<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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: 0-9787
REPUBLIC INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 73-1105145
(State of Incorporation) (IRS Employer Identification No.)
200 EAST LAS OLAS BOULEVARD
FT. LAUDERDALE, FLORIDA 33301
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 627-6000
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 [ ]
On November 11, 1996, the registrant had 192,643,478 outstanding
shares of common stock, par value $.01 per share.
<PAGE> 2
REPUBLIC INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PART I. Financial Information
ITEM 1. FINANCIAL STATEMENTS
Unaudited Condensed Consolidated Balance Sheets
as of September 30, 1996 and December 31, 1995 (Restated) ..................... 3
Unaudited Condensed Consolidated Statements
of Operations for the Three and Nine Months Ended
September 30, 1996 and 1995 (Restated) ......................................... 4
Unaudited Condensed Consolidated Statement
of Shareholders' Equity for the Nine Months
Ended September 30, 1996 ....................................................... 5
Unaudited Condensed Consolidated Statements of
Cash Flows for the Nine Months Ended
September 30, 1996 and 1995 (Restated) ......................................... 6
Notes to Unaudited Condensed Consolidated Financial
Statements ................................................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ........................................... 14
PART II. Other Information
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................................................... 20
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1996 1995
------------- ------------
(Restated)
<S> <C> <C>
Current assets:
Cash and cash equivalents ....................................... $ 154,826 $ 164,572
Accounts receivable, less allowance for doubtful accounts ....... 62,424 38,092
Inventory ....................................................... 27,954 14,924
Prepaid expenses ................................................ 9,399 3,757
Other current assets ............................................ 126,296 7,323
--------- ---------
Total current assets ........................................ 380,899 228,668
Property and equipment, net ....................................... 331,591 204,949
Investment in subscriber accounts, net ............................ 78,940 42,240
Intangible assets, net ............................................ 182,986 101,363
Other assets ...................................................... 12,449 5,246
--------- ---------
Total assets ................................................ $ 986,865 $ 582,466
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................ $ 24,000 $ 18,732
Accrued liabilities ............................................. 62,767 24,431
Current portion of deferred revenue ............................. 25,947 25,555
Current maturities of long-term debt ............................ 18,805 11,996
Income taxes payable ............................................ 3,251 3,625
--------- ---------
Total current liabilities ................................... 134,770 84,339
Long-term debt, net of current maturities ......................... -- 3,791
Deferred income taxes ............................................. 37,626 14,414
Deferred revenue, net of current portion .......................... 9,794 18,012
Other liabilities ................................................. 12,771 11,362
--------- ---------
Total liabilities ........................................... 194,961 131,918
--------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred stock, par value $.01 per share; 5,000,000 shares
authorized; none issued ....................................... -- --
Common stock, par value $.01 per share; 500,000,000 and
350,000,000 shares authorized, respectively; 191,028,437
and 161,820,630 shares issued and outstanding,
respectively .................................................. 1,910 1,618
Additional paid-in capital ...................................... 728,475 420,557
Retained earnings ............................................... 61,519 28,373
--------- ---------
Total shareholders' equity .................................. 791,904 450,548
--------- ---------
Total liabilities and shareholders' equity .................. $ 986,865 $ 582,466
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Revenue ........................................... $ 155,746 $ 78,054 $ 423,371 $ 210,679
Expenses:
Cost of operations ............................ 113,566 53,921 297,616 140,152
Selling, general and administrative ........... 24,139 17,645 76,744 49,294
--------- -------- --------- ---------
Operating income .................................. 18,041 6,488 49,011 21,233
Interest and other income ......................... 7,102 1,717 13,083 2,770
Interest expense .................................. (513) (1,264) (2,324) (4,263)
--------- -------- --------- ---------
Income from continuing operations
before income taxes ........................... 24,630 6,941 59,770 19,740
Provision for income taxes ........................ 8,638 3,055 21,816 8,774
--------- -------- --------- ---------
Income from continuing operations ................. 15,992 3,886 37,954 10,966
Income from discontinued operations, net .......... -- -- -- 508
--------- -------- --------- ---------
Net income ........................................ $ 15,992 $ 3,886 $ 37,954 $ 11,474
========= ======== ========= =========
Fully diluted earnings per common and common
equivalent share:
Continuing operations ..................... $ .07 $ .03 $ .17 $ .09
Discontinued operations ................... -- -- -- .01
--------- -------- --------- ---------
Net income ................................ $ .07 $ .03 $ .17 $ .10
========= ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained
Stock Capital Earnings
------- ---------- --------
<S> <C> <C> <C>
Balance at December 31, 1995 (Restated) ....... $ 1,618 $ 420,557 $ 28,373
Sale of common stock ...................... 99 197,484 --
Exercise of stock options and warrants .... 25 9,330 --
Capital contributions from former owners
of pooled companies ................... -- 20,669 --
Distributions to former owners of pooled
companies ............................. -- -- (4,917)
Stock issued in acquisitions .............. 168 80,965 --
Other ..................................... -- (530) 109
Net income ................................ -- -- 37,954
------- --------- --------
Balance at September 30, 1996 ................. $ 1,910 $ 728,475 $ 61,519
======= ========= ========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------
1996 1995
---- ----
(Restated)
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations ........................... $ 37,954 $ 10,966
Adjustments to reconcile income from continuing operations
to net cash provided by operations:
Depreciation, depletion and amortization .............. 27,878 18,090
Gain on the sale of property and equipment ............ (984) (383)
Changes in assets and liabilities, net of effects from
business combinations:
Accounts receivable ........................... (12,054) (4,736)
Prepaid expenses and other assets ............. (24,551) (2,777)
Accounts payable and accrued liabilities ...... (4,197) 5,586
Deferred and current income taxes payable ..... 19,719 1,110
Deferred revenue and other liabilities ........ (14,399) (10,461)
--------- ---------
Net cash provided by continuing operations .......... 29,366 17,395
--------- ---------
Cash used in discontinued operations ............................ -- (263)
--------- ---------
Cash flows from investing activities:
Advances and loans .......................................... (112,900) --
Net cash used in business combinations ...................... (17,046) (5,497)
Purchases of property and equipment ......................... (77,538) (31,019)
Investment in subscriber accounts ........................... (24,943) (10,775)
Proceeds from the sale of property and equipment ............ 2,440 1,068
Other ....................................................... 1,464 (1,013)
--------- ---------
Net cash used in investing activities ............... (228,523) (47,236)
--------- ---------
Cash flows from financing activities:
Sale of common stock ........................................ 197,583 232,031
Proceeds from long-term debt ................................ 17,104 23,432
Payments of long-term debt .................................. (47,064) (40,338)
Exercise of stock options and warrants ...................... 9,355 6,333
Capital contributions from former owners of
pooled companies ........................................ 17,876 11,828
Distributions to former owners of pooled companies .......... (4,917) (5,473)
Other ....................................................... (526) 16,053
--------- ---------
Net cash provided by financing activities ........... 189,411 243,866
--------- ---------
(Decrease) increase in cash and cash equivalents .... (9,746) 213,762
Cash and cash equivalents:
Beginning of period ......................................... 164,572 11,485
--------- ---------
End of period ............................................... $ 154,826 $ 225,247
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(000's omitted in all tables except per share amounts)
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements
include the accounts of Republic Industries, Inc. and its subsidiaries (the
"Company") and have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. All significant
intercompany accounts and transactions have been eliminated. Certain
information related to the Company's organization, significant accounting
policies and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. These unaudited condensed consolidated financial
statements reflect, in the opinion of management, all material adjustments
(which include only normal recurring adjustments) necessary to fairly state the
financial position and the results of operations for the periods presented and
the disclosures herein are adequate to make the information presented not
misleading. Operating results for interim periods are not necessarily
indicative of the results that can be expected for a full year. These interim
financial statements should be read in conjunction with the Company's audited
consolidated financial statements and notes thereto.
In order to maintain consistency and comparability between periods
presented, certain amounts have been reclassified from the previously reported
financial statements in order to conform with the financial statement
presentation of the current period.
The accompanying financial statements also include the financial
position and results of operations of CarChoice, Inc. ("CarChoice") which the
Company acquired in August 1996, and Incendere, Inc. and certain waste
companies (collectively, "Schaubach") controlled by Dwight C. Schaubach and
Denver Burglar Alarm and affiliate ("Denver Alarm"), which the Company
acquired in February 1996. These business combinations have been accounted for
under the pooling of interests method of accounting and, accordingly, these
financial statements and notes thereto have been restated as if CarChoice,
Schaubach and Denver Alarm (the "Pooled Entities") and the Company had operated
as one entity since inception. See Note 2 for a further discussion of business
combinations.
In April 1995, the Company spun-off its hazardous waste services
segment, Republic Environmental Systems, Inc. ("RESI"), now known as
International Alliance Services, Inc., to the Company's shareholders.
Accordingly, this segment has been accounted for as a discontinued operation in
the accompanying unaudited condensed consolidated statements of operations.
All per share data and numbers of shares of common stock for all
periods included in the financial statements and notes have been adjusted to
reflect a two-for-one stock split in the form of a 100% stock dividend that
was effected in June 1996, as more fully described in Note 11.
2. BUSINESS COMBINATIONS
Pending Acquisitions
In November 1996, the Company signed a definitive agreement to acquire
Alamo Rent-A-Car, Inc. and affiliated entities ("Alamo"), which are
privately-owned, in merger transactions. Alamo is the fourth largest car rental
company in the United States and operates a fleet of approximately 130,000
vehicles. Alamo operates in 42 states in the United States and has operations
in 10 European countries and Canada. The transaction, which will be accounted
for under the pooling of interests method of accounting, is subject to
customary conditions including the receipt of all required regulatory
approvals. It is contemplated that the Company will issue approximately
22,100,000 shares of the Company's common stock, par value $.01 per share
("Common Stock") in connection with the transaction.
In June 1996, the Company signed a definitive agreement to acquire
Continental Waste Industries, Inc. ("Continental") in a merger transaction.
Continental provides integrated solid waste management services to residential,
commercial and industrial customers primarily in the mid-south and eastern
United States. Under the terms of the agreement, each share of common stock of
Continental would be exchanged, on a tax-free basis, for .80 of a share of the
Company's Common Stock. As of September 30, 1996, Continental had
approximately 15,349,000 shares of common stock issued and outstanding. The
transaction, which will be accounted for under the pooling of interests method
of accounting, is subject to approval of Continental's shareholders and other
customary closing conditions, including regulatory approvals. Certain
shareholders of Continental, representing approximately 23% of Continental's
outstanding common stock, have agreed to vote their shares in favor of the
transaction and have granted to the Company irrevocable proxies to vote or to
execute written consents with respect to their shares in favor of the
transaction.
In June 1996, the Company signed a definitive agreement to acquire
Addington Resources, Inc. ("Addington") in a merger transaction. Addington
provides integrated solid waste disposal services including landfill,
collection and recycling services for cities and counties in the southeastern
United States. Under the terms of the agreement, each share of common stock of
Addington would be exchanged, on a tax-free basis, for .90 of a share of the
Company's Common Stock. As of September 30, 1996, Addington had approximately
15,194,000 shares of common stock issued and outstanding. The transaction,
which will be accounted for under the pooling of interests method of
accounting, is subject to approval
7
<PAGE> 8
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
of Addington's shareholders and other customary closing conditions, including
regulatory approvals. Six of Addington's shareholders, representing
approximately 45% of Addington's outstanding common stock, have granted to the
Company irrevocable proxies to, and agreed to, vote or to execute written
consents with respect to their shares in favor of the transaction.
In May 1996, after approval by a special committee of disinterested
members of the Company's board of directors, the Company signed a definitive
agreement to acquire AutoNation Incorporated ("AutoNation"). AutoNation is a
privately-owned company developing a chain of megastores for the sale of new
and used vehicles and is partially owned by the Company's Co-Chief Executive
Officers, and certain other officers and directors of the Company. The
transaction, which will be accounted for under the purchase method of
accounting, is subject to approval by the shareholders of the Company and
other customary closing conditions, including regulatory approvals. It is
contemplated that the Company will issue approximately 17,467,000 shares
of Common Stock in connection with the transaction.
Each of the above pending acquisitions is expected to close during the
fourth quarter of 1996.
Completed Acquisitions
Significant businesses acquired through September 30, 1996 and
accounted for under the pooling of interests method of accounting have been
included retroactively in the financial statements as if the companies had
operated as one entity since inception. Businesses acquired through September
30, 1996 and accounted for under the purchase method of accounting are included
in the financial statements from the date of acquisition.
In August 1996, the Company acquired all of the net assets of
CarChoice. CarChoice, which commenced operations in January 1995, is a
developer and operator of used car superstores similar to those being developed
by AutoNation.
In February 1996, the Company acquired all of the outstanding capital
stock of Denver Alarm. Denver Alarm provides installation, monitoring and
maintenance services to residential and commercial customers throughout
Colorado.
In February 1996, the Company acquired Schaubach. Schaubach provides
solid waste collection and recycling services to residential, commercial, and
industrial customers in southeastern Virginia and eastern North Carolina and
provides transportation of medical waste throughout the Mid-Atlantic states.
The Company issued an aggregate of 9,707,664 shares of Common Stock to
acquire CarChoice, Denver Alarm and Schaubach, all of which have been accounted
for under the pooling of interests method of accounting.
Details of the results of operations of the previously separate
companies for the periods before the pooling of interests combinations were
consummated are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
---- ----
<S> <C> <C>
Revenue:
The Company ......................... $ 376,548 $ 185,207
Pooled Entities ..................... 46,823 25,472
--------- ---------
$ 423,371 $ 210,679
========= =========
Net income (loss):
The Company ......................... $ 44,057 $ 13,136
Pooled Entities ..................... (6,103) (1,662)
--------- ---------
$ 37,954 $ 11,474
========= =========
</TABLE>
8
<PAGE> 9
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
During the nine months ended September 30, 1996, the Company also
acquired various other businesses in the solid waste and electronic security
services industries which were immaterial to the Company. The aggregate
purchase price paid by the Company related to immaterial acquisitions
accounted for under the purchase method of accounting was approximately
$101,039,000 and consisted of cash and 8,474,286 shares of Common Stock. With
respect to immaterial acquisitions accounted for under the pooling of
interests method of accounting, the Company issued 8,318,800 shares of Common
Stock. These acquisitions were not significant in the aggregate and,
consequently, prior period financial statements were not restated.
The following summarizes the preliminary purchase price allocation for business
combinations accounted for under the purchase method of accounting (including
historical accounts of immaterial acquisitions accounted for under the pooling
of interests method of accounting) consummated during the nine months ended
September 30:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Property and equipment .................................. $ 65,869 $ 23,822
Investment in subscriber accounts ....................... 17,914 --
Intangible assets ....................................... 87,385 76,887
Working capital deficiency, net of cash acquired ........ (33,695) (7,559)
Long-term debt assumed .................................. (29,563) (14,594)
Other liabilities, net .................................. (9,731) --
Common stock issued ..................................... (81,133) (73,059)
--------- ---------
Cash used in acquisitions .......................... $ 17,046 $ 5,497
========= =========
</TABLE>
In August 1995, the Company acquired all of the outstanding shares of
common stock of Hudson Management Corporation and Envirocycle, Inc.
(collectively, "HMC"). The purchase price paid by the Company was approximately
$72,800,000 and consisted of 16,000,000 shares of Common Stock. HMC, as the
third largest solid waste management company in Florida, provides solid waste
collection and recycling services to commercial, industrial and residential
customers. This acquisition has been accounted for under the purchase method
of accounting and, accordingly, is included in the Company's financial
statements from the date of acquisition.
The Company's consolidated results of operations on an unaudited pro
forma basis assuming the acquisition of HMC had occurred at the beginning of
the period presented is as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1995
------------------
<S> <C>
Revenue ....................................... $ 243,880
=========
Income from continuing operations ............. $ 11,818
=========
Fully diluted earnings per common and common
equivalent share from continuing
operations ................................ $ .09
=========
</TABLE>
In September 1996, the Company announced that the Agreement and Plan
of Amalgamation, dated as of July 1, 1996 and amended as of July 15, 1996 (the
"ADT Agreement") between Republic and ADT Limited ("ADT"), which provided for
the acquisition of ADT by Republic, had been terminated by mutual agreement of
the parties. Included in selling, general and administrative expenses for the
three months ended September 30, 1996 are approximately $3,000,000 of
transaction costs associated with the terminated ADT Agreement. In connection
with the execution of the ADT Agreement, ADT granted to Republic a warrant (the
"ADT Warrant") to purchase 15,000,000 common shares of ADT at a purchase price
of $20 per share (which approximated fair market value) subject to certain
anti-dilution adjustments. The warrant became exercisable upon the
termination of the ADT Agreement and remains exercisable until March 1997.
Pursuant to the terms of the warrant, ADT has granted to Republic certain
registration rights with respect to the common shares of ADT issuable to
Republic upon exercise of the warrant. Upon termination of the ADT Agreement,
the Company recorded the estimated fair value of the ADT Warrant totaling
approximately $5,670,000 based upon an option pricing model computation. The
Company has recorded $3,000,000 of the $5,670,000 value attributed to the ADT
Warrant as a credit to selling, general and administrative expenses for the
three months ended September 30, 1996 to offset the transaction costs incurred
in connection with the ADT
9
<PAGE> 10
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Agreement as described above. The remaining value of the ADT Warrant totaling
$2,670,000 has been included as a component of other income for the three months
ended September 30, 1996.
3. OTHER CURRENT ASSETS
Included in other current assets at September 30, 1996 are
approximately $112,900,000 in advances made to AutoNation during the nine
months ended September 30, 1996. Such advances were made pursuant to a loan
agreement whereby the Company has agreed to provide advances at an interest
rate of LIBOR plus 2% to fund AutoNation's cash flow requirements until
consummation of the acquisition of AutoNation. Such advances mature on June
30, 1997 and are secured primarily by the common stock of AutoNation's
principal operating subsidiary, all trademarks and other intellectual property
of AutoNation and, until consummation of the Company's merger with AutoNation,
AutoNation's remaining shareholder subscription commitments which commitments
approximate $28,000,000. Interest income recognized on such advances was
approximately $1,117,000 and $1,296,000 for the three and nine months ended
September 30, 1996, respectively. Also included in other current assets at
September 30, 1996 is the value assigned to the ADT Warrant totaling
$5,670,000 as discussed in Note 2.
4. PROPERTY AND EQUIPMENT
A summary of property and equipment is shown below:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Land, landfills and improvements .............. $ 133,199 $ 97,610
Trucks and equipment .......................... 277,412 157,677
Buildings and improvements .................... 34,124 29,386
Furniture and fixtures ........................ 13,241 9,061
--------- ---------
457,976 293,734
Less: accumulated depreciation and
depletion ................................. (126,385) (88,785)
--------- ---------
$ 331,591 $ 204,949
========= =========
</TABLE>
5. INVESTMENT IN SUBSCRIBER ACCOUNTS
Investment in subscriber accounts consists of capitalized costs
associated with new monitoring systems installed by the Company's electronic
security services business and the cost of acquired subscriber accounts. These
costs are amortized over periods ranging from eight to twelve years (based on
estimated and historical customer attrition rates) on a straight-line basis.
Accumulated amortization of investment in subscriber accounts at
September 30, 1996 and December 31, 1995 was $17,602,000 and $11,446,000,
respectively.
6. INTANGIBLE ASSETS
Intangible assets consist primarily of the cost of acquired businesses
in excess of the fair value of net tangible assets acquired. The cost in
excess of the fair value of net tangible assets is amortized over forty years
on a straight-line basis.
Accumulated amortization of intangible assets at September 30, 1996
and December 31, 1995 was $17,580,000 and $9,026,000, respectively.
10
<PAGE> 11
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
7. LONG-TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Vehicle floorplan credit facility, secured by the
Company's vehicle inventory, interest at LIBOR
plus 2.75%, due on demand .......................... $ 18,805 $ 9,909
Notes to banks and financial institutions, secured
by equipment and other assets ...................... -- 4,590
Other notes, secured by equipment and other assets -- 1,288
-------- --------
18,805 15,787
Less: current maturities ............................ (18,805) (11,996)
-------- --------
$ -- $ 3,791
======== ========
</TABLE>
In December 1995, the Company entered into a credit agreement (the
"Credit Agreement") with certain banks pursuant to which such banks have agreed
to advance the Company on an unsecured basis an aggregate of $250,000,000 for a
term of thirty-six months. Outstanding advances, if any, are payable at the
expiration of the thirty-six month term. The Credit Agreement requires, among
other items, that the Company maintain certain financial ratios and comply
with certain financial covenants. Interest is payable monthly and generally
determined using either a competitive bid feature or a LIBOR based rate. As
of September 30, 1996, no amounts were outstanding and the Company was in
compliance with all material covenants under the Credit Agreement.
In August 1996, the Company refinanced its existing $21,000,000
vehicle floorplan credit facility with a new $25,000,000 vehicle floorplan
credit facility. Advances under this facility bear interest at LIBOR plus
2.75% and are secured by the Company's vehicle inventory. In October
1996, the Company repaid all borrowings under this facility.
8. INCOME TAXES
Income taxes have been provided for based upon the Company's
anticipated annual effective income tax rate.
9. STOCK OPTIONS AND WARRANTS
The Company has various stock option plans under which shares of
Common Stock may be granted to key employees and directors of the Company.
Options granted under the plans are non-qualified and are granted at a price
equal to the fair market value of the Common Stock at the date of grant.
11
<PAGE> 12
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of stock option and warrant transactions for the nine months ended
September 30, 1996 is as follows:
<TABLE>
<S> <C>
Options and warrants outstanding at January 1, 1996 ......... 48,534
Granted ..................................................... 4,007
Exercised ................................................... (2,522)
Canceled .................................................... (44)
---------------
Options and warrants outstanding at September 30, 1996 ...... 49,975
===============
Average price of options and warrants exercised ............. $ 3.81
Prices of options and warrants outstanding at
September 30, 1996 ...................................... $1.05 to $30.75
Average price of options and warrants outstanding
at September 30, 1996 ................................... $ 5.71
Vested options and warrants at September 30, 1996 ........... 39,436
Options available for future grants at September 30, 1996 ... 12,380
</TABLE>
10. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common and common equivalent share are based on the
combined weighted average number of common shares and common share equivalents
outstanding which include, where appropriate, the assumed exercise or
conversion of warrants and options. In computing earnings per common and
common equivalent share, the Company utilizes the modified treasury stock
method.
The computation of weighted average common and common equivalent
shares used in the calculation of fully diluted earnings per share, which is
substantially the same as the computation used to calculate primary earnings
per share, is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Common shares outstanding ............... 191,028 159,827 191,028 159,827
Common equivalent shares ................ 50,662 41,958 52,540 42,016
Weighted average treasury shares
purchased .......................... (13,451) (8,434) (12,682) (5,302)
Effect of using weighted average
common and common equivalent
shares outstanding ................. (925) (38,938) (12,218) (77,014)
------- ------- ------- -------
227,314 154,413 218,668 119,527
======= ======= ======= =======
</TABLE>
11. SHAREHOLDERS' EQUITY
In November 1996, the Company sold 12,080,000 shares of Common Stock
in a private placement transaction resulting in net proceeds of $353,000,000.
In May 1996, the Company sold 9,878,400 shares of Common Stock in a
private placement transaction resulting in net proceeds of $197,583,000.
In May 1996, the Board of Directors declared a two-for-one split of
the Company's Common Stock in the form of a 100% stock dividend, payable June
8, 1996, to holders of record on May 28, 1996. As a result, $790,000 (par
value of shares outstanding at December 31, 1995) has been transferred from
additional paid-in capital to common stock.
In May 1996, the Company's Certificate of Incorporation was amended to
increase the number of authorized shares of Common Stock from 350,000,000
shares to 500,000,000 shares.
12
<PAGE> 13
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
12. LEGAL MATTERS
The Company is subject to various lawsuits, claims and other legal
matters arising in the ordinary course of conducting its business. The Company
believes that such lawsuits, claims and other legal matters should not have a
material adverse effect on the Company's consolidated results of operations,
financial condition or cash flows.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
unaudited condensed consolidated financial statements and notes thereto
included under Item 1. In addition, reference should be made to the Company's
audited consolidated financial statements and notes thereto and related
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
BUSINESS COMBINATIONS
The Company makes its decisions to acquire or invest in businesses
based on financial and strategic considerations.
PENDING ACQUISITIONS
In November 1996, the Company signed a definitive agreement to acquire
Alamo Rent-A-Car, Inc. and affiliated entities ("Alamo"), which are
privately-owned, in merger transactions. Alamo is the fourth largest car rental
company in the United States and operates a fleet of approximately 130,000
vehicles. Alamo operates in 42 states in the United States and has operations
in 10 European countries and Canada. The transaction, which will be accounted
for under the pooling of interests method of accounting, is subject to
customary conditions including the receipt of all required regulatory
approvals. It is contemplated that the Company will issue approximately
22,100,000 shares of the Company's common stock, par value $.01 per share
("Common Stock") in connection with the transaction.
In June 1996, the Company signed a definitive agreement to acquire
Continental Waste Industries, Inc. ("Continental") in a merger transaction.
Continental provides integrated solid waste management services to residential,
commercial and industrial customers primarily in the mid-south and eastern
United States. Under the terms of the agreement, each share of common stock of
Continental would be exchanged, on a tax-free basis, for .80 of a share of the
Company's Common Stock. As of September 30, 1996, Continental had
approximately 15,349,000 shares of common stock issued and outstanding. The
transaction, which will be accounted for under the pooling of interests method
of accounting, is subject to approval of Continental's shareholders and other
customary closing conditions, including regulatory approvals. Certain
shareholders of Continental, representing approximately 23% of Continental's
outstanding common stock, have agreed to vote their shares in favor of the
transaction and have granted to the Company irrevocable proxies to vote or to
execute written consents with respect to their shares in favor of the
transaction.
In June 1996, the Company signed a definitive agreement to acquire
Addington Resources, Inc. ("Addington") in a merger transaction. Addington
provides integrated solid waste disposal services including landfill,
collection and recycling services for cities and counties in the southeastern
United States. Under the terms of the agreement, each share of common stock of
Addington would be exchanged, on a tax-free basis, for .90 of a share of the
Company's Common Stock. As of September 30, 1996, Addington had approximately
15,194,000 shares of common stock issued and outstanding. The transaction,
which will be accounted for under the pooling of interests method of
accounting, is subject to approval of Addington's shareholders and other
customary closing conditions, including regulatory approvals. Six of
Addington's shareholders, representing approximately 45% of Addington's
outstanding common stock, have granted to the Company irrevocable proxies to
and agreed to, vote or to execute written consents with respect to their shares
in favor of the transaction.
In May 1996, after approval by a special committee of disinterested
members of the Company's Board of Directors, the Company signed a definitive
agreement to acquire AutoNation Incorporated ("AutoNation"). AutoNation is a
privately-owned company developing a chain of megastores for the sale of new
and used vehicles and is partially owned by the Company's Co-Chief
Executive Officers, and certain other officers and directors of the Company.
The transaction, which will be accounted for under the purchase method of
accounting, is subject to approval by the shareholders of the Company and other
customary closing conditions including regulatory approvals. It is
contemplated that the Company will issue approximately 17,647,000 shares of
Common Stock in connection with the transaction. Due to the start-up nature of
AutoNation's operations, this acquisition is expected to generate losses and
consequently be dilutive to earnings per share until such time as the
number of open stores and related revenue is sufficient to absorb the overhead
and related start-up costs of AutoNation.
Each of the above pending acquisitions is expected to close during the
fourth quarter of 1996.
COMPLETED ACQUISITIONS
Significant businesses acquired through September 30, 1996 and
accounted for under the pooling of interests method of accounting have been
included retroactively in the financial statements as if the companies had
operated as one entity since inception. Businesses acquired through September
30, 1996 and accounted for under the purchase method of accounting are included
in the financial statements from the date of acquisition.
In August 1996, the Company acquired all of the net assets of
CarChoice, Inc. ("CarChoice"). CarChoice, which commenced operations in
January 1995, is a developer and operator of used car superstores similar to
those being developed by AutoNation.
14
<PAGE> 15
In February 1996, the Company acquired, in merger transactions, all of
the outstanding shares of capital stock of Incendere, Inc. and certain waste
companies (collectively "Schaubach") controlled by Dwight C. Schaubach.
Schaubach provides solid waste collection and recycling services to
residential, commercial and industrial customers in southeastern Virginia and
eastern North Carolina and provides transportation of medical waste throughout
the Mid-Atlantic states.
In February 1996, the Company acquired in merger transactions, all of
the outstanding shares of capital stock of certain electronic security
companies known as Denver Burglar Alarm ("Denver Alarm"). Denver Alarm
provides installation, monitoring and maintenance services to residential and
commercial customers throughout Colorado.
The Company issued an aggregate of 9,707,664 shares of Common Stock to
acquire CarChoice, Schaubach and Denver Alarm, all of which have been accounted
for under the pooling of interests method of accounting.
During the nine months ended September 30, 1996, the Company also
acquired various other businesses in the solid waste and electronic security
services industries which were immaterial to the Company. The aggregate
purchase price paid by the company related to immaterial acquisitions
accounted for under the purchase method of accounting was approximately
$101,039,000 and consisted of cash and 8,474,286 shares of Common Stock. With
respect to immaterial acquisitions accounted for under the pooling of
interests method of accounting, the Company issued 8,318,800 shares of Common
Stock. These acquisitions were not material in the aggregate and,
consequently, prior period financial statements were not restated.
In September 1996, the Company announced that the Agreement and Plan
of Amalgamation, dated as of July 1, 1996 and amended as of July 15, 1996 (the
"ADT Agreement") between Republic and ADT Limited ("ADT"), which provided for
the acquisition of ADT by Republic, had been terminated by mutual agreement of
the parties. In connection with the execution of the ADT Agreement, ADT
granted to Republic a warrant (the "ADT Warrant") to purchase 15,000,000 common
shares of ADT at a purchase price of $20 per share (which approximated fair
market value) subject to certain anti-dilution adjustments. The warrant
became exercisable upon the termination of the ADT Agreement and remains
exercisable until March 1997. Pursuant to the terms of the warrant, ADT has
granted to Republic certain registration rights with respect to the common
shares of ADT issuable to Republic upon exercise of the warrant.
RESULTS OF OPERATIONS
REVENUE
The Company's revenue from its collection operations consists of fees
from residential, commercial and industrial customers. The Company's revenue
from landfill operations is comprised primarily of tipping fees charged to
third parties. The Company's revenue from its electronic security services
business is primarily derived from monitoring contracts for security systems
and fees charged for the sale and installation of such systems. The Company's
revenue from its automotive retailing business consists primarily of sales of
used vehicles.
The following table presents revenue data from the Company's primary
industry segments for the following periods:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Solid waste services ...................... $ 113,436 $ 66,180 $ 314,200 $ 174,647
Electronic security services .............. 19,926 11,874 57,514 36,032
Automotive retailing ...................... 22,384 -- 51,657 --
--------- -------- --------- ---------
$ 155,746 $ 78,054 $ 423,371 $ 210,679
========= ======== ========= =========
</TABLE>
The increases in revenue from the solid waste services segment for the
three and nine months ended September 30, 1996 are primarily a result of the
acquisition of Hudson Management Corporation and Envirocycle, Inc.
(collectively, "HMC") in August 1995 and other businesses during the periods,
as well as the expansion of the Company's existing businesses. The increases
in revenue from the electronic security services segment for the three and
nine months ended September 30, 1996 are principally a result of the addition
of new monitoring accounts during the periods. Revenue from the Company's
automotive retailing business during the three and nine months ended
September 30, 1996 is a result of the acquisition of CarChoice in August 1996
which was accounted for under the pooling of interests method of accounting.
CarChoice opened its first two used car megastores in December 1995 and
May 1996.
15
<PAGE> 16
OPERATING COSTS AND EXPENSES
The following table sets forth the Company's total cost of operations
and selling, general and administrative expenses as percentages of total
revenue for the following periods:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cost of operations ........................ 73% 69% 70% 67%
Selling, general and administrative ....... 16% 23% 18% 23%
</TABLE>
COST OF OPERATIONS
Cost of operations for the Company's collection operations includes
disposal, labor, fuel and equipment maintenance costs. Landfill cost of
operations includes daily operating expenses, the legal and administrative
costs of ongoing environmental compliance and site closure and post-closure
costs. Certain direct landfill development costs, such as engineering,
upgrading, cell construction and permitting costs, are capitalized and depleted
based on consumed airspace. All indirect landfill development costs, such as
executive salaries, general corporate overhead, public affairs and other
corporate services are expensed as incurred. Cost of operations for the
Company's electronic security services business primarily consists of the labor
and equipment associated with the sale, installation and monitoring of security
systems. Cost of operations for the Company's automotive retailing business
primarily consists of the direct cost to acquire vehicles sold and their related
reconditioning costs.
Cost of operations was $113,566,000 and $297,616,000 for the three and
nine month periods ended September 30, 1996, respectively, as compared to
$53,921,000 and $140,152,000 for the same periods of the prior year. These
increases reflect the Company's expanded operations through acquisitions of new
businesses and growth of its existing businesses. The increases in costs of
operations as percentages of revenue for the three and nine months ended
September 30, 1996 are primarily due to start-up operating costs associated
with the Company's automotive retailing business.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses were $24,139,000 and
$76,744,000 for the three and nine month periods ended September 30, 1996,
respectively, as compared to $17,645,000 and $49,294,000 for the same periods
of the prior year. These increases primarily reflect the growth of the
Company's business through the acquisitions of HMC and other businesses as well
as start-up costs related to the Company's automotive retailing business. The
decreases in selling, general and administrative expenses as percentages of
revenue for the three and nine months ended September 30, 1996 are primarily
due to the reduction of administrative expenses for acquired businesses and
growth in revenue.
Included in selling, general and administrative expenses for the three
months ended September 30, 1996 are approximately $3,000,000 of transaction
costs associated with the ADT Agreement which was terminated by mutual
agreement of the parties on September 30, 1996. Upon terminating the ADT
Agreement, the Company recorded the ADT Warrant at a value of approximately
$5,670,000 based upon an option pricing model computation. The Company has
recorded $3,000,000 of the $5,670,000 value attributed to the ADT Warrant as a
credit to selling, general and administrative expenses for the three months
ended September 30, 1996 to offset the transaction costs incurred in
connection with the ADT Agreement as described above. The remaining value of
the ADT Warrant totaling $2,670,000 has been included as a component of other
income for the three months ended September 30, 1996.
INTEREST AND OTHER INCOME
Interest and other income increased to $7,102,000 and $13,083,000 for
the three and nine month periods ended September 30, 1996, respectively, from
$1,717,000 and $2,770,000 for the comparable periods in 1995. These increases
are due to the increase in interest income from the Company's cash investments
resulting from the proceeds from sales of Common Stock in 1996 and 1995 and
interest income on advances to AutoNation. Also included in other income for
the three and nine months ended September 30, 1996 is the $2,670,000 value
attributed to the ADT Warrant in excess of the ADT transaction costs as
described above.
16
<PAGE> 17
INTEREST EXPENSE
Interest expense was $513,000 and $2,324,000 for the three and nine
month periods ended September 30, 1996, respectively, as compared to $1,264,000
and $4,263,000 for the comparable periods in 1995. The decreases are due to a
reduction in average borrowings outstanding during the periods.
INCOME TAXES
The Company's provision for income taxes is based upon the Company's
anticipated annual effective income tax rate. The Company's effective income
tax rates for the three and nine months ended September 30, 1996 decreased to
35.1% and 36.5% respectively, from 44.0% and 44.4% respectively, for the same
periods of the prior year. Such decreases are due to fluctuations associated
with varying effective income tax rates of businesses acquired and accounted
for under the pooling of interests method of accounting. The Company
anticipates its effective income tax rates will fluctuate in future periods as
a result of future business combinations, particularly those accounted for
under the pooling of interests method of accounting.
LANDFILL AND ENVIRONMENTAL MATTERS
The Company provides for accrued landfill and environmental costs
which include landfill site closure and post-closure costs. Landfill site
closure and post-closure costs include estimated costs to be incurred for final
closure of the landfills and estimated costs for providing required
post-closure monitoring and maintenance of landfills. These costs are accrued
based on consumed airspace. The Company estimates its future cost requirements
for closure and post-closure monitoring and maintenance for its solid waste
facilities based on its interpretation of the technical standards of the EPA's
Subtitle D Regulations. These estimates do not take into account discounts for
the present value of such total estimated costs.
Environmental costs are accrued by the Company through a charge to
income in the period such liabilities become probable and can be reasonably
estimated.
The Company periodically reassesses its methods and assumptions used
to estimate such accruals for landfill and environmental costs and adjusts such
accruals accordingly. The factors considered in reassessing its methods and
assumptions include, but are not limited to, changing regulatory requirements,
the effects of inflation, changes in operating climates in the regions in
which the Company's facilities are located and the expectations regarding
costs of securing environmental services.
DISCONTINUED OPERATIONS
In April 1995, the Company spun-off its hazardous waste services
segment, Republic Environmental Systems, Inc.("RESI"), now known as
International Alliance Services, Inc., to the Company's shareholders. The
Company has had no direct ownership interest in RESI since the spin-off. The
hazardous waste services segment of the Company's business has been accounted
for as a discontinued operation in the accompanying Unaudited Condensed
Consolidated Financial Statements.
FINANCIAL CONDITION
At September 30, 1996, the Company had $154,826,000 in cash and
$250,000,000 of availability under its credit facility. In addition, in
November 1996, the Company sold approximately 12,080,000 shares of Common Stock
in a private placement transaction resulting in net proceeds of $353,000,000.
The Company believes that its financial condition is strong and that it has
the financial resources necessary to meet its anticipated financing needs.
WORKING CAPITAL
Working capital at September 30, 1996 amounted to $246,129,000 as
compared to $144,329,000 at December 31, 1995. The increase in working capital
primarily results from the May 1996 sale of 9,878,400 shares of Common Stock in
a private placement transaction resulting in net proceeds of $197,583,000. The
Company believes working capital may decline during the remainder of 1996 and
1997 to lower levels as additional capital is used for the continued expansion
of the Company's existing businesses and the development of the AutoNation
business.
Accounts receivable at September 30, 1996 were $62,424,000 as compared
to $38,092,000 at December 31, 1995. The increase is primarily attributed to
various business acquisitions and expansion of the Company's existing
businesses.
17
<PAGE> 18
Inventory at September 30, 1996 amounted to $27,954,000 as compared to
$14,924,000 at December 31, 1995. The increase is primarily attributed to
increases in vehicle inventory associated with the May 1996 opening of a used
car megastore by CarChoice.
Other current assets at September 30, 1996 were $126,296,000 as
compared to $7,323,000 at December 31, 1995. The increase is primarily due to
approximately $112,900,000 in advances made to AutoNation during the nine
months ended September 30, 1996. In May 1996, in connection with the execution
of the definitive agreement which provides for the acquisition of AutoNation,
the parties also entered into a loan agreement (the "AutoNation Loan
Agreement") whereby the Company has agreed to provide a line-of-credit to
AutoNation for the development of new and used car megastores until
consummation of the acquisition of AutoNation. Advances under the
AutoNation Loan Agreement bear interest at LIBOR plus 2% and mature June 30,
1997. Additionally, advances are secured by the common stock of AutoNation's
principal operating subsidiary, all trademarks and intellectual property of
AutoNation and, until consummation of the Company's merger with AutoNation,
AutoNation's remaining shareholder subscription commitments which commitments
approximate $28,000,000. Also included in other current assets at
September 30, 1996 is the value assigned to the ADT Warrant totaling
$5,670,000 as previously discussed.
Accrued liabilities at September 30, 1996 were $62,767,000 as compared
to $24,431,000 at December 31, 1995. The increase is primarily attributed to
various business acquisitions and expansion of the Company's existing
businesses.
Current maturities of long-term debt increased to $18,805,000 at
September 30, 1996 from $11,996,000 at December 31, 1995. The increase is
primarily attributed to an increase in vehicle floorplan financing associated
with the Company's two used car megastores.
PROPERTY AND EQUIPMENT
Property and equipment increased to $457,976,000 at September 30, 1996
from $293,734,000 at December 31, 1995. The increase is attributed primarily
to various business acquisitions and increased capital expenditures resulting
from expansion of the Company's existing businesses.
INVESTMENT IN SUBSCRIBER ACCOUNTS
Investment in subscriber accounts represents certain capitalized
costs associated with the installation of new electronic security systems and
the cost of acquired subscriber accounts. Investment in subscriber accounts
increased $42,856,000 during the nine months ended September 30, 1996 due to
growth in electronic security system installations and acquisitions of
subscriber accounts.
INTANGIBLE ASSETS
Intangible assets increased $90,177,000 during the nine months ended
September 30, 1996 as a result of the acquisition of various businesses
accounted for under the purchase method of accounting during the period.
DEFERRED REVENUE
Deferred revenue consists primarily of proceeds from the factoring of
electronic security monitoring contracts by one of the Company's acquired
security businesses. The use of factoring was discontinued by the Company
subsequent to the date of acquisition in November 1995. Deferred revenue, net
of current portion, decreased to $9,794,000 at September 30, 1996 from
$18,012,000 at December 31, 1995. Such decrease is a result of revenue
recognition from previously factored monitoring contracts over the remaining
term of the contracts which expire through 1998.
SHAREHOLDERS' EQUITY
Shareholders' equity increased $341,356,000 during the nine months
ended September 30, 1996 primarily due to the May 1996 sale of Common Stock and
the acquisition of various businesses during the period.
CASH FLOWS
Cash and cash equivalents decreased by $9,746,000 during the nine
months ended September 30, 1996. The major components of this change are
discussed below.
18
<PAGE> 19
CASH FLOWS FROM OPERATING ACTIVITIES
The Company's net cash flows from operating activities increased
during the nine months ended September 30, 1996 primarily as a result of
various business acquisitions and expansion of the Company's existing
businesses.
CASH FLOWS FROM INVESTING ACTIVITIES
The Company made capital expenditures of approximately $77,538,000
during the nine months ended September 30, 1996 which included the purchase of
equipment, normal replacement of older equipment and expansion of landfill
sites. The Company also made capital expenditures of approximately $24,943,000
during the nine months ended September 30, 1996 related to the expansion of its
electronic security services business through installations of new monitoring
systems and acquisitions of subscriber accounts.
In addition, during the nine months ended September 30, 1996, the
Company advanced $112,900,000 to AutoNation under the AutoNation Loan Agreement
as previously discussed.
The Company expects capital expenditures to increase substantially
during the remainder of 1996 and in the foreseeable future due to the
development of the AutoNation business as well as continued internal
growth of existing businesses and pending acquisitions. In addition,
management anticipates continuing to make capital expenditures for equipment,
upgrading existing equipment and facilities, the construction of new airspace
at landfill sites and the installation of new security systems.
CASH FLOWS FROM FINANCING ACTIVITIES
Cash flows from financing activities for the nine months ended
September 30, 1996 primarily consist of $197,583,000 in net cash proceeds from
the May 1996 sale of Common Stock. Proceeds from this sale as well as
remaining proceeds from 1995 sales of Common Stock were used to repay
indebtedness assumed in business combinations.
19
<PAGE> 20
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule (For SEC use only)
(b) Reports on Form 8-K :
Form 8-K as amended by Form 8-K/A, dated July 1, 1996
reporting the signing of the definitive agreement to
combine ADT Limited ("ADT") and Republic and the grant
to Republic of a warrant to acquire 15,000,000 shares of
ADT if the agreement is terminated for any reason.
Form 8-K dated July 16, 1996 reporting the amendment
to the agreement to combine ADT and Republic.
Form 8-K dated September 30, 1996 reporting the termination of
the ADT agreement and reporting certain financial information.
20
<PAGE> 21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, Republic Industries, Inc., has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
REPUBLIC INDUSTRIES, INC.
Date: November 14, 1996 By: /s/ Michael S. Karsner
----------------------------------------
Michael S. Karsner
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
21
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 154,826
<SECURITIES> 0
<RECEIVABLES> 67,062
<ALLOWANCES> 4,638
<INVENTORY> 27,954
<CURRENT-ASSETS> 380,899
<PP&E> 457,976
<DEPRECIATION> 126,385
<TOTAL-ASSETS> 986,865
<CURRENT-LIABILITIES> 134,770
<BONDS> 0
0
0
<COMMON> 1,910
<OTHER-SE> 789,994
<TOTAL-LIABILITY-AND-EQUITY> 986,865
<SALES> 423,371
<TOTAL-REVENUES> 423,371
<CGS> 297,616
<TOTAL-COSTS> 297,616
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,324
<INCOME-PRETAX> 59,770
<INCOME-TAX> 21,816
<INCOME-CONTINUING> 37,954
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,954
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 164,572
<SECURITIES> 0
<RECEIVABLES> 40,651
<ALLOWANCES> 2,559
<INVENTORY> 14,924
<CURRENT-ASSETS> 228,668
<PP&E> 293,734
<DEPRECIATION> 88,785
<TOTAL-ASSETS> 582,466
<CURRENT-LIABILITIES> 84,339
<BONDS> 0
0
0
<COMMON> 1,618
<OTHER-SE> 448,930
<TOTAL-LIABILITY-AND-EQUITY> 582,466
<SALES> 210,679
<TOTAL-REVENUES> 210,679
<CGS> 140,152
<TOTAL-COSTS> 140,152
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,263
<INCOME-PRETAX> 19,740
<INCOME-TAX> 8,774
<INCOME-CONTINUING> 10,966
<DISCONTINUED> 508
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,474
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
