-----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, Ewv5ZT2A5Oq44ANK37kouI3Js+/6kqncd5SM3D1cEp5udVzbxiFp2msQDzNFItXN Y7I+X4hKnJok8hXQurOyug== 0000950152-99-009559.txt : 19991209 0000950152-99-009559.hdr.sgml : 19991209 ACCESSION NUMBER: 0000950152-99-009559 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 19991208 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: 99770888 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. 10-Q 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, 1999 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 10/31/99 ----- ----------------------- Common stock, par value 12,141,660 shares $.10 per share 2
THOR INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------------------- ASSETS ------ (UNAUDITED) OCTOBER 31, 1999 JULY 31, 1999 ---------------- ------------- Current assets: Cash and cash equivalents $ 54,060,736 $ 68,865,635 Accounts receivable: Trade 57,238,789 52,167,539 Other 1,779,078 1,667,486 Inventories 79,629,257 72,850,279 Deferred income taxes and other 11,185,988 6,572,972 ------------- ------------- Total current assets 203,893,848 202,123,911 ------------- ------------- Property: Land 1,492,477 1,400,995 Buildings and improvements 20,544,379 19,010,749 Machinery and equipment 15,078,627 14,122,834 ------------- ------------- Total cost 37,115,483 34,534,578 Accumulated depreciation and amortization 12,894,796 12,218,224 ------------- ------------- Property, net 24,220,687 22,316,354 ------------- ------------- Investment in joint ventures 3,504,619 3,419,101 ------------- ------------- Other assets: Goodwill 11,123,789 11,251,342 Non compete Agreements 1,959,411 2,235,010 Trademarks 1,976,484 2,020,319 Other 4,357,400 2,545,698 ------------- ------------- Total other assets 19,417,084 18,052,369 ------------- ------------- TOTAL ASSETS $ 251,036,238 $ 245,911,735 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 41,676,997 $ 48,290,096 Accrued liabilities: Taxes 6,519,210 -- Compensation and related items 9,715,762 13,676,462 Product warranties 11,349,955 11,543,598 Other 5,415,054 5,519,658 ------------- ------------- Total current liabilities 74,676,978 79,029,814 ------------- ------------- Deferred income taxes and other liabilities 1,552,856 1,508,756 Stockholders' equity: Common stock - authorized 20,000,000 shares; issued 13,730,997 shares @ 10/31/99 and 13,715,147 shares @ 7/31/99; par value of $.10 per share 1,373,100 1,371,515 Additional paid in capital 25,984,030 25,684,380 Foreign currency translation (983,300) (1,198,511) Retained earnings 171,435,813 162,018,698 Restricted Stock Plan (364,903) (216,168) Unrealized appreciation on investments 208,647 -- Cost of treasury shares 1,589,337 shares @ 10/31/99 and 1,566,637 shares @ 7/31/99 (22,846,983) (22,286,749) ------------- ------------- Total stockholders' equity 174,806,404 165,373,165 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 251,036,238 $ 245,911,735 ============= =============
See notes to consolidated financial statements 3
THOR INDUSTRIES, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME FOR THE THREE MONTHS ENDED OCTOBER 31, 1999 AND 1998 ---------------------------------------------------- (UNAUDITED) ----------- THREE MONTHS ENDED OCTOBER 31 ----------------------------- 1999 1998 ---- ---- Net sales $ 221,020,752 $ 189,176,940 Cost of products sold 191,451,261 166,154,502 ------------- ------------- Gross profit 29,569,491 23,022,438 Selling, general, and administrative expenses 13,867,160 11,728,356 ------------- ------------- Operating income 15,702,331 11,294,082 Interest income 817,586 580,902 Interest expense (39,766) (29,331) Other income 228,071 305,464 Loss on divestment of subsidiary (221,121) (190,000) ------------- ------------- Income before income taxes 16,487,101 11,961,117 Provision for income taxes 6,827,193 4,968,916 ------------- ------------- Net income $ 9,659,908 $ 6,992,201 ============= ============= Average common shares outstanding 12,148,235 12,220,818 - --------------------------------- ------------- ------------- Earnings per common share: - -------------------------- Basic $ .80 $ .57 ====== ===== Diluted $ .79 $ .57 ====== ===== 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, 1999 AND 1998 ---------------------------------------------------- (UNAUDITED) ----------- 1999 1998 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,659,908 $ 6,992,201 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 672,290 560,756 Amortization 446,987 389,335 Loss on divestment of subsidiary 221,122 190,000 Changes in non cash assets and liabilities - ------------------------------------------ Accounts receivable (5,182,842) 7,861,135 Inventories (6,778,978) (9,043,096) Prepaid expenses and other (4,881,881) (51,849) Accounts payable (6,613,099) (7,987,871) Accrued liabilities 2,039,141 3,612,618 Other Liabilities 60,465 44,400 ------------ ------------ Net cash provided by (used in) operating activities (10,356,887) 2,567,629 - --------------------------------------------------- ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant & equipment (2,559,977) (1,437,641) Disposals of property, plant & equipment 4,127 13,928 Purchase of available for sale investment (1,440,481) -- ------------ ------------ Net cash used in investing activities (3,996,331) (1,423,713) - ------------------------------------- ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (242,793) (242,960) Purchase of treasury stock (560,234) (1,661,382) Proceeds from issuance of common stock 136,135 -- ------------ ------------ Net cash used in financing activities (666,892) (1,904,342) - ------------------------------------- ------------ ------------ EFFECT OF EXCHANGE RATE CHANGES ON CASH 215,211 (89,477) ------------ ------------ Net decrease in cash and equivalents (14,804,899) (849,903) Cash and equivalents, beginning of year 68,865,635 43,531,805 ------------ ------------ CASH AND EQUIVALENTS, END OF PERIOD $ 54,060,736 $ 42,681,902 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid $ 1,105,900 $ 1,106,726 Interest paid 39,766 29,331 NON CASH TRANSACTIONS: Issuance of restricted stock 165,100 126,372 Receivable from divestment of subsidiary -- 1,011,954 Unrealized appreciation on investment 208,647 --
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, 1999 July 31, 1999 ---------------- ------------- Raw materials $32,270,015 $31,479,371 Chassis 18,090,267 19,944,422 Work in process 22,372,719 20,959,710 Finished goods 10,764,491 4,128,011 ---------- --------- Total 83,497,492 76,511,514 Less excess of FIFO costs over LIFO costs 3,868,235 3,661,235 --------- --------- Total inventories $79,629,257 $72,850,279 =========== =========== 3. Earnings Per Share Three Months Three Months ended ended October 31, 1999 October 31, 1998 ---------------- ---------------- Weighted average shares outstanding for basic earnings per share 12,148,235 12,220,818 Stock options 57,415 56,099 ---------- ---------- Total - For diluted shares 12,205,650 12,276,917 ========== ========== 4. Stockholders' Equity Comprehensive income for the quarters ended October 31, 1999 and 1998 was $10,083,766 and $6,902,724, respectively. Three Months Three Months ended ended October 31, 1999 October 31, 1998 ---------------- ---------------- Net Income $ 9,659,908 $ 6,992,201 Foreign currency translation adjustment 215,211 (89,477) Unrealized appreciation on investments 208,647 -- ----------- ----------- Comprehensive Income $10,083,766 $ 6,902,724 =========== =========== 5. Segment Information Three Months Three Months ended ended October 31, 1999 October 31, 1998 ---------------- ---------------- Net Sales: Recreation vehicles Towables $ 93,044,286 $ 80,582,529 Motorized 67,573,924 55,863,818 Other 2,135,606 1,873,437 Buses 58,266,936 50,857,156 ------------- ------------- Total $ 221,020,752 $ 189,176,940 ============= ============= Operating Income: Recreation vehicles $ 11,846,858 $ 8,933,572 Buses 5,228,394 3,335,725 Corporate (1,372,921) (975,215) ------------- ------------- Total $ 15,702,331 $ 11,294,082 ============= =============
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (CONTINUED) ----------- Identifiable Assets: Recreation vehicles $112,515,384 $98,960,442 Buses 60,082,975 51,799,333 Corporate 78,437,879 60,165,915 ------------- ------------- Total $251,036,238 $210,925,690 ============ ============
6. In December, 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. 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%. During the first quarter of fiscal 2000, pursuant to an agreement to discontinue purchasing and consigning chassis to Mountain High Coachworks, Thor agreed to guarantee up to $1,000,000 of financing on chassis purchased through Ford Motor Credit. In the event that Mountain High Coachworks is not able to continue performing its warranty obligations, the Company would be responsible for warranty on Thor West product sold before December 9, 1998. 7. 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, 2000. The effect on the Company's financial statements has not yet been determined. PART II Item 4. Submission of Matters to a Vote of Security Holders On September 16, 1999 a form 14-C was filed to inform stockholders of Thor Industries, Inc. that the holder of a majority of the outstanding stock of the Company had delivered written consent to the Company approving the 1999 Stock Option Plan. Item 6. Exhibits and Reports on Form 8-K a.) Exhibit NA b.) Reports on Form 8-K On October 25, 1999, a Form 8-K was filed with the Securities and Exchange Commission pursuant to a release No. 42021 regarding Section 21C of the Securities Exchange Act of 1934. 7 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Quarter Ended October 31, 1999 vs. Quarter Ended October 31, 1998 - --------------------------------- Net sales for the first quarter totaled $221,020,752, up 16.8% from $189,176,940 in the same period last year. Income before income taxes was $16,487,101, up 37.8% from $11,961,117 in the same period last year. Of this $4,525,984 increase in income before taxes, $695,644 represents reduced losses of Thor West of $221,122 in 1999 versus loss from operations of $726,766 and a $190,000 divestment loss in 1998. The remaining increase is attributable to increased sales. Recreation vehicle revenues of $162,753,816 were 17.7% higher than last year and were 74% of total company revenues compared to 73% last year. Recreation vehicle revenues were up primarily due to increased unit sales. Bus revenues of $58,266,935 were 14.6% higher than last year and were 26% of total company revenues compared to 27% last year. Price increases averaged approximately 1.5% for the quarter ended October 31, 1999. 1999 operating income totaled $15,702,331, up 39% from $11,294,082 in the same period last year. Of this $4,408,249 increase in operating income, $658,207 is due to operating losses of Thor West in 1998 compared to no operating losses in 1999. The remaining income is the result of increased revenues. Selling, general and administrative expenses and amortization of intangibles increased to $13,867,160, 6.3% of sales, from $11,728,356, 6.2% of sales, primarily due to increased income related compensation and selling expense related to increased volume. Interest income increased by $236,684 primarily due to investment of cash. The combined income tax rate was 41.4% in the current year compared to 41.5% last year. Financial Condition and Liquidity - --------------------------------- As of October 31, 1999, Thor had $54,060,736 in cash and cash equivalents, compared to $68,865,635 on July 31, 1999. Working capital at October 31, 1999 was $129,216,870 compared to $123,094,097 at July 31, 1999. Inventory valued at current cost at October 31, 1999 exceeded the LIFO inventory by $3,868,235. At October 31, 1999, the Company had a $30,000,000 revolving line of credit with Harris Trust and Savings Bank. There were no borrowings at October 31, 1999. 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 October 30, 2000. The Company had no long term debt as of October 31, 1999. On July 22, 1999, The Board of Directors adopted the Thor Industries, Inc. 1999 Stock Option Plan which was subsequently approved by a majority of its shareholders. Under the terms of the Plan, options to purchase 500,000 shares may be granted to selected executives of Thor Industries within a 10 year period. During the first quarter of fiscal 2000, Thor purchased 22,700 shares of its common stock, increasing treasury stock by $560,234. 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. Capital expenditures of $2,559,977 were primarily for expansion of the Company's Four Winds manufacturing facility. Additional funds to complete this expansion will be approximately $1,000,000. The Company anticipates additional capital expenditures in fiscal year 2000 of approximately $5,200,000 primarily to expand its Komfort and Thor California RV operations and its bus operations in total. Amortization of intangibles increased from $389,335 for the period ended October 31, 1998, to $446,987 for the period ended October 31, 1999. YEAR 2000 Issues - ---------------- The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's computer programs that have date-sensitive software 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 in operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. 8 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------- (CONTINUED) ----------- The Company has initiated formal communications with all of its significant suppliers and large customers to determine the extent to which the Company is vulnerable to those third parties' failure to remedy their own Year 2000 issue. The Company's total Year 2000 project costs include the estimated costs and time associated with the impact of third party's Year 2000 issues on the Company, and are based on presently available information. However, there can be no guarantee that the systems of other companies on which the Company's systems rely will be timely converted, or that a failure to convert by another company, or a conversion that is incompatible with the Company's systems, would not have a material adverse effect on the Company. The Company believes it has no exposure to contingencies related to the Year 2000 issue for the products it has sold. The Company has completed its critical Year 2000 projects. The total cost of the Year 2000 project is estimated at $343,000, substantially all of which was to purchase revised software and hardware, and was funded through operating cash flows. The Company believes that manual systems could serve as backup for any systems used internally. The Company also plans to store on spreadsheets or have manual documents on all data necessary to run its day to day operations on an interim basis during the initial month of Year 2000. 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 12/8/99 /s/ Wade F. B. Thompson --------------------- ----------------------------------- Wade F. B. Thompson Chairman of the Board, President and Chief Executive Officer DATE 12/8/99 /s/ Walter L. Bennett --------------------- ----------------------------------- Walter L. Bennett Senior Vice President Secretary (Chief Financial Officer) EX-27 2 EXHIBIT 27
5 3-MOS JUL-31-1999 AUG-01-1999 OCT-31-1999 54,060,736 0 59,017,867 0 79,629,257 203,893,848 37,115,483 12,894,796 251,036,238 74,676,978 0 0 0 1,373,100 173,433,304 251,036,238 221,020,752 221,020,752 191,451,261 205,318,421 (824,536) 0 39,766 16,487,101 6,827,193 9,659,908 0 0 0 9,659,908 .80 .79
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