-----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, DTYvCbXh2Xaxi0UUS1uW4Kea/tY7MQcawgIuA9QBJ/L0rW2plIx2gLQkKogRi2JC hDBOzDzrEN4DY95w9GJ7Dw== 0000950168-94-000283.txt : 19940822 0000950168-94-000283.hdr.sgml : 19940822 ACCESSION NUMBER: 0000950168-94-000283 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OAKWOOD HOMES CORP CENTRAL INDEX KEY: 0000073609 STANDARD INDUSTRIAL CLASSIFICATION: 2451 IRS NUMBER: 560985879 STATE OF INCORPORATION: NC FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07444 FILM NUMBER: 94544136 BUSINESS ADDRESS: STREET 1: 2225 S HOLDEN RD STREET 2: P O BOX 7386 CITY: GREENSBORO STATE: NC ZIP: 27417-0386 BUSINESS PHONE: 9198552400 MAIL ADDRESS: STREET 1: 2225 S HOLDEN ROAD STREET 2: P O BOX 7386 CITY: GREENSBORO STATE: NC ZIP: 27417-0386 10-Q 1 OAKWOOD HOMES CORPORATION SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ( X ) Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 1994 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 1-7444 OAKWOOD HOMES CORPORATION (Exact name of registrant as specified in its charter) NORTH CAROLINA 56-0985879 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2225 S. Holden Road (P.O. Box 7386), Greensboro, North Carolina (Address of principal executive offices) 27417-0386 (Zip Code) (910) 855-2400 (Registrant's telephone number, including area code) Not Applicable (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, 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 July 31, 1994. Common Stock, Par Value $.50 Per Share . . . . . . . . . . 20,467,847 (1) PART I. FINANCIAL INFORMATION QUARTERLY REPORT ON FORM 10-Q CONSOLIDATED FINANCIAL STATEMENTS For the Quarter Ended June 30, 1994 OAKWOOD HOMES CORPORATION AND SUBSIDIARIES Greensboro, North Carolina The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. (2) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands except per share data) Three Months Ended June 30, 1994 1993 Revenues Net Sales $115,313 $73,611 Financial services income 14,837 13,014 Other income 3,436 2,626 Total revenues 133,586 89,251 Costs and expenses Cost of sales 80,656 50,820 Selling, general and administrative expenses Non-financial services 27,983 17,220 Financial services 1,735 1,713 Provision for losses on credit sales 2,599 1,886 Interest expense Non-financial services 111 129 Financial services 5,828 6,290 Total costs and expenses 118,912 78,058 Income before income taxes 14,674 11,193 Provision for income taxes 5,479 4,269 Net income $ 9,195 $ 6,924 Earnings per share Primary $ .43 $ .33 Fully diluted $ .43 $ .33 Dividends paid per share $ .02 $ .02 Average shares outstanding Primary 21,325 21,213 Fully diluted 21,359 21,239
(3) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands except per share data) Nine Months Ended June 30, 1994 1993 Revenues Net Sales $272,792 $170,500 Financial services income 44,181 36,116 Other income 8,703 7,043 Total revenues 325,676 213,659 Costs and expenses Cost of sales 190,269 118,131 Selling, general and administrative expenses Non-financial services 69,157 41,706 Financial services 5,454 4,898 Provision for losses on credit sales 6,630 4,557 Interest expense Non-financial services 313 839 Financial services 18,023 18,749 Total costs and expenses 289,846 188,880 Income before income taxes 35,830 24,779 Provision for income taxes 13,043 9,089 Net income $ 22,787 $15,690 Earnings per share Primary $ 1.07 $ .83 Fully diluted $ 1.07 $ .79 Dividends paid per share $ .06 $ .06 Average shares outstanding Primary 21,370 18,831 Fully diluted 21,388 20,034
(4) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands except per share data) June 30, September 30, ASSETS 1994 1993 Cash and cash equivalents $ 27,878 $ 23,904 Receivables, principally installment contracts 364,568 424,710 Inventories: Manufactured homes 80,863 52,105 Work-in-process, materials and supplies 6,154 4,288 Land/homes under development 1,254 697 88,271 57,090 Manufactured housing communities 8,143 4,088 Property, plant and equipment 38,988 27,702 Deferred income taxes 4,077 1,564 Other assets 17,069 17,970 $548,994 $557,028 LIABILITIES AND STOCKHOLDERS' INVESTMENT Short-term borrowings $ 20,000 $ 26,800 Notes and bonds payable 218,854 255,765 Accounts and payable and accrued liabilities 48,175 39,079 Reserve for contingent liabilities 2,996 3,009 Other long-term obligations 7,164 3,499 Stockholders' investment: Common stock, $.50 par value 10,231 10,172 Additional paid in capital 144,107 143,578 Retained earnings 97,467 75,905 251,805 229,655 Less: Loan to ESOP 0 (779) Total stockholders' investment 251,805 228,876 $548,994 $557,028
(5) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands) For the Nine Months Ended June 30, 1994 1993 Operating activities: Net income $ 22,787 $ 15,690 Items not requiring (providing) cash: Depreciation and amortization 3,218 2,794 Deferred income taxes (2,513) (1,147) Provision for losses on credit sales, net of actual losses 3,114 2,094 (Increase) in other receivables (4,857) (184) (Increase) in inventories (31,181) (15,968) Increase in accounts payable and accrued liabilities 9,096 9,405 Increase in other long-term obligations 3,665 450 Cash used by operations 3,329 13,134 Installment receivables issued (232,223) (139,030) Purchase of installment loan portfolio (604) (28,807) Sale of installment loans 256,785 31,433 Receipts on installment receivables 38,250 35,425 Cash provided (used) by operating activities 65,537 (87,845) Investing activities: Additions to property, plant and equipment (13,867) (4,316) Additions to manufactured housing communities (4,062) (22) Other (65) (950) Cash used by investing activities (17,994) (5,288) Financing activities: Net borrowings (repayments) on short-term credit facilities (6,800) 31,000 Issuance of notes and bonds payable 0 43,036 Payments on notes and bonds (36,132) (35,720) Cash dividends (1,225) (1,075) Proceeds from exercise of stock options 588 3,449 Proceeds from public offering of common stock 0 53,602 Other 0 4 Cash provided (used) by financing activities (43,569) 94,296 Net increase in cash and cash equivalents 3,974 1,163 Cash and cash equivalents: Beginning of period 23,904 17,200 End of period $ 27,878 $ 18,363
(6) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) 1. The consolidated financial statements reflect all adjustments, which included only normal recurring adjustments, which are, in the opinion of management, necessary to present fairly the results of operations for the periods presented. Results of operations for any interim period are not necessarily indicative of results to be expected for a full year. 2. Effective October 1, 1993, the Company adopted prospectively Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS 109"), which requires use of an asset and liability method to account for deferred income taxes. Prior to fiscal 1994, the Company accounted for income taxes using the deferred method. Adoption of FAS 109 had the effect of increasing the Company's net deferred income tax asset by approximately $214,000 ($.01 per share) at October 1, 1993 which has been reflected as a reduction in the provision for income taxes for the quarter ended December 31, 1993. 3. The Company is contingently liable as guarantor on installment sale contracts sold to unrelated financial institutions on a full or limited recourse basis. The amount of this contingent liability was approximately $113 million at June 30, 1994. (7) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Industry developments In July 1994, new Department of Housing and Urban Development ("HUD") regulations took effect which require that manufactured homes built after July 13, 1994 be constructed to more stringent standards than homes built prior to that date. Such regulations relate principally to methods of construction and installation and are designed to enhance the homes' ability to withstand high winds. The construction and installation standards vary depending on the area ("Zone I,II or III") into which the home is delivered, with Zone II and Zone III standards being significantly more stringent than the prior minimum construction standards mandated by federal law, with Zone III standards being somewhat more stringent than Zone II standards. Standards for Zone I currently are the same as existing standards; however, HUD has stated its intention to issue new Zone I standards by January 1, 1995. Of the Company's 145 sales centers, approximately 10 currently deliver in more than two- thirds of their home sales into Zones II and III, and approximately 15 sales centers deliver a lesser portion of their unit sales into these Zones. The remaining 120 sales centers deliver homes only into Zone I and are not currently affected. Approximately 15% of the Company's calendar 1993 home sales would have been affected had the new standards been in effect in calendar 1993. The Company intends to increase retail prices to cover the costs of complying with the new standards, including profit on those costs. The increase in the average retail price of single-section and multi-section homes resulting from such cost increases is approximately 15% and 8%, respectively, for both Zones II and III. The increase in the retail price of multi-section homes is less than the increase in the price of single-section homes because some new materials required by the standards (for example, roofing and siding materials) were standard features of the Company's multi-section homes before enactment of the new standards. HUD has also issued new thermal standards for manufactured housing, relating principally to insulation ratings and the use of storm windows. The new thermal regulations, which are effective for homes manufactured beginning October 26, 1994, vary depending upon which of three geographic areas into which the home is delivered. About 15% of the Company's calendar 1993 unit sales were delivered into the northernmost thermal zone, for which the new standards are most stringent; approximately 75% of calendar 1993 unit sales were delivered into the central zone and approximately 10% were delivered into the southernmost zone, for which the new standards represent the least change from existing standards. The Company intends to increase retail prices to recover these costs and maintain its gross margins. While the Company is (8) continuing to study the new regulations and its plan for compliance is not yet complete, based on information currently available, management believes that the increase in retail prices arising from adoption of the new thermal standards will be range from approximately 3% in the southern region to 8% in the northern region for single-section homes, and from approximately 3% in the southern region to 5% in the northern region for multi-section homes. The Company does not believe that the cost increases necessitated by the new wind and thermal standards will have a material adverse effect on the Company's sales or gross margins. Three months ended June 30, 1994 compared to three months ended June 30, 1993 The following table summarizes certain key sales statistics for the quarters ended June 30, 1994 and 1993: 1994 1993 Sales dollar volume (in millions) $ 115.3 $ 73.6 New units sold 3,742 2,754 Used units sold 439 310 Average new single-section sales price $24,100 $21,700 Average new multi-section sales price $43,200 $38,600 Weighted average sales centers 140 114 New unit sales per sales center 27 24 Total sales dollar volume increased 57%, reflecting a 36% increase in new unit volume and increases of 11% and 12% in the average new unit sales prices of single-section and multi-section homes, respectively. New unit volume increased due to a 23% increase in the weighted average number of sales centers open during the period and a 13% increase in average new unit sales per sales center. Same store dollar sales rose 37% over last year. The increase in the average new unit sales price reflects price increases required to offset rising lumber prices, increasing sales in the Southwest market where the average size home sold is larger than in the Southeast market, and higher selling prices in the Southeast due to a change in product mix toward higher-end homes. Sales in the Southwest comprised 28% of total new manufactured housing sales dollars in the third quarter of 1994 compared to 11% last year. The Company has been successful in recovering increased lumber costs from its customers through higher selling prices and does not expect fluctuating lumber prices to have a material adverse effect on its results of operations. Gross profit as a percentage of sales was 30.1% in the current period compared to 31% in the prior year. Margins rose in the Southeast, principally due to manufacturing efficiencies resulting from higher production levels, offset by the effects of the Company's expansion into the Southwest, where a substantial portion of homes are sourced from third party manufacturers. Of the total new unit sales volume in the third quarter, 75% was manufactured by the (9) Company compared to 82% in the third quarter last year. During the current period the Company operated at or near its production capacity on a single shift basis at four of its operating plants. At June 30, 1994, a fifth plant acquired in January 1993 was operating at approximately 80% of capacity. Production at the Company's new Texas facility commenced in October, 1993 and at June 30, 1994, this plant was operating at approximately 65% capacity. During the first quarter of fiscal 1994 the Company began construction of an additional plant in Texas and during the third quarter began construction of a plant in Tennessee to further support the Company's expansion into the Southwest and Midwest markets. Production at these facilities is expected to commence during the fourth quarter of fiscal 1994. In April 1994, the Company purchased a third plant in Texas; production in this existing facility should commence in the fourth quarter of fiscal 1994 following completion of certain renovations. Management does not expect a significant improvement in gross margins to be realized from the additional manufacturing plants until at least fiscal 1995 because of the start-up costs associated with bringing new production capacity on line. Financial services income increased 14% as a result of the increase in the outstanding serviced loan portfolio from $480 million at June 30, 1993 to $709 million at June 30, 1994, offset slightly by a decrease in the weighted average interest rate. Credit sales represented approximately 85% and 84% of the Company's sales dollar volume in fiscal 1994 and 1993, respectively, of which approximately 94% and 95%, respectively, was originated by the Company's credit subsidiary. Financial services income for the fiscal 1994 quarter also reflects earnings on the Company's retained interests in REMIC securitizations consummated in July and October 1993 and in April 1994 which were structured as sales of receivables. The Company's earnings on its retained interests in these REMICs are reflected as a single amount within financial services income, as compared to presenting interest income on the installment sale contracts conveyed to the REMICs as interest income, and interest expense on REMIC interests purchased by investors as interest expense, for REMIC securitizations structured as collateralized borrowings. Structuring REMIC securitizations as sales of receivables will cause slower rates of growth in interest income and interest expense compared to that which would occur if such securitizations were structured as collateralized borrowings. Other income increased 31%, principally due to increased insurance commissions resulting from an improvement in the percentage of total sales for which physical damage coverage was written by the Company's agency and the overall increase in sales, offset by decreases in insurance commissions from favorable loss experience and the continuing decline in endorsement fee income resulting from the Company's emphasis on internal financing of credit sales. Total selling, general and administrative expenses increased 57%, from $18,933,000 (21.2% of revenues) in 1993 to $29,718,000 (22.2% of revenues) (10) in 1994 primarily as a result of higher sales volumes and increased servicing costs associated with the increased size of the Company's servicing portfolio. Selling, general and administrative expense for the 1994 quarter also includes a provision of approximately $1 million (.8% of revenues) relating to long-term incentive compensation to key members of management, payable in fiscal 1996 if certain earnings performance targets are achieved. The amounts of such incentive compensation are directly related to the Company's earnings for the three year period ending in fiscal 1996, and such amounts will be reduced to zero if certain minimum earnings are not achieved. Long-term incentive compensation previously was provided principally in the form of stock options, and accordingly did not result in a charge to earnings. The provision for losses on credit sales rose 38% over the prior period. The Company provides for estimated future losses on current period retail credit sales financed by the Company or sold to financial institutions on a recourse basis. The amounts provided are based on the Company's historical loss experience, current repossession trends and costs, and management's assessment of the current credit quality of the installment sale contract portfolio. Accordingly, the provision for losses on credit sales is not necessarily directly related to current period sales. Financial services interest expense decreased because the Company has begun structuring its REMIC securitizations as sales of receivables instead of as collateralized borrowings, as more fully described above. The Company's effective income tax rate was 37.3% in fiscal 1994 compared to 38.1% in fiscal 1993. Nine months ended June 30, 1994 compared to nine months ended June 30, 1993 The following table summarizes certain key sales statistics for the nine months ended June 30, 1994 and 1993: 1994 1993 Sales dollar volume (in millions) $ 272.8 $ 170.5 New units sold 9,182 6,526 Used units sold 1,175 755 Average new single-section sales price $23,600 $21,000 Average new multi-section sales price $42,200 $37,800 Weighted average sales centers 133 110 New unit sales per sales center 69 59 Total sales dollar volume increased 60%, reflecting a 41% increase in new unit volume and increases of 12% in the average new unit sales prices of both single- section and multi-section homes. New unit volume increased due (11) to a 21% increase in the weighted average number of sales centers open during the period and a 17% increase in average new unit sales per sales center. Same store dollar sales rose 36% from 1993. The increase in the average new unit sales price reflects price increases required to offset rising lumber prices, increasing sales in the Southwest market where the average size home sold is larger than in the Southeast market, and higher selling prices in the Southeast due to a change in product mix toward higher-end homes. Sales in the Southwest comprised 25% of total new manufactured housing sales dollars in the first nine months of 1994 compared to 9% last year. Gross profit as a percentage of sales was 30.3% in the current period compared to 30.7% in the prior year. Margins rose in the Southeast, principally due to manufacturing efficiencies resulting from higher production levels, partially offset by the effects of the Company's expansion into the Southwest, where a substantial portion of homes are sourced from third party manufacturers. Of the total year-to-date new unit sales volume, 76% was manufactured by the Company compared to 84% last year. Financial services income increased 22% as a result of the increase in the outstanding serviced loan portfolio from $480 million at June 30, 1993 to $709 million at June 30, 1994, offset slightly by a decrease in the weighted average interest rate. Credit sales represented approximately 86% and 83% of the Company's sales dollar volume in fiscal 1994 and 1993, respectively, of which approximately 94% and 92%, respectively, was originated by the Company's credit subsidiary. Other income increased 24%, principally due to increased insurance commissions resulting from an improvement in the percentage of total sales for which physical damage coverage was written by the Company's agency and the overall increase in sales, offset by decreases in insurance commissions from favorable loss experience and the continuing decline in endorsement fee income resulting from the Company's emphasis on internal financing of credit sales. Total selling, general and administrative expenses increased 60%, from 46,604,000 (21.8% of revenues) in 1993 to $74,611,000 (22.9% of revenues) in 1994 primarily as a result of higher sales volumes and increased servicing costs associated with the increased size of the Company's servicing portfolio. The 1994 period also includes a provision of approximately $2.4 million relating to long- term incentive compensation plan adopted in 1994. The plan provides for cash bonuses to key management payable in 1996, the amount of which are directly related to the Company's earnings for the three year period ending in fiscal 1996. Previous long-term incentive compensation plans was provided principally in the form of stock options, and accordingly did not result in a charge to earnings. (12) The provision for losses on credit sales rose 45% over the prior period. The Company provides for estimated future losses on current period retail credit sales financed by the Company or sold to financial institutions on a recourse basis. The amounts provided are based on the Company's historical loss experience, current repossession trends and costs, and management's assessment of the current credit quality of the installment sale contract portfolio. Accordingly, the provision for losses on credit sales is not necessarily directly related to current period sales. Non-financial services interest expense decreased primarily due to the redemption or conversion of the Company's 6-1/2% and 7-1/2% convertible subordinated debentures in November and December 1992. Financial services interest expense decreased because the Company has begun structuring its REMIC securitizations as sales of receivables instead of as collateralized borrowings, as more fully described above. The Company's effective income tax rate (excluding the $214,000 reduction in income tax expense arising from the adoption of FAS 109) was 37% in fiscal 1994 compared to 36.7% in fiscal 1993. The increase over fiscal 1993 was the result of higher state income taxes and an increase in the federal income tax rate. Liquidity and Capital Resources The Company's financial position at June 30, 1994 reflects the normal seasonal increase in inventories in preparation for the summer selling season. In addition, the Company's retail expansion has resulted in increased investment in inventories. Of the $31 million increase in inventories since September 30, 1993, approximately $16 million relates to the 25 new sales centers opened during the nine months ended June 30, 1994. Short-term borrowings principally reflect outstanding advances on the Company's warehouse lines of credit used to finance installment sale contracts prior to securitization or other permanent financing. Borrowings outstanding at June 30, 1994 were liquidated using a portion of the proceeds of the Company's July 1994 REMIC securitization described below. Receivables, which consist principally of installment sale contracts, decreased principally as a result of the Company's structuring of installment sale contract securitizations as sales of receivables rather than as collateralized borrowings. During the nine months ended June 30, 1994, the Company originated approximately $232 million of installment sale contracts and sold approximately $266 million of installment sale contracts, including approximately $263.4 million of contracts via two REMIC securitizations. Investors purchased an average of 97% of the interests in the REMIC trusts for approximately $254.5 million cash; the Company retained an average of 3% interest in the trusts. In July 1994, approximately $99.2 million of contracts were (13) sold via a REMIC securitization; investors purchased 92% of the interests in the REMIC trust for approximately $91.3 million cash, and the Company retained an 8% interest in the trust. Management believes that financing for installment sale contracts remains readily available and anticipates completing an additional securitization in calendar 1994. Management believes that the availability of permanent financing for installment sale contracts, the Company's short-term credit facilities and cash generated by operations are sufficient to provide for the Company's short-term liquidity needs. The Company continues to monitor the credit and equity markets and evaluate the sources and cost of the long-term capital required to finance the demands of both planned expansion and higher operating levels within existing operations. The Company will seek to raise additional equity or long-term debt based upon anticipated business demands, management's assessment of existing and future conditions in the capital markets, and management's assessment of the appropriate components of the Company's capital structure. Potential business combination On June 24, 1994, the Company signed a letter of intent to acquire Golden West Homes, an independent producer of manufactured housing headquartered in Santa Ana, California. The letter of intent provides that Oakwood will issue 700,000 shares of its common stock (equal to approximately 3.4% of its currently outstanding shares) in exchange for all of the outstanding shares of Golden West. Consummation of the acquisition is anticipated prior to September 30, 1994, and is subject to conditions, including completion of due diligence, negotiation of a definitive agreement and approval of the transaction by Oakwood's and Golden West's Boards of Directors and by the shareholders of Golden West. Golden West operates manufacturing plants in Albany, Oregon and Sacramento and Perris, California. A recently acquired fourth plant in Fort Morgan, Colorado is expected to begin production in the fall of 1994. Golden West manufactures principally multi-section homes and had net sales and net income of approximately $97 million and $1 million, respectively, for the twelve months ended March 31, 1994. (14) PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) Exhibits (4) Agreement to Furnish Copies of Instruments with Respect to Long-term Debt (10.1) Form of Performance Unit Agreement dated November 16, 1993 (10.2) Schedule identifying omitted Performance Unit Agreements which are substantially identical to the Form of Performance Unit Agreement and the target number of performance units under Performance Unit Agreements (11) Statement Re Computation of Earnings Per Share b) Reports on Form 8-K No reports on Form 8-K were filed for the quarter ended June 30, 1994. Items 1, 2, 3, 4 and 5 are inapplicable and are omitted. (15) OAKWOOD HOMES CORPORATION AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 12, 1994 OAKWOOD HOMES CORPORATION BY: s/C. Michael Kilbourne C. Michael Kilbourne Vice President (Principal Financial Officer) (Duly Authorized Officer) (16) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 EXHIBITS ITEM 6(a) FORM 10-Q QUARTERLY REPORT For the quarter ended Commission File Number June 30, 1994 1-7444 OAKWOOD HOMES CORPORATION EXHIBIT INDEX
Exhibit No. Exhibit Description 4 Agreement to Furnish Copies of Instruments with respect to Long-Term Debt (page of the sequentially numbered pages) 10.1 Form of Performance Unit Agreement dated November 16, 1993 10.2 Schedule identifying omitted Performance Unit Agreements which are substantially identical to the Form of Performance Unit Agreement and the target number of performance units under Performance Unit Agreements 11 Statement Re Computation of Earnings Per Share (page of the sequentially numbered pages)
(17) EX-4 2 EXHIBIT 4 EXHIBIT 4 AGREEMENT TO FURNISH COPIES OF INSTRUMENTS WITH RESPECT TO LONG-TERM DEBT The Registrant has entered into certain agreements with respect to long-term indebtedness which do not exceed ten percent of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of such agreements to the Commission upon request of the Commission. OAKWOOD HOMES CORPORATION By: s/C. Michael Kilbourne C. Michael Kilbourne Vice President EX-10 3 EXHIBIT 10.1 EXHIBIT 10.1 OAKWOOD HOMES CORPORATION PERFORMANCE UNIT AGREEMENT DATE: November 16, 1993 _______________________ _______________________ _______________________ Dear _______________: At the direction of the Compensation Committee of the Board of Directors of Oakwood Homes Corporation (the "Company"), you are hereby notified that you have been granted a Performance Unit Award pursuant to the Company's 1990 Long Term Performance Plan (the "Plan"), and subject to all the terms and conditions set forth therein. You are hereby awarded _________ Performance Units, each such unit to have the value of One Dollar ($1.00) (the "Target Award"), subject to the terms and conditions of the Plan and to adjustment pursuant to certain performance criteria set forth below. The date of the grant of this Award is the date of this Agreement. This Award has been granted to you to stimulate your efforts on behalf of the Company's business. The consideration for the Award is your continuous performance of services for the Company or a parent or a subsidiary from the date of this Agree- ment through November 16, 1996. The total number of Performance Units subject to the Target Award shall be deemed earned in full provided that the aggregate net income of the Company for the three fiscal years ended September 30, 1996 ("Program Net Income") is $97,846,000, such amount being equal to the aggregate net income of the Company for the three fiscal years ended September 30, 1996 if the Company achieved a compound increase of 15% per year over the Company's net income for its fiscal year ended September 30, 1993 ("Base Net Income"). The Company's net income for 1993 was $24,502,000 and this shall be the Base Net Income. If Program Net Income exceeds $97,846,000, then for every 100 basis points by which the compound annual growth rate of Program Net Income over Base Net Income exceeds 15%, you shall earn an additional number of Performance Units equal to 25% of the Target Award amount. If Program Net Income falls below $97,846,000, then for every 100 basis points by which the compound annual growth rate of Program Net Income over Base Net Income is less than 15%, the number of Performance Units earned by you shall be 33-1/3% less than the Target Award amount, so that you shall earn no Performance Units if Program Net Income represents a 12% or lower compound annual growth rate over Base Net Income. The total number of Perfor- mance Units earned shall be prorated appropriately in the event that increases or shortfalls in compound growth rates amount to fewer than 100 basis points. Program Net Income shall equal the consolidated net income of the Company before provision for the compensation to be paid pursuant to this Agreement and other Performance Unit Agreements awarded on the date hereof. Program Net Income shall be deter- mined by the Compensation Committee in writing by reference to the net income shown for the three fiscal years ended September 30, 1996 on the certified consolidated financial statements of the Company prepared in accordance with generally accepted accounting principles and after taking into account the adjust- ments provided by the preceding sentence; provided, however, that the Compensation Committee may, in its discretion, order other adjustments to Program Net Income or the calculation thereof to take account of significant transactions that externally affect the Company's net income, such as mergers, acquisitions and stock or other offerings. Exhibit A attached hereto provides an illustration of how your Performance Units will be adjusted based on several assumed amounts of Program Net Income. The cash value of the Performance Units earned pursuant to this Award shall be paid after certifi- cation in writing by the Compensation Committee as soon as practicable after November 16, 1996, or as soon as practicable after the availability of audited financial statements for the fiscal year ending September 30, 1996, whichever occurs last. Enclosed is a copy of the Plan, which covers the Award granted to you. You should familiarize yourself with all of the provisions of the Plan. Your Award is in all respects subject to the terms and conditions of the Plan and the following: 1. Your Award is payable during your lifetime only to you. 2. You shall forfeit all rights to receive payment for any Performance Units under this Award unless you remain in the continuous employment of the Company from the date hereof through November 16, 1996, unless your employ- ment is terminated due to your death or Disability (as such term is defined in Paragraph 2(h) of the Plan) occurring after November 16, 1994. If your employment is terminated by reason of your death or Disability occurring after November 16, 1994, then (i) Program Net Income and the compound annual growth rate of Program Net Income over Base Net Income shall be determined on the basis of the number of full fiscal years of the Company that have elapsed between September 30, 1993, and the date of termination, (ii) the Target Award amount shall be adjusted by multiplying it by a frac- tion the numerator of which is the number of full fiscal years that have elapsed between September 30, 1993, and the date of termination and the denominator of which is three, and (iii) all other provisions of this Award and the Plan shall apply except that payment of the Award shall be 2 made as soon as possible after death or Disability and after the Compensation Committee's written certification. 3. Your Award is not transferable, except that in the event of your death, the right to receive payment of the Performance Units, if any, earned under this Award may be transferred according to the terms of your Will or the provisions of the applicable laws of descent and distribution. 4. Nothing in this Agreement shall in any manner restrict or affect the right of the Company to terminate your employment at any time for any reason, with or without cause. Any questions or disputes with respect to the interpretation or application of this Award shall be decided by the Compensation Committee, whose decision shall be final. This Award is subject to the conditions that (i) it may be amended at any time by the Compensation Committee and (ii) it (or the program it is awarded under) must be approved by the shareholders of the Company, each in the event that the Compensation Committee determines, on advice of counsel, that amendment of this Award or the program, or the securing of shareholder approval, is necessary or advis- able in order to assure that payments of Performance Units hereunder are exempt from the limits of Section 162(m) of the Internal Revenue Code. By your signature on this Agreement, you have accepted this Award and you have represented that you understand and agree that neither the granting of the Award nor any action thereunder involves any statement or representation of any kind by the Company as to its business, affairs, earnings or assets, or as to any future increase or decrease in the market value of the Company's stock, or as to the tax status or tax consequences of the grant of this Award, including without limitation Federal and State income, inheritance, estate and transfer taxes. OAKWOOD HOMES CORPORATION By: Gwendalyn C. Scott Vice President and Secretary 3 I hereby accept the foregoing Award and agree to all the terms and conditions set forth therein and in the Oakwood Homes Corporation 1990 Long Term Performance Plan under which it is granted. [SEAL] Nicholas J. St. George Exhibit A 1990 Oakwood Long Term Performance Plan, as amended 4 Exhibit A SAMPLE ILLUSTRATIONS OF PERFORMANCE UNIT EARNINGS A. Program Net Income (rounded to the nearest thousand dollars) at Stated Compound Growth Rates From Base Net Income: 12% - $ 92,601,000 13% - $ 94,327,000 14.25% - $ 96,516,000 15% - $ 97,846,000 16.3% - $100,179,000 20% - $107,025,000 B. Performance Units that you will earn (rounded to the nearest hundred Units) at Stated Compound Growth Rates: 12% or Less 13% 14.25% 15% 16.3% 20% * -0- _______ _______ _______ _______ _______ * The Performance Units would continue to increase at the indicated rates if Program Net Income exceeded a 20% compound growth rate. EX-10 4 EXHIBIT 10.2 EXHIBIT 10.2 SCHEDULE IDENTIFYING OMITTED PERFORMANCE UNIT AGREEMENTS Name Number of Performance Units Nicholas J. St. George 1,102,000 A. Steven Michael 580,000 C. Michael Kilbourne 372,000 Robert D. Harvey, Sr. 356,000 Larry M. Walker 170,000 Larry D. Gilmore 170,000 J. Michael Stidham 170,000 Jeffrey D. Mick 130,000 Douglas R. Muir 130,000 James D. Casterline 114,000 TOTAL UNITS 3,294,000 EX-11 5 EXHIBIT 11 EXHIBIT 11 OAKWOOD HOMES CORPORATION STATEMENT RE COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended June 30, June 30, 1994 1993 1994 1993 Weighted average number of common shares outstanding 20,456 20,269 20,419 17,844 Add: Dilutive effect of stock options, computed using the treasury stock method 869 944 951 987 Weighted average number of common and common equivalent shares outstanding 21,325 21,213 21,370 18,831 Net income $ 9,195 $ 6,924 $22,787 $15,690 Earnings per common share-primary $ 0.43 $ 0.33 $ 1.07 $ 0.83 Weighted average number of common shares outstanding 20,456 20,269 20,419 17,844 Add: Dilutive effect of stock options, computed using the treasury stock method 903 970 969 1,094 Add: Additional shares assumed to be outstanding from conversion of convertible securities 0 0 0 1,096 Weighted average number of common shares outstanding assuming full dilution 21,359 21,239 21,388 20,034 Net income $ 9,195 $ 6,924 $22,787 $15,690 Add: Interest on convertible securities, net of income taxes 0 0 0 237 Net income, as adjusted $ 9,195 $ 6,924 $22,787 $15,927 Earnings per common share-fully diluted $ 0.43 $ 0.33 $ 1.07 $ 0.79
-----END PRIVACY-ENHANCED MESSAGE-----