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, 1998
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)
15 Compound Drive
Hutchinson, Kansas 67502-4349
(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 7,529,281
Class Outstanding at May 29, 1998
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
April 30, 1998
INDEX
PART I. FINANCIAL INFORMATION PAGE NO
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
April 30, 1998 and October 31, l997 3
Consolidated Condensed Statements of Income -
Three and Six Months Ended April 30, 1998
and 1997 4
Consolidated Condensed Statements of Cash Flow -
Six Months Ended April 30, 1998 and 1997 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 13
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
April 30, October 31,
1998 1997
(Unaudited)
ASSETS
Current Assets:
Cash $ 159,327 $ 189,152
Receivables, trade & other, net 6,815,449 6,745,973
Inventories, lower of cost (FIFO)
or market (Note 2) 26,296,581 25,686,022
Prepaid expenses and other current
assets 549,949 1,380,998
Total current assets 33,821,306 34,002,145
Property and equipment, at cost 35,303,393 32,232,490
Less: accumulated depreciation 20,383,685 19,800,671
Net property and equipment 14,919,708 12,431,819
Other assets 684,987 729,166
Total Assets $49,426,001 $47,163,130
LIABILITIES & SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt & capitalized leases $ 1,160,368 $ 1,094,948
Accounts payable 13,514,359 14,200,975
Accrued expenses 4,151,441 3,663,382
Total current liabilities 18,826,168 18,959,305
Long-term debt and capitalized leases 10,779,007 8,361,887
Shareholders' investment:
Common stock 753,218 738,568
Paid-in capital 18,524,519 18,918,903
Retained earnings 543,089 184,467
Total shareholders' investment 19,820,826 19,841,938
Total liabilities &
shareholders'investment $49,426,001 $47,163,130
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
1998 1997 1998 1997
Sales $38,332,942 $41,412,125 $76,813,564 $76,692,736
Cost of Sales 32,473,612 34,401,598 65,909,552 64,615,874
Gross profit 5,859,330 7,010,527 10,904,012 12,076,862
Selling, general
and administrative
expenses 3,914,767 3,779,880 7,735,225 7,485,399
Income from
operations 1,944,563 3,230,647 3,168,787 4,491,463
Other income (expense):
Interest expense (341,551) (448,034) (728,180) (912,334)
Other, net 120,948 53,040 201,177 169,432
(220,603) (394,994) (527,003) (742,902)
Income before provision
for income taxes 1,723,960 2,835,653 2,641,784 3,848,561
Provision for income
taxes 604,000 800,000 924,000 800,000
Net income $ 1,119,960 $ 2,035,653 $ 1,717,784 $ 3,048,561
Earnings Per Share (Note 3):
Basic $ .15 $ .28 $ .23 $ .42
Diluted $ .14 $ .26 $ .22 $ .39
Dividends per
share $ .025 $ .025 $ .180 $ .025
Weighted average common
and common equivilent shares
outstanding:
Basic 7,560,060 7,382,809 7,505,898 7,343,233
Diluted 7,742,633 7,685,554 7,768,438 7,727,362
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Six Months Ended
April 30,
1998 1997
Cash flow from operations:
Cash received from customers $76,744,088 $75,728,763
Cash paid to suppliers and employees (73,577,941) (72,827,784)
Interest paid (689,486) (1,010,205)
Cash provided by operations 2,476,661 1,890,774
Cash flow from investing activities:
Capital expenditures (3,144,067) (546,288)
Proceeds from sale of property and
equipment 249,166 16,500
Other, net (355,229) (54,408)
Cash used in investing activities (3,295,615) (584,196)
Cash flow from financing activities:
Net increase in other borrowings 3,829,563 (62,029)
Principal payments of long-term debt
and capitalized leases (1,347,023) (589,371)
Proceeds from exercise of stock
options 77,566 72,200
Acquisition and retirement of
treasury stock (457,300) (538,200)
Payment of dividends (1,359,162) (184,664)
Cash provided by (used in)
financing activities 743,644 (1,302,064)
Net increase (decrease) in cash (29,825) 4,514
Cash at beginning of period 189,152 255,405
Cash at end of period $ 159,327 $ 259,919
Reconciliation of net income to net cash provided by operations:
Net income $ 1,717,784 $ 3,048,561
Depreciation and amortization 851,905 878,175
Increase in receivables (69,476) (963,973)
Increase in inventories (610,559) (1,760,380)
Decrease (increase) in prepaid
expenses and other current assets 831,049 (249,345)
Decrease (increase) accounts payable
and accrued expenses (198,557) 948,445
Gain on sale of property and
equipment (45,485) (10,709)
Cash provided by operations $ 2,476,661 $1,890,774
(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 and results
of operations for the three and six months ended April 30, 1998
and 1997, and the cash flows for the six months ended April 30,
1998 and 1997.
The Company suggests that the unaudited Consolidated Condensed
Financial Statements for the three and six months ended April 30,
1998 be read in conjunction with the Company's Annual Report for
the year ended October 31, 1997.
(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, 1998 and October 31,
1997, consisted of the following:
April 30, 1998 October 31, 1997
Chassis $ 8,297,674 $ 7,675,115
Raw materials & components 9,413,671 8,673,308
Work in process 3,715,222 4,173,173
Finished goods 4,870,014 5,164,426
$26,296,581 $25,686,022
(3) Earnings per Share
In 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128, Earnings per Share (EPS), which requires the
reporting of basic and diluted earnings per share. The Company
adopted Statement 128 in the first quarter of 1998 as required.
Earnings per share and weighted average shares outstanding for
all periods presented have been restated to conform to Statement
128. Basic earnings per share excludes any dilutive effects of
stock options and is computed by dividing net income by the
weighted average shares of common stock outstanding for the
period. Diluted earnings per share is computed by dividing net
income by the weighted average shares of common stock outstanding
for the period plus the shares that would be outstanding assuming
the exercise of dilutive stock options. The effect of dilutive
stock options on weighted average shares outstanding was 182,573
and 302,745 for the quarters ended April 30, 1998 and 1997,
respectively. The effect of dilutive stock options on weighted
average shares outstanding was 262,540 and 384,129 for the six
months ended April 30, 1998 and 1997, respectively.
Options to purchase 2,500 shares of common stock at an exercise
price of $7.56 and 684,300 shares of common stock at exercise
prices ranging from $4.25 to $6.00 were outstanding during the
quarter ended April 30 of 1998 and 1997, respectively.
Accordingly, these were not included in the computation of
diluted EPS because the options exercise price was greater than
the average market price of common shares.
Options to purchase 2,500 shares of common stock at an exercise
price of $7.56 and 421,400 shares of common stock at exercise
prices ranging from $4.25 to $6.00 were outstanding during the
six months ended April 30 of 1998 and 1997, respectively.
Accordingly, these were not included in the computation of
diluted EPS because the options exercise price was greater than
the average market price of common shares.
(4) Contingencies and Litigation
At April 30, 1998 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 for three and six months ended
April 30, 1998 is calculated at statutory rates. The Company's
income tax expense for the three and six months ended April 30,
1997 was less than statutory rates due to the impact of the
utilization of net operating loss carryforwards and general
business tax credits.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS:
Net Sales
Sales for the quarter ended April 30, 1998, decreased 7.4% from
the same period in fiscal 1997. This decrease was principally
due to lower sales of ambulances, partially offset by higher
sales of bus products.
The Company's consolidated sales backlog at April 30, 1998 was
$44.3 million compared to $45.5 million at October 31, 1997 and
$46.9 million at April 30, 1997.
Cost of Sales
Cost of sales for the quarter ended April 30, 1998 were 84.7% of
sales compared to 83.1% for the same period in fiscal 1997. The
percentage increase was principally due to program discounts and
higher sales incentives on closing out 1997 models over that of the
same period last year. The Company's cost of sales for the six months
ended April 30, 1998 were 85.8% of sales compared to 84.3% of sales
for the same period in fiscal 1997. Increases were principally due
to the same reasons discussed above.
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's income tax expense for the quarter ended April 30,
1998 and 1997 were 35% and 28% of income before provisions for
income taxes. For the quarter ended April 30, 1998, provisions
for income taxes were calculated based on statutory income tax
rates. For the quarter ended April 30, 1997, due to the
utilization of net operating loss carryforwards and general
business tax credits, the company calculated a provision of less
than the statutory income tax rate. All carryforwards of net
operating losses and tax credits were utilized in the fiscal year
ended October 31, 1997. Accordingly, the Company expects future
income tax provisions to be based on statutory income tax rates.
The Company's income tax expense for the six months ended April
30, 1998 and 1997 were 35% and 21% of income before provisions
for income taxes. Differences between 1998 and 1997 provisions
are principally due to the same reasons discussed in the
immediately preceding paragraph.
Net Income
The Company's net income for the quarter ended April 30, 1998 was
$1.1 million ($.15 per share-basic) compared to $2.0 million
($.28 per share-basic) for the same period in fiscal 1997. The
decrease in the Company's net earnings was principally
attributable to a decrease in ambulance sales. This decrease was
partially offset by an increase in bus sales.
The Company's net earnings were $1.7 million ($.23 per share-
basic) for the six months ended April 30, 1998 compared to $3.0
million ($.42 per share-basic) for the six months ended April 30,
1997. The net income change is principally due to the same
reasons discussed in the immediately preceding paragraph.
LIQUIDITY AND CAPITAL RESOURCES:
The Company used existing credit lines, internally generated
funds and supplier financing and financing from issuance of
Industrial Revenue Bonds to fund its operations and capital
expenditures for the three and six months ended April 30, 1998.
Cash provided by operations was $2.5 million for the six months
ended April 30, 1998 compared to $1.9 million for the six months
ended April 30, 1997. Cash provided by operations principally
resulted from the Company's net income ($1.7 million),
depreciation ($.9 million) and a decrease in prepaid expense ($.8
million) and was partially offset by increases in inventories
($.6 million), during the six months ended April 30, 1998.
Cash used in investing activities was $3.3 million for the six
months ended April 30, 1998 compared to $.6 million for the six
months ended April 30, 1997. The increase was principally due to
higher capital expenditures for the expansion of the Company's
bus manufacturing facilities.
Cash flow provided by financing activities was $.7 million for
the six months ended April 30, 1998 compared to cash used in
financing activities of $1.3 million for the six months ended
April 30, 1997. This change principally resulted from increases
in borrowing for the six months ended April 30, 1998. This
increase was partially offset by the payment of three cash
dividends totaling $1.4 million. The Company paid a regular
quarterly cash dividend of $.025 per share in December, 1997 and
March, 1998, and a special cash dividend of $.13 per share in
January, 1998.
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.
<PAGE>
In December 1997, the Company entered into a capitalized lease
agreement with the City of South Hutchinson, Kansas for the
issuance of $3.5 million of 1997 Industrial Revenue Bonds. The
bonds bear interest at rates ranging from 4.75% to 5.80% and
mature serially over a period of ten years. The proceeds of the
bonds will be used to construct and equip an addition to the
Company's bus manufacturing facilities. As of April 30, 1998,
unused net proceeds from the bonds were $1.5 million. Except as
previously noted, at April 30, 1998 there were no other
significant or unusual contractual commitments or capital
expenditure commitments.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Except for the historical information contained herein, certain
matters discussed in this Form 10-Q are forward-looking
statements which involve risks and uncertainties, including but
not limited to economic, competitive, governmental and
technological factors affecting the Company's operations,
markets, products, services, prices and other factors.
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 April 30, 1998.
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 9, 1998 /s/ Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(Principal Accounting Officer)
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<CASH> 159,327
<SECURITIES> 0
<RECEIVABLES> 6,815,449
<ALLOWANCES> 0
<INVENTORY> 26,296,581
<CURRENT-ASSETS> 33,821,306
<PP&E> 35,303,393
<DEPRECIATION> 20,383,685
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0
0
<COMMON> 753,218
<OTHER-SE> 19,067,608
<TOTAL-LIABILITY-AND-EQUITY> 49,426,001
<SALES> 76,813,564
<TOTAL-REVENUES> 76,813,564
<CGS> 65,909,552
<TOTAL-COSTS> 73,644,777
<OTHER-EXPENSES> (201,177)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 728,180
<INCOME-PRETAX> 2,641,784
<INCOME-TAX> 924,000
<INCOME-CONTINUING> 1,717,784
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