-----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, K9eWdrjBFqpWCOOLATZilvFNESGPqVH17eOU3jEYARRJbHHM/+IBqUCrdlBKcxZm QEx0uqhDJRG056KOPng6Jw== 0000850476-97-000027.txt : 19970815 0000850476-97-000027.hdr.sgml : 19970815 ACCESSION NUMBER: 0000850476-97-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REXHALL INDUSTRIES INC CENTRAL INDEX KEY: 0000850476 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR HOMES [3716] IRS NUMBER: 954135907 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17824 FILM NUMBER: 97660862 BUSINESS ADDRESS: STREET 1: 46147 7TH STREET WEST CITY: LANCASTER STATE: CA ZIP: 93534 BUSINESS PHONE: 8057260565 MAIL ADDRESS: STREET 1: 46147 7TH STREET WEST CITY: LANCASTER STATE: CA ZIP: 93534 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 June 30, 1997 Commission file number: 0-17824 REXHALL INDUSTRIES, INC. (Exact name of Registrant as specified in its charter) California 95-4135907 (State of Incorporation) (IRS Employer Identification No.) 46147 7th Street West, Lancaster California 93534 (Address of principal executive offices) (Zip Code) (805) 726-0565 (Registrant's telephone number, including area code) 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 _____. Applicable only to Corporate Issuers State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 2,767,806 as of 7/31/1997. REXHALL INDUSTRIES, INC. INDEX PART 1 - FINANCIAL INFORMATION PAGE NUMBER Item 1. Financial Statements: Condensed Balance Sheets at June 30, 1997 3 and December 31, 1996 Condensed Statements of Operations for the three and six months ended June 30,1997 and June 30, 1996 4, 5 Condensed Statements of Cash Flows (unaudited) for the six months ended June 30, 1997 and June 30, 1996 6 Notes to Condensed Financial Statements as of June 30, 1997 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8, 9 PART II - OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K 9 Form 8-K has been filed during the quarter for which this report is filed. Signatures 10 Exhibits Exhibit 11 - Computation supporting 11 earnings per common and common equivalent share amounts Exhibit 27 - Financial Data Sheet Submitted via Edgar Electronic Filing System 12 (Audited) (Unaudited) December 31 June 30 PART I - FINANCIAL INFORMATION 1996 1997 Item 1. - Financial Statements REXHALL INDUSTRIES, INC. CONDENSED BALANCE SHEETS Assets: Current Assets Cash and Short Term Investments $ 742,000 $ 681,000 Accounts Receivable 3,208,000 5,552,000 Inventories 13,793,000 12,978,000 Other Current Assets 151,000 93,000 Income Tax Received 271,000 --- Deferred Income Taxes 439,000 439,000 Total Current Assets 18,604,000 19,743,000 Property and Equipment - Net 4,885,000 4,960,000 Other Assets 7,000 7,000 TOTAL ASSETS $23,496,000 $24,710,000 Liabilities and Shareholders' Equity: Current Liabilities Accounts Payable $7,591,000 $ 7,561,000 Warranty Allowance 355,000 323,000 Reserve for Self-Insurance 365,000 413,000 Other Accrued Liabilities 748,000 903,000 Income Taxes Payable --- --- Current Portion of Long Term Debt 26,000 25,000 Total Current Liabilities 9,085,000 9,225,000 Deferred Income Tax Liabilities 4,000 25,000 Long Term Debt 826,000 815,000 Total Liabilities $ 9,915,000 $10,065,000 Shareholders' Equity: Preferred Stock - no par value; Authorized 1,000,000 shares; no shares outstanding at June 30, 1997 and December 31, 1996 Common Stock - no par value; Authorized 10,000,000 shares; Outstanding 2,767,806 shares at 7/31/1997 and 2,630,030 shares at December 31, 1996 $ 6,533,000 $ 6,376,000 Retained Earnings 7,048,000 8,269,000 Total Shareholders' Equity 13,581,000 14,645,000 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,496,000 $24,710,000 PART I - FINANCIAL INFORMATION Item 1. - Financial Statements REXHALL INDUSTRIES, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended June 30, 1996 June 30, 1997 Sales $18,780,000 $16,215,000 Cost of Sales 15,543,000 13,583,000 Gross Profit 3,237,000 2,632,000 Selling, General, Administrative Expenses and Other Expenses 1,843,000 1,485,000 Income Before Taxes 1,394,000 1,147,000 Income Taxes 566,000 464,000 Net Income $ 828,000 $ 683,000 Net Income Per Common Share $ .29(1) $ .24 Weighted Average Number of Common Shares Outstanding (primary) 2,848,564(2) 2,821,433 (1) Net income per common share originally reported as .31. However, considering the 5% stock dividend paid on 5/26/97, the figure has been adjusted to reflect the dividend in order to equitably compare like quarters. (2) Weighted average number of common shares outstanding was originally reported as 2,712,918. Considering the 5/26/97 5% dividend, the number indicated above reflects such dividend. PART I - FINANCIAL INFORMATION Item 1. - Financial Statements REXHALL INDUSTRIES, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Six Months Ended June 30, 1996 June 30, 1997 Sales $ 33,851,000 33,880,000 Cost of Sales 28,383,000 28,848,000 Gross Profit 5,468,000 5,032,000 Selling, General, Administrative Expenses and Other Expenses 3,320,000 2,981,000 Income Before Taxes 2,148,000 2,051,000 Income Taxes 859,000 830,000 Net Income $ 1,289,000 $ 1,221,000 Net Income Per Common Share $ .45(1) $ .43 Weighted Average Number of Common Shares Outstanding 2,848,564(2) 2,821,433 (primary) (1) Net income per common share originally reported as .48. However, considering the 5% stock dividend paid on 5/26/97, the figure has been adjusted to reflect the dividend in order to equitably compare like quarters. (2) Weighted average number of common shares outstanding was originally reported as 2,712,918. Considering the 5/26/97 5% dividend, the number indicated above reflects such dividend. PART I - FINANCIAL INFORMATION Item 1. - Financial Statements REXHALL INDUSTRIES, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 1996 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $1,289,000 $1,221,000 Adjustments to reconcile net income to net cash provided(used by) operating activities: Depreciation and amortization 102,000 132,000 Decrease(Increase) in accounts receivable (502,000) (2,344,000) (Decrease)Increase in inventories (4,037,000) 815,000 Decrease in other current assets 134,000 58,000 (Decrease)Increase in accounts payable 1,973,000 (30,000) Increase in reserve for self insurance 15,000 48,000 Decrease(Increase) in other current liab. inc. warranty (106,000) (32,000) Increase in non-current accrued liabilities 242,000 155,000 (Increase)decrease income tax receivable --- 271,000 Increase(decrease) deferred income tax liabilities --- 21,000 Net cash used by operating activities (890,000) 315,000 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (504,000) (207,000) Net cash used in investing activities (504,000) (207,000) CASH FLOWS FROM FINANCING ACTIVITIES: (Repurchase) Issuance of Common Stock 32,000 (157,000) Repayment of long-term debt (12,000) (12,000) Net cash (used in) provided by financing activities 20,000 (169,000) NET DECREASE IN CASH AND CASH EQUIVALENTS (1,374,000) (61,000) BEGINNING CASH AND CASH EQUIVALENTS 1,998,000 742,000 ENDING CASH AND CASH EQUIVALENTS $ 624,000 $ 681,000 PART I - FINANCIAL INFORMATION Item 1. REXHALL INDUSTRIES, INC. Notes to the Condensed Financial Statements June 30, 1997 1. The accompanying condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Prior period financial statements have been restated to conform with current period financial statement presentation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. For further information refer to the Financial Statements and footnotes included in the Registrant's Annual Report on Form 10-K for year ended December 31, 1996. The Results of Operations for any interim period are not necessarily indicative of the results to be expected for the full year. 2. Detail of Inventory December 31, 1996 June 30, 1997 Raw Material $ 6,608,000 $ 7,639,000 Work in Process 2,753,000 2,823,000 Finished Motorhomes 4,432,000 2,516,000 TOTAL $13,793,000 $12,978,000 3. Cash in Bank $ 742,000 $ 681,000 TOTAL $ 742,000 $ 681,000 4. On 4/21/97 the Board of Directors approved to issued a 5% common stock divided to owners of record as of May 12, 1997. The earnings per share data has been adjusted in order to equitably compare like quarters. PART I - FINANCIAL INFORMATION Item 2. - Management Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Sales - 2nd Quarter 1997 Compared with 2nd Quarter 1996 Sales for the quarter ended June 30, 1997, totaled $16,215,000 as compared to $18,780,000 in 1996. The units sold in 1997 were 275 vs. 336 in 1996. The decrease in sales was due to the restructuring of the Indiana plant. Cost of Sales - 2nd Quarter 1997 compared with 2nd Quarter 1996 The Cost of Sales as a percentage of sales for the second quarter of 1997 was 83.8% vs. 82.7% in the second Quarter of 1996. The cost of sales percentage for 1997 increased due to cost obsorbtion of product improvements. Gross Profit - 2nd Quarter 1997 compared with 2nd Quarter 1996 Gross Profit for the second quarter of 1997 decreased to 16.2% from 17.2% for the second quarter of 1996. The decrease was due to the decline in sales. Selling, General Administrative and Other Expenses - 2nd Quarter 1997 compared with 2nd Quarter 1996 Selling, General Administrative and Other Expenses were 9.2% of Sales in 1997 as compared to 9.8% in the second quarter of 1996. The expenses associated with sales commissions and advertising were major factors involved in the decreased expenses. PART I - FINANCIAL INFORMATION Item 2. - Management Discussion and Analysis or Plan of Operations Financial Condition, Capital Resources and Liquidity At June 30, 1997, working capital was $10,518,000 as compared to working capital of $9,519,000 at December 31, 1996. At present, the Company has a $3,500,000 line of credit with Bank of America which can be used for working capital purposes. At June 30, 1997, the company had used $365,000 under this line of credit to obtain a stand-by Letter of Credit permitting the company to remain self-insured for Workers' Compensation. Management believes that internally generated funds, cash on hand, and borrowing available under its line of credit will be sufficient for the Company's cash needs for the next twelve months. PART II - OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K a) Exhibit 11. Computation supporting earnings per common and common equivalent share amounts. b) Reports on Form 8-K. Form 8-K has been filed during the quarter for which this report is filed. The Company is a defendant in an action on behalf of purchasers of its motorhomes, alleging that the Company and its California dealers misrepresented the construction and quality of its motorhomes. The action is currently pending in Orange County Superior Court, California. Class certification proceedings began April 1, 1997, and mailing to the certified class was authorized July 16, subject to additional hearings seeking decertification set for August 13, 1997. The relief requested includes actual damages, injunctive relief, and punitive damages, in unspecified amounts. An adverse judgment, if granted, could be material to the Company. While the outcome of the litigation cannot be predicted, the Company believes that it has meritorious defenses to the claims. (The court date August 13, 1997, has been continued by order of the court until August 27, 1997.) c) Exhibit 27. Financial data sheet submitted to SEC via Edgar Electronic Filing System. REXHALL INDUSTRIES, INC. 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. REXHALL INDUSTRIES, INC. by (Registrant) Date: August 14,1997 /S/William J. Rex William J. Rex Chairman, President and Chief Executive Officer Date: August 14, 1997 /S/Phillip J. Parks Phillip J. Parks Controller Exhibit 11. Computation Supporting Earnings per Common Share Second Quarter 1996 1997 Net Income $ 828,000 $ 683,000 Weighted Average Number of Common Shares Outstanding (primary) 2,848,564 2,821,433 Earnings per Share $ .29 $ .24 (1) Originally reported as 2,712,918 shares outstanding and earnings per share to be at .31. However, considering the 5% stock dividend paid on 5/26/97, the figures have been adjusted to reflect the dividend in order to equitably compare like quarters. -----END PRIVACY-ENHANCED MESSAGE-----