-----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, Qzhe4XjpRSqa7eP37UAyrz26CsGI6ouoCbvvYDEQ0IHwjk6UMdwNDK6a6y8ViJjx 3SFuFFQ+RE2l9jH37I8D5g== 0000950152-98-009567.txt : 19981216 0000950152-98-009567.hdr.sgml : 19981216 ACCESSION NUMBER: 0000950152-98-009567 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19981215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THOR INDUSTRIES INC CENTRAL INDEX KEY: 0000730263 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR HOMES [3716] IRS NUMBER: 930768752 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09235 FILM NUMBER: 98769488 BUSINESS ADDRESS: STREET 1: 419 W PIKE ST CITY: JACKSON CENTER STATE: OH ZIP: 45334 BUSINESS PHONE: 9375966849 MAIL ADDRESS: STREET 1: 419 W PIKE STREET CITY: JACKSON CENTER STATE: OH ZIP: 45334 10-Q 1 THOR INDUSTRIES, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED October 31, 1998 COMMISSION FILE NUMBER 1-9235 ---------------- ------ THOR INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 93-0768752 ------------------------------- ------------------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 419 West Pike Street, Jackson Center, OH 45334-0629 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (937) 596-6849 - --------------------------------------------------- -------------- 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 practicable date. Class Outstanding at 10/31/98 ----- ----------------------- Common stock, par value 12,185,810 shares $.10 per share 2 THOR INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ---------------------------
ASSETS ------ (UNAUDITED) ----------- OCTOBER 31, 1998 JULY 31, 1998 ---------------- ------------- Current assets: Cash and cash equivalents $ 42,681,902 $ 43,531,805 Accounts receivable: Trade 45,914,728 56,275,459 Other 5,362,394 1,850,844 Inventories 71,181,587 66,717,687 Prepaid expenses 5,072,987 5,328,903 ------------- ------------- Total current assets 170,213,598 173,704,698 ------------- ------------- Property: Land 1,400,247 1,400,995 Buildings and improvements 15,423,545 14,871,672 Machinery and equipment 13,695,969 14,083,765 ------------- ------------- Total cost 30,519,761 30,356,432 Accumulated depreciation and amortization 12,470,149 12,912,386 ------------- ------------- Property, net 18,049,612 17,444,046 ------------- ------------- Investment in joint ventures 3,621,950 3,369,968 ------------- ------------- Other assets: Goodwill 11,634,000 11,761,553 Non compete Agreements 2,806,351 3,011,798 Trademarks 2,151,823 2,208,158 Other 2,448,356 2,480,722 ------------- ------------- Total other assets 19,040,530 19,462,231 ------------- ------------- TOTAL ASSETS $ 210,925,690 $ 213,980,943 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 40,010,199 $ 49,382,369 Accrued liabilities: Taxes 5,160,348 -- Compensation and related items 7,661,795 11,181,046 Product warranties 10,132,416 10,063,753 Other 3,490,888 3,938,450 ------------- ------------- Total current liabilities 66,455,646 74,565,618 ------------- ------------- Other liabilities 1,245,355 1,200,955 Stockholders' equity: Common stock - authorized 20,000,000 shares; issued 13,698,147 shares @ 10/31/98 and 13,692,697 shares @ 7/31/98; par value of $.10 per share 1,369,815 1,369,270 Additional paid in capital 25,442,470 25,316,643 Foreign currency translation (1,274,416) (1,184,939) Retained earnings 138,976,429 132,227,188 Restricted Stock Plan (251,979) (137,544) Cost of treasury shares 1,512,337 shares @ 10/31/98 and 1,433,637 shares @ 7/31/98 (21,037,630) (19,376,248) ------------- ------------- Total stockholders' equity 143,224,689 138,214,370 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 210,925,690 $ 213,980,943 ============= =============
See notes to consolidated financial statements 3 THOR INDUSTRIES, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME FOR THE THREE MONTHS ENDED OCTOBER 31, 1998 AND 1997 ----------------------------------------------------
(UNAUDITED) ----------- THREE MONTHS ENDED OCTOBER 31 ----------------------------- 1998 1997 ---- ---- Net sales $189,176,940 $165,458,354 Cost of products sold 166,154,502 146,682,083 ----------- ----------- Gross profit 23,022,438 18,776,271 Selling, general, and administrative expenses 11,728,356 10,078,966 ----------- ----------- Operating income 11,294,082 8,697,305 Interest income 580,902 235,799 Interest expense (29,331) (44,865) Other income 115,464 446,973 ----------- ----------- Income before income taxes 11,961,117 9,335,212 Provision for income taxes 4,968,916 3,782,056 ----------- ----------- Net income $ 6,992,201 $ 5,553,156 =========== =========== Average common shares outstanding 12,220,818 12,215,555 --------------------------------- ----------- ----------- Earnings per common share: Basic $.57 $.45 ==== ==== Diluted $.57 $.45 ==== ==== Dividends paid per common share $.02 $.02 ------------------------------- ==== ====
See notes to consolidated financial statements 4
THOR INDUSTRIES, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE THREE MONTHS ENDED OCTOBER 31, 1998 AND 1997 ---------------------------------------------------- (UNAUDITED) ----------- 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,992,201 $ 5,553,156 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 560,756 585,671 Amortization 389,335 476,098 Changes in non cash assets and liabilities - ------------------------------------------ Accounts receivable 7,861,135 2,779,388 Inventories (9,043,096) 2,401,688 Prepaid expenses and other (51,849) 185,978 Accounts payable (7,987,871) (5,068,945) Accrued liabilities 3,802,618 894,369 Other Liabilities 44,400 -- ------------ ------------ Net cash provided by operating activities 2,567,629 7,807,403 - ----------------------------------------- ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant & equipment (1,437,641) (476,456) Disposals of property, plant & equipment 13,928 41,759 ------------ ------------ Net cash used in investing activities (1,423,713) (434,697) - ------------------------------------- ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (242,960) (244,305) Purchase of treasury stock (1,661,382) -- Proceeds from issuance of common stock - 800 ------------ ------------ Net cash used in financing activities (1,904,342) (243,505) - ------------------------------------- ------------ ------------ EFFECT OF EXCHANGE RATE CHANGES ON CASH (89,477) (144,302) ------------ ------------ Net increase (decrease) in cash and equivalents (849,903) 6,894,899 Cash and equivalents, beginning of year 43,531,805 12,752,729 ------------ ------------ CASH AND EQUIVALENTS, END OF PERIOD $ 42,681,902 $ 19,737,628 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid $ 1,106,726 $ 500,000 Interest paid 29,331 44,865 Non cash transaction: Issuance of restricted stock 126,372 46,791 Receivable from sale of Thor West 1,011,954
See notes to consolidated financial statements 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ 1. The accompanying consolidated financial statements, which are unaudited, reflect all adjustments consisting of only normal recurring adjustments, which are, in the opinion of management, necessary to present fairly the consolidated operating results for such unaudited periods. 2. Major classifications of inventories are:
(Unaudited) ----------- October 31, 1998 July 31, 1998 ---------------- ------------- Raw materials $ 45,707,055 $ 44,988,889 Work in process 19,214,324 19,858,127 Finished goods 9,320,904 4,724,367 ------------ ------------ Total 74,242,283 69,571,383 Less excess of FIFO costs over LIFO costs 3,060,696 2,853,696 ------------ ------------ Total inventories $ 71,181,587 $ 66,717,687 ============ ============
3. On September 29, 1997, the Board of Directors approved a Stock Award Plan which allows for the granting of up to 100,000 shares of restricted stock to selected executives. Restrictions expire 50% after five years following the date of issue, and the balance after six years. As of October 31, 1998, the Company issued 10,600 shares of restricted stock under the Plan. Compensation cost related to the Plan which is being amortized over the restriction period was $11,937 for the three month period ended October 31, 1998. 4. Earnings Per Share - As of January 31, 1998, the Company adopted Financial Accounting Standards Board Statement No. 128, "Earnings Per Share" (FAS 128). This standard requires the presentation of basic and diluted earnings per share on the face of the income statement. Earnings per share as reported in prior periods has been restated in accordance with FAS 128, by dividing net income by the following:
Three Months Three Months ended ended October 31, 1998 October 31, 1997 ---------------- ---------------- Weighted average shares outstanding for basic earnings per share 12,220,818 12,215,555 Stock options 56,099 48,189 ------------- ------------- Total - For diluted shares 12,276,917 12,263,744
5. Comprehensive Income - In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," which will require disclosure in the financial statements of all the changes in equity during a period from transactions and other events and circumstances from non-owner sources. Items included in comprehensive income will include separate classification of items based upon their nature. The Statement requires that comparative information for prior years to be restated. SFAS No. 130 is effective for financial statements for fiscal years beginning after December 15, 1997. The effect on the Company's financial statements has not yet been determined. 6. Segments - In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," which will require new segment information in public companies' annual financial statements. Additionally, selected information will be required in interim financial statements. The Statement requires that comparative information for prior years be restated. SFAS No. 131 is effective for financial statements for periods beginning after December 15, 1997. The effect on the Company's financial statements has not yet been determined. 7. Effective April 6, 1998, the Company implemented a 3 for 2 stock split. All per share amounts are restated to reflect this split. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (CONTINUED) ----------- 8. Effective September 30, 1998, the Company sold certain assets and liabilities of the Company's Thor West operations for $1,011,954 to the management of Thor West. Thor West's net sales and operating loss included in the three months ended October 1998 consolidated statements of income of Thor Industries, Inc. are $4,050,351 and $(848,207), respectively. Thor West's net sales and operating loss included in the three months ended October 31, 1997 consolidated statement of income for Thor Industries, Inc. are $7,765,411 and $(198,254). As part of the transaction, the Company agreed to guarantee $750,000 of debt of the acquirer and assumed a $750,000 unsecured subordinated note. The note has a three year term and bears interest at 10%. 9. Derivative Instruments and Hedging Activities - SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued in June 1998. The statement requires derivatives to be recorded on the balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in fair value of the derivatives are recorded depending upon whether the instruments meet the criterion for hedge accounting. This statement is effective for fiscal years beginning after June 15, 1999. 10. On February 9, 1998, the Company purchased certain assets and liabilities of Champion Motor Coach, Inc. (now Champion Bus, Inc.). The cash price of the acquisition was approximately $9,671,000 which was paid from internal funds. PART II No Reports. 7 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------- Quarter Ended October 31, 1998 vs. Quarter Ended October 31, 1997 - ----------------------------------- Net sales for the first quarter totaled $189,176,940, up 14.3% from $165,458,354 in the same period last year. Income before income taxes was $11,961,117, up 28.1% from $9,335,212 in the same period last year. Of this $2,625,905 increase in income before taxes, $954,000 represents income of Champion Bus, Inc. acquired on February 9, 1998, losses of Thor West in 1998 of $916,766 versus $290,439 in 1997 and, in 1997 $758,000 of non recurring losses of ElDorado National Michigan. Recreation vehicle revenues were up primarily due to increased unit sales. Recreation vehicle revenues of $138,319,784 were 10.1% higher than last year and were 73% of total company revenues compared to 76% last year. Bus revenues of $50,857,156 were 27.8% higher than last year and were 27% of total company revenues compared to 24% last year. Bus revenues include sales of $15,118,000 of Champion Bus and $200,000 sales in 1998 versus $2,866,000 in 1997 of ElDorado National Michigan, which was shut down effective 7/31/98. Manufacturing gross profit increased to 12.2% compared to 11.3% last year, due primarily to higher volume, and the ElDorado National Michigan loss last year described above. 1998 operating income totaled $11,294,082, up 29.9% from $8,697,305 in the same period last year. Champion Bus operating income accounted for approximately $1,000,000 of the increase in operating income and the October 31, 1997 results included approximately $750,000 of restated losses sustained by ElDorado National Michigan. The balance of increased operating income is the result of increased revenues. Selling, general and administrative expenses and amortization of intangibles increased to $11,728,356, 6.2% of sales, from $10,078,966, 6.1% of sales, primarily due to increased income related compensation and selling expense related to increased volume. Interest income increased by $345,103 primarily due to investment of excess cash. The combined income tax rate was 41.5% in the current year compared to 40.5% last year. Financial Condition and Liquidity - --------------------------------- As of October 31, 1998, Thor had $42,681,902 in cash and cash equivalents, compared to $43,531,805 on July 31, 1998. Working capital at October 31, 1998 was $103,757,952 compared to $99,139,080 at July 31, 1998. Inventory valued at current cost at October 31, 1998 exceeded the LIFO inventory by $3,060,696. At October 31, 1998, the Company had a $30,000,000 revolving line of credit with Harris Trust and Savings Bank. There were no borrowings at October 31, 1998. The loan agreement contains certain covenants, including restrictions on additional indebtedness, and the Company must maintain certain financial ratios. The line of credit bears interest at negotiated rates below prime and expires on November 30, 1999. The Company had no long term debt as of October 31, 1998. Amortization of intangibles decreased from $476,098 for the period ended October 31, 1997, to $389,334 for the period ended October 31, 1998 due to certain intangibles being fully amortized. On September 29, 1997, the Board of Directors approved the Thor Industries, Inc. Restricted Stock and Select Executive Incentive Plans. Under the terms of the Restricted Stock Plan a total of up to 100,000 restricted shares of stock may be granted to selected executives of Thor within a 10 year period. During the three months of fiscal 1999, Thor purchased 78,700 shares of its common stock, increasing treasury stock by $1,661,382. 8 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------- (CONTINUED) ----------- The Company believes that internally generated funds and the revolving credit agreement already in place will be sufficient to meet current operating needs and anticipated capital requirements. The Company does not anticipate significant capital expenditures for fiscal 1999. The Company established action plans to make all of our systems Year 2000 Compliant by June 30, 1999. Approximately 70% of our systems, on a corporate-wide basis, are currently Y2K compliant. While no guarantees can be given, the Company believes Thor Industries, Inc. will be able to resolve Year 2000 Compliance issues in matters affecting Thor Industries, Inc. The Company has developed a standard Year 2000 survey questionnaire being used by all Company locations. The survey forms were mailed to all national account vendors, and to critical vendors on a local level. National account survey forms are returned to the Director, Internal Audit who reviews them for compliance issues. Any needed vendor follow-up is communicated to the Senior Vice President of Purchasing for resolution. Questioning on the vendor survey form is aimed at determining whether vendors' products and administrative systems are Y2K compliant. If systems are non-complaint, the form asks what changes are needed and expected implementation dates. The Company has surveyed office equipment, auxiliary systems to the physical buildings, and our equipment for Y2K compliant microprocessors and feel the Company has no exposures in these areas. Most production, ordering, and scheduling systems, not being replaced with current Y2K software, are already complimented with extensive manual systems that can be relied upon in the event Y2K glitches are encountered. The Company's plans include converting order entry and accounting applications to microcomputer spreadsheets in the event that such systems are found not to be Y2K complaint. This report includes "forward looking statements" that involve uncertainties and risks. There can be no assurance that actual results will not differ from the Company's expectations. Factors which could cause materially different results include, among others, the success of new product introductions, the pace of acquisitions and cost structure improvements, competitive and general economic conditions, and the other risks set forth in the Company's filings with the Securities and Exchange Commission. 9 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. THOR INDUSTRIES, INC. (Registrant) DATE 12/8/98 /s/ Wade F. B. Thompson ------------------ -------------------------------------- Wade F. B. Thompson Chairman of the Board, President and Chief Executive Officer DATE 12/8/98 /s/ Walter L. Bennett ------------------ -------------------------------------- Walter L. Bennett Senior Vice President Secretary (Chief Accounting Officer) EX-27 2 EXHIBIT 27
5 0000730263 Thor Industries, Inc. 3-MOS JUL-31-1999 AUG-01-1998 OCT-31-1998 42,681,902 0 51,277,122 0 71,181,587 170,213,598 30,519,761 12,470,149 210,925,690 66,455,646 0 0 0 1,369,815 141,854,874 210,925,690 189,176,940 189,176,940 166,154,502 177,882,850 (696,366) 0 29,331 11,961,117 4,968,916 6,992,201 0 0 0 6,992,201 .57 .57
-----END PRIVACY-ENHANCED MESSAGE-----