<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1995
Commission File Number 0-8822
Cavco Industries, Inc.
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(Exact name of registrant as specified in its charter)
Arizona 86-0214910
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
301 East Bethany Home Road, Suite C-178 Phoenix, Arizona 85012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 265-0580
n/a
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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 CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
<TABLE>
<CAPTION>
Class Shares Outstanding
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<S> <C>
Common Stock, $.05 Par Value 3,382,977
</TABLE>
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CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
PART I. Consolidated Financial Information Page No.
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<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
December 31, 1995 and September 30, 1995 3-4
Consolidated Statements of Earnings
Quarter ended December 31, 1995 and 1994 5
Consolidated Statements of Cash Flows
Quarter ended December 31, 1995 and 1994 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 8
PART II. Other Information 9
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
2
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CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
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<S> <C> <C>
Current Assets
Cash $ 5,231,481 8,140,730
Accounts and notes receivable 9,275,676 4,185,533
Inventories
Manufacturing:
Raw materials 3,212,511 2,971,581
Work in process 840,153 807,949
Held for sale or lease 89,340 80,438
Real estate held for sale 6,778,714 6,133,089
----------- ----------
Total inventories 10,920,718 9,993,057
----------- ----------
Prepaid expenses 948,603 834,713
Deferred tax charge 552,981 552,981
----------- ----------
Total current assets 26,929,459 23,707,014
----------- ----------
Property. plant and equipment, at cost 14,437,761 14,285,539
Less accumulated depreciation 4,968,560 4,666,351
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Net property, plant and equipment 9,469,201 9,619,188
----------- ----------
Assets under lease 15,816,076 14,285,700
Less accumulated depreciation 684,129 596,007
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Net assets under lease 15,131,947 13,689,693
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Notes receivable, net of current portion 1,353,420 1,162,415
Investment in partnerships 2,889,400 2,534,703
Other assets 824,114 1,098,926
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$56,597,541 51,811,939
=========== ==========
</TABLE>
3
<PAGE> 4
CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
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<S> <C> <C>
Current liabilities
Notes payable $ 1,251,022 1,022,864
Current installments of long term debt 3,244,240 2,444,248
Accounts payable 3,709,943 5,009,125
Accrued expenses 6,834,992 6,939,129
Income taxes 1,033,004 42,418
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Total current liabilities 16,073,201 15,457,784
----------- ----------
Long term debt, excluding current installments 15,192,907 12,692,661
Deferred taxes and other liabilities 1,285,236 1,278,299
Stockholders' equity:
Common stock, $.05 par value; 8,000,000 shares
authorized; 3,382,977 shares issued and
outstanding 169,149 169,149
Capital in excess of par 312,054 312,054
Retained earnings 23,564,994 21,901,992
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Net stockholders' equity 24,046,197 22,383,195
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$56,597,541 51,811,939
=========== ==========
</TABLE>
4
<PAGE> 5
CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
Quarter Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Net sales $30,899,885 30,140,661
Cost of sales 24,355,984 24,098,177
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Gross profit 6,543,901 6,042,484
Selling, general and administrative expenses 3,547,674 3,405,971
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Operating income 2,996,227 2,636,513
Other income (expense)
Interest income 77,040 128,710
Interest expense (343,893) (65,940)
Miscellaneous 50,814 27,566
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(216,039) 90,336
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Income from continuing operations
before income taxes 2,780,188 2,726,849
Income taxes 1,107,420 1,098,700
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Income from continuing operations 1,672,768 1,628,149
Loss from discontinued operations, net of
tax credit of $6,800 in 1995 and $49,000 in 1994 (9,766) (166,415)
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Net income $1,663,002 1,461,734
=========== ==========
Income per share from continuing operations .49 .48
=== ===
Income per share from discontinued operations -- (.05)
====
Net income per share .49 .43
=== ===
</TABLE>
5
<PAGE> 6
CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Quarter Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Net cash used in operations $(4,568,032) (5,430,738)
Cash flows from investing activities:
Purchases of property, plant and equipment (298,906) (752,952)
Purchases of assets under lease (2,141,691) (1,504,399)
Proceeds from sales of property, plant and equipment 103,992 --
Proceeds from sales of assets under lease 217,926 155,013
Proceeds from collections on notes receivable 603,763 146,997
Additions to investment in partnerships (354,697) (1,036,809)
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Net cash used in investing activities (1,869,613) (2,992,150)
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Cash flows from financing activities:
Borrowings under lines of credit 1,352,635 411,275
Repayments on lines of credit (1,124,477) (680,601)
Proceeds from long term borrowings 4,000,000 --
Repayment of long term debt (699,762) (193,847)
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Net cash provided by (used in) financing activities 3,528,396 (463,173)
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Decrease in cash
(2,909,249) (8,886,061)
Cash at beginning of period 8,140,730 9,006,600
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Cash at end of period $ 5,231,481 120,539
=========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest $ 492,509 147,995
Income taxes $ 117,634 2,517,000
</TABLE>
6
<PAGE> 7
CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements include the accounts of the Company
and its subsidiaries, Action Healthcare Management Services, Inc.
(Action), Sun Built Homes, Inc. (Sun Built) and National Security
Containers, Inc. (NSC).
The information reflected in the consolidated financial statements has not
been examined by independent accountants and necessarily in some respects
is based upon estimates which are subject to adjustment in annual closing
of accounts.
In the opinion of the Company, all adjustments (consisting of only normal
recurring adjustments and primary eliminations of all significant
intercompany transactions) necessary to present fairly the financial
position for the periods presented have been included.
These financial statements have been prepared in accordance with the
instructions to the Form 10-Q and therefore do not include all information
and footnotes necessary for a fair presentation in conformity with
generally accepted accounting principles. These financial statements
should be read in conjunction with the financial statements and related
disclosures contained in the Corporation's Annual Report on Form 10-K for
the year ended September 30, 1995, filed with the Securities and Exchange
Commission.
2. The number of shares used in computing earnings per common share for both
quarters presented, based on the weighted average number of shares
outstanding, was 3,382,977. The number of shares reflects a three-for-two
stock split which occured in December 1994.
3. The results of operations for the quarter ended December 31, 1995 are not
necessarily indicative of the results to be expected for the full year.
7
<PAGE> 8
CAVCO INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
First Quarter 1995 Compared to First Quarter 1994
For the quarter ended December 31, 1995, the Company's net sales increased
$759,224 (2.5%) over the corresponding quarter of the previous year. While
manufactured housing sales remained comparable, significant growth emanated from
the leasing division. NSC's revenues increased from $1,077,698 for the first
quarter of 1994 to $2,250,897 for the first quarter of 1995. The growth is
contributed by three new branch locations. In addition, Sun Built's sales
increased over $700,000 from the prior year quarter, a result of a single
subdivision project which completed in December.
Gross profit margins increased to 21.2 percent compared to 20.0 percent reported
for the same quarter of the previous year. The increase is due, in large part,
to the growing impact of the leasing division, which attained a 50.6 percent
gross margin for the current quarter. Margins in the manufacturing operations
remained comparable between years (18.1% in 1995, 18.8% in 1994).
Selling, general and administrative expenses increased in 1995 to $3,547,674,
compared to $3,405,971 in 1994, but remain consistent as a percent of sales. The
increase is attributed primarily to additional NSC branch locations. The
increase in interest expense is a result of borrowings to fund additions to the
lease fleet.
The Company recognized a $.01 increase in earnings per share from continuing
operations over that for the same quarter of the previous year: $.49 compared to
$.48. Income from continuing operations was $1,672,768 and $1,628,149 for the
first quarters of 1995 and 1994, respectively. Net income increased from
$1,461,734 for the first quarter of 1994 to $1,663,002 for the first quarter of
1995, providing a $.06 increase in net income per share: $.49 compared to $.43.
Liquidity and Capital Resources
The Company finished the quarter ended December 31, 1995 with cash of $5,231,481
and working capital of $10,856,258. Net cash flow from operations was negative
due primarily to a $5.5 million increase in accounts receivable, in the
manufacturing and leasing operations. The cash and working capital positions
tend to fluctuate due to the expansion of the lease fleet.
The Company borrowed $1,352,635 from its lines of credit during the quarter. The
Company used $800,000 to temporarily fund some of the lease fleet expansion and
the increase in receivables, while Sun Built used $552,635 from its line for
additions to real estate held for sale. The Company also received $4,000,000
from its long term funding source. Uses of cash during the quarter include
$2,141,691 for additions to the lease fleet, $354,697 for additions to
investment in partnerships, and $298,906 for purchases of property, plant and
equipment. The Company also repaid $1,124,477 on its lines of credit and
$699,762 of long term debt.
The Company continues to expand its lease fleet, and has $3,000,000 available to
draw from its long term funding source. Other capital expenditures for the
remainder of the year are expected to be only those necessary for normal
replacement of machinery and equipment. The Company believes that its existing
cash, available lines of credit, and cash generated from operations will be
sufficient to meet capital expenditure and debt service requirements.
8
<PAGE> 9
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EX-27 Financial Data Schedule - Three months ended December 31,
1995
(b) Reports on Form 8-K
The Company did not file any Form 8-K's during the quarter ended
December 31, 1995.
There has not been any additional information with respect to items listed in
the Index, related to the periods being reported, which has not been previously
reported or which, in the opinion of management, is of significance to
investors.
9
<PAGE> 10
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.
Cavco Industries, Inc.
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(Registrant)
Date February 12, 1996 /s/ Robert Ward
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(Signature)
Robert Ward, Vice President,
Treasurer and Chief Financial Officer
10
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q FOR QUARTER ENDED DECEMBER 31, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD START> OCT-01-1995
<PERIOD-END> DEC-01-1995
<CASH> 5,231,481
<SECURITIES> 0
<RECEIVABLES> 9,486,664
<ALLOWANCES> 210,988
<INVENTORY> 10,920,718
<CURRENT-ASSETS> 26,929,459
<PP&E> 14,437,761
<DEPRECIATION> 4,968,560
<TOTAL-ASSETS> 56,597,541
<CURRENT-LIABILITIES> 16,073,201
<BONDS> 15,192,907
0
0
<COMMON> 169,149
<OTHER-SE> 23,877,048
<TOTAL-LIABILITY-AND-EQUITY> 56,597,541
<SALES> 29,049,495
<TOTAL-REVENUES> 30,899,885
<CGS> 23,571,721
<TOTAL-COSTS> 24,355,984
<OTHER-EXPENSES> 3,547,674
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343,893
<INCOME-PRETAX> 2,780,188
<INCOME-TAX> 1,107,420
<INCOME-CONTINUING> 1,672,768
<DISCONTINUED> (9,766)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,663,002
<EPS-PRIMARY> .49
<EPS-DILUTED> .49
</TABLE>
