-----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, BFUhcNP0ieBgHt/bTfW36BYvbYHZabkUS5A7NdHvTt2cHOGHlx0u2VaNYYMGaXLq 9TWGoypRyBvPvTL3Gj7ecw== 0000950137-96-002224.txt : 19961113 0000950137-96-002224.hdr.sgml : 19961113 ACCESSION NUMBER: 0000950137-96-002224 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHULT HOMES CORP CENTRAL INDEX KEY: 0000803349 STANDARD INDUSTRIAL CLASSIFICATION: MOBILE HOMES [2451] 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: 96659245 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 1 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 September 28, 1996 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 common shares outstanding, as of September 28, 1996 was 3,743,685. 2 SCHULT HOMES CORPORATION FORM 10-Q PERIOD ENDED SEPTEMBER 28, 1996 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 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 (a) Inapplicable (b) There were no reports on Form 8-K filed for the three month period ended September 28, 1996. 2 3 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 28, 1996 AND JUNE 29, 1996 ASSETS
SEPT. 28, 1996 JUNE 29, 1996 -------------- ------------- (unaudited) (audited) (thousands of dollars) Cash ...................................................... $10,658 $ 9,033 Accounts receivable, less allowance for doubtful accounts of $65 in September and June 1996......................... 15,548 18,338 Inventories (note 1)....................................... 16,427 16,315 Deferred income taxes...................................... 5,424 5,424 ------- ------- Total current assets.................................... 48,057 49,110 Property, plant, and equipment............................. 36,888 36,192 Loans receivable from Saturn Housing, LLC.................. 3,156 2,634 Other assets............................................... 2,587 1,797 ------- ------- Total assets............................................ $90,688 $89,733 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Trade accounts payable..................................... $12,386 $18,628 Accrued liabilities........................................ 33,358 28,851 Current portion of long-term debt.......................... 710 710 ------- ------- Total current liabilities............................... 46,454 48,189 Deferred income taxes...................................... 2,751 2,751 Long-term debt............................................. 363 684 ------- ------- Total liabilities....................................... 49,568 51,624 Shareholders' equity: Common shares, no par value, 10,000,000 shares authorized, 3,743,685 shares issued and outstanding in September and June 1996............................................ 7,921 7,921 Retained earnings......................................... 33,199 30,188 ------- ------- Total shareholders' equity.............................. 41,120 38,109 ------- ------- Total liabilities and shareholders' equity.............. $90,688 $89,733 ======= =======
See accompanying notes to condensed consolidated financial statements. 3 4 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
THREE MONTHS ENDED SEPT. 28, 1996 SEPT. 30, 1995 -------------- -------------- Net sales........................ $ 93,027 $ 80,482 Cost of goods sold............... 72,510 64,062 ---------- ---------- Gross profit.................. 20,517 16,420 Selling, general, and administrative expenses......... 15,149 13,144 ---------- ---------- Operating income.............. 5,368 3,276 Interest income.................. 126 7 Other income..................... 5 6 Interest expense................. (27) (54) ---------- ---------- Income before income taxes.... 5,472 3,235 Income taxes: Federal......................... 1,672 994 State........................... 602 356 ---------- ---------- Net income.................... $ 3,198 $ 1,885 ========== ========== PER SHARE DATA: (note 2) - ---------------------------- Net income per common share...... $ 0.85 $ 0.50 Dividends paid per common share.. $ 0.05 $ 0.04 Average shares outstanding....... 3,748,812 3,740,905
See accompanying notes to condensed consolidated financial statements. 4 5 SCHULT HOMES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (DOLLARS IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED SEPT. 28, SEPT. 30, 1996 1995 --------- --------- Cash flows from operating activities: Net income.......................................... $ 3,198 $ 1,885 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of plant and equipment............... 943 858 Changes in assets and liabilities: (Increase) decrease in accounts receivable....... 2,790 (981) (Increase) decrease in inventories............... (112) 1,314 (Increase) decrease in other assets.............. (790) 332 Increase (decrease) in trade accounts payable.... (6,242) (2,923) Increase in accrued liabilities.................. 4,507 2,782 ------- ------- Total adjustments.............................. 1,096 1,382 ------- ------- Net cash provided by operating activities............ 4,294 3,267 Cash flows from investing activities: Capital expenditures, net of retirements........... (1,639) (641) Loans to Saturn Housing, LLC....................... (522) (28) ------- ------- Net cash used in investing activities................ (2,161) (669) ------- ------- Cash flows from financing activities: Net borrowings (repayments) under line-of-credit... - (2,300) Repayment of long-term debt........................ (321) (253) Payment for repurchased shares..................... - (165) Dividends declared to common shareholders.......... (187) (149) ------- ------- Net cash provided by (used in) financing activities.. (508) (2,867) ------- ------- Net increase (decrease) in cash...................... 1,625 (269) Cash at beginning of the quarter..................... 9,033 4,566 ------- ------- Cash at end of the quarter........................... $10,658 $ 4,297 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest........................................... $ 27 $ 94 Income taxes....................................... $ 1,319 $ 569
See accompanying notes to condensed consolidated financial statements. 5 6 SCHULT HOMES CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) INVENTORIES The components of inventories are as follows:
SEPT. 28, JUNE 29, 1996 1996 -------- -------- (thousands of dollars) Raw material........... $12,069 $12,524 Work in process........ 2,360 2,247 Finished goods......... 1,998 1,544 ------- ------- Total............... $16,427 $16,315 ======= =======
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NET EARNINGS PER COMMON SHARE Net earnings 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 SEPT. 28, SEPT. 30, 1996 1995 --------- --------- Net sales................................... 100.0% 100.0% Cost of goods sold.......................... 77.9 79.6 ----- ----- Gross profit............................. 22.1 20.4 Selling, general & administrative expenses.. 16.3 16.3 ----- ----- Operating income ........................ 5.8 4.1 Interest and other income................... 0.1 0.0 Interest expense............................ (0.0) (0.1) ----- ----- Income before income taxes............... 5.9 4.0 Income taxes................................ 2.5 1.7 ----- ----- Net income .............................. 3.4 2.3 ===== =====
6 7 THREE MONTHS ENDED SEPTEMBER 28, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1995. Net Sales in the first quarter of fiscal 1997 were $93.0 million, an increase of 15.6% from sales of $80.5 in the first quarter of fiscal 1996. This was a record sales quarter for the Company. This increase was due to utilization of our plant expansions and strong market conditions, combined with a broader product line offering in certain regions. We believe we can continue to increase our sales during the second quarter compared to last year, if strong market conditions continue. The average selling price per section increased by 0.8% from the same time a year earlier. Total sections sold in the first quarter of fiscal 1997 were 4,418, an increase of 567 sections (14.7%) from the prior year period. Multi-section homes represented 68.5% of the homes sold during the first quarter of fiscal 1997, compared to 60.8% in fiscal 1996. Cost of Goods Sold in the first quarter of fiscal 1997 was $72.5 million, which represented an increase of 13.2% from the first quarter of fiscal 1996, reflecting our increase in sales. Cost of goods sold as a percentage of net sales decreased from 79.6% in fiscal 1996 to 77.9% in fiscal 1997. This percentage decrease in cost of goods sold was due primarily to decreased labor and material costs. The percentage decrease in labor was due to plant expansions becoming more efficient, along with results from the Company's margin improvement initiatives. Material costs decreased as a result of improved corporate purchasing procedures. The decrease in material costs will depend on market conditions by region, and labor costs will stabilize. Selling, General, and Administrative Expenses for the first quarter of fiscal 1997 were $15.1 million, which represented an increase of $2.0 million (15.3%) from fiscal 1996. As a percentage of net sales, these expenses remained the same at 16.3% of net sales when compared to the prior year period. The Company earned an operating income of $5.4 million in the first quarter of fiscal 1997 or 5.8% of net sales. This compares to an operating income of $3.3 million or 4.1% of net sales in the prior year period. Interest and other income contributed $131,000 to earnings in the first quarter of fiscal 1997, compared to $13,000 in the first quarter of fiscal 1996. This was due to the increase in cash flow available for investments. Interest expense for the first quarter of fiscal 1997 was $27,000, compared to $54,000 in the first quarter of fiscal 1996. Net income in the current quarter was a record $3.2 million ($0.85 per common share), compared to a net income of $1.9 million ($0.50 per common share) in the first quarter of fiscal 1996. We believe our earnings for the second quarter will be greater than second quarter of fiscal 1996. LIQUIDITY AND CAPITAL RESOURCES At the end of the current quarter, the Company had no outstanding borrowings under its credit facility which remained unchanged from the balance at June 29, 1996. At the end of the quarter, total long-term debt was $363,000, a decrease of $321,000 compared to the balance at June 29, 1996. 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 $4,000,000 for seasonal use, if needed. Capital expenditures for the first quarter of fiscal 1997 were $1,639,000, compared to $641,000 from the prior year period. The announced $6,000,000 expansion in Buckeye, Arizona should bring capital expenditures for fiscal 1997 to $12,800,000. 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. 7 8 RISK FACTORS Forward-looking statements are made only as of the date made, based upon factors known to management at the time. We are aware that material prices may increase, and have assumed that we will have no undue difficulty passing on those costs without adversely affecting sales. We have also assumed that employee relations continue to be favorable, that orders on hand are not canceled by dealers, and that no unusual workers' compensation or other legal claim adversely affects the corporation. In the short term, weather factors are often more significant in winter, and may severely restrict shipment and manufacture of houses. General economic conditions and consumer uncertainty or lack of confidence may result in delayed purchases of homes. A number of economists have predicted rising interest rates after the elections, which may adversely affect financing and sales. The Company has assumed that the current generation of retirees and the emerging generation of retirees will have the same interest in purchasing manufactured homes, an assumption which has not yet been tested and may not be appropriate. We are aware that unpredictable events can and do occur and cannot assure anyone that adverse events will not take place. The manufacture and sales of housing is a complex and difficult business, with many unforeseen events and conditions beyond the control of manufacturers. We do not intend to update statements made in this report. PART II. OTHER INFORMATION None 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: November 8, 1996 8 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 US DOLLARS 3-MOS JUN-28-1997 JUN-29-1996 SEP-30-1996 1 10,658 0 15,548 0 16,427 48,057 36,888 0 90,688 46,454 363 7,921 0 0 33,199 90,688 93,027 93,027 72,510 15,149 0 0 27 5,472 2,274 3,198 0 0 0 3,198 .85 .85
-----END PRIVACY-ENHANCED MESSAGE-----