-----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, DhtuJUfwn6zceyK2iUWxTtOO9kBmpv1r7W22i9YGLI9w70/11GY1DjuqmBhvoFt4 ZdfT18ywnUWZtxuSMdZZbg== 0000950153-96-000302.txt : 19960517 0000950153-96-000302.hdr.sgml : 19960517 ACCESSION NUMBER: 0000950153-96-000302 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAVCO INDUSTRIES INC CENTRAL INDEX KEY: 0000278166 STANDARD INDUSTRIAL CLASSIFICATION: MOBILE HOMES [2451] IRS NUMBER: 860214910 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08822 FILM NUMBER: 96565602 BUSINESS ADDRESS: STREET 1: 301 E BETHANY HOME RD STE C-178 CITY: PHOENIX STATE: AZ ZIP: 85012 BUSINESS PHONE: 6022650580 MAIL ADDRESS: STREET 1: 301 EAST BETHANY HOME ROAD STREET 2: SUITE C-178 CITY: PHOENIX STATE: AZ ZIP: 85012 10-Q 1 QUARTERLY REPORT FORTHE QUARTER ENDED 3/31/96 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1996 Commission File Number 0-8822 Cavco Industries, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Arizona 86-0214910 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 301 East Bethany Home Road, Suite C-178 Phoenix, Arizona 85012 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (602) 265-0580 -------------- n/a - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. 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 close of the period covered by this report.
Class Shares Outstanding ----- ------------------ Common Stock, $.05 Par Value 3,382,977
2 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES Index
PART I. Consolidated Financial Information Page No. -------- Item 1. Financial Statements Consolidated Balance Sheets March 31, 1996 and September 30, 1995 3-4 Consolidated Statements of Earnings Three months and six months ended March 31, 1996 and 1995 5 Consolidated Statements of Cash Flows Six months ended March 31, 1996 and 1995 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8-9 PART II. Other Information 10 Item 4. Submision of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K
2 3 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets Assets
March 31, September 30, 1996 1995 ----------- ----------- Current Assets Cash $ 2,765,626 8,140,730 Accounts and notes receivable 11,779,781 4,185,533 Inventories Manufacturing: Raw materials 3,318,886 2,971,581 Work in process 869,745 807,949 Held for sale or lease 27,800 80,438 Real estate held for sale 7,480,098 6,133,089 ----------- ----------- Total inventories 11,696,529 9,993,057 ----------- ----------- Prepaid expenses 1,062,756 834,713 Deferred tax charge 552,981 552,981 ----------- ----------- Total current assets 27,857,673 23,707,014 ----------- ----------- Property. plant and equipment, at cost 14,949,767 14,285,539 Less accumulated depreciation 5,225,887 4,666,351 ----------- ----------- Net property, plant and equipment 9,723,880 9,619,188 ----------- ----------- Assets under lease 16,828,593 14,285,700 Less accumulated depreciation 895,121 596,007 ----------- ----------- Net assets under lease 15,933,472 13,689,693 ----------- ----------- Notes receivable, net of current portion 1,556,841 1,162,415 Investment in partnerships 2,896,927 2,534,703 Other assets 798,508 1,098,926 ----------- ----------- $58,767,301 51,811,939 =========== ===========
3 4 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets Liabilities and Stockholders' Equity
March 31, September 30, 1996 1995 ----------- ----------- Current liabilities Notes payable $ 1,112,525 1,022,864 Current installments of long term debt 3,244,240 2,444,248 Accounts payable 5,121,428 5,009,125 Accrued expenses 7,549,434 6,939,129 Income taxes 184,784 42,418 ----------- ----------- Total current liabilities 17,212,411 15,457,784 ----------- ----------- Long term debt, excluding current installments 14,532,585 12,692,661 Deferred taxes and other liabilities 1,685,235 1,278,299 Stockholders' equity: Common stock, $.05 par value; 8,000,000 shares authorized; 3,382,977 shares issued and outstanding 169,149 169,149 Capital in excess of par 312,054 312,054 Retained earnings 24,855,867 21,901,992 ----------- ----------- Net stockholders' equity 25,337,070 22,383,195 ----------- ----------- $58,767,301 51,811,939 =========== ===========
4 5 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Statements of Earnings
Three Month Period Six Month Period Ended March 31, Ended March 31, 1996 1995 1996 1995 -------------------------- ---------------------------- Net sales $ 33,515,820 28,506,700 64,415,705 58,647,361 Cost of sales 27,373,648 23,522,468 51,729,632 47,620,645 -------------------------- ---------------------------- Gross profit 6,142,172 4,984,232 12,686,073 11,026,716 Selling, general and administrative expenses 3,732,883 3,399,842 7,280,557 6,805,813 -------------------------- ---------------------------- Operating income 2,409,289 1,584,390 5,405,516 4,220,903 Other income (expense) Interest income 137,058 82,398 214,098 211,108 Interest expense (438,090) (125,678) (781,983) (191,619) Miscellaneous 53,003 42,716 103,817 70,282 -------------------------- ---------------------------- (248,029) (564) (464,068) 89,771 -------------------------- ---------------------------- Income from continuing operations before income taxes 2,161,260 1,583,826 4,941,448 4,310,674 Income taxes 861,480 627,800 1,968,900 1,726,500 -------------------------- ---------------------------- Income from continuing operations 1,299,780 956,026 2,972,548 2,584,174 Loss from discontinued operations, net of tax credit of ($19,500) for 3 mos in 1995, and ($6,800) and ($130,500) for 6 mos in 1996 and 1995, respectively (8,907) (29,265) (18,673) (195,680) -------------------------- ---------------------------- Net income $ 1,290,873 926,761 2,953,875 2,388,494 ========================== ============================ Income per share from continuing operations $.38 .28 .88 .76 ==== === === === Income per share from discontinued operations -- (.01) (.01) (.06) ==== ==== ==== Net income per share $.38 .27 .87 .70 ==== === === ===
5 6 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended March 31, 1996 and 1995
1996 1995 ----------- ----------- Net cash used in operations $(4,353,885) (3,181,843) Cash flows from investing activities: Purchases of property, plant and equipment (893,396) (1,349,340) Purchases of assets under lease (3,819,046) (7,220,956) Proceeds from sales of property, plant and equipment 124,202 -- Proceeds from sales of assets under lease 596,142 414,729 Proceeds from collections on notes receivable 920,526 1,040,017 Additions to notes receivable (195,000) -- Additions to investment in partnerships (362,224) (1,195,230) ----------- ----------- Net cash used in investing activities (3,628,796) (8,310,780) ----------- ----------- Cash flows from financing activities: Borrowings under lines of credit 1,934,239 606,413 Repayments on lines of credit (1,844,578) (1,150,627) Proceeds from long term borrowings 4,000,000 3,750,000 Repayment of long term debt (1,482,084) (352,254) ----------- ----------- Net cash provided by financing activities 2,607,577 2,853,532 ----------- ----------- Decrease in cash (5,375,104) (8,639,091) Cash at beginning of period 8,140,730 9,006,600 ----------- ----------- Cash at end of period $ 2,765,626 367,509 =========== =========== Supplemental disclosure of cash flow information: Cash paid during the period for - Interest $ 931,564 167,844 =========== =========== Income taxes $ 1,426,534 4,252,500 =========== ===========
6 7 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated financial statements include the accounts of the Company and its subsidiaries, Action Healthcare Management Services, Inc. (Action), Sun Built Homes, Inc. (Sun Built) and National Security Containers, Inc. (NSC). The information reflected in the consolidated financial statements has not been examined by independent accountants and necessarily in some respects is based upon estimates which are subject to adjustment in annual closing of accounts. In the opinion of the Company, all adjustments (consisting of only normal recurring adjustments and primary eliminations of all significant intercompany transactions) necessary to present fairly the financial position for the periods presented have been included. These financial statements have been prepared in accordance with the instructions to the Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation in conformity with generally accepted accounting principles. These financial statements should be read in conjunction with the financial statements and related disclosures contained in the Corporation's Annual Report on Form 10-K for the year ended September 30, 1995, filed with the Securities and Exchange Commission. 2. The number of shares used in computing earnings per common share for all quarters presented, based on the weighted average number of shares outstanding, was 3,382,977. The number of shares reflects a three-for-two stock split which occured in December 1994. 3. The results of operations for the six month period ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. 7 8 CAVCO INDUSTRIES, INC. AND SUBSIDIARIES MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Second Quarter 1996 Compared to Second Quarter 1995 For the quarter ended March 31, 1996, the Company's net sales were $33,515,820, representing an increase of $5,009,120 (17.6%) over the same quarter of the previous year. Sales by segment are as follows: $29,648,772 for manufactured housing, $2,229,771 for the leasing division, $1,462,896 for Sun Built, and $174,381 for Action. Manufactured housing sales increased $3,506,292 (13.4%), reflecting the continued growth experienced in the industry. The leasing division improved sales by $815,237 (57.6%), assisted by three additional branch locations. Consolidated gross margin increased from 17.5% in 1995 to 18.3% in 1996. Improved margins were experienced in both the manufactured housing and leasing segments. Selling, general and administrative expenses increased $333,041 (10%), but are decreasing as a percent of sales. Interest expense increased $312,412 primarily due to the leasing operations. In 1996, net earnings from continuing operations were $1,299,780, or $.38 per share for the quarter, compared to $956,026, or $.28 per share for the same quarter of the previous year. The increased earnings are due to increased sales volumes and improved gross margins mentioned above. Six Months 1996 Compared to Six Months 1995 For the six months ended March 31, 1996, the Company's net sales increased $5,768,344 (9.8%) over the same period of the previous year. Sales by segment are as follows: $56,217,213 for manufactured housing (a 4.6% increase), $4,480,668 for the leasing division (a 79.8% increase), $3,332,889 for Sun Built (a 82.5% increase), and $384,935 for Action (a 33.7% decrease). Consolidated gross margin increased from 18.8% in 1995 to 19.7% in 1996. Gross margin in manufactured housing increased from 16.5% to 17.8%, while the leasing segment improved its gross margin from 43.9% to 45.6%. Selling, general and administrative expenses increased $474,744 (7%), but are decreasing as a percent of sales. Interest expense increased $590,364 primarily due to the leasing operations. In 1996, net earnings from continuing operations were $2,972,548, or $.88 per share compared to $2,584,174, or $.76 per share for the previous year. The increased earnings are due to increased sales volumes and improved gross margins mentioned above. The Company has continued its efforts to focus on its core businesses to ensure long term success in the future. 8 9 Liquidity and Capital Resources The Company finished the six months ended March 31, 1996 with cash of $2,765,626 and working capital of $10,645,262. Net cash flow from operations was negative due primarily to a $7.9 million increase in accounts receivable in the manufacturing and leasing operations. The cash and working capital positions tend to fluctuate due to the expansion of the lease fleet. The Company borrowed $1,934,239 from its lines of credit during the six month period. The Company used $800,000 to temporarily fund some of the lease fleet expansion and the increase in receivables, while Sun Built used $1,134,239 from its line for additions to real estate held for sale. The Company also received $4,000,000 from its long term funding source. Uses of cash during the period include $3,819,046 for additions to the lease fleet, $362,224 for additions to investment in partnerships, and $893,396 for purchases of property, plant and equipment. The Company also repaid $1,844,578 on its lines of credit and $1,482,084 of long term debt. The Company continues to expand its lease fleet, and has $3,000,000 available to draw from its long term funding source. Other capital expenditures for the remainder of the year are expected to be only those necessary for normal replacement of machinery and equipment. The Company believes that its existing cash, available lines of credit, and cash generated from operations will be sufficient to meet capital expenditure and debt service requirements. Management is currently exploring various opportunities for the Company to divest itself of its Action Healthcare Management Services, Inc. subsidiary. This will enable the Company to better focus on its core businesses. During the past several years, inflation has not had a significant impact on the Company's operations. The Company has demonstrated its ability to reduce the manufacturing costs of its products through engineering changes and effective price negotiations, and has been able to adjust the selling price of its product in reaction to changing costs. 9 10 PART II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 1. (a) The Company's annual shareholders' meeting was held on February 27, 1996. (b) The meeting involved the election of directors. Holders of 2,155,380 shares were present at the meeting, which constituted a quorum. All five prior directors - Al R. Ghelfi, Ruth Smith, Robert Wold, Steve Kleeman, and William R. Blandin - were re-elected. A sixth director, Brent Ghelfi, was also elected. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits EX-27 Financial Data Schedule - Six months ended March 31, 1996 (b) Reports on Form 8-K The Company did not file any Form 8-K's during the six month period ended March 31, 1996. There has not been any additional information with respect to items listed in the Index, related to the periods being reported, which has not been previously reported or which, in the opinion of management, is of significance to investors. 10 11 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. Cavco Industries, Inc. -------------------------------------- (Registrant) Date May 14, 1996 /s/ Robert Ward ----------------- -------------------------------------- (Signature) Robert Ward, Vice President, Treasurer and Chief Financial Officer 11 EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996. 6-MOS SEP-30-1996 OCT-01-1995 MAR-31-1996 1 2,765,626 0 11,985,792 206,011 11,696,529 27,857,673 14,949,767 5,225,887 58,767,301 17,212,411 1,679,399 0 0 169,149 25,167,921 58,767,301 60,969,813 64,415,705 50,150,583 51,729,632 7,280,557 0 781,983 4,941,448 1,968,900 2,972,548 (18,673) 0 0 2,953,875 .87 .87
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