FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2054
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended June 30, 1996
OR
( ) TRANSITION PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________________
Commission File Number 0-2642
DE TOMASO INDUSTRIES, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-0466460
- --------------------------------------------- ------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification No.)
P.0. Box 856, 107 Monmouth Street, Red Bank, N. J. 07701
- --------------------------------------------------------------------------------
(Address of principal executive offices - Zip Code)
(908) 842-7200
---------------------------------------------------
(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 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. Common Stock $2.50 par
value, 4,744,332 shares.
<PAGE>
PART I
FINANCIAL INFORMATION
2
<PAGE>
De Tomaso Industries Inc.
Consolidated Condensed Balance Sheets
June 30, 1996
<TABLE>
<CAPTION>
June 30 June 30 December 31
1996 1996 1995
US$'000 Lire m. Lire m.
Unaudited Unaudited Note
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents....................................... 11,771 18,065 24,137
Marketable securities, at cost.................................. 3,193 4,901 -
Receivables..................................................... 29,884 45,872 39,726
Trade, less allowance of Lit. 1,149 at June 30, 1996........ 16,956 26,027 23,725
Finance receivables, less allowance of Lit 2,200............ 4,359 6,691 7,597
Receivables from related parties............................ 5,793 8,892 3,624
Other receivables........................................... 2,776 4,262 4,780
Inventories..................................................... 23,406 35,928 30,717
Raw materials, spare parts and work-in-process.............. 15,451 23,718 21,469
Finished products........................................... 7,954 12,210 9,248
Prepaid expenses................................................ 964 1,479 1,109
-------- --------- --------
TOTAL CURRENT ASSETS............................................ 69,218 106,245 95,689
-------- --------- --------
Property, plant and equipment .................................. 6,413 9,846 7,709
At cost .................................................... 22,749 34,921 35,884
Less allowances for depreciation............................ (16,336) (25,075) (28,175
Trademarks and other intangible assets, net of
amortization of Lit. 500.................................... 2,932 4,500 4,750
Goodwill.................................................... 1,054 1,618 1,459
Real estate for sale........................................ 14,332 22,000 34,227
Investments in unconsolidated companies..................... 1,427 2,190 2,205
Marketable and other securities and investments,
at cost................................................... 10,831 16,625 17,176
Other assets................................................ 9,593 14,726 19,615
--------- -------- --------
TOTAL ASSETS $ 115,800 Lit. 177,750 Lit. 182,830
========= ======== ========
</TABLE>
Note: The balance sheet as at December 31, 1995 has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles.
See Notes to Consolidated Financial Statements.
3
<PAGE>
De Tomaso Industries Inc.
Consolidated Condensed Balance Sheets
June 30, 1996
<TABLE>
<CAPTION>
June 30 June 30 December 31
1996 1996 1995
US$'000 Lire m. Lire m.
Unaudited Unaudited Note
<S> <C> <C> <C>
LIABILITIES
Advances from banks............................................. 18,531 28,445 18,538
Advances from banks for finance activities...................... 4,924 7,558 8,621
Accounts payable................................................ 14,000 21,490 23,570
Accrued expenses and other payables............................. 7,464 11,455 10,218
Current portion of long-term real estate debt................... 3,201 4,913 9,550
Current portion of other long-term debt......................... 1,327 2,037 1,866
------- ------- -------
TOTAL CURRENT LIABILITIES 49,447 75,898 72,363
------- ------- -------
Long-term real estate debt, less current portion................ 4,713 7,235 9,712
Other long-term debt, less current portion...................... 4,754 7,297 8,386
Termination indemnities......................................... 5,459 8,379 8,231
Provision for claims............................................ 2,081 3,195 3,595
Minority interests.............................................. 9,621 14,768 16,773
Common stock subject to repurchase.............................. 8,094 12,424 12,549
SHAREHOLDERS' EQUITY............................................ 31,631 48,554 51,221
Common stock, par value $2.50 per share:
Authorized 10,000,000 shares; 4,744,332 (12/31/95 -
4,714,332) shares issued and outstanding
less 776,530 subject to repurchase........................... 4,422 6,788 6,744
Additional paid in capital...................................... 46,748 71,759 71,332
Treasury stock, at cost......................................... (7,704) (11,826) (11,826)
Deficit......................................................... (13,212) (20,281) (15,926)
Equity adjustment from translation.............................. 1,174 1,803 711
Accretion expense and related exchange gains.................... 203 311 186
--------- -------- --------
$ 115,800 Lit. 177,750 Lit. 182,830
========= ======== ========
Note: The balance sheet as at December 31, 1995 has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles.
See Notes to Consolidated Financial Statements.
4
<PAGE>
De Tomaso Industries, Inc.
Unaudited Consolidated Condensed Statements of Operations
6 Months Ended June 30, 1996 and 1995
June 30 June 30 June 30
1996 1996 1995
US$'000 Lire m. Lire m.
<S> <C> <C> <C>
Net sales....................................................... 31,922 49,001 29,466
Cost of sales................................................... (27,442) (42,123) (26,966)
-------- -------- --------
4,480 6,878 2,500
Selling, general and administrative expenses.................... (6,395) (9,817) (5,830)
Rental Income................................................... 489 750 -
Other income/(expense), net .................................... (57) (87) -
-------- -------- --------
(1,483) (2,276) (3,330)
Interest expense................................................ (2,070) (3,177) (1,585)
Interest income................................................. 1,328 2,039 1,663
-------- -------- --------
Loss from continuing operations before
income taxes and minority interests.......................... (2,225) (3,414) (3,252)
Income taxes.................................................... (386) (592) -
-------- -------- --------
Loss from continuing operations before
minority interests........................................... (2,611) (4,006) (3,252)
Minority interests.............................................. (227) (349) (259)
-------- -------- --------
Net (loss)/income............................................... (2,838) (4,355) (3,511)
======== ======== ========
EARNINGS/(LOSS) PER SHARE US $ Lire Lire
Net income/(loss) per share..................................... $ (0.60) Lit. (918) Lit. (1,706)
======== ======== ========
Average number of common shares and
equivalents outstanding during the period.................... 4,744,332 4,744,332 2,057,446
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
De Tomaso Industries, Inc.
Unaudited Consolidated Condensed Statements of Operations
3 Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
June 30 June 30 June 30
1996 1996 1995
US$'000 Lire m. Lire m.
<S> <C> <C> <C>
Net sales....................................................... 16,510 25,343 19,616
Cost of sales................................................... (13,173) (20,220) (15,948)
-------- -------- --------
3,337 5,123 3,668
Selling, general and administrative expenses.................... (3,528) (5,416) (3,475)
Rental Income................................................... 244 375 -
Other income/(expense), net .................................... (142) (218) -
-------- -------- --------
(89) (136) 193
Interest expense................................................ (977) (1,449) (811)
Interest income................................................. 905 1,389 649
-------- -------- --------
Loss from continuing operations before
income taxes and minority interests.......................... (161) (246) 31
Income taxes.................................................... (335) (514) -
-------- -------- --------
Loss from continuing operations before
minority interests........................................... (496) (760) 31
Minority interests.............................................. (124) (191) (100)
-------- -------- --------
Net (loss)/income............................................... (620) (951) (69)
======== ======== ========
EARNINGS/(LOSS) PER SHARE US $ Lire Lire
Net income/(loss) per share..................................... $ (0.13) Lit. (200) Lit. (34)
======== ======== ========
Average number of common shares and
equivalents outstanding during the period.................... 4,744,332 4,744,332 2,057,446
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
De Tomaso Industries, Inc.
Unaudited Consolidated Condensed Statements of Operations
6 Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
June 30 June 30 June 30
1996 1996 1995*
US$'000 Lire m. Lire m.
<S> <C> <C> <C>
Net loss...................................................... (2,838) (4,355) (3,511)
Adjustments to reconcile net loss to net cash
(used)/provided by operating activities................... (4,658) (7,152) (11,364)
--------- --------- ---------
Net cash used by operating activities......................... (7,496) (11,507) (14,875)
--------- --------- ---------
Investing activities:
Net increase in investments and marketable securities......... (1,887) (2,896) (7,168)
Net cash acquired on purchase of subsidiaries................. 358 549 -
Deferred receipts from sale of Maserati....................... - - 27,000
Purchases of property, plant and equipment.................... (2,093) (3,214) (1,250)
--------- --------- ---------
Net cash (used)/provided by investing activities.............. (3,622) (5,561) 18,582
--------- --------- ---------
Financing activities:
Increase/(decrease) in advances from banks.................... 5,762 8,844 (5,242)
Receipt of tax receivable..................................... 3,426 5,259 -
Proceeds from long-term debt.................................. 502 771 818
Principal payments of long-term debt.......................... (2,446) (3,754) -
--------- --------- ---------
Net cash provided/(used) by financing activities.............. 7,244 11,120 (4,424)
--------- --------- ---------
(Decrease)/Increase in cash and cash equivalents.............. (3,874) (5,948) (717)
Exchange movement on opening cash balances.................... (80) (124) -
Cash and cash equivalents, beginning of period................ 15,725 24,137 5,286
--------- --------- ---------
Cash and cash equivalents, end of period...................... 11,771 18,065 4,569
========= ========= =========
</TABLE>
*Reclassified to conform to June 30, 1966 presentation
Supplemental information on non-cash transactions
Cash of Lit. 570 million was included in the assets of Moto America Inc. which
were acquired in the period. The purchase price was paid in the form of shares
by the Company.
As described in Note 2, Immobiliare Broseta S.r.l. was sold to Domer S.r.l., a
25% affiliate, in the period. The principal assets and liabilities of
Immobiliare Broseta S.r.l. were property with a book value of Lit. 12,200
million and short-term real estate loans of Lit. 5,049 million. Minority
interests of Lit. 2,354 million were also eliminated. The sale price of Lit.
5,200 million was paid in the form of promissory notes issued by Domer S.r.l.
which are included in related party receivables.
See notes to consolidated condensed financial statements.
7
<PAGE>
De Tomaso Industries Inc. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 1996
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and changes in financial position in
conformity with generally accepted accounting principles. For a summary of the
Registrant's accounting principles, and other footnote information, reference is
made to the Registrant's 1995 Annual Report on Form 10-K. All adjustments
necessary for the fair presentation of the results of operations for the interim
periods covered by this report have been included. All of such adjustments are
of a normal and recurring nature.
The primary financial statements are shown in Italian lire because all of the
Company's material operating entities are based and operate entirely in Italy.
Translation of lire amounts into US Dollar amounts is included solely for the
convenience of the readers of the financial statements and has been made at the
rate of Lit. 1,535 to US $, the approximate exchange rate at June 30, 1996. It
should not be construed that the assets and liabilities, expressed in US dollar
equivalents, can actually be realized in or extinguished by US dollars at that
or any other rate.
NOTE 2 ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES
The Company completed its acquisition of the outstanding shares of Moto America
Inc., the sole distributor of Moto Guzzi motor cycles in the United States, in
the second quarter. The acquisition, effective January 1, 1996, was consummated
by the issuance of 30,000 shares of the Company. The purchase price of Lit. 471
million ($300,000) reflects the 30,000 shares issued at a fair value of $10.00
per share (Lit. 15,710 per share). The purchase has been accounted for as an
acquisition and the excess of the purchase consideration over the fair value of
assets acquired has been accounted for as goodwill, determined in the amount of
Lit. 262 million, which is being amortized over 5 years. The effects of the
acquisition are not material to the operations of the Company.
In June 1996, the Company sold its 66.7% interest in Immobiliare Broseta S.r.l.
to its 25% affiliate Domer S.r.l. The remaining 33.3% of Immobiliare Broseta
S.r.l. is owned by Interim S.p.A., a subsidiary of Domer S.r.l. The Company had
sought offers from third parties through an independent broker and the sale
price Lit. 5,200 million ($3,876,000) offered by Domer S.p.A. was the highest of
the offers received. Lit. 1,800 million ($1,173,000) of the sale price was paid
in the form of a note of Domer S.r.l., bearing interest equal to the official
Lire discount rate plus 3%, and the Lit. 3,400 million ($2,203,000) purchase
price balance is evidenced by a note calling for principal payments from the
proceeds of sales of apartments which are being developed from the Immobiliare
8
<PAGE>
De Tomaso Industries Inc. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 1996
Broseta S.r.l. property, with the balance, if any, to be paid on June 30, 1999.
This amount of Lit. 3,400 million ($2,203,000) carries an interest rate of 6%,
payable six-monthly and has been accounted for at its estimated net present
value of Lit. 2,908 million ($1,894,000) applying a discount rate of 12%,
considered to be a fair market rate for similar notes receivable. The book value
of the 66.7% interest in Immobiliare Broseta S.r.l. was Lit. 4,708 million; no
gain or loss has been recorded on the transaction.
NOTE 3 COMPUTATION OF LOSS PER SHARE
Net loss per share for the three months ended June 30, 1996 and the three months
and six months to June 30, 1995 is computed on the average number of shares of
common stock outstanding during such periods.
In July 1995, convertible preference shares formerly held by the ex-President of
the Company were exchanged for an equal number of shares of common stock and
707,774 of the resulting total of 1,480,304 shares of common stock formerly held
by the ex-President were acquired by the Company. Had the exchange of voting
preference shares and acquisition of common stock been consummated as at January
1, 1995, then the loss per share for the three months and six months to June 30,
1995 would have amounted to Lit. 29 ($0.02) and Lit. 1,492 ($0.97), respectively
NOTE 4 SUBSEQUENT EVENTS.
In July 1996, the Company completed the sale of a property owned by its US
ex-Maserati distributor subsidiary for a net amount of $1,100,000 (Lit. 1,689
million), realizing a gain of approximately Lit.
600 million ($391,000).
9
<PAGE>
De Tomaso Industries, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
3 Months to June 30, 1996
In the three months to June 30, 1996, net sales increased 29% over the
corresponding period in 1995 as follows:
Internal growth of Moto Guzzi - motorcycle segment 4%
Acquired businesses: Lita - steel tubing segment 26%
Other, net -1%
Gross margins increased to Lit. 5,123 million ($3,337,000) from Lit. 3,688
million in the corresponding period in 1995 as a result of margin increases at
the Moto Guzzi motorcycle manufacturing operation and the contributions of Moto
America Inc., the distributor of Moto Guzzi motorcycles in the United States,
which was acquired in the period, and of Lita.
The increase in operating expenses (selling, general and administrative expenses
net of rental and other income) is due mainly to the effects of the acquisitions
of Lita and Moto America Inc. and additional personnel in the Company's
temporary management and merchant banking activities. Operating expenses at Moto
Guzzi have also increased over 1995 levels reflecting the increased level of
operations of this subsidiary and the expense of improving logistics and
management information systems. Other expense is primarily represented by
exchange losses of Lit. 471 million ($307,000) on short-term advances from
subsidiaries to the parent company which resulted from strengthening of the Lire
against the Dollar in the period.
Interest receivable in the second quarter of 1996 has benefited from an under
accrual of interest receivable of approximately Lit. 350 million ($228,000) at
the end of the first quarter. Higher interest payable relates to real estate
loans on the properties acquired from Finprogetti in 1995 and interest costs for
short-term advances from banks that financed increased working capital at Moto
Guzzi and working capital at Lita.
The anomalous situation of Lit. 514 million ($335,000) of income taxes on losses
from continuing operations before income taxes and minority interests arises
from the fact that most of the Company's operations are located in Italy where
companies are taxed on their individual results without the possibility of
filing consolidated tax returns.
10
<PAGE>
De Tomaso Industries, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Conditions and Results of Operations
6 Months to June 30, 1996
In the six months to June 30, 1996, net sales increased 66% over the
corresponding period in 1995 as follows:
Internal growth of Moto Guzzi - motorcycle segment 34%
Acquired businesses: Lita - steel tubing segment 33%
Other, net -1%
Growth in the motorcycle segment is largely as a result of the first quarter
when sales were 93% up on the corresponding quarter in 1995. Sales growth in
this segment was more limited in the second quarter as the booking of some sales
of motorcycles to the public administration sector (police and military) were
deferred as the customers requested delays in deliveries until the third and
fourth quarters of the current year.
Gross margins increased to Lit. 6,878 million ($4,480,000) from Lit. 2,500
million in the corresponding period in 1995 as a result of the turnaround in the
first quarter from a Lit. 1,168 million loss in 1995 to Lit. 1,755 million
positive margin and improved second quarter margins in 1996, all as described
above. The first quarter turnaround was mainly due to volume increases in the
motorcycle segment.
The increase in operating expenses (selling, general and administrative
expenses, net of rental and other income) is due mainly to the effects of the
acquisitions of Lita and Moto America Inc. and additional personnel in the
Company's temporary management and merchant banking activities. Operating
expenses at Moto Guzzi have also increased over 1995 levels reflecting the
increased level of operations of this subsidiary and the expense of improving
logistics and management information systems. Other income and expense include
exchange losses of Lit. 920 million ($599,000) on short-term advances from
subsidiaries to the parent company due to strengthening of the Lire against the
dollar in 1996 and gains of Lit. 600 million ($391,000) on the sale of obsolete
tooling and inventory at Moto Guzzi in the first quarter.
Net interest expense in the six months ended June 30, 1996 compared to net
interest income in the corresponding period in 1995 results principally from
interest payable on real estate loans on the properties acquired from
Finprogetti in 1995 and interest costs for short-term advances from banks that
financed increased working capital at Moto Guzzi and working capital at Lita.
The anomalous situation of Lit. 592 million ($386,000) of income taxes on losses
from continuing
11
<PAGE>
De Tomaso Industries, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Conditions and Results of Operations
operations before income taxes and minority interests arises from the fact that
most of the Company's operations are located in Italy where companies are taxed
on their individual results without the possibility of filing consolidated tax
returns. The major part of this income tax expense relates to the second quarter
of 1996.
Motorcycle Segment
The small growth in net sales of the motorcycle segment in the second quarter
derives principally from increases in prices and sales mix. Price increases
averaging 5% were put into effect from March 1, 1996. Sales volumes were held
back in the second quarter as a result of approximately 200 motorcycles destined
for public administration customers which, at the customers request, will be
delivered in September and October. These motorcycles are held in inventory at
June 30, 1996. As a result of the significant volume increases in the first
quarter, net sales for the six months ended June 30, 1996 are 36% higher than
the corresponding period in 1995.
1,760 motorcycles were produced in the three months ended June 30, 1996,
compared to 1,455 in the corresponding period in 1995, an increase of 21%.
Production for the six months to June 30, 1996 was up 45% at 3,280 units against
2,267 in the same period in 1995. Production increases have been more contained
in the second quarter due to capacity constraints: the first quarter increase of
85% was achieved in part by significantly increased January production, which in
1995 and prior years had been curtailed to allow for inventory taking,
production planning and the like.
There were no significant or unusual cost increases in raw materials or labor
costs in the second quarter of 1996. Aluminum prices, which had been a
significant component of material cost increases in 1995 have been stable in
1996. In accordance with national labor agreements, national negotiations are in
course and will be made effective from June 1996. At present, there is no
indication of the likely settlement level.
Steel Tubing Segment
Lita, acquired in July 1995, has contributed Lit. 5,162 million ($3,363,000) to
consolidated net sales in the three months to June 30, 1996 and Lit. 9,762
million ($6,360,000) in the six months to June 30, 1996.
Sales volumes for the second quarter amounted to 3,305 tons, an increase of 39%
over the corresponding period in 1995, mainly from domestic (Italian) sales to
new customers and customers who had been lost under previous management. Sales
volumes for the six months amounted to 6,468
12
<PAGE>
De Tomaso Industries, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Conditions and Results of Operations
tons, 43% ahead of 1995. Export sales in the first six months, amounting to 5.8%
of total net sales, represent early stage results of the decision to compete in
export markets and further expand volumes.
Market conditions for Lita have been difficult in the first quarter of 1966 as a
result of falling steel prices which resulted in sharp decreases in market
prices for finished goods. This phenomenon continued into the second quarter
with further decreases of 10%-15% for various types of steel. Average raw
material price deceases since the beginning of the year have been approximately
22%. There are some indications that steel prices may stabilize by the end of
the third quarter of 1966.
Margins in the first quarter of 1995 were burdened by the fall in the Company's
selling prices, producing losses based on carrying values of Lita's inventories
of steel, of approximately Lit. 600 million ($391,000) in the first six months
of the year, offsetting the benefits gained from increased volumes. The effects
have been more contained in the second quarter with margins averaging 14%,
against 10% in the first quarter.
Liquidity and Sources of Capital
Net cash used in operations in the six months to June 30, 1996 amounted to Lit.
11,507 million ($7,496,000), arising from working capital movements for Lit.
9,664 million and from losses, adjusted for no-cash items, of Lit. 1,843
million. The major change in working capital is at Moto Guzzi where inventories
have increased by approximately Lit. 6,000 million as a result of sales to
public administrations (police, military) which have been deferred at the
customers' request and a build up resulting from increased activity levels and
production levels slightly behind budget. The increase in inventory has
principally been financed by existing bank credit lines. There is also a
seasonal increase in inventories at Moto America Inc., the U.S. Moto Guzzi
distributor acquired in 1996. There have been no significant working capital
changes at Lita. Inventories have been reduced as a result of price decreases
and trade receivables and trade payables have increased in line with higher
business volumes.
Despite higher business levels in the second quarter, Moto Guzzi succeeded in
reducing trade receivables compared to the end of the first quarter, though
these remain high (slightly in excess of sales for the second quarter) as a
result of 19% value added taxes included in receivables for domestic (Italian)
sales and the normal practice that payments due at the end of the month are
cleared by the banks in the early days of the following month. Accounts
receivable do not have a significant effect on liquidity as the Company has
access to short-term advances from banks, secured by trade
13
<PAGE>
De Tomaso Industries, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Conditions and Results of Operations
receivables.
A tax receivable of Lit. 5,259 million ($3,426,000) was realized in the period
with the proceeds being applied principally to the purchase of marketable
securities of Lit. 4,910 million ($3,198,000). Repayments of loan principal on
debt associated with Cologne, a rent producing real estate holding, of Lit.
2,398 million ($1,562,000) have been financed by decreases in investments in the
period. Other principal loan payments, mainly relating to Moto Guzzi's
indebtedness, have been financed from cash from operations and from bank credit
lines.
Expenditures on fixed assets, mainly at Moto Guzzi, have been financed
principally from cash from operations and from bank credit lines, with Lit. 438
million ($285,000) financed by leasing.
The disposal of Immobiliare Broseta, S.r.l. has removed Lit. 12,200 million of
real estate and Lit. 5,049 million of short-term real estate loans from the
balance sheet. The receipt of balance due from Domer S.p.A., represented by
promissory notes valued at Lit. 4,708 million (as described in Note 2 to the
quarterly financial statements) is the principal reason for the increase in
related party receivables from December 31, 1995.
Monies to cover the cash portion of the Company's stock repurchase program
(approximately $11,000,000), planned to commence in September 1996, have been
reserved. The Company's other planned cash needs will be met from cash on hand,
cash generated from operations, available credit lines, and planned asset sales.
14
<PAGE>
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.
DE TOMASO INDUSTRIES, INC.
Dated: August 8, 1996 By: s/ Howard E. Chase
--------------------------------
Howard E. Chase, President
Dated: August 8, 1996 By: s/ Carlo Previtali
--------------------------------
Carlo Previtali, Secretary
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements dated June 30, 1996 and is qualified in its
entirety by reference to such financial statements.
Dollar amounts are based on conversion rate of 1,535 Lire to the Dollar which
prevailed on June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 11,768,730
<SECURITIES> 3,192,834
<RECEIVABLES> 17,704,235
<ALLOWANCES> 748,534
<INVENTORY> 23,405,863
<CURRENT-ASSETS> 69,214,984
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0
0
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