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: July 31, 2000
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 7,578,396
Class Outstanding at September 1, 2000
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
July 31, 2000
INDEX
PART I. FINANCIAL INFORMATION PAGE NO
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
July 31, 2000 and October 31, l999 3
Consolidated Condensed Statements of Income -
Three and Nine Months Ended July 31, 2000
and 1999 4
Consolidated Condensed Statements of Cash Flow -
Nine Months Ended July 31, 2000 and 1999 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 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
July 31, October 31,
2000 1999
ASSETS
Current Assets:
Cash $ 268,191 $ 344,948
Receivables, trade & other 5,601,569 5,146,834
Inventories, lower of cost (FIFO)
or market 44,737,807 36,218,152
Prepaid expenses and other current assets 644,102 1,092,872
Total current assets 51,251,669 42,802,806
Property and equipment, at cost 42,849,037 41,234,902
Less: accumulated depreciation 24,585,876 22,895,341
Net property and equipment 18,263,161 18,339,561
Other assets 4,903,225 5,279,028
Total assets $74,418,055 $66,421,395
LIABILITIES & SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt & capitalized leases $ 1,476,557 $ 1,460,113
Accounts payable 27,256,918 19,321,738
Accrued expenses 4,810,796 5,875,654
Total current liabilities 33,544,271 26,657,505
Long-term debt and capitalized leases 14,586,486 15,803,399
Shareholders' investment:
Common stock 758,141 746,541
Paid-in capital 18,586,425 18,094,900
Deferred compensation (1,234,556) (1,033,521)
Retained earnings 8,177,288 6,152,571
Total shareholders' investment 26,287,298 23,960,491
Total liabilities & shareholders'
investment $74,418,055 $66,421,395
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
July 31, July 31,
2000 1999 2000 1999
Sales $58,220,485 $52,836,325 $159,447,884 $137,777,200
Cost of sales 51,098,300 44,132,735 138,580,788 115,768,683
Gross profit 7,122,185 8,703,590 20,867,096 22,008,517
Selling, general and
administrative expenses 5,054,480 5,214,445 15,221,243 14,314,957
Income from
operations 2,067,705 3,489,145 5,645,853 7,693,560
Other income (expense):
Interest expense (460,970) (512,394) (1,293,189) (1,365,449)
Other, net 18,262 120,039 112,168 295,235
Income before provision
for income taxes 1,624,997 3,096,790 4,464,832 6,623,346
Provision for income
taxes 362,000 1,177,000 1,294,000 2,517,000
Net income $ 1,262,997 $ 1,919,790 $ 3,170,832 $ 4,106,346
Earnings per share
Basic $ .18 $ .27 $ .44 $ .56
Diluted $ .17 $ .26 $ .42 $ .55
Dividends per share $ .025 $ .025 $ .155 $ .075
Weighted average common
and common equivilent
shares outstanding:
Basic 7,212,482 7,243,498 7,212,432 7,336,618
Diluted 7,456,147 7,504,776 7,568,586 7,465,421
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended
July 31,
2000 1999
Cash flow from operations:
Cash received from customers $158,993,149 $138,104,106
Cash paid to suppliers and employees (152,457,820) (132,523,103)
Interest paid (1,307,931) (1,310,821)
Income taxes paid (1,277,515) (1,358,028)
Cash provided by operations 3,949,883 2,912,154
Cash flow from investing activities:
Capital expenditures and acquisition (1,623,199) (7,114,816)
Proceeds from sale of property and equipment - 986,437
Other, net (69,107) (538,395)
Cash used in investing activities (1,692,306) (6,666,774)
Cash flow from financing activities:
Net increase (decrease) in other borrowings (94,135) 6,207,402
Principal payments of long-term debt
and capitalized leases (1,106,334) (699,836)
Proceeds from exercise of stock options 12,250 158,742
Acquisition and retirement of
treasury stock - (1,260,946)
Payment of dividends (1,146,115) (558,597)
Cash provided by (used in)
financing activities (2,334,334) 3,846,765
Net increase (decrease) in cash (76,757) 92,145
Cash at beginning of period 344,948 143,995
Cash at end of period $ 268,191 $ 236,140
Reconciliation of net income to net cash
provided by operations:
Net income $ 3,170,832 $ 4,106,346
Depreciation and amortization 2,284,783 1,771,091
Decrease (increase) in receivables (454,735) 326,906
Increase in inventories (8,519,655) (11,137,395)
Decrease in prepaid expenses and
other current assets 448,770 453,351
Increase in accounts payable and
accrued expenses 6,870,322 7,477,684
Other 149,566 (85,829)
Cash provided by operations $ 3,949,883 $ 2,912,154
(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 July 31,
2000 and the results of operations for the three and nine months
ended July 31, 2000 and 1999, and the cash flows for the nine
months ended July 31, 2000 and 1999.
The Company suggests that the unaudited Consolidated Condensed
Financial Statements for the three and nine months ended July 31,
2000 be read in conjunction with the Company's Annual Report on
Form 10-K for the year ended October 31, 1999.
(2) Goodwill
Other assets include unamortized goodwill of $3.4 and $3.8
million at July 31, 2000 and 1999 respectively. Goodwill
resulted from the acquisition of Mid Bus on December 1, 1998.
The purchase price was $5.0 million plus liabilities assumed of
$3.9 million. The acquisition was accounted for as a purchase
and the results of Mid Bus' operations have been consolidated
with those of the Company since the date of acquisition. The
excess cost over the fair value of net assets acquired is being
amortized on a straight-line basis over 20 years. Goodwill
amortization reflected in the consolidated statements of income,
totaled $129,390 and $120,538 for the nine months ended July 31,
2000 and 1999 respectively.
The Company continually evaluates whether later events and
circumstances have occurred that indicate the remaining estimated
useful life of goodwill may warrant revisions or that the
remaining balance of goodwill may not be recoverable. When
factors indicate that the goodwill should be evaluated for
possible impairment, the Company uses an estimate of undiscounted
cash flows over the remaining life of the goodwill in measuring
whether the goodwill is recoverable.
(3) 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 July 31, 2000 and October 31,
1999, consisted of the following:
July 31, October 31,
2000 1999
Chassis $13,119,699 $ 5,507,600
Raw materials & components 12,099,790 11,066,127
Work-in-process 7,966,426 5,329,627
Finished goods 11,551,892 14,314,798
$44,737,807 $36,218,152
(4) Earnings per Share
Dilutive securities, consisting of options to purchase the
Company's common stock and restricted stock awards included in
the calculation of diluted weighted average common shares were
243,665 and 261,278 for the three months ended July 31, 2000 and
1999, respectively. The effect of dilutive stock options and
restricted stock awards on weighted average shares outstanding
was 356,154 and 128,803 for the nine months ended July 31, 2000
and 1999, respectively.
(5) Contingencies and Litigation
At July 31, 2000, 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.
(6) Segment Information
Three Months Nine Months Ended
Ended
(In Thousands) July 31, July 31,
2000 1999 2000 1999
Revenues from
external customers:
Ambulance $25,720 $21,714 $ 73,231 $ 58,493
Buses 20,867 24,525 55,922 59,020
Terminal Trucks 11,633 6,597 30,295 20,264
Other - - - -
Consolidated Total $58,220 $52,836 $159,448 $137,777
Segment profit (pretax):
Ambulance $ 1,401 $ 845 $ 2,792 $ 2,462
Buses 564 2,690 2,301 5,693
Terminal Trucks 897 481 2,295 876
Other (1,237) (919) (2,923) (2,408)
Consolidated Total $ 1,625 $ 3,097 $ 4,465 $ 6,623
As of
July October
31, 31,
2000 1999
Segment assets:
Ambulance $30,942 $26,996
Buses 28,398 26,713
Terminal Trucks 12,604 10,197
Other 2,474 2,515
Consolidated Total $74,418 $66,421
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS:
Sales
Sales for the three months ended July 31, 2000, increased 10%,
compared to the same period in fiscal 1999. This increase was
principally due to a 79% increase in unit volume sales of
terminal trucks. This increase was partially offset by a 27%
decrease in unit volume sales of bus products. Average unit
selling price of ambulances for the three months ended July 31,
2000, increased 8%, compared to the same period in fiscal 1999,
and principally resulted from a change in product mix to more
complex units which carry higher selling prices.
The average unit selling price of bus and terminal truck products
for the three months ended July 31, 2000, decreased 10% and 2%
respectively, compared to the same period in fiscal 1999.
Historically, the Company's proprietary bus products have been
heavily skewed toward Ford Motor Company (Ford) products, which
carry higher gross margins. However, the Type-A school bus
market has moved heavily away from Ford chassis to General Motors
(GM) chassis due to price and model availability. Consequently,
the Company's mix of bus products in fiscal 2000 has followed
this shift to a greater volume of GM bus products, which carry
lower margins. Decreases in bus product unit volume sales and
average unit selling price for the three and nine months ending
July 31, 2000, are principally due to a shift in the Type-A bus
market away from Ford products combined with competitive pricing
pressures in the industry.
Sales for the nine months ended July 31, 2000, increased 16%,
compared to the same period in fiscal 1999. This increase was
principally due to 51% and 15% increases in unit volume sales of
terminal trucks and ambulances respectively for the nine months
ended July 31, 2000. These increases were partially offset by a
19% decrease in unit volume sales of bus products. Average unit
selling price of ambulances for the nine months ended July 31,
2000, increased 6%, compared to the same period in fiscal 1999.
Average unit selling price of bus and terminal truck products for
the nine months ended July 31, 2000, decreased 10% and 1%
respectively, compared to the same period in fiscal 1999.
The Company's consolidated sales backlog at July 31, 2000 was
$63.7 million compared to $59.6 million at October 31, 1999 and
$73.5 million at July 31, 1999.
Cost of Sales
Cost of sales for the three months ended July 31, 2000 was 87.8%
of sales compared to 83.5% for the same period in fiscal 1999.
The Company's cost of sales for the nine months ended July 31,
2000 was 86.9% of sales compared to 84.0% of sales for the same
period in fiscal 1999. The increase in cost of sales as a percent
of sales for the three and nine months ended July 31, 2000 was
principally due to higher terminal truck sales and higher chassis
sales which carry lower gross margins combined with a reduction
in average bus product selling price.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $.9
million for the nine months ended July 31, 2000 compared to the
same period in fiscal 1999. This increase was principally due to
higher sales distribution costs of ambulance products in the
first six months of fiscal 2000.
Other Income (Expense)
Interest expense for the three and nine months ended July 31,
2000 decreased principally as a result of the Company's reduction
in debt. This decrease was partially offset by an overall
increase of the Company's effective interest rates.
Income Taxes
The effective tax rate for the three months ended July 31, 2000
was 22% compared to 38% for the same period in fiscal 1999. The
decrease in effective rate was principally attributable to
increased state income tax credits, increased international sales
reducing federal tax liability, and the reversal of accruals
relating to prior years.
The effective tax rate for the nine months ended July 31, 2000
was 29% compared to 38% for the same period in fiscal 1999. The
decrease in effective rate was principally due to the same
reasons discussed in the immediately preceding paragraph.
Net Income
The Company's net income for the three months ended July 31, 2000
was $1.3 million ($.17 per share-diluted) compared to $1.9
million ($.26 per share-diluted) for the same period in fiscal
1999. The decrease in the Company's net income was principally
attributable to lower profit contributions from bus products. Bus
products profit contribution was lower principally due to a sales
volume decline. These decreases were partially offset by
increases in terminal truck and ambulance profits, which resulted
from higher sales described above.
The Company's net income for the nine months ended July 31, 2000
was $3.2 million ($.42 per share-diluted) compared to $4.1
million ($.55 per share-diluted) for the same period in fiscal
1999. The net income change was 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 to fund its operations and capital
expenditures for the three and nine months ended July 31, 2000.
Cash provided by operations was $3.9 million for the nine months
ended July 31, 2000 compared to $2.9 million for the nine months
ended July 31, 1999. Cash provided by operations principally
resulted from the Company's net income ($3.2 million),
depreciation and amortization ($2.3 million), an increase in
accounts payable ($6.8 million), and a decrease in prepaid
expense ($.4 million), and was partially offset by an a increase
in inventory ($8.5 million) and an increase in accounts
receivable ($.5 million), for the nine months ended July 31,
2000.
Cash used in investing activities was $1.7 million for the nine
months ended July 31, 2000 compared to $6.7 million for the nine
months ended July 31, 1999. The decrease was principally due to
lower capital expenditures and nonrecurring acquisition costs
associated with the purchase of Mid Bus in fiscal 1999.
Cash flow used by financing activities was $2.3 million for the
nine months ended July 31, 2000 compared to cash flow provided by
financing activities of $3.8 million for the nine months ended
July 31, 1999. This change principally resulted from lower new
borrowings and the payment in January, 2000 of a special cash
dividend of $.08 per share ($.6 million).
The Company has aggregate maturities of $10.7 million in
capitalized leases and long-term debt due in 2002, principally as
a result of a loan agreement with the Company's lead bank which
expires May 31, 2002. The Company currently anticipates
arranging an extension or refinancing of this debt at or prior to
maturity. See Note 2 of the "Notes to Consolidated Financial
Statements" in the Company's 1999 Form 10K.
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.
Cautionary Statement Regarding Risks and Uncertainties That May
Affect Future Results
This report and other written reports and oral statements made
from time to time by the Company may contain so-called "forward-
looking statements" about the business, financial conditions and
prospects of the Company, all of which are subject to risks and
uncertainties. One can identify these forward-looking statements
by their use of words such as "expects", "plans", "will",
"estimates", "forecasts", "projects", and other words of similar
meaning. One can also identify them by the fact that they do not
relate strictly to historical or current facts. One should
understand that it is not possible to predict or identify all
factors, which involve risks and uncertainties. Consequently,
the reader should not consider any such list or listing to be a
complete statement of all potential risks or uncertainties.
No forward-looking statement can be guaranteed and actual future
results may vary materially. The actual results of the Company
could differ materially from those indicated by the forward-
looking statements because of various risks and uncertainties
including, without limitation, changes in product demand, the
availability of vehicle chassis, adequate direct labor pools,
changes in competition, interest rate fluctuations, development
of new products, various inventory risks due to changes in market
conditions, changes in tax and other governmental rules and
regulations applicable to the Company, substantial dependence on
third parties for product quality, reliability and timely
fulfillment of orders and other risks indicated in the Company's
filings with the Securities and Exchange Commission.
The Company does not assume the obligation to update any forward-
looking statement. One should carefully evaluate such statements
in light of factors described in the Company's filings with the
Securities and Exchange Commission, especially on Forms 10-K, 10-
Q and 8-K (if any).
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 July 31, 2000.
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 September 1, 2000 /s/ Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(Principal Accounting Officer)
