<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 June 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 July 21, 1995
----- ---------------------
Class A Common Stock, $1.00 par value 2,694,306
Class B Common Stock, $1.00 par value 1,795,494
1 of 12
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INDEX
PART I - CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
PAGES
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General 3
Item 1. Consolidated Financial Statements -
Liberty Homes, Inc.
Consolidated Balance Sheet, as of
June 30, 1995 and December 31, 1994 4
Consolidated Statement of Income, for the
three months ended June 30, 1995
and 1994 5
Consolidated Statements of Income, for the
six months ended June 30, 1995
and 1994 6
Consolidated Statement of Cash Flows for the
six months ended June 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
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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 June 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1995 1994
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents....... $ 6,118,000 $ 8,069,000
Short-term investments.......... 19,050,000 19,475,000
Receivables..................... 11,373,000 6,756,000
Prepaid income taxes............ 21,000 988,000
Inventories..................... 10,871,000 9,361,000
Deferred tax asset.............. 1,086,000 1,036,000
Prepayments and other........... 931,000 740,000
--------------- --------------
Total current assets......... 49,450,000 46,425,000
--------------- --------------
Property, plant and equipment:
Land............................ 1,041,000 1,041,000
Buildings and improvements...... 17,330,000 14,902,000
Machinery and equipment......... 13,576,000 12,042,000
--------------- --------------
31,947,000 27,985,000
Less accumulated
depreciation...................... 13,936,000 13,397,000
--------------- --------------
18,011,000 14,588,000
--------------- --------------
$ 67,461,000 $ 61,013,000
--------------- --------------
--------------- --------------
LIABILITIES
Current liabilities:
Trade accounts payable.......... $ 6,447,000 $ 3,067,000
Dividend payable................ 314,000 320,000
Accrued liabilities............. 9,419,000 8,034,000
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Total current liabilities.. 16,180,000 11,421,000
-------------- --------------
Deferred income taxes................ 2,242,000 2,290,000
-------------- --------------
Contingent liabilities (see notes)
SHAREHOLDERS' EQUITY
Capital Stock:
Class A, $1 par value
Authorized - 7,500,000 Shares
Issued and outstanding - 2,695,000
in 1995 and 2,736,000 in 1994 2,695,000 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................... 44,466,000 42,688,000
-------------- --------------
49,039,000 47,302,000
-------------- --------------
$ 67,461,000 $ 61,013,000
-------------- --------------
-------------- --------------
</TABLE>
4
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LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF INCOME
for the three months ended June 30, 1995 and 1994
____________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net sales $43,407,000 $31,898,000
Cost of sales 37,122,000 26,989,000
----------- -----------
Gross profit 6,285,000 4,909,000
Selling, general and administrative
expenses 3,713,000 3,018,000
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Operating income 2,572,000 1,891,000
Interest and other income 430,000 1,313,000 (a)
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Income before
income taxes 3,002,000 3,204,000
Income tax expense 1,168,000 1,332,000
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Net income $ 1,834,000 $ 1,872,000 (a)
----------- -----------
----------- -----------
Share income per outstanding Common
Share, based upon weighted average
4,496,000 Common Shares outstanding
at June 30, 1995 and 4,571,000 Common
Shares outstanding at June 30, 1994 $.41 $.41 (a)
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---- ----
Cash dividend per share:
Class A Common Stock $.07 $.07
---- ----
---- ----
Class B Common Stock $.07 $.07
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<FN>
(a) Includes a $942,000 pretax gain on sale of idle facility in other income
which results in $552,000 of net income or $.12 per share.
</TABLE>
5
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LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF INCOME
for the six months ended June 30, 1995 and 1994
____________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net sales $82,553,000 $60,773,000
Cost of sales 71,746,000 51,557,000
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Gross profit 10,807,000 9,216,000
Selling, general and administrative
expenses 7,100,000 5,726,000
----------- -----------
Operating income 3,707,000 3,490,000
Interest and other income 809,000 1,594,000 (a)
----------- -----------
Income before
income taxes 4,516,000 5,084,000
Income tax expense 1,780,000 2,084,000
----------- -----------
Net income $2,736,000 $3,000,000 (a)
----------- -----------
----------- -----------
Share income per outstanding Common
Share, based upon weighted average
4,508,000 Common Shares outstanding
at June 30, 1995 and 4,571,000 Common
Shares outstanding at June 30, 1994 $.61 $.66 (a)
---- ----
---- ----
Cash dividend per share:
Class A Common Stock $.14 $.14
---- ----
---- ----
Class B Common Stock $.14 $.14
---- ----
---- ----
<FN>
(a) Includes a $942,000 pretax gain on sale of idle facility in other income
which results in $552,000 of net income or $.12 per share during the second
quarter of 1994.
</TABLE>
6
<PAGE>
LIBERTY HOMES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended June 30, 1995 and 1994
_______________
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,736,000 $ 3,000,000
Adjustment to reconcile net income
to net cash used in
operating activities -
Depreciation 539,000 471,000
Gain on sale of idle facility - - (942,000)
Deferred income taxes (98,000) - -
Changes in assets and liabilities:
Receivables (4,617,000) (4,744,000)
Prepaid income taxes 967,000 1,869,000
Inventories (1,510,000) (2,609,000)
Prepayments and other (191,000) 189,000
Trade accounts payable 3,380,000 2,057,000
Accrued liabilities 1,385,000 1,108,000
Dividends Payable (6,000) - -
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Net cash from operating activities 2,585,000 399,000
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Cash flows provided by (used in)
investing activities -
Proceeds from sale of idle facility - - 2,988,000
Additions to property, plant
and equipment (3,962,000) (937,000)
Redemption (purchase) of short-term
investments 425,000 (2,000,000)
----------- -----------
Net cash provided by (used in) investing
activities (3,537,000) 51,000
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Cash flows used in financing activities -
Cash dividends paid (627,000) (640,000)
Retirement of common stock (372,000) - -
----------- -----------
Net cash used in financing activities (999,000) (640,000)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (1,951,000) (190,000)
Cash and cash equivalents at beginning
of period 8,069,000 10,674,000
----------- -----------
Cash and cash equivalents at
end of period $ 6,118,000 $10,484,000
----------- -----------
----------- -----------
Supplemental disclosures of cash flow
information - cash paid during
the period for income taxes $ 911,000 $ 2,299,000
----------- -----------
----------- -----------
</TABLE>
7
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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
June 30, 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.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Cash, cash equivalents and short term investments as of June 30, 1995 and
December 31, 1994 were $25,168,000 and $27,544,000, respectively. Working
capital as of June 30, 1995 and December 31, 1994 was $33,270,000 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 six
months ended June 30, 1995, the Company repurchased a total of 41,200 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 second quarter of 1995 were $43,407,000, an increase of
$11,509,000 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 June 30, 1995 was $1,834,000
which was a $38,000 decrease from the same quarter in 1994 during which the
company's idle facility in Belton, Texas was sold at an after tax gain of
$552,000.
As sales backlogs in the manufactured housing industry are traditionally
short and as dealer inventories do not normally fluctuate substantially, the
orders that the Company receives are indicative of
9
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the day-to-day retail sales activity of its product. Any changes affecting the
desire or ability of retail customers to purchase, such as cost, credit
availability and employment, have an immediate effect on the Company's
operations.
10
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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 April, May or June, 1995 have been filed.
11
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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 August 14, 1995
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 25,168,000
<SECURITIES> 0
<RECEIVABLES> 11,373,000
<ALLOWANCES> 0
<INVENTORY> 10,871,000
<CURRENT-ASSETS> 49,450,000
<PP&E> 31,947,000
<DEPRECIATION> 13,936,000
<TOTAL-ASSETS> 67,461,000
<CURRENT-LIABILITIES> 16,180,000
<BONDS> 0
<COMMON> 4,490,000
0
0
<OTHER-SE> 44,549,000
<TOTAL-LIABILITY-AND-EQUITY> 67,461,000
<SALES> 82,553,000
<TOTAL-REVENUES> 82,553,000
<CGS> 71,746,000
<TOTAL-COSTS> 7,100,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,516,000
<INCOME-TAX> 1,780,000
<INCOME-CONTINUING> 2,736,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,736,000
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>