<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 September 30, 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 October 20, 1995
----- -------------------
Class A Common Stock, $1.00 par value 2,626,761
Class B Common Stock, $1.00 par value 1,795,494
1 of 12
<PAGE>
INDEX
PART I - CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
Pages
-----
General 3
Item 1. Consolidated Financial Statements -
Liberty Homes, Inc.
Consolidated Balance Sheet, as of
September 30, 1995 and December 31, 1994 4
Consolidated Statement of Income, for the
three months ended September 30, 1995
and 1994 5
Consolidated Statement of Income, for the
nine months ended September 30, 1995
and 1994 6
Consolidated Statement of Cash Flows for the
nine months ended September 30, 1995
and 1994 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 9-10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
2
<PAGE>
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
<PAGE>
LIBERTY HOMES, INC.
CONSOLIDATED BALANCE SHEET
as of September 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1995 1994
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . $ 5,956,000 $ 8,069,000
Short-term investments. . . . . 17,450,000 19,475,000
Receivables . . . . . . . . . . 12,179,000 6,756,000
Prepaid income taxes. . . . . . 399,000 988,000
Inventories . . . . . . . . . . 10,881,000 9,361,000
Deferred tax asset. . . . . . . 1,109,000 1,036,000
Prepayments and other . . . . . 886,000 740,000
------------ ------------
Total current assets . . . . 48,860,000 46,425,000
------------ ------------
Property, plant and equipment:
Land . . . . . . . . . . . . . . 1,041,000 1,041,000
Buildings and improvements . . . 20,042,000 14,902,000
Machinery and equipment. . . . . 14,607,000 12,042,000
------------ ------------
35,690,000 27,985,000
Less accumulated
depreciation . . . . . . . . . 14,363,000 13,397,000
------------ ------------
21,327,000 14,588,000
------------ ------------
$ 70,187,000 $ 61,013,000
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
September 30, December 31,
1995 1994
---- ----
<C> <C> <C>
Current liabilities:
Accounts payable. . . . . . . . . $ 6,377,000 $ 3,067,000
Dividend payable. . . . . . . . . 310,000 320,000
Accrued liabilities . . . . . . . 11,074,000 8,034,000
------------ ------------
Total current liabilities . . . 17,761,000 11,421,000
------------ ------------
Deferred income taxes. . . . . . . 2,290,000 2,290,000
------------ ------------
Contingent liabilities (see notes)
Shareholders' Equity
--------------------
Capital Stock:
Class A, $1 par value
Authorized - 7,500,000 Shares
Issued and outstanding - 2,627,000
in 1995 and 2,736,000 in 1994 2,627,000 2,736,000
Class B, $1 par value
Authorized - 3,500,000 Shares
Issued and outstanding - 1,795,000
in 1995 and 1,795,000 in 1994 1,795,000 1,795,000
Other capital. . . . . . . . . . 83,000 83,000
Retained earnings. . . . . . . . 45,631,00 42,688,000
------------ ------------
50,136,000 47,302,000
------------ ------------
$ 70,187,000 $ 61,013,000
------------ ------------
------------ ------------
</TABLE>
4
<PAGE>
LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF INCOME
for the three months ended September 30, 1995 and 1994
____________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net sales $ 41,675,000 $ 32,020,000
Cost of sales 34,988,000 27,466,000
------------ ------------
Gross profit 6,687,000 4,554,000
Selling, general and administrative
expenses 3,849,000 3,036,000
------------ ------------
Operating income 2,838,000 1,518,000
Interest and other income 423,000 449,000
------------ ------------
Income before
income taxes 3,261,000 1,967,000
Income tax expense 1,250,000 807,000
------------ -----------
Net income $ 2,011,000 $ 1,160,000
------------ -----------
------------ -----------
Share income per outstanding Common
Share, based upon weighted average
4,452,000 Common Shares outstanding
at September 30, 1995 and 4,571,000
Common Shares outstanding at
September 30, 1994 $.45 $.25
---- ----
---- ----
Cash dividend per share
Class A Common Stock $.07 $.07
---- ----
---- ----
Class B Common Stock $.07 $.07
---- ----
---- ----
</TABLE>
5
<PAGE>
LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF INCOME
for the nine months ended September 30, 1995 and 1994
____________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net sales $ 124,228,000 $ 92,793,000
Cost of sales 106,734,000 79,023,000
------------ -----------
Gross profit 17,494,000 13,770,000
Selling, general and administrative
expenses 10,949,000 8,762,000
------------ -----------
Operating income 6,545,000 5,008,000
Interest and other income 1,232,000 2,043,000 (a)
------------ -----------
Income before
income taxes 7,777,000 7,051,000
Income tax expense 3,030,000 2,891,000
------------ -----------
Net income $ 4,747,000 $ 4,160,000 (a)
------------ -----------
------------ -----------
Share income per outstanding Common
Share, based upon weighted average
4,489,000 Common Shares outstanding
at September 30, 1995 and 4,571,000
Common Shares outstanding at
September 30, 1994 $1.06 $.91 (a)
----- ----
----- ----
Cash dividend per share:
Class A Common Stock $ .21 $.21
----- ----
----- ----
Class B Common Stock $ .21 $.21
----- ----
----- ----
</TABLE>
(a) Includes a $942,000 pre-tax gain on sale of idle facility in other income
which results in net income of $552,000 or $.12 per share during the second
quarter of 1994.
6
<PAGE>
LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine months ended September 30, 1995 and 1994
_______________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,747,000 $ 4,160,000
Adjustment to reconcile net income
to net cash used in
operating activities -
Depreciation 966,000 746,000
Gain on sale of idle facility - - (942,000)
Deferred income taxes (73,000) (1,017,000)
Changes in assets and liabilities:
Receivables (5,423,000) (4,952,000)
Prepaid income taxes 589,000 1,869,000
Inventories (1,520,000) (2,779,000)
Prepayments and other (146,000) 283,000
Accounts payable 3,310,000 3,817,000
Accrued liabilities 3,040,000 1,591,000
Income taxes payable - - (865,000)
Dividends payable (10,000) - -
----------- ----------
Net cash from operating activities 5,480,000 1,911,000
----------- ----------
Cash flows provided by (used in)
investing activities -
Proceeds from sale of idle facility - - 2,988,000
Additions to property, plant
and equipment (7,705,000) (2,662,000)
Redemption (purchase) of short-term
investments 2,025,000 (9,000,000)
----------- ----------
Net cash used in investing activities (5,680,000) (8,674,000)
----------- ----------
Cash flows used in financing activities -
Cash dividends paid (937,000) (960,000)
Retirement of common stock (976,000) - -
----------- ----------
Net cash used in financing activities (1,913,000) (960,000)
----------- ----------
Net decrease in cash and
cash equivalents (2,113,000) (7,723,000)
Cash and cash equivalents at beginning
of period 8,069,000 10,674,000
----------- ----------
Cash and cash equivalents at
end of period $ 5,956,000 $ 2,951,000
----------- ----------
----------- ----------
Supplemental disclosures of cash flow
information - cash paid during
the period for income taxes $ 2,514,000 $ 4,772,000
----------- ----------
----------- ----------
</TABLE>
7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
September 30, 1995 will not have a significant impact on the financial condition
of the Company.
Other Contingencies
Letters of Credit totaling $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.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Cash, cash equivalents and short term investments as of September 30, 1995 and
December 31, 1994 were $23,406,000 and $27,544,000, respectively. Working
capital as of September 30, 1995 and December 31, 1994 was $31,099,000 and
$35,004,000, respectively. The decrease of these items has been caused by
accounts receivable and inventory increases as the Company's operations expand
over the normal year end base, and by the funding of the Company's facility
expansions at its Wisconsin and Indiana production sites. Also during the nine
months ended September 30, 1995 at a cost of $976,000, the Company repurchased a
total of 108,745 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 third quarter of 1995 were $41,675,000, an increase of
$9,655,000 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 for the quarter ended September 30, 1995 was
$2,011,000 which was a $851,000 increase from the same quarter 1994.
As sales backlogs in the mobile home industry are traditionally short and as
dealer inventories do not normally fluctuate
9
<PAGE>
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.
10
<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
July, August or September, 1995 have been filed.
11
<PAGE>
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 /s/ Marc A. Dosmann
----------------------------
Marc A. Dosmann
Vice President -
(Principal Financial and
Accounting Officer)
Dated November 14, 1995
-----------------
12
<PAGE>
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 /s/ Marc A. Dosmann
----------------------------
Marc A. Dosmann
Vice President -
(Principal Financial and
Accounting Officer)
Dated November 14, 1995
-----------------
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 23,406,000
<SECURITIES> 0
<RECEIVABLES> 12,179,000
<ALLOWANCES> 0
<INVENTORY> 10,881,000
<CURRENT-ASSETS> 48,860,000
<PP&E> 35,690,000
<DEPRECIATION> 14,363,000
<TOTAL-ASSETS> 70,187,000
<CURRENT-LIABILITIES> 17,761,000
<BONDS> 0
<COMMON> 4,422,000
0
0
<OTHER-SE> 45,714,000
<TOTAL-LIABILITY-AND-EQUITY> 70,187,000
<SALES> 124,228,000
<TOTAL-REVENUES> 124,228,000
<CGS> 106,734,000
<TOTAL-COSTS> 10,949,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,777,000
<INCOME-TAX> 3,030,000
<INCOME-CONTINUING> 4,747,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,747,000
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
</TABLE>
