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FORM 10-Q/A
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, 1998.
- 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.
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<CAPTION>
Shares of Outstanding
Class at November 5, 1998
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Class A Common Stock, $1.00 par value 2,224,496
Class B Common Stock, $1.00 par value 1,727,559
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The following, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, is revised.
Liquidity and Capital Resources
Cash, cash equivalents and short term investments as of September 30, 1998
and December 31, 1997 were $17,129,000 and $21,047,000, respectively. Working
capital as of September 30, 1998 and December 31, 1997 was $28,972,000 and
$27,621,000, 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 various property, plant and
equipment projects. Also during the nine months ended September 30, 1998, the
Company repurchased a total of 41,000 shares of common stock under the program
initiated in 1994 and subsequently amended to acquire up to 700,000 shares of
its common stock.
Results of Operations
Net sales for the third quarter of 1998 were $48,897,000, an increase of
$5,036,000 over the same quarter of 1997. The product mix sold by the Company
follows the industry trend. Multi-section home sales increased during the
quarter, while at the same time, single-section home volume declined. Total
unit volume was higher. Net income for the quarter ended September 30, 1998 was
$1,062,000 which was a $528,000 increase from the same quarter of 1997. Net
income improved primarily as a result of increased gross profit. The gains in
gross profit reflect the Company's higher volume of sales and improved
production efficiency.
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Outlook and Risk Factors
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 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.
Year 2000
Liberty Homes employs several electronic data processing (EDP) systems for
administrative and reporting purposes. In 1995, the Company began a process to
analyze the need to enhance its systems to accommodate planned growth of the
Company and to meet additional management information needs. As the Company
determined the systems it wished to enhance, it also discovered the need to
ensure all of its systems were able to handle year 2000 dates. This Year 2000
(Y2K) compliance issue then became a part of the Company's EDP enhancement
program. In March of 1996, the Company contracted for an overall upgrade of its
EDP system which, among many things would provide Y2K compliance for a
substantial portion of its EDP systems. This project is well on the way to
completion.
Additionally, the Company has tested and upgraded all of its information
and communication systems hardware for Y2K compliance, installed software
updates containing Y2K compliance code and initiated projects to bring
internally developed systems into Y2K compliance. Overall, the Company plans to
be done with all of its Y2K
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compliance efforts by July 1, 1999. Because of the positive results of its
remediation efforts to date, the Company does not have a contingency plan,
nor does it intend to create one at this time.
The Company's manufacturing processes do not utilize systems that are
materially reliant on Y2K compliance. Therefore, the Company's ability to
generate product will not be adversely affected by any Y2K issues.
The Company sells its product to numerous independent dealers, none of
which account for a material portion of the Company's sales. The Company
believes the risk of Y2K noncompliance associated with its dealer group is not
significant.
The Company's operations rely on a variety of suppliers, wholesale and
retail finance sources, transportation companies and utilities. The Company is
not aware of any material compliance problems with these vendors, however, it
will continue to monitor the sufficiency of this group's Y2K compliance efforts.
Liberty Homes believes the sole failure of any vendor would not have a material
adverse effect on the Company's business.
The total cost to date and expected future cost for Y2K remediation is not
material. Internally generated funds are the source of funding these compliance
costs.
The Company believes that its Y2K compliance efforts will significantly
reduce the risk of any material adverse business interruptions caused by
noncompliance. However, this statement should not be considered a guarantee of
such a reduction in risk.
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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.
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Registrant
By /s/ MARC A. DOSMANN
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Marc A. Dosmann
Vice President - Chief Financial Officer
(Principal Financial and
Accounting Officer)
Dated January 15, 1999
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