<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarter ended: Commission file number:
October 30, 1997 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 October 30, 1997 was:
Common Stock, without par value - 3,048,137 shares
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ALFA LEISURE, INC.
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Index
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
- ------- --------------------- ----
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
as of October 30, 1997 and April 30, 1997
Condensed Consolidated Statements of Income 4
for the Three and Six Months Ended
October 30, 1997 and 1996
Condensed Consolidated Statements of Cash Flows 5
for the Six Months Ended October 30, 1997 and 1996
Notes to Condensed consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
PART II. OTHER INFORMATION 8
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Signature Page 9
</TABLE>
<PAGE> 3
ALFA LEISURE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS:
<TABLE>
<CAPTION>
October 30, April 30,
(Unaudited)
---1997--- ---1997---
<S> <C> <C>
Current Assets:
Cash $ 310,750 $ 393,182
Restricted cash 320,201 149,350
Accounts receivable 887,568 1,769,153
Inventories(Note 3) 1,767,638 1,299,641
Prepaid expenses & Other current assets 104,290 150,559
Deferred tax asset 5,154 5,156
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Total current assets 3,395,601 3,767,041
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Property, plant and equipment, net 1,248,052 1,103,154
Deposits 0 10,000
Deferred tax asset 526,240 526,240
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Total Assets $ 5,169,893 $ 5,406,435
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 1,387,435 $ 1,916,611
Accrued expenses 447,058 415,841
Accrued compensation 497,466 418,474
----------- -----------
Total current liabilities 2,331,959 2,750,926
Line of credit 972,500 972,500
Deferred income 8,200 8,200
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Total Liabilities 3,312,659 3,731,626
Commitments and contingencies
Stockholders' equity:
Common stock, no par value; authorized 30,000,000
shares, issued and outstanding 3,048,137 shares 62,000 62,000
Note receivable from President (554,504) (439,792)
Retained earnings 2,349,738 2,052,601
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Total stockholders' equity 1,857,234 1,674,809
----------- -----------
$ 5,169,893 $ 5,406,435
=========== ===========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
<PAGE> 4
ALFA LEISURE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended October 30, Ended October 30,
----1997--- ---1996--- ---1997--- ---1996---
<S> <C> <C> <C> <C>
Sales $ 9,396,382 $ 7,126,796 $ 16,134,198 $ 11,924,935
Cost of Sales 8,270,235 5,915,534 14,249,615 10,269,555
------------ ------------ ------------ ------------
Gross Profit 1,126,147 1,211,262 1,884,583 1,655,380
Operating Expenses:
Selling, General/Admin 744,693 1,101,066 1,388,926 1,749,214
Interest expense 23,881 48,386 50,674 100,245
------------ ------------ ------------ ------------
768,574 1,149,452 1,439,600 1,849,459
Income (loss) before
income taxes 357,573 61,810 444,983 (194,079)
Provision for
income taxes 112,761 43,953 147,846 73,781
------------ ------------ ------------ ------------
Net Income (loss) $ 244,812 $ 17,857 $ 297,137 $ (267,860)
============ ============ ============ ============
Net Income (loss)
per share $ .08 $ .01 $ .10 $ (.09)
============ ============ ============ ============
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
<PAGE> 5
ALFA LEISURE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended October 30,
1997 1996
---------- ---------
<S> <C> <C>
Cash flows from operating
activities: Net income (loss) $ 297,137 $(267,860)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 83,222 76,566
Changes in operating assets and Liabilities:
accounts receivable 881,585 95,281
inventories (467,997) (166,255)
prepaid expense 46,268 (18,764)
accounts payable (529,176) 677,394
accrued compensation 78,992 (281,531)
accrued expenses 31,220 (20,600)
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Total changes 40,892 285,525
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Net cash provided by
operating activities 421,251 94,231
Cash flows from investing activities:
Changes in restricted cash (170,851) (1,548)
Acquisition of PP&E (228,120) (52,691)
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Net cash used in investing activities (398,971) (54,239)
Cash flows from financing activities:
Inc (Dec) Other Assets 10,000 - 0 -
Net advances to president (114,712) - 0 -
Principal payments on credit line - 0 - (450,000)
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Net cash used in financing activities (104,712) (450,000)
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Net decrease in cash (82,432) (410,008)
Cash at beginning of period 393,182 505,027
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Cash at end of period $ 310,750 $ 95,019
========= =========
Supplemental cash flow disclosures:
Interest paid $ 50,674 $ 112,478
Income taxes paid -0- 73,781
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
<PAGE> 6
ALFA LEISURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 30, 1997
1. Basis Of Presentation
The accompanying Condensed consolidated Balance Sheets of ALFA LEISURE,
INC.("Registrant") at October 30, 1997 and April 30, 1997, Condensed
Consolidated Statements of Income for the three month and six month periods
ended October 30, 1997 and October 30, 1996 and Condensed Consolidated
Statements of Cash Flows for the six month periods ended October 30, 1997 and
October 30, 1996 are unaudited, but include all adjustments, consisting only of
normal recurring adjustments, 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 October 30, 1997 is not necessarily indicative of
the operating results for the entire year. Financial statements for the year
ended April 30, 1997 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. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
October 30, 1997 April 30, 1997
---------------- --------------
<S> <C> <C>
Raw materials $ 924,200 $ 691,976
Work in process 657,872 558,326
Finished products 185,566 49,339
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$1,767,638 $1,299,641
========== ==========
</TABLE>
<PAGE> 7
ALFA LEISURE INC.
October 30,1997
Item 2. Management's Discussion and Analysis of Financial Condition
- ------- and Results of Operations
Results of Operation
--------------------
Sales increased 31.9% for the three months ended October 30, 1997, and
35.3% for the six months ended October 30, 1997 as compared to the same periods
of the previous year. This increase is attributable to increased volume from a
new lower priced model introduced during the year.
Cost of sales, expressed as a percentage of sales, increased to 88.0% in
the three months ended October 30, 1997 from 83.0% in the same periods of the
prior year. Cost of sales, expressed as a percentage of sales, increased to
88.3% in the six months ended October 30, 1997 from 86.12% in the same periods
of the prior year. These increases resulted from write offs of slow moving
inventory.
Selling, General and Administrative expenses decreased 32.4% for the three
months ended, and 20.6% for the six months ended October 30, 1997, as compared
to the corresponding periods of the prior year. These are a result of decreases
in advertising, promotion and show expenses.
Liquidity and Capital Resources
-------------------------------
Capital expenditures during fiscal 1998 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 1998 as a result
of dealer and consumer acceptance of the improved 1998 product line resulting in
increased sales activity. Registrant currently has no significant commitments
for cash expenditures other than normal operations and debt service during 1998.
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> 8
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
--------
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
October 30, 1997.
<PAGE> 9
SIGNATURE
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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: January 16, 1998
BY /s/ JOHNNIE R. CREAN
---------------------------------
Johnnie R. Crean
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> OCT-30-1997
<CASH> 310,750
<SECURITIES> 0
<RECEIVABLES> 887,568
<ALLOWANCES> 0
<INVENTORY> 1,767,638
<CURRENT-ASSETS> 3,395,601
<PP&E> 1,248,052
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,169,893
<CURRENT-LIABILITIES> 2,331,959
<BONDS> 0
0
0
<COMMON> 62,000
<OTHER-SE> 1,795,234
<TOTAL-LIABILITY-AND-EQUITY> 5,169,893
<SALES> 9,396,382
<TOTAL-REVENUES> 9,396,382
<CGS> 8,099,880
<TOTAL-COSTS> 8,099,880
<OTHER-EXPENSES> 915,048
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,881
<INCOME-PRETAX> 357,573
<INCOME-TAX> 112,761
<INCOME-CONTINUING> 244,812
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 244,812
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
