-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FdD42npIuDo7I1NAbCZvg2zRbbaZNnAFcU3pbIdHJliaZqOq8gUJumtiwjPNhuH4 86lHGPQ+MgUyH4zFM4HM8w== 0000021212-95-000011.txt : 19951119 0000021212-95-000011.hdr.sgml : 19951119 ACCESSION NUMBER: 0000021212-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 95589327 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 September 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 October 31, 1995: Common Shares, without par value 7,454,066 shares outstanding Rights to purchase Common Shares 7,454,066 rights outstanding COACHMEN INDUSTRIES, INC. INDEX PART I. FINANCIAL INFORMATION Financial Statements: Consolidated Balance Sheets- September 30, 1995 and December 31, 1994 Consolidated Statements of Income- Three and Nine Months Ended September 30, 1995 and 1994 Consolidated Statements of Cash Flows- Nine Months Ended September 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 SEPTEMBER 30, DECEMBER 31, 1995 1994 ASSETS CURRENT ASSETS Cash and temporary cash investments $ 26,466,933 $19,534,385 Investments 550,000 800,000 Trade receivables and current portion of notes receivable, less allowance for doubtful receivables 1995 - $863,000 and 1994 - $986,000 24,828,480 15,410,757 Other receivables 2,722,018 2,121,910 Inventories 45,334,121 48,152,342 Prepaid expenses and other 1,413,585 1,179,475 Deferred income taxes 1,954,000 1,954,000 Total current assets 103,269,137 89,152,869 PROPERTY AND EQUIPMENT, at cost Land and improvements 5,082,123 4,646,331 Buildings and improvements 28,640,246 20,618,726 Machinery and equipment 8,910,366 8,316,127 Transportation equipment 8,886,844 6,978,543 Office furniture and fixtures 4,186,167 3,795,421 Total property and equipment, at cost 55,705,746 44,355,148 Less, Accumulated depreciation 26,153,073 25,144,558 Net property and equipment 29,552,673 19,210,590 OTHER ASSETS Notes receivable 277,054 288,767 Real estate held for sale, less accumulated depreciation 3,458,613 3,458,883 Rental properties, less accumulated depreciation 940,446 1,796,193 Unexpended industrial revenue bond proceeds - 3,337,122 Intangibles, less accumulated amortization 1995 - $197,953 and 1994 - $108,151 4,594,899 327,121 Deferred income taxes 1,493,000 1,493,000 Other 6,072,868 5,956,737 Total other assets 16,836,880 16,657,823 TOTAL ASSETS $149,658,690 $125,021,282 The accompanying notes are part of the consolidated financial statements. COACHMEN INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (CONT'D) SEPTEMBER 30, DECEMBER 31, 1995 1994 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 2,096,854 $ 1,530,553 Accounts payable, trade 21,869,900 20,398,679 Accrued wages, salaries and commissions 4,122,811 3,075,622 Accrued dealer incentives 1,775,080 2,071,042 Accrued warranty expense 3,735,194 2,710,068 Other accrued expenses 10,753,437 6,304,825 Accrued income taxes 1,419,496 1,728,200 Total current liabilities 45,772,772 37,818,989 LONG-TERM DEBT 12,350,480 7,023,394 OTHER 5,850,921 5,422,953 Total liabilities 63,974,173 50,265,336 SHAREHOLDERS' EQUITY Common shares, without par value: authorized 30,000,000 shares; issued 1995 - 9,122,791 shares and 1994 - 9,073,696 shares 36,953,074 36,600,387 Additional paid-in capital 1,437,889 1,431,055 Retained earnings 62,897,233 52,359,629 Total shareholders' equity before treasury shares 101,288,196 90,391,071 Less, Cost of shares reacquired for the treasury 1995 - 1,672,502 shares and 1994 - 1,674,821 shares 15,603,679 15,635,125 Total shareholders' equity 85,684,517 74,755,946 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $149,658,690 $125,021,282 The accompanying notes are part of the consolidated financial statements. COACHMEN INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 1995 1994 1995 1994 Net sales $130,973,395 $102,974,854 $390,936,444 $296,930,182 Cost of goods sold 112,311,937 87,629,178 337,751,916 253,881,180 Gross profit 18,661,458 15,345,676 53,184,528 43,049,002 Operating expenses: Selling and delivery 6,753,034 5,233,155 19,586,516 15,186,780 General and administrative 4,308,232 3,684,106 14,428,916 12,105,217 Total operating expenses 11,061,266 8,917,261 34,015,432 27,291,997 Operating income 7,600,192 6,428,415 19,169,096 15,757,005 Nonoperating income (expense): Interest expense (793,353) (375,589) (2,306,449) (1,119,719) Interest income 372,889 204,041 891,010 409,593 Gain on sale of property, net 13,394 (63,703) 786,540 746,684 Other, net 265,304 (52,598) 713,779 245,131 Total nonoperating income (expense): (141,766) (287,849) 84,880 281,689 Income before income taxes 7,458,426 6,140,566 19,253,976 16,038,694 Income taxes 2,775,000 2,332,000 7,155,000 5,491,000 Net income $ 4,683,426 $ 3,808,566 $ 12,098,976 $ 10,547,694 Net income per common share $ .63 $ .52 $ 1.63 $ 1.43 Weighted average number of common shares outstanding 7,447,965 7,388,721 7,435,650 7,363,907 Cash dividends per common share $ .07 $ .06 $ .21 $ .18 The accompanying notes are part of the consolidated financial statements. COACHMEN INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by operating activities $18,707,227 $23,570,844 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from: Sale of property and equipment, real estate held for sale and rental properties 2,899,362 1,855,847 Sale of investments 263,888 1,629,661 Acquisitions of property and equipment (10,162,117) (3,837,452) Acquisition of a business, net of cash acquired (4,654,877) (1,180,000) Collections on notes receivable, net 11,713 804,783 Unexpended industrial revenue bond proceeds 3,337,122 - Other 237,701 (90,716) Net cash used in investing activities (8,067,208) (817,877) CASH FLOWS FROM FINANCING ACTIVITIES Payments of short-term borrowings (900,000) - Payments of long-term debt (1,598,786) (683,779) Cash dividends paid (1,561,372) (1,325,843) Proceeds from sale of common shares 352,687 434,561 Other - 11,303 Net cash used in financing activities (3,707,471) (1,563,758) Increase in cash and temporary cash investments 6,932,548, 21,189,209 CASH AND TEMPORARY CASH INVESTMENTS Beginning of period 19,534,385 2,200,911 End of period $ 26,466,933 $23,390,120 Noncash 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 nine-month periods ended September 30, 1995 are not necessarily indicative of the results to be expected for the full year. 3. Inventories consist of the following: September 30, December 31, 1995 1994 Raw material $ 15,359,997 $ 15,751,077 Work in-process 6,236,208 5,053,551 Finished goods 23,737,916 27,347,714 Total inventories $ 45,334,121 $ 48,152,342 4. The provision for income taxes consists of the following: Three Months Nine Months September 30, September 30, 1995 1994 1995 1994 Federal $2,522,000 $2,053,000 $6,515,000 $4,903,000 State 253,000 279,000 640,000 588,000 Total provision $2,775,000 $2,332,000 $7,155,000 $5,491,000 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 September 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 $5.4 million was recorded as goodwill and is being amortized on a straight-line basis over forty years. Unaudited pro forma financial information for 1994, as if this acquisition had occurred on January 1, 1994, is as follows: Pro Forma Nine Months Ended September 30, 1994 (Unaudited) Net sales $368,041,245 Pro forma net income 12,111,148 Pro forma net income per share 1.64 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. 7. On August 14, 1995, the Prodesign plant of the Company's Viking Formed Products division was destroyed by fire. Prodesign manufactures thermoformed components for the van conversion industry. The building and contents were fully insured and it is anticipated that a gain will be recognized from the insurance proceeds. The gain will be reported in the fourth quarter when reliable estimates will be available and/or a settlement with the insurance company occurs. 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 Nine Months Ended September 30, 1995 and 1994 Increases (Decreases) Net sales $ 27,998,541 27.2% $ 94,006,262 31.7% Cost of goods sold 24,682,759 28.2 83,870,736 33.0 Selling and delivery expenses 1,519,879 29.0 4,399,736 29.0 General and administrative expenses 624,126 16.9 2,323,699 19.2 Interest expense 417,764 111.2 1,186,730 106.0 Interest income 168,848 82.8 481,417 117.5 Gain on sale of property, net 77,097 121.0 39,856 5.3 Other, net 317,902 * 468,648 191.2 Income before income taxes 1,317,860 21.5 3,215,282 20.0 Income taxes 443,000 19.0 1,664,000 30.3 Net income 874,860 23.0 1,551,282 14.7 * Not meaningful NET SALES Consolidated net sales for the quarter ended September 30, 1995 were $130,973,395, an increase of 27.2% over the $102,974,854 reported for the corresponding quarter last year. Net sales for the nine months were $390,936,444 representing an increase of 31.7% over the $296,930,182 reported for the same period in 1994. Vehicle segment sales for the 1995 quarter and nine 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 nine 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 4.7% for the quarter and 10.1% for the nine months. Housing segment sales for the 1995 quarter and nine 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 September 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 28.2% or $24,682,759 for the three months and 33.0% or $83,870,736 for the nine months ended September 30, 1995. The in- crease for both periods is generally in line with the increase in net sales. The higher increase than the increase in net sales is substantially due to an industry wide sales decline in van conversions and intensified competition in camping trailers, as well as an expected lower profitability level in the new housing operations in North Carolina and Tennessee. As these plants reach full capacity, inefficiencies associated with the plant openings should be eliminated. The industry decline in sales of van conversions and increased competition in camping trailers has 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 EXPENSES As a percentage of net sales, selling and delivery expenses were 5.2% and 5.1% for the 1995 and 1994 quarter and 5.0% and 5.1% for the comparable nine- month periods. Delivery expenses tend to fluctuate with sales mix, as well as changes in geographical areas to which products are delivered. The slight nine-month decrease in selling and delivery expenses as a percentage of net sales 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 $4,308,232 or 3.3% of net sales for the third quarter compared to $3,684,106 or 3.6% for the 1994 corresponding three months and $14,428,916 or 3.7% of net sales for the nine months compared to $12,105,217 or 4.1% for the 1994 nine 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, subsequent to the third quarter of 1994. INTEREST EXPENSE Interest expense was $793,353 and $2,306,449 for the three and nine-month periods in 1995 compared to $375,589 and $1,119,719 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 $168,848 and $481,417, respectively, for the 1995 three and nine-month periods. The amount is indicative of the increase in cash and temporary cash investments in 1995 over 1994 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 nine months of 1995. GAIN ON THE SALE OF PROPERTY, NET The amount in net gain on the sale of property for the third quarter of 1995 represents income of $13,394 compared to a loss of $63,703 in the same period in 1994. For the nine months the amount represents income of $786,540 and $746,684 for 1995 and 1994, respectively. The net gain in 1995 primarily results from the disposition of investment and rental properties located in Florida, Georgia and Indiana, while the net gain in 1994 reflects the disposition of idle properties located in Georgia and Indiana. OTHER, NET Other income, net, reflects income of $265,304 for the third quarter and $713,779 for the nine months compared to expense of $52,598 for the 1994 quarter and income of $245,131 for the 1994 nine months. The most significant variance was due to an increase in interest participation in finance company transactions. INCOME TAXES For the third quarter and nine-month periods ended September 30, 1995, the effective tax rate was 37.2% compared to a third quarter effective tax rate in 1994 of 38.0% and a year-to-date rate of 34.2%. 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 September 30, 1995, to meet its seasonal working capital needs. At September 30, 1995, there were no borrowings against this line of credit. The Company experienced a net cash increase of $6,932,548 for the 1995 nine months, principally from operating activities. 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. 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. The use of funds in financing activities 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. Financing activities consumed cash for dividends, payments of long-term debt and the repayment of short-term borrowings assumed with the acquisition of Georgie Boy. At September 30, 1995, the working capital increased $6.2 million over December 31, 1994 to $57.5 million. PART II. OTHER INFORMATION Item 4. Items 1 through 6 inclusive are not applicable. 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: November 10, 1995 GARY L. GROOM Gary L. Groom, Executive Vice President - Finance (Principal Financial Officer) Date: November 10, 1995 WILLIAM M. ANGELO William M. Angelo, Corporate Controller (Principal Accounting Officer) 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 9-MOS DEC-31-1995 SEP-30-1995 26,467 550 27,550 863 45,334 103,269 55,706 26,153 149,659 45,773 12,350 21,349 0 0 64,335 149,659 390,936 390,936 337,752 371,767 (85) 237 2,306 19,254 7,155 12,099 0 0 0 12,099 1.63 1.63
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