-----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, Nz66Ws2exQwWYFChW6zu2y6mhJyyZHfzXa4UQAn57ZcFwbgSs4VTyFHomOVtOuv6 5Q6b+ko7UyASU4SL+LAClg== 0000021759-99-000009.txt : 19990312 0000021759-99-000009.hdr.sgml : 19990312 ACCESSION NUMBER: 0000021759-99-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990131 FILED AS OF DATE: 19990311 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLLINS INDUSTRIES INC CENTRAL INDEX KEY: 0000021759 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 430985160 STATE OF INCORPORATION: MO FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12619 FILM NUMBER: 99562620 BUSINESS ADDRESS: STREET 1: 421 E 30TH AVE CITY: HUTCHINSON STATE: KS ZIP: 67502 BUSINESS PHONE: 3166635551 MAIL ADDRESS: STREET 1: 15 COMPOUND DRIVE STREET 2: PO BOX 648 CITY: HUTCHINSON STATE: KS ZIP: 67502 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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: January 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission file number 0-12619 Collins Industries, Inc. (Exact name of registrant as specified in its charter) Missouri (State or other jurisdiction of incorporation) 43-0985160 (I.R.S. Employer Identification Number) 15 Compound Drive Hutchinson, Kansas 67502-4349 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code 316-663-5551 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 APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.10 par value 7,386,781 Class Outstanding at March 11, 1999 COLLINS INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q January 31, 1999 INDEX PART I. FINANCIAL INFORMATION PAGE NO Item 1. Financial Statements: Consolidated Condensed Balance Sheets January 31, 1999 and October 31, l998 3 Consolidated Condensed Statements of Income - Three Months Ended January 31, 1999 and 1998 4 Consolidated Condensed Statements of Cash Flow - Three Months Ended January 31, 1999 and 1998 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Collins Industries, Inc. and Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) January October 31, 31, 1999 1998 ASSETS Current Assets: Cash $ 1,009,400 $ 143,995 Receivbles, trade & other 3,988,234 5,346,051 Inventories, lower of cost (FIFO) or market 33,606,254 25,271,242 Prepaid expenses and other current assets 1,063,589 985,420 Total current assets 39,667,477 31,746,708 Property and equipment, at cost 39,807,920 37,783,917 Less: accumulated depreciation 21,500,626 21,038,717 Net property and equipment 18,307,294 16,745,200 Other assets 5,104,598 584,141 Total assets $63,079,369 $49,076,049 LIABILITIES & SHAREHOLDERS' INVESTMENT Current liabilities: Current maturities of long-term debt & capitalized leases $ 2,010,032 1,108,750 Accounts payable 16,399,276 12,017,444 Accrued expenses 4,867,146 2,946,167 Total current liabilities 23,276,454 16,072,361 Long-term debt and capitalized leases 19,152,711 12,733,085 Shareholders' investment: Common stock 742,398 743,088 Paid-in capital 18,017,074 18,051,859 Retained earnings 1,960,732 1,475,656 Treasury stock (70,000) -- Total shareholders' investment 20,650,204 20,270,603 Total liabilities & shareholders' investment $63,079,369 $49,076,049 (See accompanying notes) Collins Industries, Inc. and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months Ended January 31, 1999 1998 Sales $38,174,032 $38,480,622 Cost of sales 32,499,842 33,435,940 Gross profit 5,674,190 5,044,682 Selling, general and administrative expenses 4,346,537 3,820,458 Income from operations 1,327,653 1,224,224 Other income (expense): Interest expense (427,681) (386,629) Other, net 164,876 80,229 (262,805) (306,400) Income before provision for income taxes 1,064,848 917,824 Provision for income taxes 394,000 320,000 Net income $ 670,848 $ 597,824 Earnings per share Basic $ .09 $ .08 Diluted $ .09 $ .08 Dividends per share $ .025 $ .155 Weighted average common and common equivilent shares outstanding: Basic 7,420,974 7,452,847 Diluted 7,468,975 7,903,702 (See accompanying notes) Collins Industries, Inc. and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (Unaudited) Three Months Ended January 31, 1999 1998 Cash flow from operations: Cash received from customers $40,823,896 $36,978,808 Cash paid to suppliers and employees (37,056,833) (38,164,207) Interest paid (391,301) (347,935) Cash provided by (used in) operations 3,375,762 (1,533,334) Cash flow from investing activities: Capital expenditures and acquisition (5,599,938) (1,588,096) Other, net (63,961) (316,616) Cash used in investing activities (5,663,899) (1,904,712) Cash flow from financing activities: Net increase in other borrowings 3,599,561 5,261,678 Principal payments of long-term debt and capitalized leases (218,001) (289,049) Proceeds from exercise of stock options 6,126 65,629 Acquisition and retirement of treasury stock (111,600) (108,000) Payment of dividends (185,772) (1,169,525) Cash provided by financing activities 3,090,314 3,760,733 Net increase in cash 802,177 322,687 Cash at beginning of period 207,223 189,152 Cash at end of period $ 1,009,400 $ 511,839 Reconciliation of net income to net cash provided by (used in) operations: Net income $ 670,848 $ 597,824 Depreciation and amortization 532,159 411,946 Decrease (increase) in receivables 2,649,864 (1,501,814) Decrease (increase) in inventories (3,312,224) 1,382,792 Decrease (increase) in prepaid expenses and other current assets (47,567) 607,733 Increase (decrease) in accounts payable and accrued expenses 2,882,682 (3,031,815) Cash provided by (used in) operations $ 3,375,762 $(1,533,334) (See accompanying notes) COLLINS INDUSTRIES, INC. AND SUBSIDIARIES Notes to Consolidated Condensed Financial Statements (Unaudited) (1) General The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring items) necessary to summarize fairly the Company's financial position at January 31, 1999 and the results of operations and the cash flows for the three months ended January 31, 1999 and 1998. The Company suggests that the unaudited Consolidated Condensed Financial Statements for the three months ended January 31, 1999 be read in conjunction with the Company's Annual Report for the year ended October 31, 1998. (2) Inventories Inventories, which include material, labor, and manufacturing overhead, are stated at the lower of cost (FIFO) or market. Major classes of inventories as of January 31, 1999 and October 31, 1998, consisted of the following: January 31, October 31, 1999 1998 Chassis $ 9,787,561 $ 7,916,058 Raw materials & components 11,687,591 8,871,980 Work in process 4,534,056 3,408,167 Finished goods 7,597,046 5,075,037 $33,606,254 $25,271,242 (3) Earnings per Share Dilutive securities, consisting of options to purchase the Company's common stock, included in the calculation of diluted weighted average common shares were 48,001 shares for the three month period ended January 31, 1999, and 450,855 shares for the three month period ended January 31, 1998. (4) Contingencies and Litigation At January 31, 1999, the Company had contingencies and litigation pending which arose in the ordinary course of business. Litigation is subject to many uncertainties and the outcome of the individual matters is not presently determinable. It is management's opinion that this litigation would not result in liabilities that would have a material adverse effect on the Company's consolidated financial position. (5) Income Taxes The provision for income taxes for three months ended January 31, 1999 is calculated at statutory rates. (6) Acquisitions On December 1, 1998, the Company completed the acquisition of all of the common stock of Mid Bus, Inc., a manufacturer of Type A-I and A-II school buses. The acquisition, which was financed through borrowings on the Company's revolving credit facility, and was accounted for as a purchase. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS: Sales Sales for the quarter ended January 31, 1999, decreased slightly compared to the same period in fiscal 1998. Sales were flat principally as a result of lower terminal truck sales, partially offset by an increase in bus sales including the impact of Mid Bus, Inc., an Ohio based manufacturer of small school buses. However, the first quarter of fiscal 1998 included a sizable terminal truck order from the United States Postal Service. The Company's consolidated sales backlog at January 31, 1999 increased 71% to $57.4 million compared to $33.6 million at October 31, 1998. This increase was across all product lines. Including the Mid Bus acquisition, the backlog of bus product lines increased by 96%, ambulances by 53% and terminal trucks by 45%. The Company's consolidated sales backlog was $44.4 million at January 31, 1998. Cost of Sales Cost of sales for the quarter ended January 31, 1999 was 85.1% of sales compared to 86.9% for the same period in fiscal 1998. The percentage decrease was principally due to an increase in sales of higher margin bus products, partially offset by an unfavorable sales mix, and lower sales volumes in ambulances and terminal trucks. Selling, General and Administrative Expenses Selling, general and administrative expenses for the quarter ended January 31, 1999, was 11.4% of sales compared to 9.9% for the same period in fiscal 1998. The percentage increase was principally due to increased marketing expenses associated with direct sales personnel and advertising. Other Income (Expense) Interest expense increased principally as a result of the Company's increase in borrowings to fund capital asset additions, a plant expansion and the acquisition of Mid Bus, Inc.. This increase was partially offset by an overall reduction of the Company's effective interest rates. The reduction of the Company's effective interest rate was principally due to the Company negotiating a lower interest rate with the Bank prior to entering into the July 31, 1998, Loan Agreement and new Industrial Revenue Bond financing. Net Income The Company's net income for the quarter ended January 31, 1999 was $.7 million ($.09 per share-diluted) compared to $.6 million ($.08 per share-diluted) for the same period in fiscal 1998. The increase in the Company's net earnings was principally attributable to stronger operating results from bus products including those of the newly acquired Mid Bus, Inc. This increase was partially offset by lower profits from ambulance and terminal truck products. LIQUIDITY AND CAPITAL RESOURCES: The Company used existing credit lines, internally generated funds and supplier financing to fund its operations and capital expenditures for the quarter ended January 31, 1999. Cash provided by operations was $3.4 million for the three months ended January 31, 1999 compared to ($1.5) million for the three months ended January 31, 1998. Cash provided by operations principally resulted from the Company's net income ($.7 million), depreciation ($.5 million) an increase in accounts payable ($2.8 million), a decrease in accounts receivable ($2.6 million), and was partially offset by an increase in inventory ($3.3 million), during the three months ended January 31, 1999. Cash used in investing activities was $5.7 million for the three months ended January 31, 1999 compared to $1.9 million for the three months ended January 31, 1998. The increase was principally due to higher capital expenditures including the acquisition of Mid Bus Inc. Cash flow provided by financing activities was $3.1 million for the three months ended January 31, 1999 compared to $3.8 million for the three months ended January 31, 1998. This change principally resulted from lower new borrowings for the three months ended January 31, 1999 compared to the same period in 1998. This decrease was partially offset by the payment of special cash dividend of $.13 per share ($1.0 million) in January, 1998. The Company believes that its cash flows from operations and bank credit lines will be sufficient to satisfy its future working capital and capital expenditure requirements. Year 2000 Issue The Year 2000 ("Y2K") issue is the result of computer programs being written using two digits rather than four to define the applicable year. The Company's computer equipment and software and devices with imbedded technology that are time-sensitive may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Company has developed and begun implementing a plan intended to ensure that its computer equipment and software will function properly with respect to dates in the year 2000 and thereafter. For this purpose, the term "computer equipment and software" includes systems that are commonly thought of as information technology ("IT") systems, including accounting, data processing and telephone/PBX systems, hand-held terminals, scanning equipment, and other miscellaneous systems, as well as systems that are not commonly thought of as IT systems, such as alarm systems, fax machines, or other miscellaneous systems. Both IT and non-IT systems may contain imbedded technology, which complicates the Company's Y2K identification, assessment, remediation, and testing efforts. Based upon its identification and assessment efforts to date, the Company believes that certain of the computer equipment and software that it currently uses will require replacement or modification. A substantial portion of the Company's software relates to prepackaged, copyrighted software written by Mapics, Actionware and American Viking. The Company has obtained Y2K compliant versions of these software packages and has fully converted to the Y2K version of Actionware. The Company has installed the Y2K versions of Mapics and American Viking in a test environment and intends to fully convert to these versions in 1999. Additionally, in the ordinary course of replacing computer equipment and software, the Company attempts to obtain replacements that are Y2K compliant. The Company expects that its overall Y2K plan, which began in fiscal 1998, will be completed by October 31, 1999. However, the Company is in the process of developing a contingency plan for certain internal systems. The Company has also contacted significant suppliers such as Ford, General Motors and Cummins concerning the Company's use of embedded technology from such vendors. Significant suppliers have implemented plans to help ensure the uninterrupted supply of goods to their customers, and have initiated efforts to evaluate the status of products using embedded technology. The cost of the Y2K issue is not expected to have a materially adverse impact on the Company's results of operation or adversely affect the Company's relationships with customers, vendors or others. Additionally, there can be no assurance that the Y2K issues of other entities will not have a material adverse impact on the Company's systems or results of operations. Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Results This report and other written reports and oral statements made from time to time by the Company may contain so-called "forward- looking statements" about the business, financial conditions, prospects of the Company and year 2000 issues, all of which are subject to risks and uncertainties. One can identify these forward-looking statements by their use of words such as "expects", "plans", "will", "estimates", "forecasts", "projects", and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. One should understand that it is not possible to predict or identify all factors which involve risks and uncertainties. Consequently, the reader should not consider any such list or listing to be a complete statement of all potential risks or uncertainties. No forward-looking statement can be guaranteed and actual future results may vary materially. The actual results of the Company could differ materially from those indicated by the forward- looking statements because of various risks and uncertainties including without limitation, changes in product demand, the availability of vehicle chassis, adequate direct labor pools, changes in competition, interest rate fluctuations, development of new products, various inventory risks due to changes in market conditions, changes in tax and other governmental rules and regulations applicable to the Company, substantial dependence on third parties for product quality, reliability and timely fulfillment of orders and other risks indicated in the Company's filings with the Securities and Exchange Commission. Additionally, the Company's recent acquisition of Mid Bus, Inc. involves certain risks and uncertainties including without limitation, the Company's ability to operate Mid Bus profitably and to retain Mid Bus' customers, suppliers and labor force. The Company does not assume the obligation to update any forward- looking statement. One should carefully evaluate such statements in light of factors described in the Company's filings with the Securities and Exchange Commission, especially on Forms 10-K, 10- Q and 8-K (if any). PART II - OTHER INFORMATION Item 1 - Legal Proceedings Not applicable Item 2 - Changes in Securities Not applicable Item 3 - Defaults on Senior Securities Not applicable Item 4 - Submission of Matters to a Vote of Security-Holders Not applicable Item 5 - Other Information Not applicable Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits: 27.0 - EDGAR Financial Data Schedule (b) Reports on Form 8-K - The Company filed Form 8-K, all of which reported information under Item 5 of Form 8-K, on the following date: December 1, 1998 SIGNATURE 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. COLLINS INDUSTRIES, INC. (REGISTRANT) DATE March 11, 1999 /s/ Larry W. Sayre LARRY W. SAYRE VICE PRESIDENT - FINANCE AND CHIEF FINANCIAL OFFICER (Principal Accounting Officer) EX-27 2
5 3-MOS OCT-31-1999 JAN-31-1999 1,009,400 0 3,988,234 0 33,606,254 39,667,477 39,807,920 21,500,626 63,079,369 23,276,454 0 0 0 742,398 19,907,806 63,079,369 38,174,032 38,174,032 32,499,842 36,846,379 (164,876) 0 427,681 1,064,848 394,000 670,848 0 0 0 670,848 .09 .09
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