-----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, CCcqepOoMlezCCd39DDzK6jSA2OjfHsNMFjUrOt82ZRrpwr9kNW4Gf8sxC6379ow DSNhqe6GRhET3LJtb4Odow== 0000314132-94-000003.txt : 19940901 0000314132-94-000003.hdr.sgml : 19940901 ACCESSION NUMBER: 0000314132-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940731 FILED AS OF DATE: 19940831 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEETWOOD ENTERPRISES INC/DE/ CENTRAL INDEX KEY: 0000314132 STANDARD INDUSTRIAL CLASSIFICATION: 3716 IRS NUMBER: 951948322 STATE OF INCORPORATION: DE FISCAL YEAR END: 0428 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07699 FILM NUMBER: 94547396 BUSINESS ADDRESS: STREET 1: 3125 MYERS ST STREET 2: P O BOX 7638 CITY: RIVERSIDE STATE: CA ZIP: 92523 BUSINESS PHONE: 7143513500 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) X OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1994 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 1-7699 FLEETWOOD ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Delaware 95-1948322 _______________________ _____________________________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3125 Myers Street, Riverside, California 92503-5527 _________________________________________________________________ __________ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (909) 351- 3500 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 close of the period covered by this report. Class Outstanding at July 31, 1994 _________________________ _______________________________________ Common stock, $1 par value 45,996,542 shares Preferred share purchase rights -- CONDENSED FINANCIAL STATEMENTS The following unaudited interim condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Such financial statements have been reviewed by Arthur Andersen & Co. in accordance with standards established by the American Institute of Certified Public Accountants. As indicated in their report included herein, Arthur Andersen & Co. does not express an opinion on these statements. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. In the Company's opinion, the statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the results of operations for the periods ending July 31, 1994 and July 25, 1993 and the balances as of July 31, 1994 and April 24, 1994. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the board of directors and shareholders of Fleetwood Enterprises, Inc.: We have made a review of the accompanying condensed consolidated balance sheet of FLEETWOOD ENTERPRISES, INC. (a Delaware Corporation) and subsidiaries as of July 31, 1994, and the related condensed consolidated statements of income for the fourteen-week period ended July 31, 1994 and the thirteen-week period ended July 25, 1993, the condensed consolidated statements of cash flows for the fourteen-week period ended July 31, 1994 and the thirteen-week period ended July 25, 1993 and the condensed consolidated statement of changes in shareholders' equity for the fourteen-week period ended July 31, 1994, in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to the financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Fleetwood Enterprises, Inc. and subsidiaries as of April 24, 1994, and the related consolidated statements of income, cash flows and changes in shareholders' equity for the year then ended (not presented herein), and, in our report dated June 23, 1994 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of April 24, 1994, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ARTHUR ANDERSEN & CO. Orange County, California August 31, 1994 FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (CONSENSED) (Amounts in thousands except per share data) (UNAUDITED) Fourteen Thirteen Weeks Ended Weeks Ended July 31, July 25, 1994 1993 OPERATING REVENUES: Manufacturing sales $ 753,578 $ 528,288 Finance interest income 10,720 9,139 764,298 537,427 COSTS AND EXPENSES: Cost of products sold 608,536 432,177 Operating expenses 103,889 78,970 Finance interest expense 4,645 3,978 717,070 515,125 Operating income 47,228 22,302 OTHER INCOME (EXPENSE): Investment income 2,334 2,545 Interest expense (818) (573) Other (11) 40 1,505 2,012 Income before provision for income taxes and cumulative effect of accounting change 48,733 24,314 Provision for income taxes (19,646) (9,381) Minority interest in net loss of subsidiary 165 193 Income before cumulative effect of accounting change 29,252 15,126 Cumulative effect of change in accounting for income taxes -- (1,500) Net income $ 29,252 $ 13,626 Income per share before cumulative effect of accounting change $.63 $.33 Cumulative effect of change in accounting for income taxes -- (.03) Net income per Common and equivalent share $.63 $.30 Dividends declared per share of Common stock outstanding $.14 $.125 Common and equivalent shares outstanding 46,457 46,002 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONDENSED) (Amounts in thousands) ASSETS July 31, April 24, 1994 1994 (Unaudited) Cash $ 33,269 $ 37,267 Investments 181,675 121,212 Receivables: Manufacturing 158,402 158,054 Finance company 302,273 386,207 Inventories: Raw materials 113,383 117,778 Work in process and finished products 53,763 65,876 Land held for future development 6,800 6,800 Property, plant and equipment 235,581 220,788 Deferred tax benefits 63,640 59,084 Other assets 54,278 51,057 $1,203,064 $1,224,123 LIABILITIES AND SHAREHOLDERS'EQUITY Accounts payable $ 87,810 $ 80,568 Commercial paper borrowings and long-term debt 273,887 360,601 Employee compensation and benefits 98,878 98,004 Federal and state taxes on income 16,826 (4,323) Insurance reserves 43,626 45,343 Other liabilities 112,955 97,715 Total liabilities 633,982 677,908 Contingent liabilities Minority interest (435) (251) Shareholders' equity: Preferred stock, $1 par value,authorized 10,000,000 shares, none outstanding -- - -- Common stock, $1 par value, authorized 75,000,000 shares, outstanding 45,997,000 at July 31, 1994 and 45,996,000 at April 24,1994 45,997 45,996 Capital surplus 40,956 40,949 Retained earnings 483,899 461,086 Foreign currency translation adjustment (1,248) (1,565) Investment securities valuation adjustment (87) - -- 569,517 546,466 $1,203,064 $1,224,123 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED) (Amounts in thousands) (UNAUDITED) Fourteen Thirteen Weeks Weeks Ended Ended July 31, July 25, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $29,252 $13,626 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 5,108 4,091 Amortization of intangibles and goodwill 497 455 Provision for credit losses 1,387 672 (Gain) loss on sales of property, plant and equipment 11 (40) Changes in assets and liabilities: (Increase) decrease in manufacturing receivables (348) 19,549 Decrease in inventories 16,508 2,263 Increase in deferred tax benefits and other assets (8,274) (6,165) Increase in accounts payable 7,242 3,447 Increase in employee compensation and benefits 874 99 Increase in Federal and state taxes on income 21,149 10,344 Increase in other liabilities 13,523 5,042 Foreign currency translation adjustment 317 (718) Net cash provided by operating activities 87,246 52,665 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of finance receivables (310,504) (239,461) Principal collected on finance receivables 267,624 222,951 Proceeds from sale of retail sales contracts 125,427 - -- Purchases of investment securities: Held-to-maturity (1,684,253) (1,751,377) Available-for-sale (213,201) (58,420) Proceeds from maturity of investment securities: Held-to-maturity 1,664,110 1,753,597 Available-for-sale 135,970 7,414 Proceeds from sale of available-for-sale investment securities 36,824 36,173 Purchases of property, plant and equipment, net (19,912) (25,372) Minority interest in subsidiary (184) (193) Net cash provided by (used in) investing activities 1,901 (54,688) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of commercial paper 471,971 323,448 Principal payments on commercial paper (558,685) (317,858) Dividends to shareholders (6,439) (5,708) Proceeds from exercise of stock options 8 - - Net cash used in financing activities (93,145) (118) Decrease in cash (3,998) (2,141) Cash at beginning of period 37,267 34,834 Cash at end of period $33,269 $32,693 Supplementary disclosures: Income taxes paid $2,434 $618 Interest paid 6,330 6,041 See accompanying notes to financial statements. FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (CONDENSED) (Amounts in thousands) Foreign Investment Common Stock Currency Securities Total Number Capital Retained Translation Valuation Shareholders' of Shares Amount Surplus Earnings Adjustment Adjustment Equity Balance April 24, 1994 45,996 $45,996 $40,949 $461,086 $(1,565) $ -- $546,466 Add (deduct)- Net income -- -- -- 29,252 -- - -- 29,252 Cash dividends declared on Common stock -- -- -- (6,439) -- - -- (6,439) Stock options exercised 1 1 7 -- -- - -- 8 Foreign currency translation adjustment -- -- -- -- 317 - -- 317 Investment securities valuation adjustment -- -- -- -- -- (87) (87) Balance July 31, 1994 45,997 $45,997 $40,956 $483,899 $(1,248) $ (87) $569,517 See accompanying notes to financial statements.
FLEETWOOD ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 1994 1) Reference to Annual Report Reference is made to the Notes to Consolidated Financial Statements included in the Company's Form 10-K annual report for the year ended April 24, 1994. 2) Investment Securities Effective with the beginning of fiscal year 1995, the Company adopted FAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The statement requires that all applicable investments be classified as trading securities, available-for-sale securities or held-to- maturity securities. The Company did not have any investments classified as trading securities during the periods presented. The statement further requires that held-to-maturity securities be reported at amortized cost and available-for-sale securities be reported at fair value, with unrealized gains and losses excluded from earnings but reported in a separate component of shareholders' equity (net of the effect of income taxes) until they are sold. At the time of sale, any gains or losses, calculated by the specific identification method, will be recognized as a component of operating results. The following is a summary of investment securities as of July 31, 1994: (Amounts in thousands) Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available-for-Sale Securities: U.S. Treasury securities and obligations of U.S. government agencies $ 37,664 $ 30 $ 97 $ 37,597 Obligations of states and political subdivisions 33,741 25 18 33,748 U.S. Corporate securities 1,002 -- -- 1,002 Foreign government obligations 7,634 250 18 7,866 Other debt securities 39,793 336 646 39,483 $119,834 $641 $779 $119,696 Held-to-Maturity Securities: Foreign government obligations $ 4,689 $ -- $ -- $ 4,689 Other debt securities 57,239 -- -- 57,239 $61,928 $ -- $ -- $61,928
The amortized cost and estimated fair value of the securities at July 31, 1994, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. (Amounts in thousands) Fair Cost Value Available-for-Sale: Due in one year or less $ 81,084 $ 80,657 Due after one year through five years 20,242 20,248 Due after five years through ten years 18,508 18,791 $119,834 $119,696 Held-to-Maturity: All due in one year or less $61,928$61,928
Investment income for the quarter ended July 31, 1994 consisted of the following: Amount Interest income $2,054 Gross realized gains 299 Gross realized losses (9) Investment management fees (10) $2,334 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Current Quarter Compared to Same Quarter Last Year Significant sales gains from both of the Company's major business segments led to record earnings for the first quarter of fiscal 1995. Net income for the quarter ended July 31, 1994, increased 115 percent to $29,252,000 or 63 cents per share, up from $13,626,000 or 30 cents per share last year. Last year's first period earnings included a $1,500,000 charge or 3 cents per share for a change in accounting for income taxes. Also, this year's first quarter contained 14 weeks compared to 13 weeks in last year's similar period. Total revenues for the Company reached $764.3 million for the quarter, 42 percent ahead of last year's $537.4 million. Strong demand for manufactured housing in most regions of the country and an expanding Fleetwood market share resulted in the highest quarterly housing revenues on record. Housing revenues jumped 55 percent in the first quarter to $351.9 million, up from $227.6 million a year ago. The Company sold 18,359 homes in the period, 49 percent ahead of last year's first quarter. Housing group sales represented 47 percent of total Company revenues compared to 43 percent last year. Recreational vehicle revenues reached a new first quarter high of $389.9 million, 32 percent ahead of the $294.3 recorded a year ago. Strong sales gains from motor homes and travel trailers led to the increase. Motor home revenues were up 36 percent to a first quarter record $220.0 million on a 26 percent gain in unit volume to 4,668. The travel trailer division also posted record sales for a July quarter with a 29 percent increase to $135.4 million. Unit volume was up 25 percent to 10,755. The Company's folding trailer division recorded revenues of $21.6 million, a new first quarter high and 8 percent ahead of last year's exceptionally strong first period. Folding trailer shipments rose 1 percent to 5,257 units. Fleetwood's European RV operation generated first quarter revenues of $12.9 million, 66 percent ahead of last year's $7.7 million. Recreational vehicle sales accounted for 52 percent of total Company revenues, down from 56 percent last year. Manufacturing gross profit increased to 19.2 percent of sales from 18.2 percent last year, reflecting higher profit margins for both housing and recreational vehicles. This resulted from a combination of factors, including improved pricing, relatively stable direct labor and raw material costs, and the favorable effect of higher volume on certain manufacturing overhead costs which are not directly variable with sales. Operating expenses rose 32 percent to $103.9 million, but decreased as a percentage of revenues from 14.7 percent to 13.6 percent, reflecting the effect of higher volume. Selling expenses of $43.4 million were up 54 percent, and also rose as a percentage of revenues from 5.2 percent to 5.7 percent. Cost increases were primarily volume-related and included higher product warranty expenses, as well as increases for sales commissions, marketing programs and product financing. General and administrative expenses increased 19 percent to $60.5 million primarily due to higher employee compensation and benefits, much of which was related to increased management incentive compensation based upon improved profitability. Non-operating income for the first quarter included net interest income of $1.5 million, down 23 percent from $2.0 million last year. The decline reflects reduced investment income primarily caused by lower rates of return and higher interest expense for the Company's European operation. The combined Federal and state income tax rate increased to 40.3 percent from last year's 38.6 percent primarily due to higher amounts accrued for state income taxes in the current year. PART II OTHER INFORMATION There are no other items to be reported or exhibits to be filed. 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. FLEETWOOD ENTERPRISES, INC. Paul M. Bingham Financial Vice President and Chief Financial Officer August 31, 1994 -----END PRIVACY-ENHANCED MESSAGE-----