-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, B3iLX1Gqj/cmPrtDDMjzZbiWcRaL296wr3Z1cikfGi/ur7llIErS/zcimP29MEUT mnHt848TYHhLbL/nzWowGg== 0000021212-95-000006.txt : 19950517 0000021212-95-000006.hdr.sgml : 19950516 ACCESSION NUMBER: 0000021212-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 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: 95537516 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 Form 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (MARK ONE) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 April 30, 1995: Common Shares, without par value 7,440,251 shares outstanding Rights to purchase Common Shares 7,440,251 rights outstanding The index is at page 2 in the sequential numbering system Page 1 of 13 pages COACHMEN INDUSTRIES, INC. INDEX Page No. PART I. FINANCIAL INFORMATION Financial Statements: Consolidated Balance Sheets- March 31, 1995 and December 31, 1994....................3-4 Consolidated Statements of Income- Three Months Ended March 31, 1995 and 1994.............. 5 Consolidated Statements of Cash Flows- Three Months Ended March 31, 1995 and 1994.............. 6 Condensed Notes to Consolidated Financial Statements....7-8 Management's Discussion and Analysis of Financial Condition and Results of Operations........................9-12 PART II. OTHER INFORMATION.................................... 13 SIGNATURES..................................................... 13 Page 2 of 13 pages COACHMEN INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS MARCH 31, DECEMBER 31, 1995 1994 ASSETS CURRENT ASSETS Cash and temporary cash investments $ 8,991,859 $ 19,534,385 Investments 800,000 800,000 Trade receivables and current portion of notes receivable, less allowance for doubtful receivables 1995 - $711,000 and 1994 - $986,000 30,768,896 15,410,757 Other receivables 1,512,980 2,121,910 Inventories 53,251,111 48,152,342 Prepaid expenses and other 1,064,548 1,179,475 Deferred income taxes 1,954,000 1,954,000 Total current assets 98,343,394 89,152,869 PROPERTY AND EQUIPMENT, at cost Land and improvements 4,880,471 4,646,331 Buildings and improvements 26,918,139 20,618,726 Machinery and equipment 9,139,432 8,316,127 Transportation equipment 8,093,014 6,978,543 Office furniture and fixtures 3,999,311 3,795,421 Total property and equipment, at cost 53,030,367 44,355,148 Less, Accumulated depreciation 25,841,450 25,144,558 Total net property and equipment 27,188,917 19,210,590 OTHER ASSETS Notes receivable 286,130 288,767 Real estate held for sale, less accumulated depreciation 3,458,793 3,458,883 Rental properties, less accumulated depreciation 1,771,998 1,796,193 Unexpended industrial revenue bond proceeds 930,222 3,337,122 Intangibles, less accumulated amortization 1995 - $138,086 and 1994 - $108,151 4,654,766 327,121 Deferred income taxes 1,493,000 1,493,000 Other 5,973,001 5,956,737 Total other assets 18,567,910 16,657,823 TOTAL ASSETS $144,100,221 $125,021,282 The accompanying notes are part of the consolidated financial statements. Page 3 of 13 pages COACHMEN INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (CONT'D) MARCH 31, DECEMBER 31, 1995 1994 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 2,712,414 $ 1,530,553 Accounts payable, trade 23,650,343 20,398,679 Accrued wages, salaries and commissions 2,303,343 3,075,622 Accrued dealer incentives 2,210,993 2,071,042 Accrued warranty expense 3,519,907 2,710,068 Other accrued expenses 10,269,411 6,304,825 Accrued income taxes 3,171,123 1,728,200 Total current liabilities 47,837,534 37,818,989 LONG-TERM DEBT 12,941,124 7,023,394 OTHER 5,626,117 5,422,953 Total liabilities 66,404,775 50,265,336 SHAREHOLDERS' EQUITY Common shares, without par value: authorized 30,000,000 shares; issued 1995 - 9,110,159 shares and 1994 - 9,073,696 shares 36,843,163 36,600,387 Additional paid-in capital 1,433,751 1,431,055 Retained earnings 55,044,097 52,359,629 Total shareholders' equity before treasury shares 93,321,011 90,391,071 Less, Cost of shares reacquired for the treasury 1995 - 1,674,116 shares and 1994 - 1,674,821 shares 15,625,565 15,635,125 Total shareholders' equity 77,695,446 74,755,946 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $144,100,221 $125,021,282 The accompanying notes are part of the consolidated financial statements. Page 4 of 13 pages COACHMEN INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31, 1995 1994 Net sales $131,770,379 $ 93,635,237 Cost of goods sold 115,208,267 81,524,099 Gross profit 16,562,112 12,111,138 Operating expenses: Selling and delivery 6,482,492 4,866,151 General and administrative 4,627,614 3,964,554 Total operating expenses 11,110,106 8,830,705 Operating income 5,452,006 3,280,433 Nonoperating income (expense): Interest expense (728,332) (359,526) Interest income 171,405 71,728 Gain on sale of property, net 18,592 74,631 Other, net 172,793 246,519 Total nonoperating income (expense) (365,542) 33,352 Income before income taxes 5,086,464 3,313,785 Income taxes 1,883,000 693,000 Net income $ 3,203,464 $ 2,620,785 Net income per common share $ .43 $ .36 Weighted average number of common shares outstanding 7,415,985 7,340,130 Cash dividends per common share $ .07 $ .06 The accompanying notes are part of the consolidated financial statements. Page 5 of 13 pages COACHMEN INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by (used in) operating activities $(2,234,613) $ 2,715,789 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from: Sale of property and equipment, real estate held for sale and rental properties 482,079 768,340 Sale of investments 13,888 1,629,661 Acquisitions of property and equipment (5,155,669) (1,423,900) Acquisition of a business, net of cash acquired (4,654,877) - Collections on notes receivable, net 2,637 1,151,062 Unexpended industrial revenue bond proceeds 2,406,900 - Other 165,931 (88,617) Net cash provided by (used in) investing activities (6,739,111) 2,036,546 CASH FLOWS FROM FINANCING ACTIVITIES Payments of short-term borrowings (900,000) - Payments of long-term debt (392,582) (365,112) Cash dividends paid (518,996) (440,454) Proceeds from sale of common shares 242,776 126,111 Net cash used in financing activities (1,568,802) (679,455) Increase (decrease) in cash and temporary cash investments (10,542,526) 4,072,880 CASH AND TEMPORARY CASH INVESTMENTS Beginning of period 19,534,385 2,200,911 End of period $ 8,991,859 $ 6,273,791 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. Page 6 of 13 pages 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-month period ended March 31, 1995 are not necessarily indicative of the results to be expected for the full year. 3. Inventories consist of the following: March 31, December 31, 1995 1994 Raw material $ 19,772,058 $ 15,751,077 Work in-process 6,246,748 5,053,551 Finished goods 27,232,305 27,347,714 Total inventories $ 53,251,111 $ 48,152,342 4. The provision for income taxes consists of the following: March 31, March 31, 1995 1994 Federal $ 1,726,000 $ 629,000 State 157,000 64,000 Total provision $ 1,883,000 $ 693,000 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 three months ended March 31, 1994, the Company recognized additional net deferred tax assets of approximately $.5 million. The federal and state income tax provisions for the quarter ended March 31, 1994 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 March 31, 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. Page 7 of 13 pages 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 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 charged to 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 in 1995. Unaudited pro forma financial information for 1994, as if this acquisition had occurred on January 1, 1994, is as follows: Pro Forma Three Months Ended March 31, 1994 (Unaudited) Net sales $115,648,232 Pro forma net income 3,075,476 Pro forma net income per share .42 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 are they necessarily indicative of the results that may occur in the future. Page 8 of 13 pages 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 Ended March 31, 1995 and 1994 Increases (Decreases) Net sales $ 38,135,142 40.7% Cost of goods sold 33,684,168 41.3 Selling and delivery expense 1,616,341 33.2 General and administrative expense 663,060 16.7 Interest expense 368,806 102.6 Interest income 99,677 139.0 Gain on sale of property, net (56,039) (75.1) Other, net (73,726) (29.9) Income before income taxes 1,772,679 53.5 Income taxes 1,190,000 171.7 Net income 582,679 22.2 Page 9 of 13 pages NET SALES Consolidated net sales for the quarter ended March 31, 1995 were $131,770,379, an increase of 40.7% over the $93,635,237 reported for the corresponding quarter last year. The Company's vehicle segment, which includes the parts and supply group of companies, experienced a net sales increase of 39.1% and the Company's housing segment had a net sales increase of 54.2%. Vehicle segment sales for the 1995 quarter were boosted by the inclusion of the sales of Georgie Boy Mfg., Inc. ("Georgie Boy"), a manufacturer of Class A motorhomes, since its acquisition on January 3, 1995. In addition, the 1994 quarter 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 first quarter of 1995 and the net sales of Southern Ambulance from the first quarter of 1994, the Company's vehicle segment experienced a net sales increase of 20.6%. 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 41.3% or $33,684,168 for the first quarter of 1995 over 1994. The increase is generally in line with the increase in net sales. The slightly higher increase than the increase in net sales is substantially due to 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 4.9% and 5.2% for 1995 and 1994, respectively. Delivery expenses decreased $53,801 or .1% of net sales. An increase in net sales usually leads to more efficient utilization of transportation equipment. In addition, these expenses fluctuate with sales mix, as well as changes in geographical areas to which products are delivered. Selling expenses decreased .2% as a percentage of net sales. This decrease was 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 EXPENSES General and administrative expenses were $4,627,614 or 3.5% of net sales for the 1995 three months compared to $3,964,554 or 4.2% for the corresponding 1994 three 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 first quarter of 1994. Page 10 of 13 pages INTEREST EXPENSE Interest expense was $728,332 in 1995 compared to $359,526 the prior year. This increase is primarily due to increases in long-term debt from the acquisition of Georgie Boy, the start-up of All American Homes in North Carolina 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 quarter. INTEREST INCOME Interest income increased $99,677 for the 1995 quarter compared to 1994. The amount is indicative of the increase in cash and temporary cash investments in 1995 over the 1994 quarter. This increase in cash and temporary cash investments was basically generated from operating activities throughout 1994. GAIN ON THE SALE OF PROPERTY, NET The net gain on sale of property for the first quarter of 1995 was $56,039 lower than in 1994. This variance was substantially the result of the sale of miscellaneous small properties located in the State of Indiana during the 1994 quarter. OTHER, NET Other income, net, represented income in the amount of $172,793 and $246,519 for the first three months of 1995 and 1994, respectively. The decrease from 1994 was due to the gain on sale of common stock investments in the 1994 quarter. INCOME TAXES During the first quarter of 1995, the effective income tax rate was 37.0% compared to an effective income tax rate of 20.9% for the same quarter in 1994. 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. Page 11 of 13 pages 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 $20 million at March 31, 1995, to meet its seasonal working capital needs. At March 31, 1995, there were no borrowings against this line of credit. The Company experienced a net cash use of $10,542,526 for the 1995 quarter, 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 consumed cash due primarily to a substantial increase in accounts receivable resulting from the increase in net sales. This was partially offset by cash provided by an increase in accounts payable and a decrease in inventories. Cash flows from operating activities reflect the operations of Georgie Boy from January 3, 1995. All assets and liabilities of Georgie Boy acquired 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 March 31, 1995, the working capital decreased $.8 million from December 31, 1994 to $50.5 million. Page 12 of 13 pages PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) Exhibits None b) Reports on Form 8-K A Current Report on Form 8-K was filed on January 16, 1995 relating to the Company's acquisition of the outstanding capital stock of Georgie Boy Mfg., Inc. on January 3, 1995. A Current Report on Form 8-K/A was filed on April 23, 1995 pursuant to the requirements of Item 7, Financial Statements and Exhibits, relating to the Company's acquisition of the outstanding capital stock of Georgie Boy Mfg., Inc. on January 3, 1995. 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 May 12, 1995 GARY L. GROOM Gary L. Groom, Executive Vice President - Finance (Principal Financial Officer) Date May 12, 1995 WILLIAM M. ANGELO William M. Angelo, Corporate Controller (Principal Accounting Officer) Page 13 of 13 pages EX-27 2
5 This schedule contains summary financial information extracted from the consolidated statement of income and consolidated balance sheet and is qualified in its entirety by reference to such financial statements. 0000021212 COACHMEN INDUSTRIES, INC. 1000 3-MOS DEC-31-1995 MAR-31-1995 8,992 800 32,993 711 53,251 98,343 53,030 25,841 144,100 47,838 12,941 21,218 0 0 56,478 144,100 131,770 131,770 115,208 126,318 366 84 728 5,086 1,883 3,203 0 0 0 3,203 .43 .43
-----END PRIVACY-ENHANCED MESSAGE-----