<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarter Ended June 30,1999
------------
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 1-5325
--------
Huffy Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0326270
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 Byers Road, Miamisburg, Ohio 45342
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(937) 866-6251
----------------------------------------------------
(Registrant's telephone number, including area code)
No Change
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 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 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.
Outstanding Shares: 10,163,015 as of August 12, 1999
---------------- ----------------------------
Page 1 of 12
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED). COMPANY FOR WHICH REPORT IS FILED:
---------------------------------
<TABLE>
HUFFY CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollar Amounts in Thousands, Except Per Share Data)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 172,131 $ 182,024 $ 321,464 $ 325,947
Cost of sales 143,577 144,269 270,924 263,232
----------- ----------- ----------- -----------
Gross profit 28,554 37,755 50,540 62,715
Selling, general and administrative expenses 18,236 24,614 37,283 43,971
Plant closure and manufacturing
reconfiguration 621 12,639 2,708 12,639
----------- ----------- ----------- -----------
Operating income 9,697 502 10,549 6,105
Other expense (income)
Interest expense 1,390 1,651 3,072 2,997
Interest income (51) (26) (118) (77)
Other (224) 173 (89) 381
----------- ----------- ----------- -----------
Earnings (loss) before income taxes 8,582 (1,296) 7,684 2,804
Income tax expense (benefit) 3,291 (524) 2,958 1,045
----------- ----------- ----------- -----------
Earnings (loss) from continuing
operations 5,291 (772) 4,726 1,759
----------- ----------- ----------- -----------
Discontinued operations:
Income (loss) from discontinued operations,
net of income tax expense (benefit) of $409,
$(208) and $1,188 -- 746 (312) 2,001
Gain on disposal of
discontinued operations, net of
income tax expense of $2,338 -- -- 3,028 --
----------- ----------- ----------- -----------
Net earnings (loss) $ 5,291 $ (26) $ 7,442 $ 3,760
=========== =========== =========== ===========
Earnings per common share:
Basic:
Weighted average number of
common shares 10,495,552 12,251,566 11,127,747 12,389,646
=========== =========== =========== ===========
Earnings (loss) from continuing
operations $ 0.50 $ (0.06) $ 0.42 $ 0.14
Earnings from discontinued operations 0.00 0.06 0.24 0.16
----------- ----------- ----------- -----------
Net earnings per common share $ 0.50 $ 0.00 $ 0.66 $ 0.30
=========== =========== =========== ===========
Diluted:
Weighted average number of
common shares 10,656,838 12,426,543 11,289,033 12,564,623
=========== =========== =========== ===========
Earnings (loss) from continuing
operations $ 0.50 $ (0.06) $ 0.42 $ 0.14
Earnings from discontinued operations 0.00 0.06 0.24 0.16
----------- ----------- ----------- -----------
Net earnings per common share $ 0.50 $ 0.00 $ 0.66 $ 0.30
=========== =========== =========== ===========
</TABLE>
Page 2 of 12
<PAGE> 3
<TABLE>
HUFFY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts In Thousands)
<CAPTION>
June 30, December 31,
1999 1998
------------ ------------
ASSETS
- ------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 12,277 $ 17,834
Accounts and notes receivable, net 95,649 70,149
Inventories 68,227 46,442
Prepaid expenses and federal income taxes 26,149 20,425
Net assets of discontinued operations -- 70,338
-------- --------
Total current assets 202,302 225,188
-------- --------
Property, plant and equipment, at cost 149,076 177,992
Less: accumulated depreciation and amortization 92,029 114,260
-------- --------
Net property, plant and equipment 57,047 63,732
Excess of cost over net assets acquired, net 31,094 31,985
Deferred federal income taxes 3,721 3,565
Other assets 4,202 4,388
-------- --------
$298,366 $328,858
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable $ 55,450 $ 99,240
Current installments of long-term obligations 379 6,411
Accounts payable 68,953 32,603
Accrued expenses and other current liabilities 41,477 36,641
-------- --------
Total current liabilities 166,259 174,895
-------- --------
Long-term obligations, less current installments 23,765 29,784
Other long-term liabilities 29,425 31,028
-------- --------
Total liabilities 219,449 235,707
-------- --------
Shareholders' equity:
Preferred stock -- --
Common stock 16,655 16,633
Additional paid-in capital 66,135 65,892
Retained earnings 84,430 78,967
Less: cost of treasury shares 88,303 68,341
-------- --------
Total shareholders' equity 78,917 93,151
-------- --------
$298,366 $328,858
======== ========
</TABLE>
Page 3 of 12
<PAGE> 4
<TABLE>
HUFFY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar Amounts in Thousands)
<CAPTION>
Six Months Ended
June 30,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings from continuing operations $ 4,726 $ 1,759
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 6,862 7,755
Loss (gain) on sale of property, plant and equipment 601 (1)
Deferred federal income tax expense (2,499) --
Changes in assets and liabilities:
Accounts and notes receivable, net (25,500) (16,256)
Inventories (21,785) (20,549)
Prepaid expenses and federal income taxes (3,380) 1,322
Other assets (23) (112)
Accounts payable 36,350 16,432
Accrued expenses and other current liabilities 5,113 13,253
Other long-term liabilities (1,864) 1,453
Other -- (18)
-------- --------
Net cash provided by (used in) continuing operating (1,399) 5,038
activities
Discontinued operations:
Gain on disposal of discontinued operations 3,028 --
Income (loss) from discontinued operations (312) 2,001
Items not affecting cash, net -- 2,673
Cash provided by (used in) discontinued operations 70,338 (8,058)
-------- --------
Net cash provided by (used in) discontinued 73,054 (3,384)
operating activities
Net cash provided by operating activities 71,655 1,654
========================================================================================================
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (5,946) (6,710)
Proceeds from sale of property, plant and equipment 6,267 11
Acquisition of businesses -- (11,917)
-------- --------
Net cash provided by (used in) investing activities 321 (18,616)
=========================================================================================================
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in short-term borrowings (43,790) 35,670
Reduction of long-term debt (12,051) (4,456)
Issuance of common shares 265 1,357
Purchase of treasury shares (19,962) (12,281)
Dividends paid (1,995) (2,182)
-------- --------
Net cash provided by (used in) financing activities (77,533) 18,108
=========================================================================================================
Net change in cash and cash equivalents
Cash and cash equivalents: (5,557) 1,146
Beginning of the year 17,834 2,110
-------- --------
End of the six month period $ 12,277 $ 3,256
=========================================================================================================
</TABLE>
Page 4 of 12
<PAGE> 5
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Dollar Amounts in Thousands)
Note 1: Footnote disclosure which would substantially duplicate the disclosure
contained in the Annual Report to Shareholders for the year ended
December 31, 1998 has not been included. The unaudited interim
consolidated financial statements reflect all adjustments which, in the
opinion of management, are necessary to a fair statement of the results
for the periods presented and to present fairly the consolidated
financial position of Huffy Corporation as of June 30, 1999. All such
adjustments are of a normal recurring nature.
Note 2: Inventories of Huffy Bicycle Company and Huffy Sports Company are
valued using the dollar value LIFO method and, as a result, it is
impractical to separate inventory values between raw materials,
work-in-process and finished products on an interim basis.
Note 3: During the second quarter of 1998, the Company implemented a plan to
maximize operational efficiency by eliminating excess production
capacity and reducing annual operating expenses at the Huffy Bicycle
Company. The plan includes the closure of the Celina, Ohio
manufacturing facility to reduce capacity; the leasing of a parts
fabrication facility to support other plants; and the continuation of
its import program for opening price point bikes. In 1999, these
charges included severance and related benefits ($1,262); facility
shutdown and asset write-downs ($95); and new facility startup and
equipment, personnel, and inventory relocation ($1,351).
Note 4: In March 1999, Huffy Corporation reached an agreement with U.S.
Industries, Inc. to sell the assets of its Harrisburg, Pennsylvania
based lawn and garden tools and wheelbarrows business, True Temper
Hardware Company, for $100 million. The results for True Temper
Hardware Company have been classified as discontinued operations in the
Consolidated Statements of Earnings. The assets and liabilities of
discontinued operations have been classified in the December 31, 1998
Consolidated Balance Sheet as "Net assets of discontinued operations."
Summarized balance sheet data for discontinued operations is as
follows:
<TABLE>
December 31, 1998
-----------------
<S> <C>
Current assets $61,313
Property, plant & equipment, net 20,639
Other assets 2,271
-------
Total assets 84,223
Current liabilities 13,885
-------
Net assets $70,338
=======
</TABLE>
Page 5 of 12
<PAGE> 6
Note 5. The Company has classified its operations into the following business
segments:
Sporting Goods - bicycles, backboards and related products.
Service - in-store assembly, repair, and display services and inventory
counting services
<TABLE>
Earnings (loss)
Before Income
Sales Taxes
--------- ---------------
<S> <C> <C>
JUNE 30, 1999
Sporting Goods $ 196,524 $3,245
Service 125,314 8,615
Eliminations (374)
Interest, net (2,954)
General Corporate (1,222)
========= ======
$ 321,464 $7,684
========= ======
JUNE 30, 1998
Sporting Goods $ 223,986 $2,426
Service 102,469 7,277
Eliminations (508)
Interest, net (2,920)
General Corporate (3,979)
========= ======
$ 325,947 $2,804
========= ======
</TABLE>
Note 6: The components of comprehensive income are immaterial for disclosure.
Page 6 of 12
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
THREE AND SIX MONTHS ENDED JUNE 30, 1999
COMPARED TO THE
THREE AND SIX MONTHS ENDED JUNE 30, 1998
(Dollar Amounts in Thousands, Except Per Share Data)
NET EARNINGS (LOSS)
- -------------------
Huffy Corporation ("Huffy" or "Company") had net earnings from continuing
operations of $5,291or $.50 per common share for the quarter ended June 30, 1999
compared to $(772), or ($0.06) per common share for the same period last year.
For the six months ended June 30, 1999 net earnings were $4,726 compared to
$1,759 for the same period in 1998. The Service segment had record net earnings
resulting from the positive impact of the 1998 Inventory Auditors acquisition,
productivity enhancements and a one-time credit resulting from a pension plan
benefit modification. This increase in net earnings was partially offset by
decreased earnings in the Sporting Goods segment due to bicycle price deflation
and overall sales softness of the sporting goods market.
NET SALES
- ---------
Net sales from continuing operations for the quarter ended June 30, 1999 were
$172,131, a decrease from sales of $182,024 for the same quarter in 1998. Net
sales in the Sporting Goods segment decreased $20,802 from the same period in
the prior year. Net sales decreased at Huffy Bicycle Company due to continued
price deflation and at Huffy Sports Company due to soft demand for basketball
systems coupled with a shift toward lower price point units. In the Services
segment, net sales increased $10,751 primarily due to increased demand for
merchandising services and the impact of the June 1998 Inventory Auditors
acquisition.
For the six months ended June 30, 1999 net sales from continuing operations were
$321,464 compared to $325,947 for the same period in 1998. In the Sporting Goods
segment, net sales decreased $27,462 due to price deflation in the bicycle
marketplace and an overall softness of the sporting goods market. In the Service
segment, net sales increased $22,845 due to the positive impact of the 1998
Inventory Auditors acquisition along with increased demand for assembly and
merchandising services.
GROSS PROFIT
- ------------
Gross profit for the quarter ended June 30, 1999 was $28,554, down from the
$37,755 achieved in the second quarter of 1998. Gross profit for the second
quarter of 1999 was 16.6% of net sales compared to 20.7% for the second quarter
of 1998. Gross profit as a percent of net sales for the Sporting Goods segment
decreased 7.0%, primarily due to a lower margin product mix and unfavorable
pricing pressures. In the Services for Retail segment gross margins as a percent
of net sales declined 1.2% primarily due to capacity constraints experienced by
Washington Inventory Service caused by a significant volume increase in
inventory services and record low unemployment across the nation.
For the six months ended June 30, 1999 gross profit was $50,540 compared to
$62,715 for the same period in 1998. As a percent of net sales gross profit for
the six months ended June 30, 1999 was 15.7% compared to 19.2% for the same
period in 1998. For the Sporting Goods segment gross profit as a percent of net
sales decreased 4.8% primarily due to product mix and worldwide bicycle industry
competitiveness, particularly with imports from Asia. Gross profit as a percent
of net sales for the Service segment decreased 2.1%, primarily
Page 7 of 12
<PAGE> 8
as a result of growth related cost increases due to a tight labor force coupled
with increased worker's compensation and medical charges.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling, general and administrative expenses were $18,236 for the second quarter
of 1999, compared to $24,614 for the same period in 1998. As a percent of net
sales, selling, general and administrative expenses for the quarter ended June
30, 1999 were 10.6% compared to 13.5% for the second quarter of 1998. In the
Sporting Goods segment the decrease in selling, general and administrative
expenses for the quarter ended June 30, 1999 is primarily the result of volume
related decreases in both commissions and expenses. Selling, general and
administrative expenses in the Service segment decreased as a result of a
one-time credit related to a pension plan benefit modification.
For the six months ended June 30, 1999, selling, general and administrative
expenses were $37,283 compared to $43,971 for the same period in 1998. As a
percent of net sales, selling, general and administrative expenses for the six
months ended June 30, 1999 were 11.6% compared to 13.5% in 1998. The decrease in
selling, general and administrative expenses is primarily due to the continued
emphasis on Continuous Rapid Improvement, volume related cost reductions in the
Sporting Goods segment, and a one-time credit resulting from a pension plan
benefit modification in the Service segment.
PLANT CLOSURE AND MANUFACTURING RECONFIGURATION
- -----------------------------------------------
During the second quarter of 1998, the Company implemented a plan to maximize
operational efficiency by eliminating excess production capacity and reducing
annual operating expenses at the Huffy Bicycle Company. The plan included the
closure of the Celina, Ohio manufacturing facility to reduce capacity; the
leasing of a parts fabrication facility to support other plants; and the
continuation and expansion of its import program for opening price point bikes.
In 1999, these charges included facility shutdown and asset write-downs $(95);
new facility startup and equipment, personnel, and inventory relocation
$(1,351); and severance and related benefits $(1,262).
SALE OF TRUE TEMPER HARDWARE
- ----------------------------
In March 1999, the Company sold the assets of its lawn and garden tools and
wheelbarrows business, True Temper Hardware Company to U.S. Industries, Inc. The
purchase price was $100 million cash and is subject to certain post-closing
adjustments based on closing date financial statements.
The net earnings from continuing operations excludes results and gain from the
Company's lawn and garden and wheelbarrow business. The lawn and garden and
wheelbarrow business had net sales of $24,480 and a net loss of $(312), or
$(0.03) per common share for the six months ended June 30, 1999, compared to net
sales of $76,668 and net earnings of $2,001,or $0.16 per common share for the
same period in 1998. For the second quarter of 1998, the lawn and garden and
wheelbarrow business had net sales of $38,286 and net earnings of $746, or $0.06
per common share. The 1999 gain on the sale of the lawn and garden and
wheelbarrow business was $3,028, or $0.27 per common share.
YEAR 2000 COMPLIANCE
- --------------------
Many existing computer programs used globally use only two digits to identify a
year in the date field. These programs, if not corrected, could fail or create
erroneous results after the century date changes on January 1, 2000. This Year
2000 issue is believed to affect virtually all companies, including Huffy.
Huffy relies on computer-based technology and uses a variety of third-party
hardware and proprietary and third-party software. In addition to the
information technology ("IT") systems, the Company's operations rely on various
non-IT equipment and systems that contain embedded computer technology. During
1996, the Company began evaluating and assessing all of its internal
date-sensitive systems and equipment for Year
Page 8 of 12
<PAGE> 9
2000 compliance. The assessment phase of the Year 2000 project is substantially
complete and included both information technology equipment and non-information
technology equipment. Based on such assessment, the Company determined that it
was necessary to modify or replace a portion of its information systems. For its
major IT systems, as of June 30, 1999, the Company is approximately 97% complete
in the modification or replacement of its critical software and hardware and
expects all such modifications and replacements to be completed by the Fall of
1999. After completion of this phase, the Company plans to test and implement
its IT systems. As of June 30, 1999, the Company has completed testing of
approximately 95% of its remediated systems. Completion of the testing and
implementation of all remediated systems is expected during the fall of 1999.
The Company has also communicated with significant suppliers and customers to
determine their Year 2000 compliance and the extent to which the Company is
vulnerable to any third-party Year 2000 issues. Essentially all significant
suppliers and customers have replied to our inquiries in writing indicating that
they expect to be Year 2000 compliant on a timely basis.
The Company is actively involved in the assessment and development of
contingency plans and anticipates by December 31, 1999 contingency plans will be
developed for mission critical systems. Based upon current information,
management believes that the most likely worst case scenario would be isolated,
short business interruptions, having minimal impact on the results of
operations.
The Company's Year 2000 compliance program is directed primarily towards
ensuring that the Company will be able to continue to perform four critical
functions: (1) produce and ship goods, (2) order and receive inventory, (3) pay
its employees and vendors, and (4) schedule and perform service business. It is
difficult, or impossible, to assess with any degree of accuracy, the impact on
any of these four areas of the failure of one or more aspects of the Company's
compliance program.
Because the Company began this process in a timely fashion, and because it
regularly evaluates and upgrades its IT capabilities, the total estimated cost
of the Year 2000 project alone is not material and has been funded by operating
cash flows. The Company's remaining Year 2000 budget does not include material
amounts for hardware and software replacement.
The novelty and complexity of the Year 2000 issues, the proposed solutions, and
the Company's dependence on the technical skills of employees and independent
contractors and on the representations and preparedness of third parties are
among the factors that could cause the Company's efforts to be less than fully
effective. Moreover, Year 2000 issues present a number of risks that are beyond
the Company's reasonable control, such as the failure of utility companies to
deliver electricity, the failure of telecommunications companies to provide
voice and data services, the failure of financial institutions to process
transactions and transfer funds, the failure of vendors to deliver merchandise
or perform services required by the Company and the collateral effects on the
Company of the effects of Year 2000 issues on the economy in general or on the
Company's business partners and customers in particular. Although the Company
believes that its Year 2000 compliance program is designed to appropriately
identify and address those Year 2000 issues that are subject to the Company's
reasonable control, there can be no assurance that the Company's efforts in this
regard will be fully effective or that Year 2000 issues will not have a material
adverse effect on the Company's business, financial condition or results of
operations.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The sale of True Temper Hardware Company has favorably impacted the Company's
liquidity and capital resources as of June 30, 1999 by generating $73 million in
cash which was primarily used to reduce both short and long term borrowings and
repurchase common stock. The Company's balance sheet reflects fluctuations
Page 9 of 12
<PAGE> 10
in both current assets and current liabilities attributable to seasonal changes
in the operations of its businesses.
ENVIRONMENTAL
- -------------
As disclosed in the Company's Annual Report to Shareholders for the year ended
December 31, 1998, the Company, along with others, has been designated as a
potentially responsible party (PRP) by the U.S. Environmental Protection Agency
(the "EPA") with respect to claims involving the discharge of hazardous
substances into the environment in the Baldwin Park operable unit of the San
Gabriel Valley Superfund site ("Superfund"). Currently, the Company, along with
other PRPs is negotiating an agreement with local water companies to develop a
water treatment and supply project intended to result in a settlement by and
among the PRPs, the local water companies, the EPA, and the state of California.
At this time, the relative liabilities of the parties are uncertain. The
Company's total accrual for estimated environmental remediation costs related to
the Superfund site and other potential environmental liabilities is
approximately $6,100 at June 30, 1999. Management expects that the majority of
expenditures relating to costs currently accrued will be made over the next two
to ten years. In developing its estimate of environmental remediation costs, the
Company considers, among other things, currently available technological
solutions, alternative cleanup methods and risk-based assessments of the
contamination and, as applicable, an estimation of its proportionate share of
remediation costs. The Company may also make use of external consultants, and
consider, when available, estimates by other PRPs and governmental agencies and
information regarding the financial viability of other PRPs. The Company
believes it is unlikely that it will incur substantial previously unanticipated
costs as a result of failure by other PRPs to satisfy their responsibilities for
remediation costs. On May 15, 1997, the Company, along with other PRPs, received
special notice letters from the EPA requesting a good faith offer of remediation
for the Superfund. A group of PRPs, including the Company, filed a good faith
offer on July 2, 1999 and are awaiting a response from the EPA. Based upon
information currently available, such future costs are not expected to have a
material adverse effect on the Company's financial condition, liquidity, or its
ongoing results of operations. However, such costs could be material to results
of operations in a future period.
Please see the Company's meaningful cautionary statements regarding forward
looking statements contained in the Company's report on Form 8-K filed with the
Securities and Exchange Commission on April 1, 1998 which is hereby incorporated
herein by reference.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
The Company, along with numerous California water companies and other PRPs for
the Baldwin Park Operable Unit of the San Gabriel Valley Superfund, has been
named in eight civil lawsuits which allege claims related to the contaminated
groundwater in the Azusa, California area. On March 12, 1998, the California
Public Utilities Commission ("PUC") issued an Order Instituting Investigation
("OII"), stating that because the toxic tort lawsuits relate to water quality,
public health and safety, and the operations and practices of the public
utilities subject to the PUC's jurisdiction, the PUC intends to pursue its
jurisdiction by investigating the operations and practices of the named
defendant public utilities, their compliance with the PUC standards and policies
regarding water quality, and whether those standards and policies regarding
water quality continue to be adequate to protect the public health and safety.
The PUC investigation and decision is expected to conclude in September, 1999.
As a result of the PUC OII, a majority of the lawsuits were stayed pending the
PUC determination. The plaintiffs appealed the decisions to stay. Following a
hearing on the matter, the Court of Appeal took the matter under submission and
a decision is pending. To date, the matters are in their initial stage. It is
impossible to currently predict the outcome of the litigation.
Page 10 of 12
<PAGE> 11
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits - The Exhibits, as shown in the "Index of Exhibits", attached
hereto as page 12, are filed as a part of this Report.
SIGNATURES
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.
HUFFY CORPORATION, registrant
August 12, 1999 /s/ Timothy G. Howard
- --------------------------------- -------------------------------------
Date Timothy G. Howard
Vice President - Corporate Controller
(Principal Accounting Officer)
Page 11 of 12
<PAGE> 12
INDEX OF EXHIBITS
Exhibit
No. Item
- ------- -------------------------
(2) Not applicable
(3) Not applicable
(4) Not applicable
(10) Not applicable
(11) Not applicable
(15) Not applicable
(18) Not applicable
(19) Not applicable
(22) Not applicable
(23) Not applicable
(24) Not applicable
(27) Financial Data Schedule
(99) Not applicable
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 12,277
<SECURITIES> 0
<RECEIVABLES> 97,936
<ALLOWANCES> (2,287)
<INVENTORY> 68,227
<CURRENT-ASSETS> 202,302
<PP&E> 149,076
<DEPRECIATION> (92,029)
<TOTAL-ASSETS> 298,366
<CURRENT-LIABILITIES> 166,259
<BONDS> 23,765
0
0
<COMMON> 16,655
<OTHER-SE> 62,262
<TOTAL-LIABILITY-AND-EQUITY> 298,366
<SALES> 321,464
<TOTAL-REVENUES> 321,464
<CGS> 270,924
<TOTAL-COSTS> 310,915
<OTHER-EXPENSES> (89)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,072
<INCOME-PRETAX> 7,684
<INCOME-TAX> 2,958
<INCOME-CONTINUING> 4,726
<DISCONTINUED> (312)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,442
<EPS-BASIC> .66
<EPS-DILUTED> .66
</TABLE>
