<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended April 4, 1998
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 000-22765
---------
EXCELSIOR-HENDERSON MOTORCYCLE
MANUFACTURING COMPANY
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-1771946
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
805 Hanlon Drive
Belle Plaine, Minnesota 56011
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(612) 873-7000
-----------------------------
Registrant's telephone number
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 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 / /
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date: Common Stock, $.01 par
value --13,028,897 issued and outstanding as of May 12, 1998.
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE
MANUFACTURING COMPANY
QUARTERLY REPORT ON FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------------------- --------
<S> <C> <C>
Item 1. Financial Statements:
Balance Sheets (Unaudited) as of April 4, 1998
and January 3, 1998 3
Statements of Operations (Unaudited)
for the Three Months Ended
March 31, 1997 and April 4, 1998 and
Cumulative for the Period from Inception
(December 22, 1993) to April 4, 1998 4
Statements of Cash Flows (Unaudited)
for the Three Months Ended
March 31, 1997 and April 4, 1998 and Cumulative
for the Period from Inception (December 22, 1993)
to April 4, 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 10
PART II. OTHER INFORMATION 11
-----------------
SIGNATURES 13
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</TABLE>
2
<PAGE>
PART I -- FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
EXCELSIOR-HENDERSON MOTORCYCLE MANUFACTURING COMPANY
(A DEVELOPMENT STAGE COMPANY)
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
January 3, April 4,
1998 1998
-------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,484,502 $ 5,682,627
Short-term investments 11,764,689 11,764,689
Other current assets 113,497 389,404
-------------- -------------
Total current assets 24,362,688 17,836,720
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$255,529 and $460,263 13,353,897 20,194,108
RESTRICTED CASH 7,275,569 7,355,436
DEPOSITS 2,670,675 82,977
INTELLECTUAL PROPERTY, to be amortized 200,545 208,710
OTHER ASSETS, net 322,093 314,124
-------------- -------------
$48,185,467 $45,992,075
-------------- -------------
-------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,997,783 $ 3,104,684
Accrued liabilities 585,481 986,288
Current maturities of long-term debt 675,372 671,976
-------------- -------------
Total current liabilities 3,258,636 4,762,948
-------------- -------------
LONG-TERM DEBT, less current maturities 13,738,615 13,639,405
-------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDERS' EQUITY:
Common stock, 16,666,666 shares authorized, par value of $.01;
13,026,191 and 13,027,858 shares issued and outstanding 130,262 130,279
Additional paid-in capital 41,066,473 41,072,707
Deficit accumulated during the development stage (10,008,519) (13,613,264)
-------------- -------------
Total stockholders' equity 31,188,216 27,589,722
-------------- -------------
$48,185,467 $45,992,075
-------------- -------------
-------------- -------------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE MANUFACTURING COMPANY
(A DEVELOPMENT STAGE COMPANY)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Cumulative for the
-------------------------- Period from Inception
March 31, April 4, (December 22, 1993)
1997 1998 to April 4, 1998
------------ ------------ ----------------------
<S> <C> <C> <C>
PREOPERATING EXPENSES:
Research and development $477,108 $1,539,128 $6,271,795
Marketing 283,376 835,875 3,342,901
General and administrative 318,070 1,280,529 4,881,129
------------ ------------ ----------------------
Total preoperating expenses 1,078,554 3,655,532 14,495,825
INTEREST INCOME 90,482 414,107 1,441,913
INTEREST EXPENSE (1,688) (363,320) (559,352)
------------ ------------ ----------------------
NET LOSS $(989,760) $(3,604,745) $(13,613,264)
------------ ------------ ----------------------
------------ ------------ ----------------------
NET LOSS PER SHARE
Basic and diluted $(0.17) $(0.28) $(2.17)
------------ ------------ ----------------------
------------ ------------ ----------------------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic and diluted 5,874,231 13,027,821 6,272,522
------------ ------------ ----------------------
------------ ------------ ----------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE MANUFACTURING COMPANY
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Cumulative for the Period
---------------------------- From Inception
March 31, April 4, (December 22, 1993) to
1997 1998 April 4, 1998
------------- ------------- -------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (989,760) $(3,604,745) $(13,613,264)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and Amortization 17,046 212,703 518,276
Change in current assets and liabilities:
Other current assets (78,046) (275,907) (389,404)
Accounts payable 17,238 1,106,901 3,104,684
Accrued liabilities (37,875) 400,807 986,288
------------- ------------- -------------------------
Net cash used in operating activities (1,071,397) (2,160,241) (9,393,420)
------------- ------------- -------------------------
INVESTING ACTIVITIES:
Purchases of short-term investments, net -- -- (11,764,689)
Property and equipment additions (41,576) (4,457,247) (15,482,470)
Payments made for intellectual property (21,225) (8,165) (208,710)
Payments of equipment deposits -- -- (82,977)
Purchases of restricted cash -- (79,867) (210,436)
Changes in other assets (85,534) -- --
------------- ------------- -------------------------
Net cash used in investing activities (148,335) (4,545,279) (27,749,282)
------------- ------------- -------------------------
FINANCING ACTIVITIES:
Proceeds from long-term debt -- -- 2,505,095
Payments under capital lease and long-term
debt obligations (3,084) (102,606) (477,993)
Payments incurred for other assets -- -- (324,749)
Proceeds from issuance of Series A Convertible
Preferred Stock, net of offering expenses -- -- 10,314,000
Proceeds from issuance of common stock, net of
offering expenses 15,000 6,251 30,808,976
------------- ------------- -------------------------
Net cash provided by (used in)
financing activities 11,916 (96,355) 42,825,329
------------- ------------- -------------------------
Net increase (decrease) in cash and cash
equivalents (1,207,816) (6,801,875) 5,682,627
CASH AND CASH EQUIVALENTS:
Beginning of period 5,376,601 12,484,502 --
------------- ------------- -------------------------
End of period $4,168,785 $ 5,682,627 $ 5,682,627
------------- ------------- -------------------------
------------- ------------- -------------------------
SUPPLEMENTAL CASH FLOW
INFORMATION:
Interest paid $ 1,687 $ 201,835 $ 366,511
Noncash transactions-
Property and equipment acquired under
capital lease obligations -- -- 5,214,279
Restricted cash received from long-term debt -- -- 7,145,000
Conversion of note payable into common stock -- -- 75,000
Issuance of common stock for services -- -- 125,000
Issuance of common stock in settlement of
construction payable -- -- 5,010
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE MANUFACTURING COMPANY
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION:
The accompanying balance sheet of Excelsior-Henderson Motorcycle
Manufacturing Company (the "Company") as of April 4, 1998 and the statements
of operations and cash flows for the three months ended March 31, 1997 and
April 4, 1998, and cumulative for the period from inception (December 22,
1993) to April 4, 1998 have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows as of April 4, 1998 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 3, 1998. The results of operations for the three
months ended April 4, 1998 are not necessarily indicative of the operating
results for the full fiscal year.
2. BASIC AND DILUTED NET LOSS PER SHARE:
Basic and diluted net loss per share for all periods presented is computed
using the weighted average number of common shares outstanding. Shares
reserved for warrants or stock options are not considered because the impact
of the incremental shares is antidilutive.
3. COMMITMENTS AND CONTINGENCIES:
In October 1997, the Company signed a construction agreement with a
third-party vendor for the construction of the Company's paint and finishing
facility. The cost of the paint facility will be approximately $7.3 million.
The Company paid 20% of the cost upon execution of the agreement and will
make certain progress payments during construction and a final payment upon
completion of the paint facility. Through April 4, 1998, the Company had
made payments totaling $5.1 million on the paint and finishing facility
construction agreement. In order to finance a portion of the paint and
finishing facility and other equipment, the Company has entered into a loan
agreement with the State of Minnesota, through the Minnesota Agriculture and
Economic Development Board, providing for a $7.1 million loan for a portion
of the cost of the paint and finishing facility and certain reserves. The
loan proceeds are being held in escrow and will be available to the Company
upon installation and acceptance of the paint and finishing and purchase of
certain manufacturing equipment and product tooling. The loan has a 10-year
term with interest at an annual rate of 9.5% and is secured by the paint and
finishing facility and certain of the Company's equipment.
6
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE
MANUFACTURING COMPANY
THE INFORMATION PRESENTED BELOW IN MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF SECTION 21E OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS ARE SUBJECT
TO RISKS AND UNCERTAINTIES, INCLUDING THOSE DISCUSSED UNDER "FORWARD-LOOKING
STATEMENTS" BELOW, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE PROJECTED. BECAUSE ACTUAL RESULTS MAY DIFFER, READERS ARE CAUTIONED
NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
The Company plans to manufacture, market and sell premium heavyweight
cruiser and touring motorcycles with a brand that evokes an authentic
American motorcycling heritage and lifestyle. The Company is in the
development stage and its operations are subject to all of the risks inherent
in the establishment of a new business enterprise, including the risk that
full-scale operations may not occur. The Company does not anticipate having
motorcycle sales until late 1998. As a result of the operating expenses
described below in "Results of Operations," the Company's deficit accumulated
during the development stage was $13.6 million at April 4, 1998. Historic
spending levels are not indicative of anticipated future spending levels
because the Company is entering a period in which it will increase spending
on product research and development, marketing and dealer network
development, and staffing and other general operating expenses. For
these reasons, the Company believes its expenses, losses, and deficit
accumulated during the development stage will increase significantly before
any material product sales are generated.
RESULTS OF OPERATIONS
THREE MONTHS ENDED APRIL 4, 1998 AND MARCH 31, 1997
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased to $1,539,000 for the three months ended April 4, 1998 from
$477,000 for the three months ended March 31, 1997. The increases were
primarily due to staffing increases and increased product design and
development costs, as well as expenses for developing prototypes.
MARKETING EXPENSES. Marketing expenses increased to $836,000 for the
three months ended April 4, 1998 from $283,000 for the three months ended
March 31, 1997. The increases were primarily due to staffing increases,
increased advertising and promotion costs and dealer network development
expenses.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses increased to $1,281,000 for the three months ended April 4, 1998
from $318,000 for the three months ended March 31, 1997. The increases were
primarily due to staffing increases and other general operating expenses.
INTEREST INCOME. Interest income increased to $414,000 for the three
months ended April 4, 1998 from $90,000 for the three months ended March 31,
1997. The increase generally reflects interest earned on increased average
levels of cash, cash equivalents and short-term investments held by the
Company resulting from the proceeds of the Company's initial public offering
of its Common Stock.
INTEREST EXPENSE. Interest expense increased to $363,000 for the three
months ended April 4, 1998 from $2,000 for the three months ended March 31,
1997. The increase reflects interest on additional long-term debt and
capital leases entered into during 1997.
7
<PAGE>
NET OPERATING LOSS CARRYFORWARDS
As of January 3, 1998, the Company had net operating loss carryforwards
of approximately $8.8 million for federal income tax purposes that are
available to offset future taxable income through the year 2012. A valuation
allowance equal to the full amount of the related deferred tax asset has been
established due to the uncertainty of realization of the deferred tax asset.
Certain restrictions, caused by a 1996 change in ownership resulting from
sales of the Company's stock, will limit annual utilization of these net
operating loss carryforwards. The portion of the net operating loss
carryforwards subject to this limitation is approximately $2,600,000. The
calculated annual limitation is approximately $600,000.
LIQUIDITY AND CAPITAL RESOURCES
On July 29, 1997, the Company closed on the initial public offering of
its Common Stock, with net proceeds to the Company of $27.4 million. The
Company is using the net proceeds for funding research and development costs
(including pre-production manufacturing and completion of the design,
engineering and testing of the Super X); sales and marketing costs (including
increased marketing activity prior to the commercial introduction of the
Super X and dealer network development); capital expenditures (including
completing and equipping the manufacturing and administrative facility,
acquiring tooling and motorcycle components and supplies); and general and
administrative costs. Based upon its current estimates, the Company believes
that its available cash resources, including the proceeds received from the
initial public offering of Common Stock, as well as the proceeds received
from the Minnesota Department of Trade and Economic Development (see below),
will be sufficient to fund the pre-production operations of the Company.
However, the Company may require additional fixed asset and inventory
financing prior to commencement of production. Upon commencement of
production, the Company will need to obtain substantial amounts of fixed
asset and working capital financing. However, if sufficient fixed asset
and/or working capital financing is not available, the Company will have to
look to other means of financing. In addition, if the Company's estimates of
the amount of financing needed to commence production of the Super X are
incorrect due to unanticipated additional costs of equipping the Company's
manufacturing facility, unanticipated problems in the development of the
Super X for production, increased labor costs, increased costs of motorcycle
parts and raw materials, increased marketing and dealer network development
expenses, increased rates of consumption of available cash resources, or
other unanticipated events, then the Company may need additional equity or
debt financing in excess of the proceeds of its initial public offering of
Common Stock prior to or shortly after commencement of production of the
Super X.
In October 1997, the Company signed a construction agreement with a
third-party vendor for the construction of the Company's paint and finishing
facility. The cost of the facility will be approximately $7.3 million. The
Company paid 20% of the cost upon execution of the agreement and is making
certain progress payments during construction with a final payment due upon
completion of the paint facility. Through April 4, 1998, the Company had
made payments totaling $5.1 million on the paint and finishing facility
construction agreement. In order to finance a portion of the paint and
finishing facility and other equipment, the Company has entered into a loan
agreement with the State of Minnesota, through the Minnesota Agriculture and
Economic Development Board, providing for a $7.1 million loan for a portion
of the cost of the paint and finishing facility and certain reserves. The
loan proceeds are being held in escrow and will be available to the Company
upon installation and acceptance of the paint and finishing facility and
purchase of certain manufacturing equipment and product tooling. The loan
has a 10-year term with interest at an annual rate of 9.5% and is secured by
the paint and finishing facility and certain of the Company's equipment.
YEAR 2000 ISSUE
Based on an internal analysis, the Company does not believe that its
information technology systems will be materially affected by the Year 2000
issue. The Company intends to solicit Year 2000 status information from its
suppliers prior to commencing operations for confirmation that the Year 2000
issue will not affect the Company's supply chain.
8
<PAGE>
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), changes the
way companies calculate their earnings per share ("EPS"). SFAS 128 replaces
primary EPS with basic EPS. Basic EPS is computed by dividing reported
earnings by weighted average shares outstanding, excluding potentially
dilutive securities. Fully diluted EPS, termed diluted EPS under SFAS 128,
is also disclosed. The Company adopted SFAS 128 for the quarter and year
ended January 3, 1998, at which time all prior year EPS data was restated in
accordance with SFAS 128. All EPS data in this Quarterly Report on Form 10-Q
is reported in accordance with SFAS 128.
FORWARD-LOOKING STATEMENTS
Certain statements made in this Quarterly Report on Form 10-Q, including
those summarized below, are forward-looking statements within the meaning of
the safe harbor provisions of Section 21E of the Securities Exchange Act of
1934, as amended, that involve risks and uncertainties, and actual results
may differ. Factors that could cause actual results to differ include those
identified below.
- - THE COMPANY PLANS TO MANUFACTURE, MARKET AND SELL PREMIUM HEAVYWEIGHT
CRUISER AND TOURING MOTORCYCLES WITH A BRAND THAT EVOKES AN AUTHENTIC
AMERICAN MOTORCYCLING HERITAGE AND LIFESTYLE -- The Company has not had
sales to date and does not anticipate motorcycle sales until late 1998.
As of April 4, 1998, the Company had an accumulated deficit of $13.6
million. The Company expects operating losses to increase as its product
development, marketing and sales, manufacturing and administrative
functions expand prior to and during the initial stage of motorcycles
sales. There can be no assurance that the Company will generate
motorcycle sales or become profitable.
The Company's success depends upon market acceptance of its brand
of products. Market acceptance depends upon the ability of the Company
to establish its intended brand image and a reputation for high quality
and to differentiate its brand of products from its competitors. The
Company will operate in a highly competitive environment and compete
against established motorcycle manufacturers such as Harley-Davidson,
BMW, Ducati, Honda, Kawasaki, Moto-Guzzi, Suzuki, Triumph and Yamaha.
Harley-Davidson, which is expected to be the Company's primary
competitor in the U.S. market, has stated in its public reports that it
had a 49% share of the U.S. market for new heavyweight motorcycle
registrations in 1997 and that it will double its 1995 production
capacity by the year 2003. The Company also expects that other
manufacturers will attempt to enter the industry, including Polaris
Industries Inc., a manufacturer of snowmobiles, personal watercraft and
all-terrain vehicles, which announced that it would begin manufacturing
a cruiser motorcycle to be available in limited quantities in Spring
1998. The Company's established competitors have greater resources than
the Company. No assurance can be given that the Company's products will
be accepted or that the Company will be able to compete effectively.
- - THE COMPANY DOES NOT ANTICIPATE HAVING MOTORCYCLE SALES UNTIL LATE 1998 --
Factors that may affect the timing of production of the Super X include
problems in acquisition, installation and successful operation of the
motorcycle production equipment, the ability of the Company to locate
competent suppliers or obtain adequate quantities of components and
supplies at reasonable costs, the ability of the Company to hire
additional qualified personnel and the ability of the Company's
engineering and manufacturing staff to design, engineer and produce the
Super X. In addition, for the Company to be successful, its products
must be manufactured to meet high quality standards in production
volumes. The transition from prototype to mass production will involve
various risks and uncertainties that may not be apparent at this time
and there can be no assurance that the Company will be able to
successfully react to unanticipated difficulties and commence mass
production in late 1998.
As the Company moves closer to mass production of the Super X,
there will be increasing demands on the Company's management,
operational and financial resources to manage growth. Mass production
of the
9
<PAGE>
Super X will require the Company to hire additional qualified personnel.
Competition is intense for highly skilled workers, and there can be no
assurance that the Company will be successful in attracting, training
and retaining such
Sales of the Super X and any additional motorcycles the Company may
produce are dependent on the Company establishing a dealer network. The
Company has executed agreements with 62 dealers as of April 4, 1998.
Prior to production, the Company will need to attract additional dealers
to sell its brand of products by convincing such dealers that the
Company's products will be a successful and profitable line. In
addition, the Company will be required to support its dealers through,
among other things, making floor plan financing available through third
parties, continuing education about the Company's brand of products,
supplying parts and accessories, and training repair personnel. The
Company does not have any history in such dealer support. If the
Company is unable to establish and support an adequate dealer network,
sales and distribution of the Company's products will be adversely
affected.
Prior to sales of the Super X, the Company will be required to
obtain approvals and make certifications regarding compliance with
federal, state and local regulations regarding the noise, emissions and
safety characteristics of its motorcycles. In addition, the Company's
manufacturing facility will be required to comply with environmental and
safety standards. The potential delays and costs that could result from
obtaining such regulatory approvals and complying with, or failing to
comply with, such regulations could result in a delay in motorcycle
production and adversely affect operating results.
- - BASED UPON ITS CURRENT ESTIMATES, THE COMPANY BELIEVES THAT ITS
AVAILABLE CASH RESOURCES, INCLUDING THE PROCEEDS RECEIVED FROM THE
INITIAL PUBLIC OFFERING OF COMMON STOCK, AS WELL AS THE PROCEEDS
RECEIVED FROM THE MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC
DEVELOPMENT, WILL BE SUFFICIENT TO FUND THE PRE-PRODUCTION OPERATIONS OF
THE COMPANY -- If the Company's estimates of the amount of financing
needed to commence production of the Super X are incorrect due to
unanticipated additional costs of equipping the Company's manufacturing
facility, unanticipated problems in the development of the Super X for
production, increased labor costs, increased costs of motorcycle parts
and raw materials, increased marketing and dealer network development
expenses, increased rates of consumption of available cash resources,
the unavailability of inventory and working capital financing, or other
unanticipated events, then the Company may need additional equity or
debt financing prior to or shortly after commencement of production of
the Super X. There can be no assurance that the Company will be able to
obtain such financing or that such financing will be available on terms
favorable to the Company.
- - THE COMPANY MAY REQUIRE ADDITIONAL INVENTORY AND WORKING CAPITAL
FINANCING PRIOR TO COMMENCEMENT OF PRODUCTION; UPON COMMENCEMENT OF
PRODUCTION, THE COMPANY WILL NEED TO OBTAIN SUBSTANTIAL AMOUNTS OF FIXED
ASSET AND WORKING CAPITAL FINANCING -- The availability and terms of any
inventory, fixed asset or working capital financing will depend on a
number of credit market factors, including interest rates, liquidity and
lending regulations, as well as the business prospects and financial
condition of the Company. There can be no assurance that the Company
will be able to obtain such financing or that such financing will be
available on terms favorable to the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
10
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following exhibits are filed as part of this Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1997:
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
3.1 Restated Articles of Incorporation of Company, as Amended. (1)
3.3 By-Laws of the Company. (2)
10.4 Contract for Private Development by and among City of Belle
Plaine, Minnesota and Belle Plaine Economic Development Authority
Belle Plaine, Minnesota and the Company dated as of December 31,
1996. (3)
10.5 Assignment, Assumption and Amendment of Development Contract by and
among the City of Belle Plaine, Minnesota, Belle Plaine Economic
Authority, Belle Plaine, Minnesota, the Company, and Ryan Belle
Plaine, LLC dated April 21, 1997. (4)
10.6 Lease Agreement between Ryan Belle Plaine, LLC and the Company
dated April 21, 1997.4
10.7 Construction Agreement by and between Ryan Belle Plaine, LLC and
the Company dated April 21, 1997.(4)
10.8 Guaranty by Ryan Companies US, Inc. in favor of the Company dated
April 21, 1997.(4)
10.9 Amended and Restated 1995 Stock Option Plan.4
10.11 Form of Employee Agreement. (5)
27.1 Financial Data Schedule
</TABLE>
Copies of Exhibits will be furnished upon request and payment of the
Company's reasonable expenses in furnishing the Exhibits.
(b) REPORTS ON FORM 8-K
On March 3, 1998, the Company filed a Current Report on Form 8-K
relating to a change in the Company's fiscal year to a 52-53 week year ending
on the Saturday nearest December 31.
- -----------------------------------
(1) Incorporated by reference to the like numbered Exhibit to the Company's
Registration Statement on Form S-1 filed with the Commission on May 23,
1997 (Registration No. 333-27789).
(2) Incorporated by reference to the like numbered Exhibit to Amendment No.
1 to the Company's Registration Statement on Form SB-2 filed with the
Commission on July 23, 1996 (Registration No. 333-05060C).
(3) Incorporated by reference to the like numbered Exhibit to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996 (File
No. 000-22765).
(4) Incorporated by reference to the like numbered Exhibit to the Company's
Quarterly Report on Form 10-QSB for the period ended March 31, 1997
(File No. 000-22765).
(5) Incorporated by reference to the like numbered Exhibit to Amendment No.
1 to the Company's Registration Statement on Form S-1 filed with the
Commission on June 27, 1997 (the Registration No. 333-27789).
12
<PAGE>
EXCELSIOR-HENDERSON MOTORCYCLE
MANUFACTURING COMPANY
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.
EXCELSIOR-HENDERSON MOTORCYCLE
MANUFACTURING COMPANY
DATE: May 15, 1998 By: /s/ Thomas M. Rootness
------------------------------------------------
Thomas M. Rootness,
Senior Vice President of Finance and Administration
and Chief Financial Officer
(Duly authorized officer and Principal Financial
Officer)
13
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<S> <C> <C>
3.1 Restated Articles of Incorporation of Company. . . . . . . . . . . . . . . . . . Incorporated by Reference
3.3 By-Laws of the Company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.4 Contract for Private Development by and among City of Belle Plaine,
Minnesota and Belle Plaine Economic Development Authority, Belle
Plaine, Minnesota and the Company dated as of December 31, 1996. . . . . . . . . Incorporated by Reference
10.5 Assignment, Assumption and Amendment of Development Contract by and
among the City of Belle Plaine, Minnesota, Belle Plaine Economic Authority,
Belle Plaine, Minnesota, the Company, and Ryan Belle Plaine, LLC
dated April 21, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.6 Lease Agreement between Ryan Belle Plaine, LLC and the Company
dated April 21, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.7 Construction Agreement by and between Ryan Belle Plaine, LLC
and the Company dated April 21, 1997 . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.8 Guaranty by Ryan Companies US, Inc. in favor of the Company
dated April 21, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.9 Amended and Restated 1995 Stock Option Plan. . . . . . . . . . . . . . . . . . . Incorporated by Reference
10.11 Form of Employee Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
27.1 Financial Data Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Filed Electronically
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-START> JAN-04-1998
<PERIOD-END> APR-04-1998
<CASH> 5,682,627
<SECURITIES> 11,764,689
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,836,720
<PP&E> 20,654,371
<DEPRECIATION> 460,263
<TOTAL-ASSETS> 45,992,075
<CURRENT-LIABILITIES> 4,762,948
<BONDS> 0
0
0
<COMMON> 130,279
<OTHER-SE> 27,459,443
<TOTAL-LIABILITY-AND-EQUITY> 45,992,075
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,655,532
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 363,320
<INCOME-PRETAX> (3,604,745)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,604,745)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
</TABLE>
