<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
X Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995.
- 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 0-5555
LIBERTY HOMES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1174256
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
P.O. BOX 35, GOSHEN, INDIANA 46527
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP Code)
(219) 533-0431
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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
----- -----
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
Shares of Outstanding
Class at April 21, 1995
----- -----------------
Class A Common Stock, $1.00 par value 2,700,306
Class B Common Stock, $1.00 par value 1,795,494
1 of 11
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INDEX
PART I - CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
- -------------------------------------------------------
Pages
General 3
Item 1. Consolidated Financial Statements -
Liberty Homes, Inc.
Consolidated Balance Sheet, as of
March 31, 1995 and December 31, 1994 4
Consolidated Statement of Income, for the
three months ended March 31, 1995
and 1994 5
Consolidated Statement of Cash Flows for the
three months ended March 31,
1995 and 1994 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 8-9
Part II - Other Information
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
2
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PART I - CONSOLIDATED FINANCIAL INFORMATION
GENERAL
The consolidated financial statements and footnotes thereto listed in the
Index on page 2 of this report have been prepared using generally accepted
accounting principles applied on a basis consistent with 1994. The results of
operations for the interim period presented are not necessarily indicative of
results to be expected for the year. The information included in this report
has not been examined prior to filing by an independent public accountant, and
is therefore, subject to any adjustments which may result from the year-end
examination of the Company's financial statements. The information furnished
herein reflects all adjustments (consisting of normal recurring adjustments)
which, in the opinion of management, are necessary for a fair presentation of
the results for the interim periods.
3
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LIBERTY HOMES, INC.
CONSOLIDATED BALANCE SHEET
as of March 31, 1995 and December 31, 1994
<TABLE>
<CAPTION>
ASSETS LIABILITIES
- ------ -----------
March 31, December 31, March 31, December 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Current assets: Current liabilities:
Cash and cash equivalents.......... $ 2,650,000 $ 8,069,000 Accounts payable............ $ 8,488,000 $ 8,366,000
Short-term investments............. 19,025,000 19,475,000 Dividend payable............ 316,000 320,000
Receivables........................ 11,926,000 6,756,000 Accrued liabilities......... 3,496,000 2,735,000
Prepaid income taxes............... 557,000 988,000 ----------- -----------
Inventories........................ 11,148,000 9,361,000 Total current liabilities.. 12,300,000 11,421,000
Deferred tax asset................. 1,036,000 1,036,000 ----------- -----------
Prepayments and other.............. 908,000 740,000 Deferred income taxes.......... 2,290,000 2,290,000
----------- ----------- ----------- -----------
Total current assets............ 47,250,000 46,425,000
----------- -----------
Contingent liabilities (see notes)
Shareholders' Equity
--------------------
Capital Stock:
Class A, $1 par value
Authorized - 7,500,000 Shares
Property, plant and equipment: Issued and outstanding - 2,716,000 in
1995 and 2,736,000 in 1994 2,716,000 2,736,000
Land............................ 1,041,000 1,041,000 Class B, $1 par value
Buildings and improvements...... 14,998,000 14,902,000 Authorized - 3,500,000 Shares
Machinery and equipment......... 12,721,000 12,042,000 Issued and outstanding - 1,795,000 in
----------- ----------- 1995 and 1,795,000 in 1994 1,795,000 1,795,000
28,760,000 27,985,000
Other capital................. 83,000 83,000
Less accumulated Retained earnings............. 43,111,000 42,688,000
depreciation.................. 13,715,000 13,397,000 ----------- -----------
----------- -----------
15,045,000 14,588,000 47,705,000 47,302,000
----------- ----------- ----------- -----------
$ 62,295,000 $ 61,013,000 $ 62,295,000 $ 61,013,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
4
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LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF INCOME
for the three months ended March 31, 1995 and 1994
____________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net sales $39,146,000 $28,875,000
Cost of sales 34,624,000 24,568,000
----------- -----------
Gross profit 4,522,000 4,307,000
Selling, general and administrative
expenses 3,387,000 2,708,000
----------- -----------
Operating income 1,135,000 1,599,000
Interest and other income 379,000 281,000
----------- -----------
Income before
income taxes 1,514,000 1,880,000
Income tax expense 612,000 752,000
----------- -----------
Net income $ 902,000 $ 1,128,000
----------- -----------
----------- -----------
Share income per outstanding Common
Share, based upon weighted average
4,520,000 Common Shares outstanding
at March 31, 1995 and 4,571,000 Common
Shares outstanding at March 31, 1994 $.20 $.25
---- ----
---- ----
Cash dividend per share:
Class A Common Stock $.07 $.07
---- ----
---- ----
Class B Common Stock $.07 $.07
---- ----
---- ----
</TABLE>
5
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LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the three months ended March 31, 1995 and 1994
_______________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 902,000 $ 1,128,000
Adjustment to reconcile net income
to net cash used in
operating activities -
Depreciation 318,000 221,000
Deferred income taxes - - - -
Changes in assets and liabilities:
Receivables (5,170,000) (4,662,000)
Refundable income taxes 431,000 1,440,000
Inventories (1,787,000) (2,280,000)
Prepayments and other (168,000) 300,000
Accounts payable 122,000 1,205,000
Accrued liabilities 761,000 700,000
Income taxes payable - - (599,000)
----------- -----------
Net cash used in operating activities (4,591,000) (2,547,000)
----------- -----------
Cash flows provided by (used in)
investing activities -
Additions to property, plant
and equipment, net (775,000) (525,000)
Redemption of short-term investments 450,000 9,000,000
----------- -----------
Net cash provided by (used in) investing
activities (325,000) 8,475,000
----------- -----------
Cash flows used in financing activities -
Cash dividends paid (320,000) (320,000)
Retirement of common stock (183,000) - -
----------- -----------
Net cash used in financing activities (503,000) (320,000)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (5,419,000) 5,608,000
Cash and cash equivalents at beginning
of period 8,069,000 10,674,000
----------- -----------
----------- -----------
Cash and cash equivalents at
end of period $ 2,650,000 $16,282,000
----------- -----------
----------- -----------
Supplemental disclosures of cash flow
information - cash paid during
the period for income taxes $ 181,000 $ 1,351,000
----------- -----------
----------- -----------
</TABLE>
6
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OTHER INFORMATION
SHORT TERM INVESTMENTS:
Short term investments consist primarily of certificates of deposits with
original maturities greater than 90 days.
INVENTORIES:
Inventories, consisting primarily of raw materials, are stated at the lower
of cost or market, with cost determined on a first-in, first-out basis.
CONTINGENT LIABILITIES:
Repurchase Obligations
The Company is contingently liable under terms of repurchase agreements
with various financial institutions which provide for the repurchase of its
homes sold to dealers under floor plan financing arrangements upon dealer
default. The Company's exposure to loss under such agreements is reduced by the
resale of the repurchased home. The Company believes any losses incurred under
outstanding repurchase agreements in excess of the accruals established as of
March 31, 1995 will not have a significant impact on the financial condition of
the Company.
Other Contingencies
Letters of Credit totalling $4,000,000 have been issued to the Company's
insurance carriers who have underwritten the Company's insurance programs.
REVENUE RECOGNITION:
The Company recognizes revenue when the product is shipped to independent
dealers.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Working capital as of March 31, 1995 and December 31, 1994, was $34,950,000
and $35,004,000, respectively. Cash, cash equivalents and short-term
investments as of March 31, 1995 and December 31, 1994 were $21,675,000 and
$27,544,000, respectively. The decrease in cash, cash equivalents and short-
term investments was due to the normal increase in accounts receivable and
inventories for operations in the first quarter. There was no debt as of March
31, 1995 and December 31, 1994. The Company's expansion program at its
Wisconsin and Indiana plants is continuing on schedule. Funding for the
expansion is being provided by existing working capital. During the quarter
ended March 31, 1995, the Company repurchased a total of 20,500 shares of common
stock under the program initiated in 1994 to acquire up to 300,000 shares of its
common stock.
Net sales for the first quarter of 1995 were $39,146,000, an increase of
$10,271,000 from the same quarter of 1994. This increase results from higher
sales at the Company's reopened Kansas plant, initial sales from the newly
opened Alabama plant and increased prices implemented to offset increased costs
due to mandated regulations covering energy performance and wind stability
specifications. Net income of $902,000 for the first quarter of 1995 was a
decrease of $226,000 from the same quarter of 1994. The decrease in earnings
results from production start-up costs sustained at the Company's new Alabama
facility and increased material costs. As sales backlogs in the mobile home
industry are traditionally short, and as dealer inventories
8
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do not normally fluctuate substantially, the orders that the Company receives
are indicative of the day to day retail sales activity of its products. Any
changes affecting the desire or ability of retail customers to purchase, such as
cost, availability of credit and unemployment, have an immediate effect on the
Company's operations.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No exhibits are filed as part of this report, and no reports on Form 8-K
for January, February or March, 1995 have been filed.
10
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIBERTY HOMES, INC.
----------------------------
Registrant
By____________________________
Marc A. Dosmann
Vice President -
(Principal Financial and
Accounting Officer)
Dated May 12, 1995
------------------
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 21,625,000
<SECURITIES> 0
<RECEIVABLES> 11,296,000
<ALLOWANCES> 0
<INVENTORY> 11,148,000
<CURRENT-ASSETS> 47,250,000
<PP&E> 28,760,000
<DEPRECIATION> 13,715,000
<TOTAL-ASSETS> 62,295,000
<CURRENT-LIABILITIES> 12,300,000
<BONDS> 0
<COMMON> 4,511,000
0
0
<OTHER-SE> 43,194,000
<TOTAL-LIABILITY-AND-EQUITY> 62,295,000
<SALES> 39,146,000
<TOTAL-REVENUES> 39,146,000
<CGS> 34,624,000
<TOTAL-COSTS> 3,387,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,514,000
<INCOME-TAX> 612,000
<INCOME-CONTINUING> 902,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 902,000
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
