <CAPTION> Nominee Votes For Votes Withheld ---------------- ---------- -------------- <S> <C> <C> Robert M. Davies 2,219,199 19,224 </TABLE> To consider the approval of an amendment to the Company's 1994 Omnibus Stock Plan to increase the shares issuable thereunder from 350,000 shares to 500,000 shares. <TABLE> <CAPTION> For Against Abstain No Vote --------- --------- ------- ------- <S> <C> <C> <C> 2,056,141 65,407 18,559 -0- </TABLE> To authorize the Company-designated proxy holders to vote on such other matters as might come before the meeting including, but not limited to the adjournment of the meeting to solicit additional votes to achieve a quorum or to obtain an affirmative vote on a proposal. The results of the voting were as follows: <TABLE> <CAPTION> For Against Abstain No Vote --------- --------- ------- ------- <S> <C> <C> <C> 2,196,069 22,383 19,971 -0- </TABLE> ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27. Financial Data Schedule (EDGAR transmission only) (b) No reports on Form 8-K were filed during the quarter for which this report is filed. - 14 -
15 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OAKHURST COMPANY, INC. Date: October 14, 1996 By: /s/ Mark Auerbach --------------------------- Mr. Mark Auerbach Chief Executive Officer Chief Financial Officer - 15 -
16 EXHIBIT INDEX ------------- Exhibit Number Description - ------- ----------- 27 Financial Data Schedule