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: January 31, 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 7,383,410
Class Outstanding at February 18, 1997
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
JANUARY 31, 1997
INDEX
PART I. FINANCIAL INFORMATION PAGE NO
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
January 31, 1997 and October 31, l996 3
Consolidated Condensed Statements of Income -
Three Months Ended January 31, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flow -
Three Months Ended January 31, 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 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
January 31, October 31,
1997 1996
(Unaudited)
ASSETS
Current Assets:
Cash $ 242,621 $ 255,405
Receivables, trade & other, net 6,379,666 8,310,009
Inventories, lower of cost (FIFO)
or market (Note 2) 24,958,242 23,615,159
Prepaid expenses and other current assets 758,721 459,275
Total current assets 32,339,250 32,639,848
Property and equipment, at cost 34,923,948 34,610,370
Less: accumulated depreciation 22,891,750 22,573,220
Net property and equipment 12,032,198 12,037,150
Other assets 964,874 1,067,454
Total assets $45,336,322 $45,744,452
LIABILITIES & SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt
& capitalized leases $ 1,126,969 $ 1,125,842
Accounts payable 11,988,960 13,729,044
Accrued expenses 3,088,837 3,580,731
Total current liabilities 16,204,766 18,435,617
Long-term debt, less current maturities 14,217,404 12,827,409
Long-term capitalized leases, less
current maturities 484,908 590,601
Shareholders' investment:
Common stock, $.10 par value 743,191 727,411
Paid-in capital 19,488,597 19,701,491
Retained deficit (5,492,169) (6,505,077)
14,739,619 13,923,825
Less - Treasury stock, at cost (310,375) (33,000)
Total shareholders' investment 14,429,244 13,890,825
Total liabilities &
shareholders' investment 45,336,322 45,744,452
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
January 31,
1997 1996
Sales $35,280,611 $32,408,792
Cost of sales 30,214,276 27,399,767
Gross profit 5,066,335 5,009,025
Selling, general and administrative
expenses 3,705,519 3,689,208
Income from operations 1,360,816 1,319,817
Other income (expense):
Interest, net (464,300) (634,584)
Other, net 116,392 49,164
(347,908) (585,420)
Income before income taxes 1,012,908 734,397
Provision for income taxes 0 0
Net income $ 1,012,908 $ 734,397
Earnings per share $ 0.13 $ 0.10
Weighted average common and common
equivalent shares outstanding 7,769,171 7,287,778
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Three Months Ended
January 31,
1997 1996
Cash flow from operations:
Cash received from customers $37,210,954 $33,695,851
Cash paid to suppliers and employees (37,114,198) (33,663,716)
Interest paid (600,058) (657,871)
Cash used in operations (503,302) (625,736)
Cash flow from investing activities:
Capital expenditures (313,578) (122,722)
Other, net (3,458) (3,567)
Cash used in investing activities (317,036) (126,289)
Cash flow from financing activities:
Net increase in other borrowings 1,579,831 833,934
Principal payments of long-term debt
and capitalized leases (294,402) (317,786)
Proceeds from exercise of stock options 60,325 0
Retirement of common stock (260,825) 0
Acquisition of treasury stock (277,375) 0
Cash provided by financing activities 807,554 516,148
Net decrease in cash (12,784) (235,877)
Cash at beginning of period 255,405 842,953
Cash at end of period $ 242,621 $ 607,076
Reconciliation of net income to net cash
used in operations:
Net income $ 1,012,908 $ 734,397
Depreciation and amortization 427,954 530,300
Common stock issued for benefit of
employees 0 33,313
Decrease in receivables 1,930,343 1,287,059
Increase in inventories (1,343,083) (1,116,658)
Increase in prepaid expenses
and other current assets (299,446) (141,751)
Decrease in accounts payable
and accrued expenses (2,231,978) (1,952,396)
Cash used in operations $ (503,302) $ (625,736)
(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 those 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 at January 31,
1997 and October 31, 1996 and results of its operations and its cash
flows for the three months ended January 31, 1997 and 1996.
The Company suggests that the unaudited Consolidated Condensed
Financial Statements for the three months ended January 31, 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 January 31, 1997 and October 31,
1996, consisted of the following:
January 31, October 31,
1997 1996
Chassis $ 6,906,937 $ 6,466,570
Raw materials & components 9,265,896 8,867,477
Work in process 3,456,988 3,061,276
Finished goods 5,328,421 5,219,836
$24,958,242 $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.
(4) Contingencies and Litigation
At January 31, 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.
(5) Income Taxes
The provision for income taxes as calculated at statutory rates
is offset by the tax affect of net operating loss and general tax
credit carryforwards.
(6) Subsequent Event
On February 12, 1997, the Company entered into a letter of intent
to sell certain assets of the Company's wheelchair lift product
line to The Braun Corporation. Consummation of the sale is
subject to customary due diligence and the negotiation and
execution of a definitive agreement. The Company's wheelchair
lift products have historically represented approximately three
percent (3%) of consolidated sales and have not contributed to
the Company's net income in recent years. Based on the letter of
intent, the Company should realize a pretax gain of approximately
$2 million on the sale. The Company expects to complete the sale
in mid-March and to record the gain in its second fiscal quarter
ending April 30, 1997.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS:
Net Sales
Sales for the quarter ended January 31, 1997 were $35.3 million
or 9% higher than the $32.4 million in net sales for the
quarter ended January 31, 1996. This increase was principally
due to higher sales of terminal truck products.
The Company's consolidated sales backlog at January 31, 1997 was
$43.3 million compared to $40.4 million at October 31, 1996 and
$41.4 at January 31, 1996.
Cost of Sales
The Company's cost of sales for the quarter ended January 31,
1997 was $30.2 million or 85.6% of sales compared to
$27.4 million or 84.5% of sales for the quarter ended
January 31, 1996. This increase was principally due to a higher
sales mix of terminal truck products which carry a higher material
content than ambulances and buses.
Selling, General & Administrative Expenses
Selling, general and administrative expenses were $3.7 million in
the quarters ended January 31, 1997 and 1996. Selling, general
and administrative expenses were 10.5% of sales for the quarter
ended January 31, 1997 compared to 11.4% of sales for the quarter
ended January 31, 1996. The overall percentage decline resulted
principally from a non-recurring expense of $.4 million recorded
in the quarter ended January 31, 1996 which related to an
unfavorable jury verdict of certain litigation.
Other Income (Expense)
Interest expense decreased principally as a result of the
Company's overall reduction of its outstanding interest-bearing
debt.
Income Taxes
The Company had no provisions for income taxes 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 $1.9 million
and $.5 million, respectively.
Net Earnings
The Company's net earnings were $1.0 million ($.13 per share) for
the quarter ended January 31, 1997 compared to income of
$.7 million ($.10 per share) for the quarter ended January 31,
1996. The improvement in the Company's earnings is principally
attributable to the Company's improved earnings from ambulance
products and lower interest expense.
Other
On February 12, 1997, the Company entered into a letter of intent
to sell certain assets of the Company's wheelchair lift product
line to The Braun Corporation. Consummation of the sale is
subject to customary due diligence and the negotiation and
execution of a definitive agreement. The Company's wheelchair
lift products have historically represented approximately three
percent (3%) of consolidated sales and have not contributed to
the Company's net income in recent years. Based on the letter of
intent, the Company should realize a pretax gain of approximately
$2 million on the sale. The Company expects to complete the sale
in mid March and to record the gain in its second fiscal quarter
ending April 30, 1997.
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 January 31, 1997.
Cash used in operations was $.5 million for the quarter ended
January 31, 1997 compared to $.6 million for quarter ended
January 31, 1996. Cash used in operations principally
resulted from the Company's increase in inventories and reductions
of accounts payable and accrued expenses during the quarter ended
January 31, 1997.
Cash used in investing activities was $.3 million for the quarter
ended January 31, 1997 compared to $.1 million for the quarter
ended January 31, 1996. The increased use of cash was
principally due to higher capital expenditures of $.3 million for
the quarter ended January 31, 1997.
Cash flow provided by financing activities was $.8 million for the
quarter ended January 31, 1997 compared to $.5 million for the
quarter ended January 31, 1996. This change principally resulted
from increases in borrowings in the quarter ended January 31,
1997 and was partially offset by principal repayments of debt
($.3 million) and the acquisition of treasury stock ($.3
million), and the retirement of common stock ($.3 million).
The Company believes that its cash flows from operations and bank
credit lines will be sufficient to satisfy its future working
capital and capital expenditure requirements.
At January 31, 1997 there were no significant or unusual
contractual commitments or capital expenditure commitments.
The Company's bus operations may be impacted in the second fiscal
quarter ending April 30, 1997 as a result of Ford Motor Company's
shutdown of its Lorain, Ohio production plant. Ford's shutdown of
this plant, which produces the Ford E350 and E450 chassis, stems
from a labor dispute between the UAW and Johnson Controls, the
principal supplier of Ford's seats for these chassis. A prolonged
strike also would ultimately impact the Company's ambulance
operations. Due to the nature of this situation, it is not possible
to predict when normally scheduled chassis deliveries from Ford
will be resumed. The Company is currently exploring alternatives to
accelerate the production of buses when normal chassis deliveries
are resumed by Ford. The company has experienced no cancellation of
orders from these shortages.
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
Not applicable
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 - No reports on Form 8-K were filed
during the quarter ended January 31, 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 February 21, 1997 /s/ Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
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