-----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, EFjqDL51L1pzTAS+gUWGVSSUx5JW5eGojmu8sgc/4gMjK3aItcFodTgp8/4tJ8wl /7akOmysgfm2/0GKM7Dcfw== 0001007171-96-000014.txt : 19960910 0001007171-96-000014.hdr.sgml : 19960910 ACCESSION NUMBER: 0001007171-96-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960727 FILED AS OF DATE: 19960909 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUE BIRD CORP CENTRAL INDEX KEY: 0000889469 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 133638126 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-49544-01 FILM NUMBER: 96627584 BUSINESS ADDRESS: STREET 1: 3920 ARKWRIGHT ROAD CITY: MACON STATE: GA ZIP: 31210 BUSINESS PHONE: 9127577100 MAIL ADDRESS: STREET 2: 3920 ARKWRIGHT RD STE 275 CITY: MACON STATE: GA ZIP: 31210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUE BIRD BODY CO CENTRAL INDEX KEY: 0000889468 STANDARD INDUSTRIAL CLASSIFICATION: TRUCK & BUS BODIES [3713] IRS NUMBER: 580813156 STATE OF INCORPORATION: GA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-49544 FILM NUMBER: 96627585 BUSINESS ADDRESS: STREET 1: 3920 ARKWRIGHT ROAD STREET 2: SUITE 275 CITY: MACON STATE: GA ZIP: 31210 BUSINESS PHONE: 9127577100 MAIL ADDRESS: STREET 1: 3920 ARKWRIGHT ROAD STREET 2: SUITE 275 CITY: MACON STATE: GA ZIP: 31210 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /x/ JOINT QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the period ended July 27, 1996 / / 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 33-49544-01 Commission File Number 33-49544 Blue Bird Corporation Blue Bird Body Company (Exact name of registrant as (Exact name of registrant as specified in its charter) specified in its charter) Delaware Georgia (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) 13-3638126 58-0813156 (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) 3920 Arkwright Road 3920 Arkwright Road Macon, Georgia 31210 Macon, Georgia 31210 (Address of principal executive (Address of principal executive offices, including zip code) offices, including zip code) (912) 757-7100 (912) 757-7100 (Registrant's telephone number, (Registrant's telephone number, including area code) including area code) Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes /X/ No / / As of June 1, 1996, 8,424,778 shares of Blue Bird Corporation's common stock and 10 shares of Blue Bird Body Company's common stock were outstanding. BLUE BIRD BODY COMPANY ("BLUE BIRD" OR THE "COMPANY") IS A WHOLLY- OWNED SUBSIDIARY OF BLUE BIRD CORPORATION ("BBC"). BLUE BIRD MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING CERTAIN PORTIONS OF THIS FORM 10-Q APPLICABLE TO IT WITH THE REDUCED DISCLOSURE FORMAT PERMITTED BY SUCH GENERAL INSTRUCTION. BLUE BIRD CORPORATION BLUE BIRD BODY COMPANY QUARTERLY REPORT ON FORM 10-Q FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED July 27, 1996 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Condensed Consolidated Balance Sheets as of July 27, 1996 and October 28, 1995 ..................................... 1 Condensed Consolidated Statements of Income for the three-month and nine-month periods ended July 27, 1996 and July 29, 1995 ........................................ 2 Condensed Consolidated Statements of Cash Flows for the nine-month periods ended July 27, 1996 and July 29, 1995 .................................... 3 Notes to Condensed Consolidated Financial Statements ................................. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ........................................... 6 PART II. OTHER INFORMATION Item 1. Legal Proceedings ...................................... 8 Item 6. Exhibits and Reports on Form 8-K ....................... 8 Signatures ....................................................... 9 BLUE BIRD CORPORATION AND SUBSIDIARIES BLUE BIRD BODY COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS JULY 27, 1996 AND OCTOBER 28, 1995 ($ IN THOUSANDS)
JULY 27, OCTOBER 28, 1996 1995 --------- ----------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,260 $ 21,452 Trade receivables 20,067 18,866 Leases receivable 33,125 47,222 Inventories 156,756 83,346 Prepaid expenses 1,579 1,020 Other current assets 2,914 5,927 -------- -------- Total current assets 219,701 177,833 LEASES RECEIVABLE, NONCURRENT 38,654 15,000 PROPERTY, PLANT, AND EQUIPMENT 61,170 58,872 Less accumulated depreciation (25,986) (21,860) -------- -------- Property, plant, and equipment, net 35,184 37,012 -------- -------- GOODWILL AND OTHER INTANGIBLE ASSETS 163,733 165,594 Less accumulated amortization (24,714) (21,712) -------- -------- Goodwill & other intangible assets, net 139,019 143,882 -------- -------- OTHER ASSETS 6,935 6,065 -------- -------- Total assets $ 439,493 $ 379,792 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revolving credit facilities $ 46,547 $ 35,662 Current portions of long-term debt 13,000 12,000 Accounts payable 58,600 25,743 Income taxes payable 1,764 6,926 Deferred income taxes 8,442 9,535 Other current liabilities 33,644 26,242 -------- -------- Total current liabilities 161,997 116,108 LONG-TERM DEBT 118,404 113,750 DEFERRED INCOME TAXES 5,550 5,898 OTHER LIABILITIES 21,017 20,536 REDEEMABLE COMMON STOCK, NET 20,431 20,872 -------- -------- Total liabilities 327,399 277,164 STOCKHOLDERS' EQUITY: Common stock, $.01 par value; 25,000,000 shares authorized; 7,704,778 and 7,704,778 outstanding respectively 77 77 Additional paid-in capital 77,023 77,023 Retained earnings 37,553 27,896 Other stockholders' equity (2,559) (2,368) -------- -------- Total stockholders' equity 112,094 102,628 -------- -------- Total liabilities and stockholders' equity $ 439,493 $ 379,792 ======== ========
The accompanying notes are an integral part of these condensed consolidated statements. 1 BLUE BIRD CORPORATION AND SUBSIDIARIES BLUE BIRD BODY COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED JULY 27, 1996 AND JULY 29, 1995 ($ IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED JULY 27, JULY 29, JULY 27, JULY 29, 1996 1995 1996 1995 --------- --------- --------- --------- (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) Net sales $ 146,788 $ 137,340 $ 346,115 $ 319,445 Cost of goods sold 122,141 113,037 287,427 264,085 -------- -------- -------- -------- Gross profit 24,647 24,303 58,688 55,360 Selling, general and administrative expenses 10,612 9,499 31,501 29,462 Amortization of goodwill and other intangibles 940 965 2,820 3,728 -------- ------- -------- -------- Operating income 13,095 13,839 24,367 22,170 Interest income 1,845 1,016 5,353 2,993 Interest and debt issue expense (4,425) (5,332) (12,796) (14,005) Other income (expense) 110 613 543 475 ------- ------- ------- ------- Income before income taxes 10,625 10,136 17,467 11,633 Provision for income taxes 4,049 4,330 6,835 4,929 ------- ------- ------- ------- Net income before extraordinary items 6,576 5,806 10,632 6,704 Extraordinary item - loss on extinguishment of debt (net of income tax benefit of $838) 0 0 (1,416) 0 ------- ------- ------- ------- Net income $ 6,576 $ 5,806 $ 9,216 $ 6,704 ======= ======= ======= =======
The accompanying notes are an integral part of these condensed consolidated statements. 2 BLUE BIRD CORPORATION AND SUBSIDIARIES BLUE BIRD BODY COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIODS ENDED JULY 27, 1996 AND JULY 29, 1995 ($ IN THOUSANDS)
NINE MONTHS ENDED JULY 27, JULY 29, 1996 1995 --------- --------- (UNAUDITED) (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 9,216 $ 6,704 ------- ------- Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Extraordinary loss on extinguishment of debt 2,254 0 Depreciation and amortization 8,694 9,452 Increase in cash surrender value of life insurance (47) (71) Deferred income taxes (1,441) (1,971) Changes in operating assets and liabilities: (Increase) decrease in trade receivables (1,201) (6,597) (Increase) decrease in inventories (73,410) (74,177) (Increase) decrease in prepaid expenses (559) (109) Increase (decrease) in accounts payable 32,857 24,449 Increase (decrease) in income taxes payable (5,162) 974 Other 10,220 2,730 -------- -------- Total adjustments (27,795) (45,320) -------- -------- Net cash used in operating activities (18,579) (38,616) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant, and equipment acquisitions (2,587) (2,762) Leases receivable (9,557) (9,991) -------- -------- Net cash used in investing activities (12,144) (12,753) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowing on working capital revolvers 49,539 49,900 Repayment of long-term debt (33,000) (6,000) Debt prepayment premium (1,625) 0 Other (192) (949) -------- -------- Net cash (used in) provided by financing activities 14,722 42,951 -------- -------- EFFECT OF EXCHANGE RATE FLUCTUATIONS (191) (95) -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (16,192) (8,513) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 21,452 10,490 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,260 $ 1,977 ======== ======== SUPPLEMENTAL INFORMATION: Cash interest paid $ 2,294 $ 11,818 ======== ======== Cash income taxes paid $ 8,351 $ 5,928 ======== ======== The accompanying notes are an integral part of these condensed consolidated statements. 3 BLUE BIRD CORPORATION AND SUBSIDIARIES BLUE BIRD BODY COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF FINANCIAL STATEMENTS AND FORMATION AND ORGANIZATION The accompanying unaudited condensed consolidated financial statements of Blue Bird Corporation and subsidiaries ("BBC") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the joint annual report of BBC and Blue Bird Body Company (the "Predecessor") (see "Acquisition" below) on Form 10-K for the fiscal year ended October 28, 1995. The accompanying unaudited financial statements include, in the opinion of management, all adjustments, which are of a normal recurring nature, necessary for a fair presentation for the periods presented. Results for the interim periods presented are not necessarily indicative of results that may be expected for a full fiscal year. FISCAL YEAR BBC's fiscal year ends on the Saturday nearest October 31 of each year, generally referred to as a "52-/53-week year." Fiscal year 1996 contains 53 weeks and fiscal year 1995 contains 52 weeks. ACQUISITION On April 15, 1992, BBC (formerly B B Holding Corp.) acquired all of the outstanding capital stock of the Predecessor through the merger of B B Acquisition Corp., a wholly owned subsidiary of BBC, with and into the Predecessor (the "Acquisition"), with the Predecessor as the surviving corporation. The Acquisition was accounted for as a purchase. 4 2. INVENTORIES Inventories are valued at the lower of cost or market, cost being determined on the last-in, first-out basis. If the first-in, first-out method had been used, inventories would have been approximately $4,000,000 higher at July 27, 1996 and approximately $2,600,000 higher at October 28, 1995. The components of inventory consist of the following at July 27, 1996 and October 28, 1995 (dollars in thousands):
1996 1995 Raw materials $ 29,024 $32,463 Work in process 47,473 22,831 Finished goods 80,259 28,052 -------- ------- $156,756 $83,346 ======== =======
3. CONTINGENCIES PENDING LITIGATION AND INSURANCE PROGRAM As of July 27, 1996, a number of product liability cases were pending against a subsidiary of BBC. Neither the outcome of certain cases nor the amounts of any liabilities related to these certain cases are known, however, management believes that the ultimate resolution of these matters will not have a material adverse impact on BBC's financial position or results of operations. 5 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED JULY 27, 1996 COMPARED TO THREE MONTHS ENDED JULY 29, 1995 Net sales for the quarter ended July 27, 1996, were $146.8 million, an increase of 6.9% or $9.4 million compared to the corresponding period in 1995. This increase was due to more deliveries with a higher average selling price during the current reporting period as compared to the 1995 period. Gross profit increased to $24.6 million in the third quarter of 1996 from $24.3 million in the third quarter of 1995, an increase of $.3 million or 1.4% due to higher sales volume. Selling, general and administrative expenses increased to $10.6 million from $9.5 million in the 1995 period, an increase of 11.6% or $1.1 million. This increase was due primarily to higher engineering and selling/promotional expenses. Interest income was $1.8 million in 1996, an increase of $.8 million compared to $1.0 million in the third quarter of 1995. This increase was due to a higher average dollar amount of leases held in the lease portfolio in 1996 compared to 1995. Interest and debt issue expenses decreased to $4.4 million in the current period from $5.3 million in the prior year's period due to lower interest rates on bank debt as well as lower debt due to the repurchase of $25 million of Subordinated Debt in December, 1995. The resulting lower interest expense was partially offset by higher interest expense on the line of credit related to leases in Blue Bird Capital Corporation. The line of credit for Blue Bird Capital Corporation was not in place during the 1995 period. Other (income)/expense was $.1 million income in the current period as compared to $.6 million income in the corresponding period in 1995 due primarily to an insurance settlement received in the 1995 period. The provision for income taxes was $4.0 million in the current period compared to $4.3 million in the 1995 period. The effective tax rate for the current period was 38.1% compared to 42.7% during the prior year period. The effective tax rate for both periods is higher than the statutory rate primarily due to the effect of certain nondeductible amortization charges, principally goodwill. NINE MONTHS ENDED JULY 27, 1996 COMPARED TO NINE MONTHS ENDED JULY 29, 1995 Net sales for the nine months ended July 27, 1996, were $346.1 million, an increase of $26.7 million or 8.4% compared to the corresponding period in 1995. This was due to delivering more units during the current period as compared to the 1995 period. 6 Gross profit increased to $58.7 million in the current period as compared to $55.4 million in the 1995 period. This was an increase of $3.3 million or 6.0%. The increased gross profit was due to the higher sales volume. Selling, general and administrative expenses increased to $31.5 million from $29.5 million in the 1995 period, an increase of $2.0 million or 6.8%. This increase was due primarily to normal budgeted increases in engineering and marketing, as well as higher selling expenses. Interest income increased to $5.4 million in 1996, compared to $3.0 million in 1995. The increase was due mainly to a higher average dollar amount of leases held in the lease portfolio in 1996 compared to 1995. Interest and debt issue expenses decreased to $12.8 million in the current period from $14.0 million in the prior year's period due to lower interest rates on bank debt as well as lower debt due to the repurchase of $25 million of Subordinated Debt in December, 1995. The resulting lower interest expense was partially offset by interest expense on the line of credit related to leases in Blue Bird Capital Corporation. The line of credit for Blue Bird Capital Corporation was not in place during the 1995 period. The provision for income taxes was $6.8 million in the current period compared to $4.9 million in the 1995 period. The effective tax rate for the current period was 39.1% compared to 42.4% during the prior year period. The effective tax rate for both periods is higher than the statutory rate primarily due to the effect of certain nondeductible amortization charges, principally goodwill. On December 14, 1995, the Company repurchased, for cash on the open market, $25 million in principal amount of outstanding 11 3/4% Senior Subordinated Notes due 2002, Series B (the "Subordinated Notes") for the purchase price (expressed as a percentage of principal amount) of 106.500% plus accrued interest to the purchase date. An extraordinary loss of $1.4 million net of a tax benefit of $.8 million occurred during the 1996 period due to the early extinguishment of such Subordinated Notes. FINANCIAL CONDITION WORKING CAPITAL The Company's working capital needs are seasonal. Working capital and related bank borrowings are lowest immediately after heavy school bus deliveries late in the fourth fiscal quarter. Beginning in December or January, working capital and related bank borrowings typically start to increase as parts are purchased or manufactured and distributed to the assembly plants for assembly into buses. Management tries to build buses as close to expected delivery time as possible. Inventory is at its highest during May, June and July prior to heavy seasonal deliveries. 7 LIQUIDITY AND CAPITAL RESOURCES Net cash used in operating activities during the current period was $18.6 million. This was primarily the result of the seasonal increase in inventory and payment of income taxes, partially offset by depreciation, amortization and an increase in accounts payable. Net borrowings on the working capital revolvers increased $49.5 million, reflecting primarily the seasonal increase in inventory. The early extinguishment of $25 million of outstanding Subordinated Notes was funded primarily from internally generated cash and partially from an increase in the working capital revolver. On March 29, 1996, Blue Bird Capital Corporation entered into an Amended and Restated Loan Agreement with LaSalle National Bank, as Agent, and other financial institutions (the "Amended Credit Agreement"). The Amended Credit Agreement provides Blue Bird Capital with a revolving credit facility (the "Credit Facility") up to a maximum aggregate principal amount of $100 million, subject to certain limitations as set forth in the Amended Credit Agreement. The Credit Facility terminates on March 31, 1999 and may be extended for up to two one-year periods. The Company believes that its established financing sources are adequate for the foreseeable future. Part II. OTHER INFORMATION Item 1. Legal Proceedings. Reference is made to BBC's and the Predecessor's Joint Annual Report on Form 10-K for the fiscal year ended October 28, 1995 for a description of certain legal proceedings to which BBC or the Predecessor is a party. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 27 Financial data schedule (b) Reports on Form 8-K. There were no reports on Form 8-K filed by the Registrants during the quarter ended July 27, 1996. 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BLUE BIRD CORPORATION BLUE BIRD BODY COMPANY By /s/ Paul E. Glaske By /s/ Paul E. Glaske Paul E. Glaske Paul E. Glaske Chairman of the Board and Chairman of the Board and President and Director President and Director (Principal Executive (Principal Executive Officer) Officer) Date: September 9, 1996 Date: September 9, 1996 By /s/ Bobby G. Wallace By /s/ Bobby G. Wallace Bobby G. Wallace Bobby G. Wallace Vice President, Treasurer and Vice President - Finance Secretary and Director and Administration, (Principal Financial and Treasurer and Secretary Accounting Officer) and Director (Principal Financial and Accounting Officer) Date: September 9, 1996 Date: September 9, 1996 9 Exhibit Index ------------- Exhibit No. Description ------- ----------- 27 Financial data schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 0000889468 Blue Bird Body Company 1,000 9-MOS NOV-02-1996 JUL-27-1996 5,260 0 53,192 0 156,756 219,701 61,170 25,986 439,493 161,997 118,404 77,100 0 0 55,425 439,493 346,115 346,115 287,427 287,427 33,778 0 12,796 17,467 6,835 10,632 0 1,416 0 9,216 0 0
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