UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 30, 1997
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 0-12619
Collins Industries, Inc.
(Exact name of registrant as specified in its charter)
Missouri
(State or other jurisdiction of incorporation)
43-0985160
(I.R.S. Employer Identification Number)
421 East 30th Avenue Hutchinson, Kansas 67502-2489
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code 316-663-5551
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.10 par value 7,383,105
Class Outstanding at June 9, 1997
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
APRIL 30, 1997
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
April 30, 1997 and October 31, l996 3
Consolidated Condensed Statements of Income -
Three and Six Months Ended April 30, 1997
and 1996 4
Consolidated Condensed Statements of Cash Flow -
Six Months Ended April 30, 1997 and 1996 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1-6 12
SIGNATURES 14
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
April 30, October 31,
1997 1996
(Unaudited)
ASSETS
Current assets:
Cash $ 259,919 $ 255,405
Receivables, trade and other, net 9,273,982 8,310,009
Inventories, lower of cost or
market (Note 2) 25,375,539 23,615,159
Prepaid expenses and other current assets 708,620 459,275
Total current assets 35,618,060 32,639,848
Property and equipment, at cost: 35,001,797 34,610,370
Less: accumulated depreciation 23,070,690 22,573,220
Net property and equipment 11,931,107 12,037,150
Other assets 906,373 1,067,454
Total assets $48,455,540 $45,744,452
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capitalized leases $ 1,132,759 $ 1,125,842
Accounts payable 13,759,644 13,729,044
Accrued expenses 4,498,576 3,580,731
Total current liabilities 19,390,979 18,435,617
Long-term debt, less current maturities 12,383,416 12,827,409
Long-term capitalized leases, less
current maturities 376,277 590,601
Shareholders' investment:
Common stock, $.10 par value 738,341 727,411
Paid-in capital 19,207,707 19,701,491
Retained deficit (3,641,180) (6,505,077)
16,304,868 13,923,825
Less - Treasury stock, at cost 0 (33,000)
Total shareholders' investment 16,304,868 13,890,825
Total liabilities &
shareholders' investment $48,455,540 $45,744,452
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
1997 1996 1997 1996
Sales $41,412,125 $37,637,590 $76,692,736 $70,046,382
Cost of sales 34,401,598 32,357,770 64,615,874 59,757,537
Gross profit 7,010,527 5,279,820 12,076,862 10,288,845
Selling, general and
administrative expenses 3,779,880 3,433,921 7,485,399 7,123,129
Income from operations 3,230,647 1,845,899 4,591,463 3,165,716
Other income (expense):
Interest expense (448,034) (605,221) (912,334) (1,239,805)
Other, net 53,040 95,249 169,432 144,413
(394,994) (509,972) (742,902) (1,095,392)
Income before provision
for income taxes 2,835,653 1,335,927 3,848,561 2,070,324
Provision for income taxes 800,000 0 800,000 0
Net income $ 2,035,653 $ 1,335,927 $ 3,048,561 $ 2,070,324
Earnings per share (Note 3):
Net income per common and
common equivalent share $ .26 $ .18 $ .39 $ .28
Net income per share -
assuming full dilution $ .26 $ .17 $ .39 $ .28
Dividends per share $ .025 $ 0 $ .025 $ 0
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Six Months Ended
April 30,
1997 1996
Cash flow from operations:
Cash received from customers $75,728,763 $69,051,998
Cash paid to suppliers and employees (72,827,784) (67,575,664)
Interest paid (1,010,205) (1,303,443)
Cash provided by operations 1,890,774 172,891
Cash flow from investing activities:
Capital expenditures (546,288) (376,004)
Proceeds from sale of equipment 16,500 0
Other, net (54,408) 7,050
Cash used in investing activities (584,196) (368,954)
Cash flow from financing activities:
Net increase (reduction) in other borrowings (62,029) 685,853
Principal payments of long-term
debt and capitalized leases (589,371) (636,514)
Proceeds from exercise of stock options 72,200 0
Retirement of common stock (260,825) 0
Acquisition of treasury stock (277,375) 0
Payment of dividends (184,664) 0
Cash provided by (used in) financing
activities (1,302,064) 49,339
Net increase (decrease) in cash 4,514 (146,724)
Cash at beginning of period 255,405 842,953
Cash at end of period $ 259,919 $ 696,229
Reconciliation of net income to cash provided by operations:
Net income $ 3,048,561 $ 2,070,324
Depreciation and amortization 878,175 1,039,247
Common stock issued for benefit of employees 0 49,756
Increase in receivables (963,973) (994,384)
Decrease (increase) in inventories (1,760,380) 328,726
Decrease (increase) in prepaid expenses and
other current assets (249,345) 17,961
Increase (decrease) in accounts payable and
accrued expenses 948,445 (2,338,739)
Gain on sale of equipment (10,709) 0
Cash provided by operations $ 1,890,774 $ 172,891
(See accompanying notes)
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(1) General
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from these estimates.
In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring items)
necessary to summarize fairly the Company's financial
position and results of operations for the three and six
months ended April 30, 1997 and 1996, and the cash flows for
the six months ended April 30, 1997 and 1996.
The Company suggests that the unaudited Consolidated
Condensed Financial Statements for the three and six months
ended April 30, 1997 be read in conjunction with the
Company's Annual Report for the year ended October 31, 1996.
(2) Inventories
Inventories, which include material, labor and manufacturing
overhead, are stated at the lower of cost (FIFO) or market.
Major classes of inventories as of April 30, 1997 and October 31,
1996 consisted of the following:
April 30, October 31,
1997 1996
Chassis $ 6,967,556 $ 6,466,570
Raw materials & components 9,224,232 8,867,477
Work in process 4,220,267 3,061,276
Finished goods 4,963,484 5,219,836
$25,375,539 $23,615,159
(3) Earnings per Share
The computation of earnings per share is based on the
weighted average number of outstanding common shares during
the period plus common stock equivalents consisting of
certain shares subject to stock options.
The shares used in the computations of earnings per share for
the periods ended April 30 were as follows:
Three Months Ended Six Months Ended
April 30, April 30,
1997 1996 1997 1996
Primary 7,685,554 7,521,917 7,727,362 7,404,711
Fully diluted 7,685,554 7,727,005 7,727,362 7,507,255
In February 1997, the Financial Accounting Standards Board issued State-
ment of Financial Accounting (SFAS) No. 128, "Earnings per Share." The
new standard simplifies the computation of earnings per share (EPS) and
increases the comparability to international standards. Under SFAS
No. 128 primary EPS is replaced by "Basic" EPS, which excludes dilution
and is computed by dividing income available to common shareholders by
the weighted-average number of common shares outstanding for the period.
"Diluted" EPS, which is computed similarly to fully diluted EPS, reflects
the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock.
SFAS No. 128 is effective December 15, 1997 and does not allow for early
adoption. Upon adoption, all prior-period EPS information (including
interim EPS) is required to be restated. Pro forma EPS, under SFAS
No. 128 for each period presented, are as follows:
Three Months Six Months
Ended Ended
April 30, April 30,
1997 1996 1997 1996
Basic EPS $.28 $.18 $.42 $.28
Diluted EPS $.26 $.17 $.39 $.28
(4) Contingencies and Litigation
At April 30, 1997 the Company had contingencies and
litigation pending which arose in the ordinary course of
business. Litigation is subject to many uncertainties and
the outcome of the individual matters is not presently
determinable. It is management's opinion that this
litigation would not result in liabilities that would have a
material adverse effect on the Company's consolidated
financial position or results of operations.
(5) Income Taxes
The primary difference between the Company's effective income tax
rate and provision for income taxes as calculated at the federal
statutory rate is the tax effect of utilizing net operating loss
carryforwards and tax credits.
(6) Subsequent Event
On May 9, 1997 the Company completed the sale of its UVL
(Under Vehicle Lift) product line to The Braun Corporation.
The Company will report a pretax gain of approximately $1.1
million from this sale in the third fiscal quarter ending
July 31, 1997. The UVL is one of the Company's wheelchair
lift products which has historically represented approximately
3% of the Company's consolidated sales and has had a negligible
impact on the Company's earnings in recent years. This sale will
allow the Company to further reduce interest-bearing debt and
focus more attention on marketing and manufacturing specialty
vehicles.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Net Sales
Sales for the six months ended April 30, 1997 were $76.7
million compared to $70.0 million for the same period in
fiscal 1996. Sales for the three months ended April 30, 1997 were
$41.4 million compared to $37.6 million for the same period
in fiscal 1996. These increases were principally due to improved
sales of terminal trucks. The overall sales increases were partially
offset by declines in bus sales.
The Company's consolidated sales backlog at April 30, 1997 was
$46.9 million compared to $40.4 million at October 31, 1996 and
$56.5 million at April 30, 1996. The April 30, 1996 backlog
included a $13.2 million order from the United States Postal Service
which has been completed.
Cost of Sales
Cost of sales for the six months ended April 30, 1997 were
84.3% of sales compared to 85.3% of sales for the same period
in fiscal 1996. Cost of sales for the three months ended April 30,
1997 were 83.1% of sales compared to 86.0% for the same period in
fiscal 1996. These decreases were principally due to improved margins
from ambulance product lines. These decreases were partially
offset by lower margins realized from terminal truck products.
Selling, General & Administrative Expenses
Selling, general and administrative expenses were $7.5
million or 9.8% of sales for the six months ended April 30,
1997 compared to $7.1 million or 10.2% of sales for the six
months ended April 30, 1996. The increase was due to an
increase in the sales force for ambulance products.
Other Income (Expense)
Interest expense for the six months ended April 30, 1997 was
$.9 million compared to $1.2 million for the same period in
fiscal 1996. Interest expense for the three months ended April 30,
1997 was $.4 million compared to $.6 million for the same
period in fiscal 1996. These declines resulted from
reductions in the Company's interest-bearing debt.
Income Taxes
The Company recorded a provision for income taxes of $.8 million,
for the three and six months ended April 30, 1997. The primary
difference between the Company's effective income tax rate
and the provision for income taxes calculated at the federal statutory
rate is due to the utilization of net operating losses and tax credits.
The Company's net operating loss and general business tax credit
carryforwards at October 31, 1996 were approximately $1.8 million
and $.3 million, respectively.
Net Earnings
The Company's net income was $3.0 million ($.39 per share)
for the six months ended April 30, 1997 compared to $2.1
million ($.28 per share) for the same period in fiscal 1996.
This improvement was principally due to the improved
operations in the Company's ambulance product lines with
smaller improvements in the terminal truck and bus product
lines and decreases in interest expense associated with
reduced borrowings. These improvements in net income were
partially offset by a provision for income taxes of $.8 million
($.10 per share) discussed in the immediately preceding paragraph.
The Company's net income for the quarter ended April 30, 1997
was $2.0 million ($.26 per share) compared to $1.3 million
($.18 per share) for the same period in fiscal 1996. The net
income change is principally due to the same reasons
discussed in the immediately preceding paragraph.
Other
On May 9, 1997 the Company completed the sale of its UVL (Under
Vehicle Lift) product line to The Braun Corporation. The Company
will report a pretax gain of approximately $1.1 million from this
sale in the third fiscal quarter ending July 31, 1997. The UVL
is one of the Company's wheelchair lift products which has historically
represented approximately 3% of the Company's consolidated sales and
has had a negligible impact on the Company's earnings in recent years.
This sale will allow the Company to further reduce interest-bearing
debt and focus more attention on marketing and manufacturing specialty
vehicles.
LIQUIDITY AND CAPITAL RESOURCES:
The Company used existing credit lines, internally generated
funds and supplier financing to fund its operations and
capital expenditures for the quarter ended April 30, 1997.
Cash provided by operations was $1.9 million for the six
months ended April 30, 1997 compared to $.2 million for the
six months ended April 30, 1996. Cash provided by operations
principally resulted from the Company's net income ($3.0
million), depreciation ($.9 million) and an increase in accounts
payable ($.9 million), and was partially offset by increases in
inventories ($1.8 million) and receivables ($1.0 million) during
the six months ended April 30, 1997.
Cash used in investing activities was $.6 million for the six
months ended April 30, 1997 compared to $.4 million for the
six months ended April 30, 1996. The increased use of cash
was principally due to higher capital expenditures for the
six months ended April 30, 1997.
Cash used in financing activities was $1.3 million for
the six months ended April 30, 1997 compared to cash
provided by financing activities of $.1 million for the six
months ended April 30, 1996. This change principally
resulted from decreases in borrowings, principal repayments of
debt ($.6 million), the acquisition of treasury stock ($.3 million),
the retirement of common stock ($.3 million) and the payment of
dividends ($.2 million) in the six months ended April 30, 1997.
The Company resumed the payment of dividends with a $.025 per share
dividend paid March 14, 1997. This is the first dividend declared
since August of 1993. The Company intends to pay regular quarterly
dividends in the future subject to results of operations,
limitations imposed by the Company's loan agreements and applicable
to law.
The Company believes that its cash flow from operations and
bank credit lines will be sufficient to satisfy its
working capital and capital expenditure requirements in the
immediate future.
At April 30, 1997 there were no significant or unusual
contractual commitments or capital expenditure commitments.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Not Applicable
Item 2 - Changes in Securities
Not Applicable
Item 3 - Defaults on Senior Securities
Not Applicable
Item 4 - Submission of Matters to a Vote of Security Holders
The Company's 1997 Annual Meeting of Shareholders was held
February 28, 1997. Mr. Lewis W. Ediger and Mr. Arch G.
Gothard, III were each elected as a director for a three year
term. Mr. Ediger received 5,872,120 votes for, 594,024
against and no abstentions. Mr. Gothard received 5,871,557
votes for, 594,587 against and no abstentions. The other directors
whose term of office continued after the meeting were: Don L.
Collins, Donald Lynn Collins, Don S. Peters and Robert E. Lind.
The Company also approved the Collins Industries, Inc. 1997
Omnibus Incentive Plans, a copy of which is set forth in the
Proxy Statement. The proposal received 3,878,326 affirmative votes,
862,393 negative votes, with 93,558 abstentions. The
proposal was approved by 59.9% of the quorum.
For the fiscal year ending October 31, 1997, the Company also
ratified the appointment of its independent public
accountants, Arthur Andersen LLP at its 1997 Annual Meeting
of Shareholders. Accordingly, Arthur Andersen LLP received
6,448,860 votes for, 3,850 votes against and 13,434
abstentions.
Item 5 - Other Information
Not Applicable
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
27.0 - EDGAR Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed Forms 8-K, all of which reported
information under Item 5 of Form 8-K, on the following
dates:
February 7, 1997
February 13, 1997
March 3, 1997
March 10, 1997
April 18, 1997
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.
COLLINS INDUSTRIES, INC.
(REGISTRANT)
DATE June 11, 1997 s/Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING OFFICER)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INCOME-TAX> 800,000
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