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 March 2, 1996
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 1-6403
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0803978
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 152, Forest City, Iowa 50436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 582-3535
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 ____.
There were 25,352,222 shares of $.50 par value common stock outstanding on April
11, 1996.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO REPORT ON FORM 10-Q
Page
Number
PART I. FINANCIAL INFORMATION: (Interim period information unaudited)
Consolidated Balance Sheets 1 & 2
Unaudited Consolidated Statements of Operations 3
Unaudited Consolidated Condensed Statements of Cash Flows 4
Unaudited Condensed Notes to Consolidated Financial Statements 5 & 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 9
PART II. OTHER INFORMATION 10 - 12
Part I Financial Information
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DOLLARS IN THOUSANDS MARCH 2, AUGUST 26,
ASSETS 1996 1995
- ------------------------------------ ------------- -----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 14,541 $ 8,881
Marketable securities 3,713 2,144
Receivables, less allowance for doubtful
accounts ($856 and $1,184, respectively) 36,452 37,807
Dealer financing receivables less allowance
for doubtful accounts ($250 and $255,
respectively) 9,760 9,345
Inventories 57,968 53,161
Prepaid expenses 4,184 3,342
Deferred income taxes 6,224 6,224
-------- --------
Total current assets 132,842 120,904
-------- --------
PROPERTY AND EQUIPMENT, at cost
Land 1,500 1,512
Buildings 43,339 43,014
Machinery and equipment 79,266 77,998
Transportation equipment 7,922 7,965
-------- --------
132,027 130,489
Less accumulated depreciation 88,372 87,511
-------- --------
Total property and equipment, net 43,655 42,978
-------- --------
LONG-TERM NOTES RECEIVABLE, less allowances
($1,406 and $950, respectively) 2,354 2,465
-------- --------
INVESTMENT IN LIFE INSURANCE 16,736 15,942
-------- --------
DEFERRED INCOME TAXES, NET 14,107 14,107
-------- --------
INTANGIBLE AND OTHER ASSETS 14,970 15,234
-------- --------
TOTAL ASSETS $224,664 $211,630
======== ========
See Unaudited Condensed Notes to Consolidated Financial Statements
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DOLLARS IN THOUSANDS MARCH 2, AUGUST 26,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
- -------------------------------------- ----------- ------------
(Unaudited)
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,962 $ 3,564
Notes payable 4,500 4,000
Accounts payable, trade 25,983 22,581
Income tax payable 2,834 ---
Accrued expenses:
Insurance 5,704 4,620
Product warranties 3,179 3,184
Vacation liability 3,318 3,287
Promotional 3,835 1,916
Other 7,874 8,058
-------- --------
Total current liabilities 60,189 51,210
-------- --------
LONG-TERM DEBT AND OBLIGATIONS
UNDER CAPITAL LEASES 12,281 12,678
-------- --------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 46,792 45,223
-------- --------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 2,184 2,071
-------- --------
STOCKHOLDERS' EQUITY
Capital stock, common, par value $.50;
authorized 60,000,000 shares 12,920 12,915
Additional paid-in capital 23,729 23,658
Reinvested earnings 72,134 69,440
-------- --------
108,783 106,013
Less treasury stock, at cost 5,565 5,565
-------- --------
Total stockholders' equity 103,218 100,448
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $224,664 $211,630
======== ========
See Unaudited Condensed Notes to Consolidated Financial Statements
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
TWENTY-SEVEN/TWENTY-SIX
THIRTEEN WEEKS ENDED WEEKS ENDED
--------------------------- ------------------------------
MARCH 2, FEBRUARY 25, MARCH 2, FEBRUARY 25,
1996 1995 1996 1995
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Revenues:
Manufactured products $ 105,780 $ 111,270 $ 219,166 $ 235,728
Services 7,822 4,178 16,414 10,479
--------- --------- --------- ---------
Total net revenues 113,602 115,448 235,580 246,207
--------- --------- --------- ---------
Costs and Expenses:
Cost of manufactured product 92,639 95,314 190,405 202,315
Cost of services 4,616 2,723 9,613 6,196
Selling and delivery 5,495 6,594 12,304 12,672
General and administrative 7,605 5,750 15,277 12,154
--------- --------- --------- ---------
Total costs and expenses 110,355 110,381 227,599 233,337
--------- --------- --------- ---------
Operating income 3,247 5,067 7,981 12,870
Financial income 67 1,018 81 824
--------- --------- --------- ---------
Income before taxes 3,314 6,085 8,062 13,694
Provision (credit) for taxes 1,076 (6,000) 2,834 (6,000)
--------- --------- --------- ---------
Net income $ 2,238 $ 12,085 $ 5,228 $ 19,694
========= ========= ========= =========
Income per common share:
Net income $ .09 $ .48 $ .21 $ .78
========= ========= ========= =========
Weighted average number of
shares of common stock
outstanding 25,346 25,244 25,346 25,243
========= ========= ========= =========
</TABLE>
See Unaudited Condensed Notes to Consolidated Financial Statements.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
DOLLARS IN THOUSANDS TWENTY-SEVEN TWENTY-SIX
WEEKS ENDED
-----------------------------
March 2, February 25,
1996 1995
------------ ------------
Cash flows from operating activities:
Net income $ 5,228 $ 19,694
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 4,806 4,084
Deferred income taxes -- (6,000)
Realized and unrealized gains
on investments, net (149) (282)
Investments in trading securities (3,157) (1,937)
Proceeds from the sale of
trading securities 1,737 2,440
Minority shareholders' portion of
consolidated subsidiary's net income 113 23
Other 85 783
Change in assets and liabilities:
Decrease in accounts receivable 1,203 4,008
Increase in inventories (4,844) (11,254)
Increase in accounts payable and
accrued expenses 9,581 303
Increase in postretirement benefits 1,569 925
Other (842) (2,943)
-------- --------
Net cash provided by operating activities 15,330 9,844
-------- --------
Cash flows used by investing activities:
Purchases of property and equipment (4,936) (5,283)
Investments in dealer receivables (20,022) (18,717)
Collections of dealer receivables 19,601 16,218
Other (856) (268)
-------- --------
Net cash used by investing activities (6,213) (8,050)
-------- --------
Cash flows used by financing activities
and capital transactions:
Payments of long-term debt and
capital leases (2,177) (880)
Payments of cash dividends (2,534) (2,524)
Proceeds from issuance of
long-term debt 1,000 700
Other 254 63
-------- --------
Net cash used by financing
activities and capital transactions (3,457) (2,641)
-------- --------
Net increase (decrease) in cash
and cash equivalents 5,660 (847)
Cash and cash equivalents -
beginning of period 8,881 847
-------- --------
Cash and cash equivalents -
end of period $ 14,541 $ --
======== ========
See Unaudited Condensed Notes to Consolidated Financial Statements.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, consisting of
normal recurring accruals, necessary to present fairly the consolidated
financial position as of March 2, 1996, the consolidated results of
operations for the 27 and 13 weeks ended March 2, 1996 and the 26 and 13
weeks ended February 25, 1995, and the consolidated cash flows for the 27
weeks ended March 2, 1996 and the 26 weeks ended February 25, 1995.
2. The results of operations for the 27 weeks ended March 2, 1996, are not
necessarily indicative of the results to be expected for the full year.
Service revenues, in the Consolidated Statements of Operations, consist of
revenues generated by Cycle-Sat, Inc. (Cycle-Sat) and Winnebago Acceptance
Corporation (WAC), subsidiaries of the Company.
3. Inventories are valued at the lower of cost or market, with cost being
determined under the last-in, first-out (LIFO) method and market defined as
net realizable value.
Inventories are composed of the following (dollars in thousands):
MARCH 2, AUGUST 26,
1996 1995
-------- ----------
Finished Goods $22,494 $19,855
Work In Process 16,202 14,223
Raw Materials 35,356 34,704
------- -------
74,052 68,782
LIFO Reserve 16,084 15,621
------- -------
$57,968 $53,161
======= =======
4. Since March 1992, the Company has had a financing and security agreement
with NationsCredit Corporation (NationsCredit) a Nations Bank Company.
Terms of the agreement limit borrowings to the lesser of $30,000,000 or 75
percent of eligible inventory (fully manufactured recreation vehicles and
motor home chassis and related components). Borrowings are secured by the
Company's receivables and inventory. Borrowings pursuant to the agreement
bear interest at the prime rate, as defined in the agreement, plus 50 basis
points. The line of credit is available through March 31, 1997, and
continues during successive one-year periods unless either party provides
at least 90-days notice prior to the end of the one-year period to the
other party that they wish to terminate the line of credit. The agreement
also contains certain covenants including maintenance of minimum net worth,
working capital and current ratio. As of March 2, 1996, the Company was in
compliance with these covenants. There were no outstanding borrowings under
the line of credit at March 2, 1996 or August 26, 1995.
The Company and Cycle-Sat maintain a line of credit with Firstar Bank Cedar
Rapids (Firstar). Terms of the agreement limit the amount advanced to the
lesser of $4,500,000 or the sum of 80 percent of Cycle-Sat's eligible
accounts receivable and 50 percent of its inventory. Borrowings pursuant to
the agreement bear interest at the 90-day LIBOR rate, plus 150 basis points
(7.4 percent per annum at March 2, 1996 and August 26, 1995). The agreement
contains certain restrictive covenants. As of March 2, 1996, Cycle-Sat was
in compliance with these covenants. Borrowings under the line of credit are
secured by Cycle-Sat's accounts receivable and inventories and have been
guaranteed by the Company. The line of credit expires January 31, 1997. The
outstanding balance under the line of credit was $4,500,000 at March 2,
1996 and $4,000,000 at August 26, 1995. As of March 2, 1996, Cycle-Sat had
exceeded the available borrowing limit by $285,000. Subsequent to the end
of the quarter, Cycle-Sat repaid the excess borrowings.
5. It is customary practice for companies in the recreation vehicle industry
to enter into repurchase agreements with lending institutions which have
provided wholesale floor plan financing to dealers. The Company's
agreements provide for the repurchase of its products from the financing
institution in the event of repossession upon a dealer's default. The
Company was contingently liable for approximately $137,647,000 and
$120,487,000 under repurchase agreements with lending institutions as of
March 2, 1996, and August 26, 1995, respectively. Included in these
contingent liabilities are approximately $35,737,000 and $37,616,000,
respectively, of certain dealer receivables subject to recourse agreements
with NationsCredit and John Deere Credit, Inc.
6. For the 27 weeks ended March 2, 1996 and the 26 weeks ended February 25,
1995 the Company paid cash for the following (dollars in thousands):
TWENTY-SEVEN TWENTY-SIX
WEEKS ENDED WEEKS ENDED
--------------- ---------------
MARCH 2, FEBRUARY 25,
1996 1995
--------------- ---------------
Interest $ 978 $ 605
Income Taxes 520 3,914
7. At March 2, 1996, Postretirement Health Care and Deferred Compensation
Benefits included postretirement benefits related to health care and other
benefits of $25,838,000 and deferred compensation of $20,954,000.
Net postretirement benefit cost for the 13 and 27 weeks ended March 2, 1996
consisted of the following components:
(DOLLARS IN THOUSANDS) THIRTEEN TWENTY-SEVEN
WEEKS WEEKS
------- ------------
Service cost - benefits earned during the period $366 $ 759
Interest cost on accumulated
postretirement benefit obligation 379 786
Amortization of (gain)/loss (31) (63)
---- -------
$714 $ 1,482
==== =======
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended March 2, 1996 Compared to Thirteen Weeks Ended February 25,
1995
Net revenues of manufactured products for the 13 weeks ended March 2, 1996
decreased $5,490,000 or 4.9 percent from the 13 week period ended February 25,
1995. Motor home shipments decreased by 262 units or 12.3 percent during the 13
weeks ended March 2, 1996 when compared to the second quarter of fiscal 1995.
The second quarter of 1996 continued to reflect the weakness within which the RV
industry has operated since last summer. The Company has seen an improvement in
the RV industry recently, therefore, the Company is optimistic about the outlook
for the remainder of the 1996 fiscal year.
Service revenues for the 13 weeks ended March 2, 1996 increased $3,644,000 or
87.2 percent from the comparable period of fiscal 1995. Cycle-Sat recorded
revenues of $7,441,000, an increase of $3,606,000 or 94.0 percent, primarily due
to increased revenues generated through the acquisition by Cycle-Sat of the TFI
division of MPO Videotronics (TFI) during the third quarter of fiscal 1995.
Cost of manufactured products, as a percent of manufactured product revenues,
was 87.6 percent for the 13 weeks ended March 2, 1996 compared to 85.7 percent
for the 13 weeks ended February 25, 1995. This percentage increase was primarily
caused by lower motor home production volume.
Cost of services, as a percent of service revenues, decreased during the second
quarter of fiscal 1996 to 59.0 percent from 65.2 percent during the second
quarter of fiscal 1995. This percentage decrease is attributed to the increase
in Cycle-Sat's sales and the fixed costs of its operations remaining relatively
constant.
Selling and delivery expenses decreased by $1,099,000 to $5,495,000 comparing
the 13 weeks ended March 2, 1996 to the 13 weeks ended February 25, 1995 and
decreased as a percentage of net revenues to 4.8 percent from 5.7 percent. The
decreases in dollars and percentage primarily reflects decreases in the
Company's promotional and advertising costs and net delivery expenses.
General and administrative expenses increased by $1,855,000 to $7,605,000
comparing the 13 weeks ended March 2, 1996 to the 13 weeks ended February 25,
1995 and increased as a percentage of net revenues to 6.7 percent from 5.0
percent. The increases in dollars and percentage were caused primarily by
increased spending by Cycle-Sat, increases in the Company's reserves for
retirement programs and legal reserves.
The Company had net financial income of $67,000 for the second quarter of fiscal
1996 compared to net financial income of $1,018,000 for the comparable quarter
of fiscal 1995. During the 13 weeks ended March 2, 1996, the Company recorded
realized and unrealized gains in its marketable securities portfolio of
$189,000, interest expense of $90,000 and foreign currency transaction losses of
$32,000. During the 13 weeks ended February 25, 1995, the Company recorded
$705,000 of realized and unrealized gains in its marketable securities
portfolio, $207,000 of foreign currency transaction gains and $106,000 of
interest income.
For the 13 weeks ended March 2, 1996, the Company reported net income of
$2,238,000 or $.09 per share which consisted primarily of income from
manufactured products operations of $1,987,000 ($.08 per share) and income from
Cycle-Sat operations of $26,000. This quarter's results reflect the impact of
income tax expense of $1,076,000. For the 13 weeks ended February 25, 1995, the
Company reported net income of $12,085,000 or $.48 per share which consisted
primarily of income from manufactured products operations of $6,197,000 ($.25
per share) and a net loss from Cycle-Sat operations of $487,000 ($.02 per
share). Also during the quarter ended February 25, 1995, the Company reported a
$6,000,000 ($.24 per share) credit for income taxes.
Twenty-Seven Weeks Ended March 2, 1996 Compared to Twenty-Six Weeks Ended
February 25, 1995
Net revenues of manufactured products for the 27 weeks ended March 2, 1996
decreased $16,562,000 or 7.0 percent from the 26 weeks ended February 25, 1995.
Motor home shipments decreased by 609 units or 13.4 percent during the 27 weeks
ended March 2, 1996 when compared to the first half of fiscal 1995. This
decrease in the Company's revenues is attributed to the weakness the RV industry
has experienced since last summer.
Service revenues for the 27 weeks ended March 2, 1996 increased $5,935,000 or
56.6 percent from the 26 weeks ended February 25, 1995. Cycle-Sat recorded
revenues of $15,684,000, an increase of $5,811,000, or 58.9 percent, primarily
due to increased revenues generated through the acquisition by Cycle-Sat of TFI.
Cost of manufactured products, as a percent of manufactured product revenues,
was 86.9 percent for the 27 weeks ended March 2, 1996 compared to 85.8 percent
for the 26 weeks ended February 25, 1995. This percentage increase was primarily
caused by lower motor home production volume.
Cost of services, as a percent of service revenue, decreased to 58.6 percent
from 59.1 percent when comparing the 27 weeks ended March 2, 1996 to the 26
weeks ended February 25, 1995. This percentage decrease is attributed to the
increase in Cycle-Sat's sales while its fixed costs remained constant
Selling and delivery expenses decreased by $368,000 but increased to 5.2 percent
from 5.1 percent of net revenues when comparing the 27 weeks ended March 2, 1996
to the comparable period of fiscal 1995. The decrease in dollars can be
attributed primarily to a reduction in the Company's promotional and advertising
costs.
General and administrative expenses increased by $3,123,000 to $15,277,000
comparing the 27 weeks ended March 2, 1996 to the 26 weeks ended February 25,
1995 and increased as a percentage of net revenues to 6.5 percent from 4.9
percent. The increase in dollars and percentage were caused primarily by
increases of Cycle-Sat's spending, increases in the Company's reserves for
retirement programs and provisions for product liability expenses.
The Company had net financial income of $81,000 for the first half of fiscal
1996 compared to net financial income of $824,000 for the first half of fiscal
of 1995. During the 27 weeks ended March 2, 1996, the Company recorded realized
and unrealized gains in its marketable securities portfolio of $149,000,
interest expense of $145,000, and foreign currency transaction gains of $77,000.
During the 26 weeks ended February 25, 1995, the Company recorded foreign
currency transaction gains of $313,000, realized and unrealized gains in its
marketable securities portfolio of $281,000, and interest income of $230,000.
For the 27 weeks ended March 2, 1996, the Company reported net income of
$5,228,000 or $.21 per share which consisted primarily of income from
manufactured products operations of $4,399,000 ($.17 per share) and income from
Cycle-Sat operations of $222,000 ($.01 per share). The results of the 27 weeks
ended March 2, 1996 reflect the impact of income tax expense of $2,834,000. For
the 26 weeks ended February 25, 1995, the Company reported net income of
$19,694,000 or $.78 per share which consisted primarily of income from
manufactured products operations of $12,599,000 ($.50 per share), the
aforementioned $6,000,000 ($.24 per share) tax credit, and income of $137,000
($.01 per share) from Cycle-Sat operations.
LIQUIDITY AND FINANCIAL CONDITION
The Company meets its working capital and capital equipment requirements and
cash requirements of subsidiaries with funds generated internally and funds
borrowed under agreements with financial institutions.
At March 2, 1996, working capital was $72,653,000, an increase of $2,959,000
from the amount at August 26, 1995. The Company's principal sources and uses of
cash during the 27 weeks ended March 2, 1996 are set forth in the unaudited
consolidated condensed statement of cash flows for that period.
Principal known demands at March 2, 1996 on the Company's liquid assets for the
remainder of fiscal 1996 include approximately $3,209,000 of capital
expenditures (primarily equipment replacements) and $2,535,000 of cash dividends
declared by the Board of Directors on February 1, 1996 (payable April 8, 1996).
Management currently expects its cash on hand, funds from operations and
borrowings available under existing credit facilities to be sufficient to cover
both short-term and long-term operating requirements.
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders
(a) The annual meeting was held December 13, 1995.
(b) The election of nine directors was the only shareholder business
transacted at the annual meeting. The breakdown of the votes was as
follows*:
VOTES CAST VOTES CAST VOTES
FOR AGAINST ABSTAINED
------------ ------------ -----------
John K. Hanson 20,027,780 244,223 98,876
Gerald E. Boman 20,035,327 236,676 98,876
David G. Croonquist 20,253,432 18,571 98,876
Fred G. Dohrmann 20,038,036 233,967 98,876
Keith D. Elwick 20,253,052 18,951 98,876
Donald W. Olson 20,240,812 31,191 98,876
Joseph M. Shuster 20,269,203 2,800 98,876
Frederick M. Zimmerman 20,265,469 6,534 98,876
Francis L. Zrostlik 20,262,987 9,016 98,876
* There were no broker non-votes.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit - See Exhibit Index on page 12.
(b) The Company did not file any reports on Form 8-K during the period
covered by this report.
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.
WINNEBAGO INDUSTRIES, INC.
-------------------------------
(Registrant)
Date April 10, 1996 /s/Fred G. Dohrmann
Fred G. Dohrmann
President and Chief Executive Officer
Date April 10, 1996 /s/Ed F. Barker
Ed F. Barker
Vice President, Controller and Chief
Financial Officer
EXHIBIT INDEX
4c. Amendment dated February 1, 1996 to Line of Credit Agreement and Term Loan
Agreement among Winnebago Industries, Inc., Cycle-Sat, and Firstar Bank
Cedar Rapids.
FOURTH AMENDMENT
TO
CREDIT AGREEMENT
(REVOLVING LINE OF CREDIT FACILITY)
This Fourth Amendment to Credit Agreement ("Fourth Amendment") is dated as of
February 1, 1996 and is by and between Cycle-Sat, Inc., a corporation duly
organized and validly existing under the laws of the State of Iowa, (the
"Borrower"), Winnebago Industries, Inc., (the "Guarantor") and Firstar Bank
Iowa, N.A. f/k/a Firstar Bank Cedar Rapids, N.A (the "Bank");
WHEREAS, the Borrower and the Bank have previously entered into a Credit
Agreement (the "Agreement") dated as of February 24, 1994;
WHEREAS, the Agreement has been previously amended by First Amendment to Credit
Agreement dated as of January 31, 1995 (the "First Amendment") and by Second
Amendment to Credit Agreement dated as of November 2, 1995 (the "Second
Amendment") and by Third Amendment to Credit Agreement dated as of January 2,
1996 (the "Third Amendment", and together with the First Amendment, the Second
Amendment and the Credit Agreement, the "Agreement").
WHEREAS, the Borrower and Bank have agreed to certain further changes to the
Agreement;
NOW, THEREFORE, do the parties agree to amend the Agreement as follows:
1. NEGATIVE COVENANTS. The following shall be added as Section 8 and all
subsequent sections shall be relettered accordingly:
"8. NEGATIVE COVENANTS. The Borrower agrees that during the term of
this Agreement and so long thereafter as any obligations remain
outstanding, it will not, without the prior written consent of
the Bank, make any change, for any reason whatsoever, in the
majority ownership or control of the Borrower. Such change will
constitute a default under the terms of this Agreement."
2. GENERAL PROVISIONS. The following shall be added as Section
10.a. and all subsequent sections shall be relettered
accordingly:
"a. CROSS COLLATERALIZATION AND CROSS DEFAULT. The Borrower
agrees that all of the Bank's security shall serve as
security for all of the Borrower's obligations, that the
Bank may make recourse to such security in any order or
grouping it desires, and that all of the Bank's security
shall remain in full force and effect, unless specifically
released in writing by the Bank, so long as any of the
Borrower's obligations remain unsatisfied or outstanding.
Nothing in the Agreement or this Fourth Amendment shall
operate in any way to reduce, abridge or limit the Bank's
rights under the various security instruments, including the
right to proceed directly against the Borrower without
recourse to any of the Bank's security.
The Borrower agrees that in the event of a default under the
terms of any of the Borrower's obligations, that such a
default shall be deemed a default under all of the
Borrower's obligations, at the option of the Bank."
3. GUARANTY AFFIRMATION. Winnebago Industries, Inc. acknowledges that the
agreement represented by this Fourth Amendment does not discharge, affect,
or impair liability under the guaranty dated January 31, 1995.
4. ACKNOWLEDGMENT OF RECEIPT. By their execution of the Fourth Amendment, the
parties acknowledge receipt of a copy of this document.
5. SAVINGS. All other terms and conditions of the Credit Agreement, not
specifically modified by this Fourth Amendment, shall remain in full force
and effect.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AMENDMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN DOCUMENT (EXCEPT THE AGREEMENT AS
PREVIOUSLY AMENDED) MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS
AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
Cycle-Sat, Inc. Firstar Bank Iowa, N.A.
By: /s/ Loren A. Swenson By: /s/ Dirk A. Thierer
Loren A. Swenson, President Dirk A. Thierer, Vice President
Winnebago Industries, Inc., guarantor
By: /s/ Fred G. Dohrmann
Fred G. Dohrmann, President & CEO
FIRSTAR BANK IOWA, N.A.
FEBRUARY 1, 1996
Firstar Bank Iowa, N.A.
222 Second Avenue, S.E.
Cedar Rapids, IA 52401
RE: Account Name: Cycle-Sat, Inc.
Loan Dated: FEBRUARY 1, 1996
Loan Number: 1247441--9001
Principal Amount: $4,500,000.00
To Whom It May Concern:
The following named individuals are authorized to make oral or written requests
for advances under the above-referenced note, and all future renewals:
Name Title
---- -----
Loren A. Swenson President
Maryln Shores Mgr. Accounting and Control
Firstar Bank Iowa, N.A. is entitled to rely upon the oral or written requests
for advances of any one of the named individuals until the authority granted
herein is revoked in writing.
Each of the undersigned acknowledges that a request made by any one of the
above-named individuals shall be binding upon and consented to by remaining
signators.
Each of the undersigned acknowledge receipt of a copy of this document.
FEBRUARY 1, 1996
Date
Cycle-Sat, Inc.
By /s/ Loren A. Swenson
Loren A. Swenson, President
LATE PAYMENT ADDENDUM
This Addendum is made part of the promissory note (the "Note") by the
undersigned borrower (the "Borrower") in favor of Firstar Bank Iowa, N.A. (the
"Bank") as of the date identified below.
"If any payment is not made on or before 15 days after its due date, the Bank
may collect a delinquency charge of 5% of the amount of the late payment."
Dated as of: February 1, 1996
(Individual Borrower) Cycle-Sat, Inc.
Borrower Name (Organization)
__________________________(SEAL) a Iowa Corporation
By: /s/ Loren A. Swenson
Borrower Name___________________ Name and Title Loren A. Swenson, President
__________________________(SEAL) By_________________________________
Borrower Name___________________ Name and Title _______________________
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> MAR-02-1996
<CASH> 14,541
<SECURITIES> 3,713
<RECEIVABLES> 47,318
<ALLOWANCES> 1,106
<INVENTORY> 57,968
<CURRENT-ASSETS> 132,842
<PP&E> 132,027
<DEPRECIATION> 88,372
<TOTAL-ASSETS> 224,664
<CURRENT-LIABILITIES> 60,189
<BONDS> 0
0
0
<COMMON> 12,920
<OTHER-SE> 90,298
<TOTAL-LIABILITY-AND-EQUITY> 224,664
<SALES> 113,602
<TOTAL-REVENUES> 113,602
<CGS> 97,255
<TOTAL-COSTS> 97,255
<OTHER-EXPENSES> 13,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (67)
<INCOME-PRETAX> 3,314
<INCOME-TAX> 1,076
<INCOME-CONTINUING> 2,238
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,238
<EPS-PRIMARY> .09
<EPS-DILUTED> 0
</TABLE>
