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 October 2, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-7753
DECORATOR INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 25-1001433
-------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10011 Pines Blvd., Suite #201, Pembroke Pines, Florida 33024
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 436-8909
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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title of each class Outstanding at November 16, 2004
------------------- --------------------------------
Common Stock, Par Value $.20 Per Share 2,824,235 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
DECORATOR INDUSTRIES, INC
BALANCE SHEETS
ASSETS October 2, January 3,
2004 2004
----------- -----------
(UNAUDITED)
Current Assets:
Cash and Cash Equivalents $ 114,032 $ 3,991,631
Accounts Receivable, less allowance for
doubtful accounts ($200,202 and $200,598) 4,569,218 3,519,418
Inventories 5,635,021 4,123,397
Other Current Assets 408,916 274,285
----------- -----------
Total Current Assets 10,727,187 11,908,731
----------- -----------
Property and Equipment
Land, Buildings & Improvements 7,241,898 5,114,341
Machinery, Equipment, Furniture & Fixtures 6,455,589 6,064,877
----------- -----------
Total Property and Equipment 13,697,487 11,179,218
Less: Accumulated Depreciation and Amortization 5,724,738 5,157,452
----------- -----------
Net Property and Equipment 7,972,749 6,021,766
----------- -----------
Goodwill, less accumulated Amortization of $1,348,569 2,731,717 2,731,717
Identifiable intangible asset, less accumulated Amortization
of $519,000 4,032,323 --
Other Assets 260,484 426,108
----------- -----------
Total Assets $25,724,460 $21,088,322
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 3,288,482 $ 1,878,683
Current Maturities of Long-term Debt 170,745 166,251
Accrued Expenses:
Income Taxes 232,423 --
Compensation 1,008,020 940,158
Acquisition Liability 1,257,114 --
Other 1,454,007 915,777
----------- -----------
Total Current Liabilities 7,410,791 3,900,869
----------- -----------
Long-Term Debt 1,795,245 1,926,832
Deferred Income Taxes 662,000 646,000
----------- -----------
Total Liabilities 9,868,036 6,473,701
----------- -----------
Stockholders' Equity
Common Stock $.20 par value: Authorized shares, 10,000,000;
Issued shares (4,487,728 and 4,485,728) 897,546 897,146
Paid-in Capital 1,415,506 1,426,435
Retained Earnings 21,714,159 20,576,497
----------- -----------
24,027,211 22,900,078
Less: Treasury stock, at cost: 1,663,493 and 1,686,840 shares 8,170,787 8,285,457
----------- -----------
Total Stockholders' Equity 15,856,424 14,614,621
----------- -----------
Total Liabilities and Stockholders' Equity $25,724,460 $21,088,322
=========== ===========
The accompanying notes are an integral part of the financial statements.
1
DECORATOR INDUSTRIES, INC
STATEMENTS OF EARNINGS
(UNAUDITED)
For the Thirteen Weeks Ended For the Thirty-Nine Weeks Ended
---------------------------- -------------------------------
October 2, 2004 September 27, 2003 October 2, 2004 September 27, 2003
--------------- ------------------ --------------- ------------------
Net Sales $ 12,123,515 100.00% $10,984,598 100.00% $ 39,236,393 100.00% $ 31,531,366 100.00%
Cost of Products Sold 9,587,728 79.08% 8,632,287 78.59% 31,034,588 79.10% 24,658,537 78.20%
------------ ----------- ------------ ------------
Gross Profit 2,535,787 20.92% 2,352,311 21.41% 8,201,805 20.90% 6,872,829 21.80%
Selling and Administrative Expenses 1,908,195 15.74% 1,677,318 15.27% 5,885,577 15.00% 4,878,209 15.47%
------------ ----------- ------------ ------------
Operating Income 627,592 5.18% 674,993 6.14% 2,316,228 5.90% 1,994,620 6.33%
Other Income (Expense)
Interest and Investment Income 20,148 0.17% 35,258 0.32% 73,624 0.19% 77,220 0.24%
Interest Expense (28,755) -0.24% (16,104) -0.14% (83,825) -0.21% (39,890) -0.13%
------------ ----------- ------------ ------------
Earnings Before Income Taxes 618,985 5.11% 694,147 6.32% 2,306,027 5.88% 2,031,950 6.44%
Provision for Income Taxes 250,000 2.07% 275,000 2.50% 915,000 2.33% 807,000 2.56%
------------ ----------- ------------ ------------
Net Income $ 368,985 3.04% $ 419,147 3.82% $ 1,391,027 3.55% $ 1,224,950 3.88%
============ =========== ============ ============
EARNINGS PER SHARE
Basic $ 0.13 $ 0.15 $ 0.49 $ 0.44
============ =========== ============ ============
Diluted $ 0.12 $ 0.15 $ 0.47 $ 0.44
============ =========== ============ ============
Weighted Average Number of Shares Outstanding
Basic 2,820,107 2,795,166 2,813,256 2,793,207
Diluted 2,993,534 2,829,568 2,959,435 2,811,246
The accompanying notes are an integral part of the financial statements.
2
DECORATOR INDUSTRIES, INC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Thirty-nine Weeks Ended
-------------------------------
October 2, 2004 September 27, 2003
--------------- ------------------
Cash Flows From Operating Activities:
Net Income $ 1,391,027 $ 1,224,950
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities
Depreciation and Amortization 1,103,252 525,261
Provision for Losses on Accounts Receivable -- 30,000
Deferred Taxes 13,000 87,000
(Gain) Loss on Disposal of Assets (62) 11,864
Increase (Decrease) from Changes in:
Accounts Receivable (1,049,800) (1,226,026)
Inventories (254,510) 201,767
Prepaid Expenses (131,631) (105,254)
Other Assets 165,624 100,170
Accounts Payable 1,409,799 696,997
Accrued Expenses 838,515 99,100
----------- -----------
Net Cash Provided by Operating Activities 3,485,214 1,645,829
----------- -----------
Cash Flows From Investing Activities:
Net cash paid for acquisitions (4,882,733) --
Capital Expenditures (2,209,615) (694,064)
Proceeds from Property Dispositions 5,852 900
----------- -----------
Net Cash Used in Investing Activities (7,086,496) (693,164)
----------- -----------
Cash Flows From Financing Activities:
Long-term Debt Payments (127,093) (105,062)
Dividend Payments (253,364) (251,359)
Proceeds from Exercise of Stock Options 42,640 --
Issuance of Stock for Directors Trust 61,500 30,000
Proceeds on Debt from Building -- 640,000
----------- -----------
Net Cash (Used in) Provided by Financing Activities (276,317) 313,579
Net (Decrease) Increase in Cash and Cash Equivalents (3,877,599) 1,266,244
Cash and Cash Equivalents at Beginning of Year 3,991,631 2,117,762
----------- -----------
Cash and Cash Equivalents at End of Period $ 114,032 $ 3,384,006
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash Paid for:
Interest $ 39,646 $ 26,043
Income Taxes $ 663,869 $ 533,059
The accompanying notes are an integral part of the financial statements.
3
DECORATOR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
THIRTY-NINE WEEKS ENDED OCTOBER 2, 2004 AND SEPTEMBER 27, 2003
(UNAUDITED)
NOTE 1. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments necessary to
present fairly the Company's financial position as of October
2, 2004, the changes therein for the thirty-nine week period
then ended and the results of operations for the thirty-nine
week periods ended October 2, 2004 and September 27, 2003.
NOTE 2. The financial statements included in the Form 10-Q are
presented in accordance with the requirements of the form and
do not include all of the disclosures required by accounting
principles generally accepted in the United States of America.
For additional information, reference is made to the Company's
annual report on Form 10-K for the year ended January 3, 2004.
The results of operations for the thirty-nine week periods
ended October 2, 2004 and September 27, 2003 are not
necessarily indicative of operating results for the full year.
NOTE 3. INVENTORIES
Inventories at October 2, 2004 and January 3, 2004 consisted
of the following:
October 2, 2004 January 3, 2004
--------------- ---------------
Raw Material and supplies $4,990,694 $3,506,619
In Process and Finished Goods 644,327 616,778
---------- ----------
Total Inventory $5,635,021 $4,123,397
========== ==========
NOTE 4. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by
weighted-average number of shares outstanding. Diluted
earnings per share includes the dilutive effect of stock
options. In accordance with SFAS No. 128, the following is a
reconciliation of the numerators and denominators of the basic
and diluted EPS computations.
For the Thirteen Weeks Ended For the Thirty-Nine Weeks Ended
---------------------------- -------------------------------
October 2, 2004 September 27, 2003 October 2, 2004 September 27, 2003
--------------- ------------------ --------------- ------------------
Numerator:
Net income $ 368,985 $ 419,147 $1,391,027 $1,224,950
========== ========== ========== ==========
Denominator:
Weighted-average number of
common shares outstanding 2,820,107 2,795,166 2,813,256 2,793,207
Dilutive effect of
stock options on net income 173,427 34,402 146,179 18,039
---------- ---------- ---------- ----------
2,993,534 2,829,568 2,959,435 2,811,246
========== ========== ========== ==========
Diluted earnings per share: $ 0.12 $ 0.15 $ 0.47 $ 0.44
========== ========== ========== ==========
4
NOTE 5. BUSINESS ACQUISITION
On January 22, 2004, the Company entered into an agreement,
effective January 26, 2004, to purchase the land, building,
machinery, equipment, inventory and other assets of Fleetwood
Enterprises Inc.'s ("Fleetwood") drapery operation in Douglas,
Georgia for a purchase price of $4 million in cash, plus an
additional amount for inventory of up to $1,257,114. Payment
for the inventory is due to Fleetwood on January 24, 2005 and
will include interest at 4%.
In connection with the acquisition, the Company and Fleetwood
entered into an agreement for the Company to be the exclusive
supplier of Fleetwood's drapery, bedspread, and other decor
requirements for a period of six years. If, at the end of
three years, Fleetwood is satisfied with the Company's
performance under this agreement, it will extend the terms of
this agreement an additional three years.
The acquired business was engaged in the manufacture of
curtains, valances, bedspreads and other decor items.
Fleetwood used the acquired business to supply most of its
Manufactured Housing and some of its Recreational Vehicle
requirements for these items. Sales to other customers were
negligible.
The Company has assigned the excess costs of this acquisition
over the value of the asset acquired to an identifiable
intangible asset. This intangible will be amortized over the
life of the agreement with Fleetwood. The agreement to expand
its relationship and become Fleetwood's exclusive supplier of
the above mentioned products was the primary factor in
compelling the Company to make the asset purchase. The asset
is currently being amortized over six years. If the agreement
is extended an additional three years, the intangible will be
amortized over the nine year period. The remaining benefits of
the agreement with Fleetwood exceed the remaining capitalized
cost of the intangible asset.
The Company is unable to provide meaningful pro-forma
financial statements for this combination, because it is
operating the business on a substantially different basis than
its predecessor.
The Company used internal funds for the purchase price paid at
closing and will likely generate sufficient funds internally
to satisfy the remaining obligation due in January 2005. At
the date of closing, the Company's $5,000,000 line of credit
was unused. The Company does expect to use its line of credit
for working capital requirements during 2004.
Fleetwood was the Company's largest customer in 2003,
representing approximately 26% of total sales. The combined
sales of the acquired business and the Company's to
Fleetwood's Manufactured Housing and Recreational Vehicle
businesses would have been approximately 36% of the Company's
total sales in 2003.
The total acquisition cost and liability is as follows:
Total Acquisition Cost $6,139,847
Cash Paid through October 2, 2004 4,882,733
----------
Acquisition Liability at October 2, 2004 $1,257,114
==========
5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
CAUTIONARY STATEMENT: THIS QUARTERLY REPORT ON FORM 10-Q MAY CONTAIN STATEMENTS
RELATING TO FUTURE EVENTS, INCLUDING RESULTS OF OPERATIONS, THAT ARE CONSIDERED
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS REPRESENT THE
COMPANY'S EXPECTATIONS OR BELIEF AS TO FUTURE EVENTS AND, BY THEIR VERY NATURE,
ARE SUBJECT TO RISKS AND UNCERTAINTIES WHICH MAY RESULT IN ACTUAL EVENTS
DIFFERING MATERIALLY FROM THOSE ANTICIPATED. IN PARTICULAR, FUTURE OPERATING
RESULTS AND FUTURE LIQUIDITY WILL BE AFFECTED BY THE LEVEL OF DEMAND FOR
RECREATIONAL VEHICLES, MANUFACTURED HOUSING AND HOTEL/MOTEL ACCOMMODATIONS AND
MAY BE AFFECTED BY CHANGES IN ECONOMIC CONDITIONS, INTEREST RATE FLUCTUATIONS,
COMPETITIVE PRODUCTS AND PRICING PRESSURES WITHIN THE COMPANY'S MARKETS, THE
COMPANY'S ABILITY TO CONTAIN ITS MANUFACTURING COSTS AND EXPENSES, AND OTHER
FACTORS. FORWARD-LOOKING STATEMENTS BY THE COMPANY SPEAK ONLY AS OF THE DATE
MADE, AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE SUCH
STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS.
FINANCIAL CONDITION
The Company's financial ratios changed significantly as illustrated below. The
financial condition remains strong, and the long-term debt to total
capitalization ratio remained low at 10.17%
October 2, 2004 July 3, 2004 April 3, 2004 January 3, 2004
--------------- ------------ ------------- ---------------
Current Ratio 1.45 1.58 1.48 3.05
Quick Ratio 0.69 0.82 0.76 2.00
LT Debt to Total Capital 10.17% 10.59% 11.18% 11.65%
Working Capital $3,316,396 $4,341,863 $3,608,081 $8,007,862
The change in the Company's financial ratios reflects the acquisition in January
2004 of Fleetwood's drapery operation in Douglas, Georgia. The Company paid
$4,000,000 at closing and on January 24, 2005 will pay up to $1,257,114, plus
interest at 4%, for inventory purchased from Fleetwood. The Company used
internal funds for the purchase price paid at closing and will likely generate
sufficient funds to satisfy the remaining obligation.
Days sales outstanding in accounts receivable were 33.5 days at October 2, 2004,
compared to 37.3 days at September 27, 2003. Net accounts receivable decreased
by $41,437 from September 27, 2003 to October 2, 2004, due to the improvement in
days sales outstanding. Inventories increased by $1,448,718 from September 27,
2003 to October 2, 2004. This increase is attributable to the acquisition of the
Fleetwood Drapery operation and to the overall increase in business.
In January 2004, the Company began assigning certain account receivables under a
"Receivables Servicing and Credit Approved Receivables Purchasing Agreement"
with CIT Group/Commercial Services Inc. Only receivables from sales to the
Hospitality industry may be assigned to CIT. Under the agreement CIT provides
credit checking, credit approval, and collection responsibilities for the
assigned receivables. If CIT approves an order from a Hospitality customer and
the resulting receivables are not paid or disputed by the Customer within ninety
days of sale, CIT will pay the receivable to the Company and assume ownership of
the receivable. CIT begins collection efforts for the assigned receivables (both
approved and not approved) when they are due (Hospitality sales are made on Net
30 terms). Approved receivables were approximately $600,000 at the end of the
third quarter. Hospitality customers are instructed to make payments directly to
CIT and CIT then wires collected funds to the Company. The Company pays CIT
six-tenths of a percent of
6
all assigned receivables. Management believes this cost will be mostly offset by
reductions in Bad Debt expense and collection costs. The Company entered into
this arrangement to take advantage of CIT's extensive credit checking and
collection capabilities. Management believes this arrangement will improve
liquidity.
Capital expenditures, excluding the assets acquired from Fleetwood, were
$2,209,615 for the thirty-nine weeks ended October 2, 2004. This was primarily
due to the purchase of a manufacturing facility in Phoenix, Arizona for
$1,524,099, which closed in August 2004. The Company used its line of credit to
finance a portion of this purchase. Also contributing to the increase in capital
expenditures was $332,920 for a building addition to the Company's Elkhart,
Indiana facility, which increased the Company's pleated shade capacity by 50%.
As of October 2, 2004, the Company had no borrowings against its $5,000,000 line
of credit.
The opening of the Phoenix facility will not create a material adverse effect on
the liquidity of the Company. The resources required for the operation will be
similar to those required at the Company's other facilities. During its first
periods of operations, this facility will negatively affect the financial
performance of the Company. A positive contribution should be realized sometime
during 2005.
Management does not foresee any events which will adversely affect its liquidity
during 2004.
RESULTS OF OPERATIONS
The following tables show the percentage relationship to net sales of certain
items in the Company's Statements of Earnings:
Third Third
Quarter Quarter YTD YTD
Earnings Ratios 2004 2003 2004 2003
--------------- ------------ ------------- ------------- ------------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 79.08 78.59 79.10 78.20
Gross margin 20.92 21.41 20.90 21.80
Selling and administrative 15.74 15.27 15.00 15.47
Interest and investment income (0.17) (0.32) (0.19) (0.24)
Interest expense 0.24 0.14 0.21 0.13
Income taxes 2.07 2.50 2.33 2.56
Net income 3.04 3.82 3.55 3.88
THIRTEEN WEEK PERIOD ENDED OCTOBER 2, 2004, (THIRD QUARTER 2004) COMPARED TO
THIRTEEN WEEK PERIOD ENDED SEPTEMBER 27, 2003, (THIRD QUARTER 2003)
Net sales for the Third Quarter 2004 were $12,123,515, compared to $10,984,598
for the same period in the previous year, a 10.4% increase. Excluding sales
arising from the acquisition of Fleetwood's drapery operation, net sales of
existing business were virtually flat. Sales to the Company's recreational
vehicle customers increased about 11.3% compared to the same period of the prior
year, partially due to the additional Fleetwood business. Sales to the Company's
manufactured housing customers increased by 27.4%, due to the additional
Fleetwood business. Sales to the Company's hospitality customers decreased about
6.4% for the quarter ended October 2, 2004 compared to the same quarter of the
prior year.
7
Cost of products sold increased to $9,587,728, or 79.1% in the Third Quarter
2004, compared to $8,632,287, or 78.6% in the Third Quarter 2003.
Selling and administrative expenses were $1,908,195 in the Third Quarter 2004
versus $1,677,318 in the Third Quarter 2003. The increase is largely due to
expenses associated with the Fleetwood acquisition, including amortization of
the intangible asset of $187,500. As a percentage of sales, selling and
administrative expenses increased from 15.3% to 15.7%. Excluding the
amortization of the intangible asset, selling and administrative expenses as a
percentage of sales would have decreased to 14.2% in the Third Quarter 2004.
Interest expense increased to $28,755 in the Third Quarter 2004 from $16,104 in
the Third Quarter 2003 mostly due to interest on the inventory purchased from
Fleetwood in January 2004.
Net income decreased to $368,985 in the Third Quarter of 2004 compared to
$419,147 in the Third Quarter of 2003, a decrease of 12.0%. This decrease is
largely the result of increased administrative expenses, and a small increase in
the cost of products sold percentage.
THIRTY-NINE WEEK PERIOD ENDED OCTOBER 2, 2004, (FIRST NINE MONTHS 2004) COMPARED
TO THIRTY-NINE WEEK PERIOD ENDED SEPTEMBER 27, 2003, (FIRST NINE MONTHS 2003)
Net sales for the First Nine Months 2004 were $39,236,393, compared to
$31,531,366 for the same period in the previous year, a 24.4% increase.
Excluding sales arising from the acquisition of Fleetwood's drapery operation,
net sales of existing business increased 12.4%. Sales to the Company's
recreational vehicle customers increased about 29.7% compared to the same period
of the prior year, partially due to the additional Fleetwood business. Sales to
the Company's manufactured housing customers increased by 31.6%, due to the
additional Fleetwood business. Sales to the Company's hospitality customers
increased about 4.6% for the nine months ended October 2, 2004 compared to the
same period of the prior year.
Cost of products sold increased to $31,034,588, or 79.1% in the First Nine
Months 2004, compared to $24,658,537, or 78.2% in the First Nine Months 2003.
Selling and administrative expenses were $5,885,577 in the First Nine Months
2004 versus $4,878,209 in the First Nine Months 2003. The increase is largely
due to expenses associated with the Fleetwood acquisition, including
amortization of the intangible asset of $519,000, and to increases in personnel
costs. As a percentage of sales, selling and administrative expenses decreased
from 15.5% to 15.0% due to increased sales volume. Excluding the amortization of
the intangible asset, selling and administrative expenses would have decreased
to 13.7% for the First Nine Months 2004.
Interest expense increased to $83,825 in the First Nine Months 2004 from $39,890
in the First Nine Months 2003 because of interest on the inventory purchased
from Fleetwood in January 2004, interest on the loan secured by the Company's
Elkhart, Indiana facility which was not outstanding during the entire First Nine
Months 2003, and periodic borrowings on the Company's line of credit.
Net income increased to $1,391,027 in the First Nine Months 2004 compared to
$1,224,950 in the First Nine Months 2003, an increase of 13.6%. This increase is
largely the result of increased sales, partially offset by increased
administrative expenses.
8
EBITDA
EBITDA represents income before income taxes, interest expense, depreciation and
amortization and is an approximation of cash flow from operations before tax.
The Company uses EBITDA as an internal measure of performance and believes it is
a useful and commonly used measure of financial performance in addition to
income before taxes and other profitability measures under Generally Accepted
Accounting Principals ("GAAP")
EBITDA is not a measure of performance under GAAP. EBITDA should not be
construed as an alternative to operating income and income before taxes as an
indicator of the Company's operations in accordance with GAAP. Nor is EBITDA an
alternative to cash flow from operating activities in accordance with GAAP. The
Company's definition of EBITDA can differ from that of other companies.
The following table reconciles Net Income, the most comparable measure under
GAAP to EBITDA for the Third Quarter 2004 and 2003, and the First Nine Months
2004 and 2003.
For the Thirteen Weeks Ended For the Thirty-Nine Weeks Ended
---------------------------- -------------------------------
October 2, 2004 September 27, 2003 October 2, 2004 September 27, 2003
--------------- ------------------ --------------- ------------------
Net Income $ 368,985 $ 419,147 $1,391,027 $1,224,950
Add:
Income tax 250,000 275,000 915,000 807,000
Interest Expense 28,755 16,104 83,825 39,890
Depreciation and
amortization 384,982 174,956 1,103,252 525,261
---------- ---------- ---------- ----------
EBITDA $1,032,722 $ 885,207 $3,493,104 $2,597,101
========== ========== ========== ==========
The Company's EBITDA increased 17% and 35% for the Third Quarter 2004 and First
Nine Months 2004, respectively, compared to the same periods of the prior year.
Item 4. Controls and Procedures.
(a) The Company's Chief Executive Officer and Chief Financial Officer have
reviewed the effectiveness of the Company's disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)
within 90 days of the date of this report. These officers have
concluded that the Company's disclosure controls and procedures were
adequate and effective to ensure that material information relating to
the financial statements has been disclosed.
(b) There were no significant changes in the Company's internal controls or
in other factors that could significantly affect the Company's internal
controls and procedures subsequent to the review date, nor any
significant deficiencies or material weaknesses in such internal
controls and procedures requiring corrective actions.
9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits filed herewith:
31.1 - Certification of President
31.2 - Certification of Treasurer
32 - Certificate required by 18 U.S.C.ss.1350.
(b) No reports on Form 8-K were filed by the Company during the
quarterly period ended October 2, 2004.
10
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.
DECORATOR INDUSTRIES, INC.
(Registrant)
Date: November 16, 2004 By: /s/ William A.Bassett
---------------- ------------------------------------
William A. Bassett, President
Date: November 16, 2004 By: /s/ Michael K. Solomon
----------------- ------------------------------------
Michael K. Solomon, Treasurer
11