-----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, rH1BfySjwE6EQ5Zx55QWg63kvotkr6VKbmFrc871w7RaHWycAi0LiRzuwP36mLqa hInDX2MNa6xZAN3KZnMxRw== 0000912057-95-000490.txt : 19950517 0000912057-95-000490.hdr.sgml : 19950517 ACCESSION NUMBER: 0000912057-95-000490 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950210 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHULT HOMES CORP CENTRAL INDEX KEY: 0000803349 STANDARD INDUSTRIAL CLASSIFICATION: 2452 IRS NUMBER: 351608892 STATE OF INCORPORATION: IN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10532 FILM NUMBER: 95507946 BUSINESS ADDRESS: STREET 1: 221 US 20 WEST STREET 2: P O BOX 151 CITY: MIDDLEBURY STATE: IN ZIP: 46540 BUSINESS PHONE: 2198255881 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended December 31, 1994 Commission File Number 0-15506 -------- SCHULT HOMES CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Indiana 35-1608892 - - - --------------------------------- ------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 221 U.S. 20 West, Middlebury, Indiana 46540 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 219-825-5881 ------------ 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 XX NO ------------- ------------- The number of shares of common stock outstanding, as of December 31, 1994 was 3,768,527. SCHULT HOMES CORPORATION FORM 10-Q PERIOD ENDED DECEMBER 31, 1994 PART I. Financial Information Item 1. Financial Statements A. Schult Homes Corporation and Subsidiaries Condensed Consolidated Financial Statements B. Notes to the Condensed Consolidated Financial Statements C. Exhibit 27 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. Other Information Item 1. Legal Proceedings --- Inapplicable Item 2. Changes in Securities --- Inapplicable Item 3. Defaults upon Senior Securities --- Inapplicable Item 4. Submission of Matters to a Vote of Security Holders --- Inapplicable Item 5. Other Information --- Inapplicable Item 6. Exhibits and Reports on Form 8-K --- Inapplicable (a) Inapplicable (b) There were no reports on Form 8-K filed for the three month period ended December 31, 1994. 2 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1994 AND JULY 2, 1994 ASSETS
DEC. 31, 1994 JULY 2, 1994 ------------- ------------ (unaudited) (audited) (thousands of dollars) Cash ...................................................... $ 376 $ 1,774 Accounts receivable, less allowance for doubtful accounts of $37 in December 1994 and $64 in July 1994.............. 10,198 13,717 Inventories (note 1)....................................... 14,160 13,697 Deferred income taxes...................................... 4,218 3,553 ------- ------- Total current assets.................................... 28,952 32,741 Property, plant, and equipment............................. 33,380 32,204 Goodwill, net.............................................. 831 882 Other assets............................................... 1,287 1,551 ------- ------- Total assets............................................ $64,450 $67,378 ------- ------- ------- ------- LIABILITIES AND COMMON SHAREHOLDERS' EQUITY Trade accounts payable..................................... $ 8,340 $13,613 Accrued liabilities........................................ 19,626 19,257 Current portion of long-term debt.......................... 994 994 ------- ------- Total current liabilities............................... 28,960 33,864 Deferred income taxes...................................... 2,766 2,766 Long-term debt............................................. 2,394 2,390 ------- ------- Total liabilities....................................... 34,120 39,020 Common shareholders' equity: Common shares, no par value, 10,000,000 shares authorized, 3,768,527 shares issued and outstanding in December 1994 and 3,767,616 in July 1994............................... 8,054 8,042 Retained earnings......................................... 22,276 20,316 ------- ------- Total common shareholders' equity....................... 30,330 28,358 ------- ------- Total liabilities and common shareholders' equity....... $64,450 $67,378 ------- ------- ------- -------
See accompanying notes to condensed consolidated financial statements. 3 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DEC. 31, 1994 JAN. 1, 1994 DEC. 31, 1994 JAN. 1, 1994 ------------- ------------ ------------- ------------ (13 WEEKS) (13 WEEKS) (26 WEEKS) (27 WEEKS) Net sales.......................... $ 70,526 $ 60,333 $142,434 $126,463 Cost of goods sold................. 57,783 49,265 116,367 102,002 -------- -------- -------- -------- Gross margin.................... 12,743 11,068 26,067 24,461 Selling, general, and administrative expenses........... 11,391 9,194 22,032 19,446 -------- -------- -------- -------- Operating income................ 1,352 1,874 4,035 5,015 Interest income.................... 3 46 5 64 Other income....................... 15 19 26 13 Interest expense................... ( 69) - ( 160) - -------- -------- -------- -------- Income before income taxes...... 1,301 1,939 3,906 5,092 Income taxes: Federal........................... 411 598 1,214 1,564 State............................. 143 213 430 560 -------- -------- -------- -------- Net income...................... $ 747 $ 1,128 $ 2,262 $ 2,968 -------- -------- -------- -------- -------- -------- -------- -------- PER SHARE DATA: (note 2) - - - ---------------------------- Net income per common share........ $ 0.20 $ 0.30 $ 0.60 $ 0.79 -------- -------- -------- -------- -------- -------- -------- -------- Dividends paid per common share.... $ 0.04 $ 0.03 $ 0.08 $ 0.06 -------- -------- -------- -------- -------- -------- -------- -------- Average shares outstanding......... 3,773,198 3,765,911 3,773,003 3,765,765 --------- --------- --------- --------- --------- --------- --------- ---------
See accompanying notes to condensed consolidated financial statements. 4 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (DOLLARS IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DEC. 31, JAN. 1, DEC. 31, JAN. 1, 1994 1994 1994 1994 -------- -------- -------- -------- (13 WEEKS) (13 WEEKS) (26 WEEKS) (27 WEEKS) Cash flows from operating activities: Net income.........................................$ 747 $ 1,128 $ 2,262 $ 2,968 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of plant and equipment.............. 763 636 1,537 1,224 Amortization of goodwill......................... 26 26 51 51 Changes in assets and liabilities: Decrease in accounts receivable................. 4,047 3,092 3,519 2,485 (Increase) decrease in inventories.............. ( 436) ( 307) ( 463) 481 (Increase) decrease in other assets............. ( 563) ( 24) ( 401) 70 Decrease in trade accounts payable.............. (3,491) ( 26) (5,273) (4,295) Increase (decrease) in accrued liabilities...... ( 466) (2,590) 369 ( 838) ------- ------- ------- ------- Total adjustments.................................. ( 120) 807 ( 661) ( 822) ------- ------- ------- ------- Net cash provided by operating activities........ 627 1,935 1,601 2,146 Cash flows from investing activities: Capital expenditures............................... ( 992) (3,987) (2,713) (4,671) ------- ------- ------- ------- Net cash used in investing activities............ ( 992) (3,987) (2,713) (4,671) Cash flows from financing activities: Proceeds from issuance of long term debt........... 500 - 500 100 Repayment of long-term debt........................ ( 248) ( 168) ( 497) ( 331) Issuance of common stock........................... 12 12 12 12 Dividends paid to common shareholders.............. ( 151) ( 113) ( 301) ( 226) ------- ------- ------- ------- Net cash provided by (used in) financing activities 113 ( 269) ( 286) ( 445) Net decrease in cash................................ ( 252) (2,321) (1,398) (2,970) Cash at beginning of the quarter.................... 628 2,969 1,774 3,618 ------- ------- ------- ------- Cash at end of the quarter..........................$ 376 $ 648 $ 376 $ 648 ------- ------- ------- ------- ------- ------- ------- ------- Supplemental disclosures of cash flow information: Cash paid during the period for: Interest..........................................$ 42 $ 56 134 119 Capitalized interest.............................. - 56 - 98 Income taxes...................................... 2,218 2,858 3,242 4,491
See accompanying notes to condensed consolidated financial statements. 5 SCHULT HOMES CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) INVENTORIES The components of inventories are as follows:
DEC. 31, JULY 2, 1994 1994 --------------------------- (thousands of dollars) Raw material........... $10,906 $10,180 Work in process........ 2,328 2,120 Finished goods......... 926 1,397 ------- ------- Total............... $14,160 $13,697 ------- ------- ------- -------
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NET INCOME PER COMMON SHARE Net income per common share is calculated by dividing net income by the weighted average number of common shares and common share equivalents outstanding during the period. (3) INTERIM FINANCIAL STATEMENTS The Company's quarterly sales and operating results are principally affected by the seasonal nature of the Company's business. Historically, the Company's sales and operating results are at their lowest levels in the fiscal third quarter, when weather conditions have an adverse impact on both orders and shipments. In the opinion of Company management, the interim financial statements reflect all adjustments, consisting only of normal recurring accruals, which are necessary for a fair statement of the results for the interim periods presented. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following table sets forth selected items of the Company's statement of operations as a percentage of net sales for the periods indicated.
PERCENTAGE OF NET SALES THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ------------------ DEC. 31, JAN. 1, DEC. 31, JAN. 1, 1994 1994 1994 1994 -------- -------- -------- ------- Net sales............................. 100.0% 100.0% 100.0% 100.0% Cost of goods sold.................... 81.9 81.7 81.7 80.7 ----- ----- ----- ----- Gross margin....................... 18.1 18.3 18.3 19.3 Selling, general and administrative expenses............................. 16.2 15.2 15.5 15.4 ----- ----- ----- ----- Operating income .................. 1.9 3.1 2.8 3.9 Interest and other income............. 0.0 0.1 0.0 0.1 Interest expense...................... 0.1 0.0 0.1 0.0 ----- ----- ----- ----- Income before income taxes......... 1.8 3.2 2.7 4.0 Income taxes.......................... 0.7 1.3 1.1 1.7 ----- ----- ----- ----- Net income ........................ 1.1 1.9 1.6 2.3 ----- ----- ----- ----- ----- ----- ----- -----
THREE MONTHS ENDED DECEMBER 31, 1994 COMPARED TO THREE MONTHS ENDED JANUARY 1, 1994. NET SALES in the second quarter of fiscal 1995 were $70.5 million, which represented an increase of $10.2 million (16.9%) from the second quarter of fiscal 1994. This increase in sales was due to utilization of our fiscal 1994 plant expansions and strong demand for housing nationwide. The average selling price per section increased by 6.0% from the same time a year 6 earlier, principally due to new HUD energy standards and general price increases. Total sections sold in the second quarter of fiscal 1995 were 3,372, an increase of 313 sections (10.2%) from the prior year period. Multi-section homes represented 64.5% of the homes sold during the second quarter of fiscal 1995, compared to 62.5% in fiscal 1994. COST OF GOODS SOLD in the second quarter of fiscal 1995 was $57.8 million, which represented an increase of $8.5 million (17.3%) from the second quarter of fiscal 1994. Cost of goods sold as a percentage of net sales increased from 81.7% in fiscal 1994 to 81.9% in fiscal 1995. This increase in cost of goods sold was principally due to the startup of two new plants and the impact of heavy rains in Texas during October. The new Etna Green, Indiana plant continued to improve and performed better than in the prior quarter. Etna Green builds the Company's most complex and demanding products -- all drywall homes. The construction process is more difficult and requires more training than construction using traditional manufactured home materials. The Navasota, Texas plant experienced significant increased labor costs for the quarter in an attempt to train a significant number of employees as a result of the expansion. Efforts to train these new employees while maintaining quality has slowed the process of reaching full production and has increased costs. Compounding the problems at Navasota were unusually heavy rains in the area. Some materials were lost; and the plant was forced to shut down briefly. SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES for the second quarter of fiscal 1995 were $11.4 million, which represented an increase of $2.2 million (23.9%) from fiscal 1994. As a percentage of net sales, these expenses increased to 16.2% from 15.2% in the prior year period. This was principally the result of increased warranty and dealer volume rebate costs. The Company earned an operating income of $1.4 million in the second quarter of fiscal 1995 or 1.9% of net sales. This compares to an operating income of $1.9 million or 3.1% of net sales in the prior year period. Interest and other income contributed $18,000 to earnings in the second quarter of fiscal 1995, compared to $65,000 in the second quarter of fiscal 1994. Interest expense for the second quarter of fiscal 1995 was $69,000. There was no interest expense for the second quarter of fiscal 1994. This was due to the capitalization of interest related to our capital expansion program. Net income in the current quarter was $747,000 ($0.20 per common share), compared to a net income of $1.1 million ($0.30 per common share) in the second quarter of fiscal 1994. SIX MONTHS ENDED DECEMBER 31, 1994 COMPARED TO SIX MONTHS ENDED JANUARY 1, 1994. NET SALES in the first half of fiscal 1995 were $142.4 million, which represented an increase of $16.0 million (12.6%) from the first half of fiscal 1994. This increase in sales was due to utilization of our fiscal 1994 plant expansions, strong market conditions and increased selling price. The average selling price per section increased by 5.6% from the same time a year earlier, principally due to new HUD energy standards and general price increases. Total sections sold in the first half of fiscal 1995 were 6,899, an increase of 433 sections (6.7%) from the prior year period. Multi-section homes represented 66.3 % of the homes sold during the first half of fiscal 1995, compared to 63.2% in fiscal 1994. COST OF GOODS SOLD in the first half of fiscal 1995 was $116.4 million, which represented an increase of $14.4 million (14.1%) from the first half of fiscal 1994. Cost of goods as a percentage of net sales in fiscal 1995 was 81.7%, compared to 80.7% in fiscal 1994. This increase was primarily due to start-up costs associated with three plant expansions and the impact of heavy rains in Texas during October. Progress has been made in dealing with these start-up problems and further progress is expected in the future. SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES for the first half of fiscal 1995 were $22.0 million, which represented an increase of $2.6 million (13.3%) from the first half of fiscal 1994. 7 As a percentage of net sales, these expenses increased to 15.5% from 15.4% in the prior year period. This was principally the result of increased dealer volume rebate costs. The Company earned an operating income of $4.0 million in the first half of fiscal 1995 or 2.8% of net sales. This compares to an operating income of $5.0 million or 3.9% of net sales in the prior year period. Interest and other income contributed $31,000 to earnings in the first half of fiscal 1995, compared to $77,000 in the first half of fiscal 1994. Interest expense for the first half of fiscal 1995 was $160,000. There was no interest expense for the first half of fiscal 1994. This was due to capitalization of interest related to our capital expansion program. Net income for the first half of fiscal 1995 was $2.3 million ($0.60 per common share), which compares to a net income of $3.0 million ($0.79 per common share) for the first half of fiscal 1994. LIQUIDITY AND CAPITAL RESOURCES At the end of the current quarter, the Company had $0.5 million of outstanding borrowings under its credit facility, which was an increase of $0.5 million from the balance at July 2, 1994. At the end of the quarter, total long- term debt remained constant at $2.4 million compared to the balance at July 2, 1994. The Company's unsecured credit facility expiring January 31, 1997 permits borrowings of up to $10,000,000. The Company has access to additional bank financing up to $3,000,000 for seasonal use, if needed. Capital expenditures for the first six months of fiscal 1995 were $2,713,000, compared to $4,671,000 from the prior year period. The Company expects that funds generated from operations combined with funds available under long-term secured financing arrangements and its revolving credit facility will be adequate to support its capital expenditure needs and required debt amortization. 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. SCHULT HOMES CORPORATION ------------------------------------- (Registrant) By: ______________________________ Fred A. Greenawalt Chief Accounting Officer By: ______________________________ Walter E. Wells Chief Executive Officer & President Date: February 10, 1995 8 EX-27 2 FDS
5 1,000 6-MOS JUL-01-1995 DEC-31-1994 376 0 10,198 0 14,160 28,952 33,380 0 64,450 28,960 2,394 8,054 0 0 22,276 64,450 142,434 142,434 116,367 22,032 0 0 160 3,906 1,644 2,262 0 0 0 2,262 .60 .60
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