SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarter ended: Commission file number:
July 31, 1996 0-8624
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ALFA LEISURE, INC
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(Exact name of registrant as specified in its charter)
TEXAS 75-1309458
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(State or other jurisdiction (IRS Employer identification
of incorporation or organization) number)
13501 "5th" Street, Chino, California 91710
--------------------------------------------
(Address of principal executive office)
(909) 628-5574
---------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required 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
-----
Indicate by check mark whether the Registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15 (d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES X NO
-----
The number of shares outstanding of each of the Registrant's
classes of common stock, as of July 31, 1996 was:
Common Stock, without par value - 3,050,000 shares
<PAGE 2>
ALFA LEISURE, INC.
--------------------
Index
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PART I. FINANCIAL INFORMATION Page
- ------- --------------------- -----
Item 1. Financial Statements(unaudited)
Balance Sheets as of July 31, 1996 3
and April 30, 1996
Statements of Income for the Three 4
Months Ended July 31, 1996 and 1995
Statements of Cash Flows for the 5
Three Months Ended July 31, 1996 and 1995
Notes to Unaudited Financial Statements 6
Item 2 Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
PART II. OTHER INFORMATION 9
- -------- -----------------
Signature Page 10
<PAGE 3>
ALFA LEISURE, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS:
July 31, April 30,
---1996---- ---1996---
Current Assets:
Cash $ 11,791 $ 505,027
Restricted cash 209,861 209,142
Accounts receivable, trade 809,976 1,816,653
Inventories(Note 1) 2,614,504 1,694,798
Prepaid expense 105,070 85,621
--------- ---------
Total current assets 3,751,202 4,311,241
--------- ---------
Property, plant and equipment, net 1,113,018 1,136,691
Deferred tax asset 540,270 540,270
--------- ---------
Total Assets $ 5,404,490 $ 5,988,202
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable, trade $ 2,261,975 $ 1,801,110
Accrued expenses 376,742 411,464
Accrued compensation 113,121 387,261
--------- ---------
Total current liabilities $ 2,751,838 $ 2,599,835
Line of credit 1,547,500 1,997,500
Deferred income 8,200 8,200
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Total Liabilities $ 4,307,538 $ 4,605,535
Commitments and contingencies
Stockholders' equity:
Common stock, no par value; authorized
30,000,000 shares, issued and
outstanding 3,050,000 shares 62,000 62,000
Note receivable from President (402,390) (402,390)
Retained earnings 1,437,342 1,723,057
--------- ---------
Total stockholders' equity 1,096,952 1,382,667
--------- ---------
$ 5,404,490 $ 5,988,202
========= =========
See accompanying notes to the unaudited financial statements.
<PAGE 4>
ALFA LEISURE INC.
STATEMENTS OF INCOME
(UNAUDITED)
Three Months
Ended July 31,
---1996----- -----1995---
Sales $ 4,720,598 $ 3,226,011
Cost of Sales 4,080,861 3,042,952
--------- ---------
Gross Profit 639,737 183,059
Expenses:
Selling, General/Admin. 843,767 753,492
Interest expense 51,859 96,569
--------- ---------
895,626 850,061
Income before income taxes (255,889) (667,002)
Provision for income taxes 29,828
--------- ---------
Net Income $ (285,717) $ (667,002)
========= =========
Net Income or loss per share $ ( .09) $ ( .22)
========= =========
See accompanying notes to the unaudited financial statements.
<PAGE 5>
ALFA LEISURE, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended July 31
1996 1995
----- -----
Cash flows from operating
activities: Net income $ (285,717) $ (667,002)
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 38,284 26,601
(Inc)Dec in restricted cash ( 719) 9,405
Decrease in accounts rec 1,006,677 1,145,836
Increase in inventories (919,706) (741,006)
Increase in prepaid expense (19,449) (82,861)
Increase in accounts payable 460,865 221,026
Decrease in accrued compensation (274,140) (183,905)
Decrease in accrued expenses (34,722) (35,154)
--------- ---------
Total adjustments 257,090 (359,942)
--------- ---------
Net cash provided (used)
by operating activities ( 28,627) (307,060)
--------- ---------
Cash flows from investing activities:
Acquisition of PP&E (14,609) ( 17,277)
--------- ---------
Net cash provided (used)
by investing activities (14,609) ( 17,277)
Cash flows from financing activities:
Principal payments on LTD -0- ( 942)
Principal payments on
credit line (450,000) ( -0-)
--------- ---------
Net cash provided (used)
by financing activities (450,000) ( 942)
Net increase (decrease) in cash (493,236) (325,279)
Cash at beginning of period 505,027 332,498
--------- ---------
Cash at end of period $ 11,791 $ 7,219
========= =========
Supplemental cash flow disclosures:
Interest paid $ 51,859 $ 60,012
Income taxes paid 30,254 -0-
See accompanying notes to the unaudited financial statements.
<PAGE 6>
ALFA LEISURE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
July 31, 1996
1. Accounting Policies
The accompanying Balance sheets of ALFA LEISURE,
INC.("Registrant") at July 31, 1996 and April 30, 1996 and the
Statements of Income and Cash Flows for the three month periods
ended July 31, 1996 and July 31, 1995 are unaudited, but include
all adjustments, consisting only of normal recurring accruals,
which management considers necessary for a fair presentation of
Registrant's financial condition and results of operations in
accordance with generally accepted accounting principles. The
information for the three month period ended July 31, 1996 is not
necessarily indicative of the operating results for the entire
year. Financial statements for the year ended April 30, 1996 are
available for a full discussion of Registrant's organization and
background and for a summary of its significant accounting
policies.
Registrant's fiscal year ends on the last Sunday in April
and its fiscal quarters are measured in increments of thirteen
(13) week periods beginning on the day following the last Sunday
in April. While the financial statements reflect operations of
Registrant as of, and/or for the periods ending on the last
Sunday in April, and the thirteen (13) week periods measured
therefrom, they have been presented as if Registrant's fiscal
year ends on April 30 in order to simplify the presentation.
2. Earnings Per Share
Net income per share is based upon the weighted average
number of shares outstanding during the periods presented. The
weighted average shares outstanding during the three months ended
July 31, 1996 and 1995 were 3,050,000.
3. Inventories
Inventories are summarized as follows:
July 31, 1996 April 30, 1996
-------------- --------------
Raw materials $ 1,275,919 $ 964,528
Work in process 531,487 588,260
Finished products 807,098 142,010
--------- ---------
$ 2,614,504 $ 1,694,798
========= =========
<PAGE 7>
ALFA LEISURE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
July 31, 1996
(Continued)
4. Commitments and Contingencies:
Financing Arrangements:
Registrant is contingently liable at July 31, 1996 under the
terms of repurchase agreements which have been established with
financing institutions to provide inventory financing for dealers
of Registrant's products. The risk of loss under these
agreements is spread over numerous dealers and financing
institutions and is reduced by the resale value of any products
which may require repurchase. Registrant has historically
experienced no significant losses under these agreements.
5. Income Taxes:
The provision for income taxes is calculated using
Registrant's estimated annual effective tax rate including the
utilization of loss carry forwards.
6. Financial Condition:
The Company's July 31 quarter, it's seasonally lowest sales
quarter historically results in operating losses. At July 31,
1996 Stockholders' Equity of $1,096,952 and favorable credit
terms extended by vendors continues to play a major role in
determining the adequacy of funds generated internally.
Management is confident in its ability to maintain profitability
and believes internally generated funds along with an available
line of credit provide adequate resources to meet its needs.
7. Line of credit:
The Company has a line of credit set at $2,000,000 bearing
interest at Bank of America's prime rate plus 1%. Interest is
payable monthly. Although the line of credit is payable within
90 days of any written demand by the lender, the lender has given
assurances that no demand will be made for principal payments
through July 1997. Accordingly, this obligation has been
classified as noncurrent in the balance sheets at July 31, 1996
and April 1996.
Substantially all assets of the Company are pledged as
collateral for the line of credit. The Company's President has
personally guaranteed the line of credit and has assigned his
rights under the lease for the Company's principal manufacturing
facility as additional collateral.
<PAGE 8>
ALFA LEISURE INC.
July 31,1996
Item 2. Management's Discussion and Analysis of Financial
- -------- Condition and Results of Operations
Results of Operation
---------------------
Sales increased 46% for the quarter ended July 31, 1996 as
compared to the same quarter of the previous year. The increase
resulted substantially from increased unit sales as a result of
general improvement in the recreational vehicle market.
Cost of sales, expressed as a percentage of sales, decreased
to 86% in the quarter ended July 31, 1996 from 94% in the same
quarter of the prior year. This decrease is resulted from the
increase in sales activity.
Selling, General and Administrative expenses increased
approximately 12% for the quarter ended July 31, 1996 as compared
to the corresponding period in 1995, again resulting from the
increased sales activity. Interest expense declined as a result
of borrowing levels.
Liquidity and Capital Resources
--------------------------------
Capital expenditures during fiscal 1997 are expected to be
primarily for routine periodic replacement of existing plant and
equipment. Registrant believes that it has sufficient available
capacity to meet the demand for its products in the foreseeable
future.
Registrant meets its needs for working capital and capital
expenditures with internally generated funds and from a line of
credit. Registrant has been able to take discounts on trade
payables as a result of Registrant's line of credit and favorable
credit terms with its vendors.
Registrant is confident of overall profitability in fiscal
1997 as a result of the introduction of a new product line and
increased sales activity. In addition, Registrant currently has
no significant commitments for cash expenditures other than
normal operations and debt service during 1997. The favorable
credit terms extended by vendors continues to play a key role in
determining the adequacy of funds available to conduct operations
in an efficient manner.
<PAGE 9>
PART II
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OTHER INFORMATION
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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.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
--------
Not Applicable.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the
quarter ended July 31, 1996.
<PAGE 10>
SIGNATURE
-----------
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.
ALFA LEISURE, INC.
a Texas Corporation
Dated: September 13, 1996
BY /s/ Johnnie R. Crean
---------------------
Johnnie R. Crean
President
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JUL-31-1996
<CASH> 221,652
<SECURITIES> 0
<RECEIVABLES> 809,976
<ALLOWANCES> 0
<INVENTORY> 2,614,504
<CURRENT-ASSETS> 3,751,202
<PP&E> 1,113,018
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,404,490
<CURRENT-LIABILITIES> 2,751,838
<BONDS> 0
0
0
<COMMON> 62,000
<OTHER-SE> 1,034,952
<TOTAL-LIABILITY-AND-EQUITY> 5,404,490
<SALES> 4,720,598
<TOTAL-REVENUES> 4,720,598
<CGS> 4,080,861
<TOTAL-COSTS> 4,080,861
<OTHER-EXPENSES> 843,767
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,859
<INCOME-PRETAX> (255,889)
<INCOME-TAX> 29,828
<INCOME-CONTINUING> (285,717)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (285,717)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
