0000021212-95-000008.txt : 19950810
0000021212-95-000008.hdr.sgml : 19950810
ACCESSION NUMBER: 0000021212-95-000008
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950809
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: COACHMEN INDUSTRIES INC
CENTRAL INDEX KEY: 0000021212
STANDARD INDUSTRIAL CLASSIFICATION: MOTOR HOMES [3716]
IRS NUMBER: 351101097
STATE OF INCORPORATION: IN
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-07160
FILM NUMBER: 95559873
BUSINESS ADDRESS:
STREET 1: 601 E BEARDSLEY AVE
STREET 2: P O BOX 3300
CITY: ELKHART
STATE: IN
ZIP: 46514
BUSINESS PHONE: 2192620123
MAIL ADDRESS:
STREET 1: 601 E BEARDSLEY AVE
CITY: ELKHART
STATE: IN
ZIP: 46515
10-Q
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 number 1-7160
COACHMEN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1101097
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
601 EAST BEARDSLEY AVENUE, ELKHART, INDIANA 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 219-262-0123
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 practical date:
At July 31, 1995:
Common Shares, without par value 7,447,957 shares outstanding
Rights to purchase Common Shares 7,447,957 rights outstanding
COACHMEN INDUSTRIES, INC.
INDEX
PART I. FINANCIAL INFORMATION
Financial Statements:
Consolidated Balance Sheets-
June 30, 1995 and December 31, 1994
Consolidated Statements of Income-
Three and Six Months Ended June 30, 1995 and 1994
Consolidated Statements of Cash Flows-
Six Months Ended June 30, 1995 and 1994
Condensed Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
SIGNATURES
COACHMEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
June 30, DECEMBER 31,
1995 1994
ASSETS
CURRENT ASSETS
Cash and temporary cash investments $ 17,105,907 $19,534,385
Investments 550,000 800,000
Trade receivables and current portion of
notes receivable, less allowance for
doubtful receivables 1995 - $799,000 and
1994 - $986,000 20,145,939 15,410,757
Other receivables 1,841,795 2,121,910
Inventories 49,054,456 48,152,342
Prepaid expenses and other 1,628,570 1,179,475
Deferred income taxes 1,954,000 1,954,000
Total current assets 92,280,667 89,152,869
PROPERTY AND EQUIPMENT, at cost
Land and improvements 4,928,471 4,646,331
Buildings and improvements 28,951,544 20,618,726
Machinery and equipment 9,941,413 8,316,127
Transportation equipment 8,698,803 6,978,543
Office furniture and fixtures 4,140,695 3,795,421
Total property and equipment, at cost 56,660,926 44,355,148
Less, Accumulated depreciation 26,543,009 25,144,558
Net property and equipment 30,117,917 19,210,590
OTHER ASSETS
Notes receivable 282,080 288,767
Real estate held for sale, less
accumulated depreciation 3,458,703 3,458,883
Rental properties, less
accumulated depreciation 879,981 1,796,193
Unexpended industrial revenue bond
proceeds - 3,337,122
Intangibles, less accumulated amortization
1995 - $168,019 and 1994 - $108,151 4,624,833 327,121
Deferred income taxes 1,493,000 1,493,000
Other 6,092,423 5,956,737
Total other assets 16,831,020 16,657,823
TOTAL ASSETS $139,229,604 $125,021,282
The accompanying notes are part of the consolidated financial statements.
COACHMEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS (CONT'D)
JUNE 30, DECEMBER 31,
1995 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,646,354 $ 1,530,553
Accounts payable, trade 18,212,553 20,398,679
Accrued wages, salaries and commissions 3,273,473 3,075,622
Accrued dealer incentives 954,495 2,071,042
Accrued warranty expense 3,614,464 2,710,068
Other accrued expenses 9,699,226 6,304,825
Accrued income taxes 1,026,837 1,728,200
Total current liabilities 39,427,402 37,818,989
LONG-TERM DEBT 12,595,066 7,023,394
OTHER 5,730,795 5,422,953
Total liabilities 57,753,263 50,265,336
SHAREHOLDERS' EQUITY
Common shares, without par value: authorized
30,000,000 shares; issued 1995 - 9,119,266
shares and 1994 - 9,073,696 shares 36,916,325 36,600,387
Additional paid-in capital 1,436,231 1,431,055
Retained earnings 58,735,112 52,359,629
Total shareholder' equity before
treasury shares 97,087,668 90,391,071
Less, Cost of shares reacquired for the
treasury 1995 - 1,673,066 shares and
1994 - 1,674,821 shares 15,611,327 15,635,125
Total shareholders' equity 81,476,341 74,755,946
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $139,229,604 $125,021,282
The accompanying notes are part of the consolidated financial statements.
COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
Net sales $128,192,670 $100,320,091 $259,963,049 $193,955,328
Cost of goods sold 110,231,712 84,727,903 225,439,979 166,252,002
Gross profit 17,960,958 15,592,188 34,523,070 27,703,326
Operating expenses:
Selling and delivery 6,350,990 5,087,474 12,833,482 9,953,625
General and administrative 5,493,070 4,456,557 10,120,684 8,421,111
Total operating expenses 11,844,060 9,544,031 22,954,166 18,374,736
Operating income 6,116,898 6,048,157 11,568,904 9,328,590
Nonoperating income
(expense):
Interest expense (784,764) (384,604) (1,513,096) (744,130)
Interest income 346,716 133,824 518,121 205,552
Gain on sale of
property, net 754,554 735,756 773,146 810,387
Other, net 275,682 51,210 448,475 297,729
Total nonoperating
income: 592,188 536,186 226,646 569,538
Income before
income taxes 6,709,086 6,584,343 11,795,550 9,898,128
Income taxes 2,497,000 2,466,000 4,380,000 3,159,000
Net income $ 4,212,086 $ 4,118,343 $ 7,415,550 $ 6,739,128
Net income per
common share $ .57 $ .56 $ 1.00 $ .92
Weighted average number
of common shares
outstanding 7,442,648 7,362,300 7,429,390 7,351,270
Cash dividends per
common share $ .07 $ .06 $ .14 $ .12
The accompanying notes are part of the consolidated financial statements.
COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS
ENDED JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating
activities $ 7,726,808 $13,741,237
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of property and equipment, real
estate held for sale and rental
properties 2,025,203 2,856,391
Sale of investments 263,888 1,629,661
Acquisitions of property and equipment (8,826,711) (2,644,869)
Acquisition of a business, net of
cash acquired (4,654,877) -
Collections on notes receivable, net 6,687 858,053
Unexpended industrial revenue bond proceeds 3,337,122 -
Other 122,231 100,255
Net cash provided by (used in) investing
activities (7,726,457) 2,799,491
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of short-term borrowings (900,000) -
Payments of long-term debt (804,700) (424,799)
Cash dividends paid (1,040,067) (882,512)
Proceeds from sale of common shares 315,938 366,751
Other - 908
Net cash used in financing activities (2,428,829) (939,652)
Increase (decrease) in cash and temporary
cash investments (2,428,478) 15,601,076
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 19,534,385 2,200,911
End of period $ 17,105,907 $17,801,987
Non-cash investing and financing activities:
Liabilities assumed in acquisition
of a business $ 8,757,472
Long-term debt issued in conjunction
with acquisition of a business $ 6,141,129
The accompanying notes are part of the consolidated financial statements.
COACHMEN INDUSTRIES, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet data as of December 31, 1994 was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
2. In the opinion of management, the information furnished herein
includes all adjustments of a normal and recurring nature necessary
to reflect a fair statement of the interim periods reported. The
results of operations for the three and six-month periods ended
June 30,1995 are not necessarily indicative of the results to be expected
for the full year.
3. Inventories consist of the following:
June 30, December 31,
1995 1994
Raw material $ 16,095,638 $ 15,751,077
Work in-process 5,053,190 5,053,551
Finished goods 27,905,628 27,347,714
Total inventories $ 49,054,456 $ 48,152,342
4. The provision for income taxes consists of the following:
Three Months Six Months
June 30, June 30,
1995 1994 1995 1994
Federal $2,267,000 $2,221,000 $3,993,000 $2,850,000
State 230,000 245,000 387,000 309,000
Total provision $2,497,000 $2,466,000 $4,380,000 $3,159,000
At December 31, 1993, the Company had net deferred tax assets not
previously reinstated to the balance sheet of approximately $1.3
million. During the first quarter of 1994, the Company recognized
additional net deferred tax assets of approximately $.5 million.
The federal and state income tax provisions for that quarter were
reduced by corresponding credits for deferred income taxes,
representing the reduction of the valuation allowance to recognize
deferred income tax assets.
5. The Company was contingently liable at June 30, 1995 to banks and
other financial institutions on repurchase agreements in connection
with financing provided by such institutions to most of the
Company's independent dealers in connection with their purchase of
the Company's recreational vehicle products. These agreements
provide for the Company to repurchase its products from the
financing institution in the event that they have repossessed them
upon a dealer's default. The risk of loss resulting from these
agreements is spread over the Company's numerous dealers and is
further reduced by the resale value of the products repurchased.
The Company is involved in various legal proceedings which are
ordinary litigations incidental to the industry and which are
covered in whole or in part by insurance. Management believes that
any liability which may result from these proceedings will not be
significant.
6. On January 3, 1995, the Company acquired all of the issued and
outstanding capital stock of Georgie Boy Mfg., Inc., ("Georgie Boy")
a manufacturer of Class A motorhomes. The purchase price aggregated
$12.8 million and consisted of $6.7 million in cash and a $6.1
million promissory note payable to the seller. The promissory note
bears interest at the prime rate, payable monthly, with annual
principal installments of $1,000,000 commencing January 3, 1996 with
the balance due January 3, 2001.
The acquisition was accounted for using the purchase method, and the
operating results of Georgie Boy have been included in the Company's
1995 consolidated financial statements since the date of acquisition.
The excess of the purchase price over the acquired tangible and
intangible net assets of approximately $4.4 million was recorded as
goodwill and is being amortized on a straight-line basis over forty
years. The purchase price allocation is based on preliminary estimates
and is subject to adjustment as additional information becomes available.
Unaudited pro forma financial information for 1994, as if this
acquisition had occurred on January 1, 1994, is as follows:
Pro Forma
Six Months
Ended June 30, 1994
(Unaudited)
Net sales $240,286,980
Pro forma net income 7,973,440
Pro forma net income per share 1.08
The unaudited pro forma data shown above is not necessarily
indicative of the consolidated results that would have occurred
had the acquisition taken place on January 1, 1994, nor is it
necessarily indicative of the results that may occur in the
future.
COACHMEN INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition, results of
operations and cash flows during the periods included in the accompanying
consolidated financial statements.
A summary of the changes in the principal items included in the consolidated
statements of income is shown below.
Comparison of
Three Months Six Months
Ended June 30, 1995 and 1994
Increases (Decreases)
Net sales $ 27,872,579 27.8% $66,007,721 34.0%
Cost of goods sold 25,503,809 30.1 59,187,977 35.6
Selling and
delivery expense 1,263,516 24.8 2,879,857 28.9
General and
administrative expense 1,036,513 23.3 1,699,573 20.2
Interest expense 400,160 104.0 768,966 103.3
Interest income 212,892 159.1 312,569 152.1
Gain on sale of
property, net 18,798 2.6 (37,241) (4.6)
Other, net 224,472 * 150,746 50.6
Income before income taxes 124,473 1.9 1,897,422 19.2
Income taxes 31,000 1.3 1,221,000 38.7
Net income 93,743 2.3 676,422 10.0
* Not meaningful
NET SALES
Consolidated net sales for the quarter ended June 30, 1995 were $128,192,670,
an increase of 27.8% over the $100,320,091 reported for the corresponding
quarter last year. Net sales for the six months were $259,963,049
representing an increase of 34% over the $193,955,328 reported for the same
period in 1994. Vehicle segment sales for the 1995 quarter and six months
were augmented with the sales of Georgie Boy Mfg., Inc. ("Georgie Boy"), a
manufacturer of Class A motor homes, acquired January 3, 1995. In addition,
the 1994 six month period included the sales of Southern Ambulance Builders,
Inc. which was sold April 29, 1994. After eliminating the net sales of both
Georgie Boy from the 1995 periods and Southern Ambulance from the 1994
periods, the Company's vehicle segment experienced a net sales increase of
3.8% for the quarter and 12.2% for the six months. Housing segment sales for
the 1995 quarter and six months were increased by the sales of All American
Homes in North Carolina and Tennessee. The acquisition of assets from Muncy
Building Enterprises, L.P. for the North Carolina plant and construction of
the Tennessee plant occurred subsequent to June 30, 1994. Both vehicles and
housing experienced increases in unit sales and unit sales prices, as well
as, increases in market share.
COST OF GOODS SOLD
Cost of goods sold increased 30.1% or $25,503,809 for the three months and
35.6% or $59,187,977 for the six months ended June 30, 1995. The increase
for both periods is generally in line with the increase in net sales. The
slightly higher increase than the increase in net sales is substantially due
to an industry wide sales decline in van conversions, as well as an expected
lower profitability level in the new housing operations in North Carolina and
Tennessee. As these plants reach full capacity, inefficiences associated with
the plant openings should be eliminated. The sales industry decline in van
conversions led to strong pricing competition and underutilized capacity.
Also, contributing to a higher percentage cost of goods sold is the increase
in motorized sales as a result of the acquisition of Georgie Boy. Motorized
products generally have a higher cost of goods manufactured as a percentage of
net sales due to the chassis cost.
SELLING AND DELIVERY EXPENSE
As a percentage of net sales, selling and delivery expenses were 5.0% and
5.1% for the 1995 and 1994 quarter and 4.9% and 5.1% for the comparable six-
month periods. Delivery expenses tend to fluctuate with sales mix, as well as
changes in geographical areas to which products are delivered. The quarter
and six-month decreases in selling expenses as a percentage of net sales were
primarily the result of increased demand for the Company's products, a focus
on reducing selling expenses where practical, and concentration on
competitive pricing.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expense was $5,493,070 or 4.3% of net sales for
the second quarter compared to $4,456,557 or 4.4% for the 1994 corresponding
three months and $10,120,684 or 3.9% of net sales for the six months compared
to $8,421,111 or 4.3% for the 1994 six months. A decrease in the percent
usually accompanies an increase in net sales due to the fixed nature of the
expenses in this category. The most substantial portion of the increase in
dollars is in administrative salaries and payroll taxes due to the
acquisition of Georgie Boy, All American Homes in North Carolina (assets
acquired in September 1994) and the start-up of a new manufacturing facility
for All American Homes in Tennessee, all subsequent to the second quarter of
1994.
INTEREST EXPENSE
Interest expense was $784,764 and $1,513,096 for the three and six-month
periods in 1995 compared to $384,604 and $744,130 in the same periods last
year. This increase is primarily due to increases in long-term debt from the
acquisition of Georgie Boy and the economic development bond obtained for
construction of the All American Homes Tennessee facility. There has also
been a general increase in interest rates subsequent to the 1994 periods.
INTEREST INCOME
Interest income increased $212,892 and $312,569, respectively, for the 1995
three and six-month periods. The amount is indicative of the increase in
cash and temporary cash investments in 1995 over 994 and a general rise in
interest rates since the 1994 periods. This increase in cash and temporary
cash investments was basically generated from operating activities throughout
1994 and the first six months of 1995.
GAIN ON THE SALE OF PROPERTY, NET
The net gain on the sale of property for the second quarter of 1995 was
$18,798 higher and for the six months was $37,241 lower than in the same
periods in 1994. The gain in 1995 primarily results from the disposition of
investment and rental properties located in Florida, Georgia and Indiana,
while the gain in 1994 reflects the disposition of idle properties located in
Georgia and Indiana.
OTHER, NET
Other income, net, represented income of $275,682 for the second quarter and
$448,475 for the six months compared to income of $51,210 and $297,729 for
the 1994 second quarter and six months, respectively. The most significant
variance was due to an increase in interest participation in finance company
transactions.
INCOME TAXES
For the second quarter ended June 30, 1995, the effective tax rate was 37.2%
and a year-to-date rate of 37.1% compared to a second quarter effective tax
rate in 1994 of 37.5% and a year-to-date rate of 31.9%. As a result of
available federal tax loss carryforwards, no federal income tax provision was
recorded in 1993 and net deferred tax assets were fully reserved for by a
valuation allowance. During the first quarter of 1994, the effective federal
tax rate was low due to the reduction of the federal tax provision by a
deferred tax credit of approximately $.5 million, resulting from the
elimination of the remaining valuation allowance.
LIQUIDITY AND CAPITAL RESOURCES
The Company generally relies on funds from operations as its primary source
of liquidity. In addition, the Company maintains an unsecured committed line
of credit, which totaled $30 million at June 30, 1995, to meet its seasonal
working capital needs. At June 30, 1995, there were no borrowings against
this line of credit. The Company experienced a net cash use of $2,428,478 for
the 1995 six months, principally from investing activities. This consisted
mainly of the acquisition of property and equipment for start-up of the All
American Homes, Tennessee modular housing division and the January 3, 1995
acquisition of Georgie Boy. Operating activities provided cash primarily
through net income and a substantial decrease in inventories. This was
partially offset by cash used from an increase in accounts receivable and a
decrease in accounts payable and other accrued liabilities. Cash flows from
operating activities reflect the operations of Georgie Boy from January 3,
1995. All acquired assets and liabilities of Georgie Boy are excluded from
operating cash flows. Financing activities also consumed cash for dividends,
payments of long-term debt and the repayment of short-term borrowings assumed
with the acquisition of Georgie Boy. At June 30, 1995, the working capital
increased $1.6 million over December 31, 1994 to $52.9 million.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a) The annual meeting of the shareholders of Coachmen Industries,
Inc. was held on May 4, 1995.
b) The following nominees were elected Directors for a one-year
term:
Thomas H. Corson
Keith D. Corson
Gary L. Groom
Claire C. Skinner
Philip C. Barker
R. James Harring
William P. Johnson
Philip G. Lux
William G. Milliken
c) The tabulation of votes for each Director nominee was as
follows:
For Withheld
Election of Directors:
Thomas H. Corson 6,608,227 44,242
Keith D. Corson 6,606,508 43,961
Gary L. Groom 6,606,627 43,842
Claire C. Skinner 6,606,448 44,021
Philip C. Barker 6,604,029 46,440
R. James Harring 6,603,629 46,840
William P. Johnson 6,606,729 43,740
Philip G. Lux 6,606,800 43,669
William G. Milliken 6,592,469 58,000
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.
COACHMEN INDUSTRIES,INC.
(Registrant)
Date: August 4, 1995 GARY L. GROOM
Gary L. Groom, Executive Vice
President - Finance (Principal
Financial Officer)
Date: August 4, 1995 WILLIAM M. ANGELO
William M. Angelo, Corporate
Controller (Principal Accounting
Officer)
EX-27
2
5
0000021212
COACHMEN INDUSTRIES, INC.
1000
6-MOS
DEC-31-1995
JUN-30-1995
17,106
550
22,787
799
49,054
92,281
56,661
26,543
139,230
39,427
12,595
21,305
0
0
60,171
139,230
259,963
259,963
225,440
248,394
(227)
191
1,513
11,796
4,380
7,416
0
0
0
7,416
1.00
1.00