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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
One) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
X FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.
- ------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
- ------ 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) IRS Employer Identification No.
PO Box 35, Goshen, Indiana 46527-0035
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number (219) 533-0431
Securities registered pursuant to Section 12 (g) of the Act:
Name of Each Exchange
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- -------------------
Class A Common Stock NASDAQ
Class B Common Stock NASDAQ
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this form 10-K /X/
As of March 20, 2000, the aggregate market value of the voting Common Stock
Class B, held by nonaffiliates (based upon the closing price on such date) was
approximately $1,700,000. Number of shares outstanding of each of the
registrant's classes of common stock
Shares of Outstanding
CLASS AT MARCH 20, 2000
----- -----------------
Class A Common Stock, $1.00 par value 2,197,908
Class B Common Stock, $1.00 par value 1,706,247
The Exhibit Index is located on page 12.
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PART I
FORWARD LOOKING INFORMATION - The discussion below contains forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements include statements regarding industry and company
outlooks and risk factors. The Company may make other forward looking statements
orally or in writing from time to time. All such forward looking statements are
not guaranties of future events or performance and involve risks and
uncertainties. Actual results may differ materially from those in the forward
looking statements as the result of a number of material factors. These factors
include without limitation, the availability of financing credit at both the
wholesale and retail level, the availability of a competent workforce, the
regulation of the industry at the federal, state and local levels, changes in
interest rates, unanticipated results in pending legal proceedings and the
condition of the economy and its effect on consumer confidence.
ITEM 1. BUSINESS
Liberty Homes, Inc. (the "Company") was organized as an Indiana corporation
in 1970 as the successor to a business founded in 1941. The Company designs,
manufactures and sells at wholesale throughout most of the United States a broad
line of manufactured homes under various trade names. Additionally, it sells at
retail in two Company-owned retail centers in Indiana and North Carolina.
Constructed on a wheel-mounted under-carriage, a manufactured home is a
relocatable factory-built dwelling which, when moved to a location, properly set
up and connected to utilities, provides permanent housing. A manufactured home
may also consist of two or more units which are moved separately and when
securely joined together are called multi-sectional housing.
A manufactured home is to be distinguished from a travel trailer, motor
home or other recreational vehicle which is generally used for living
accommodations during relatively short periods, primarily for vacation and
recreational purposes.
The Company's typical manufactured home contains a living room, dining
area, kitchen
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equipped with range and refrigerator, two, three, four or five bedrooms, and one
or more baths complete with tub and/or shower, flush toilet and lavatory. The
homes are equipped with central heating, carpeting, a choice of coordinated
colors and interior decoration, and a wide range of floor plans. Single section
homes are 12, 14 or 16 feet wide and vary in overall length from 36 to 80 feet
(including about 4 feet for the hitch). Multi-section homes are two or more 12,
14, 15 or 16 foot wide sections, with overall lengths ranging from 36 to 80 feet
(including about 4 feet for the hitch).
The Company utilizes assembly line techniques in the production of its
homes. Lumber for walls, roofs, ceilings and floors, steel, wood or vinyl
siding, ceiling materials, windows, furniture, electrical and plumbing fixtures,
and many other items are purchased from numerous suppliers for fabrication or
assembly. Sources of material are readily available and the Company is not
dependent upon any particular supplier for its raw materials or component parts.
Aside from sales at its two retail centers, the Company sells its products
to numerous independent dealers, most of whom also sell competing products. In
the year ended December 31, 1999, the Company's largest dealer accounted for
approximately three percent of the Company's sales. The Company generally
manufactures its homes only after receipt of orders from its dealers, and sales
backlogs in the manufactured housing industry are traditionally short.
Retail prices for the Company's single section homes typically range from
approximately $25,000 to $50,000 and from approximately $35,000 to $100,000 for
multi-sections. The Company's homes generally fall within the low to mid price
range of the industry.
Manufactured homes were sold by the Company during 1999 to dealers in most
of the continental United States. Transportation charges from the point of
manufacture to the dealer are an important factor in the cost of a manufactured
home and often influence a dealer's preference for similar products. In general,
most retail outlets are located within a 500 mile radius of the manufacturing
facility serving the dealer.
In each of the geographical areas in which the Company operates, it faces
direct competition
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from other manufacturers, some of whom are larger than the Company and possess
greater financial resources. This group of competitors consists of manufacturers
who compete with the Company on a national level as well as many others who are
only regional in scope. According to data from the National Conference of States
on Building Codes and Standards (NCSBCS) at the end of 1999, there were 71
companies operating 323 facilities producing manufactured housing in the United
States. Due to transportation complexities, none of the Company's products, and
very little of the industry's products are shipped outside the United States.
Since the manufactured homes sold by the Company are a form of housing, changes
in factors which influence the national housing market usually affect the
Company's business, either beneficially or adversely.
In addition, the quality and number of manufactured home developments with
space available for new homes sometimes affect the market for manufactured
homes. Manufactured home parks and placement of manufactured homes on
real-estate type scattered sites or subdivisions are generally subject to local
zoning ordinances and other local regulations. Any limitation of the
availability of space for manufactured homes due to any cause, including such
local ordinances, could adversely affect the Company's business.
In 1999, Irish Homes, Inc., a wholly-owned subsidiary of the Company, began
a retail center in Elkhart, Indiana. Irish Homes, Inc., commenced operations in
1988 to develop subdivisions using the Company's manufactured homes. The homes
located within subdivisions include a garage and are placed on a foundation with
landscaping, concrete and other work, performed on site by independent
contractors.
In 1998, Statesville Housing Center, Inc. was formed as a wholly-owned
subsidiary of the Company and began operations as a retail dealer of the
Company's homes. This retail center is located in Statesville, North Carolina
within a mile of one of the Company's manufacturing plants.
During 1997, the Company formed Gipper Development Company, LLC, a majority
owned entity, which is developing a manufactured housing community in Northern
Indiana. The
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development includes only homes manufactured by the Company.
In 1994, the Company formed Waverlee Homes, Inc., a majority owned
subsidiary, which operates production facilities in Hamilton and Tuscumbia,
Alabama. This operation incorporates many state-of-the-art manufacturing
concepts and enhances the Company's ability to serve the market in the South
Central United States.
The Company's ability to sell is dependent to a considerable degree upon
the availability and terms of financing both to its dealers and to retail
customers. Consequently, increases in interest rates or tightening of credit
through governmental action or otherwise could adversely affect the Company's
business. Conversely, a lowering of interest rates or relaxation of credit
restraints could improve the Company's business.
Because of their size and weight, manufactured homes are generally
transported by specially modified trucks. Most states require special permits
for the movement of such homes. Typically, these permits prescribe the roads to
be used, speed limits, hours during which travel is permitted, types of
signaling devices which must be used, and other such restrictions, primarily for
safety purposes. Seasonal weather conditions can also be a factor for
transportation.
The construction of manufactured homes, and the plumbing, heating and
electrical systems installed therein, are subject to the National Manufactured
Home Construction and Safety Standards promulgated by the U.S. Department of
Housing and Urban Development (HUD) pursuant to authority granted them by the
National Manufactured Home Construction and Safety Standards Act of 1974. HUD
has also promulgated lengthy and complex regulations to implement and enforce
the construction standards, and there are substantial penalties for deviations
from the regulations.
Dealers who purchase from the Company generally obtain inventory financing
from financial institutions (usually banks or finance companies) on a "floor
plan" basis whereby the financial institution obtains a lien upon, or title to,
all or part of a dealer's inventory. To assist dealers in obtaining such
financing, the Company, in accordance with trade practice, generally enters into
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repurchase agreements with lending institutions whereby the Company, during the
period (generally not in excess of one year) pending sale to a retail customer,
agrees to repurchase a home so financed in the event of the dealer's default and
subsequent inability to repay the amount borrowed from the financial
institution. In the event of repurchase, the Company will experience a loss if
the repurchase price paid to the financial institution plus any related costs of
repossession (e.g., freight, repairs) exceed the proceeds received by the
Company from resale of the home repurchased. The Company's losses under these
dealer repurchase agreements have not been significant.
Retail customers often finance their purchases with funds borrowed from
banks, finance companies and savings and loan associations. Such retail finance
arrangements sometimes call for an effective interest rate considerably higher
than that imposed for conventional home mortgage financing.
EMPLOYEES
As of March 13, 2000, the Company had approximately 1,350 full-time
employees.
ITEM 2. PROPERTIES.
Syracuse, Indiana Sheridan, Oregon
Yoder, Kansas Ocala, Florida
Dorchester, Wisconsin Statesville, North Carolina
Plant #1 Hamilton, Alabama
Plant #2 Tuscumbia, Alabama
Leola, Pennsylvania Goshen, Indiana
The Company's executive office and engineering and design center is located
in Goshen, Indiana. The remaining locations are manufacturing facilities.
The Company owns all of its properties in fee simple and believes that its
facilities and equipment contained therein are well maintained and in good
condition. All of the Company's manufacturing facilities are intended for the
manufacture of manufactured homes, and in the Company's judgment, all are
adequate for their current use.
The Company's plants are utilized during one shift per day.
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ITEM 3. LEGAL PROCEEDINGS.
The Company is party to various legal proceedings from the normal course of
operations. The Company has provided for anticipated losses resulting from the
litigation. In management's opinion, the Company has adequate legal defenses and
does not believe these suits will materially affect the Company's operations or
financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders for the three
months ended December 31, 1999.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's 1999 Annual Report to Shareholders is an exhibit of this
filing. The information under the caption "Capital Stock" on page four of the
report is incorporated by reference as Item 5 of this filing.
ITEM 6. SELECTED FINANCIAL DATA.
The Company's 1999 Annual Report to Shareholders is an exhibit of this
filing. The information under the caption "Selected Financial Data" on page one
of the report is incorporated by reference as Item 6 of this filing.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Company's 1999 Annual Report to Stockholders is an exhibit of this
filing. The information contained on pages one through three of the report under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" is incorporated by reference as Item 7 of this filling.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's 1999 Annual Report to Stockholders is an exhibit of this
filing. The 1999, 1998 and 1997 consolidated financial statements and footnotes
thereto, together with the report thereon of Crowe, Chizek and Company LLP dated
February 15, 2000, on pages six through fourteen of the report are incorporated
by reference as Item 8 of this filing.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Edward J. Hussey, age 82, has been President, Chairman of the Board and a
Director of the Company (or it predecessors) since 1960, and is the father of
Edward Joseph Hussey and Michael F. Hussey.
Edward Joseph Hussey, age 52, is an attorney and a son of Edward J. Hussey.
He has been a Director of the Company since 1981, Secretary of the Company since
1985 and was named Vice President of the Company in 1990. In September, 1987, he
began employment with the Company on a full time basis. Since 1975, he has been
associated with the law firm of Hodges & Davis P.C., where he is still a
shareholder.
Michael F. Hussey, age 43, has been employed by the Company since 1980. He
was named Vice President of Finance in 1984 and became a Director in 1988. He is
the son of Edward J. Hussey.
David M. Huffine, age 51, has been a Director of the Company since 1988. He
has also held the position of President of I.M. Homes, Inc., Rocky Ford,
Colorado since 1997. Prior thereto, he was President of Sky View Homes, Inc.,
Chairman of the Board of Rampart Investigations, and Vice President of Calumet
Securities Corporation.
Mitchell Day, age 44, has been a Director since 1995. He has also been
President of Day
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Equipment Corporation, Goshen, Indiana since 1984.
Ralph D. Ray, age 67, has been employed in various management positions
with the Company for 30 years. He has been Treasurer of the Company since 1984.
Dorothy L. Peterson, age 88, has been employed with the Company since 1952.
She was appointed Assistant Treasurer in 1985.
Marc A. Dosmann, age 47, joined the Company in February, 1995 as Vice
President and Chief Financial Officer. From January, 1990 to February, 1995, he
was Corporate Controller of Leer, Inc.
Bruce A. McMillan, age 48, has served the Company in various capacities for
25 years. He was appointed to the position of Vice President of Sales in 1994.
Ronald Atkins, age 49, has served the Company in manufacturing and
purchasing functions since 1981. During 1996, he was appointed to the position
of Vice President of Purchasing.
Nader Tomasbi, age 40, joined the Company in July 1994. In 1998, he was
appointed as Vice President of Engineering and Design.
Brian L. Christner, age 40, joined the Company in December 1994 as
Controller. Previously he was Controller at Life Treatment Centers, Inc.
ITEM 11. EXECUTIVE COMPENSATION.
The Company's Proxy Statement for the Annual Meeting of Shareholders to be
held on April 27, 2000 includes information under the captions "Executive
Compensation and Shareowner Return Performance Presentation" on pages six
through eight. Those sections are exhibits of this filing and are incorporated
by reference as Item 11 of this filing.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The Company's Proxy Statement for the Annual Meeting of Shareholders to be
held on April 27, 2000 includes information under the caption "Shares
Outstanding and Voting Rights" on pages two and three. This section is an
exhibit of this filing and is incorporated by reference as Item 12
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of this filing.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company's Proxy Statement for the Annual Meeting of Shareholders to be
held April 27, 2000 includes information in footnotes four and seven on page
five. This information is incorporated by reference as item 13 of this filing.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report on Form 10-K:
<TABLE>
<CAPTION>
1. FINANCIAL STATEMENTS
<S> <C>
Consolidated Balance Sheet at December 31, 1999 and 1998 See Shareholder Annual Report
Page 6
Consolidated Statements of Income See Shareholder Annual Report
for Years Ended December 31, 1999, 1998 and 1997 Page 8
Consolidated Statements of Changes in Shareholders' See Shareholder Annual Report
Equity for the Years Ended December 31, 1999, 1998 Page 8
and 1997
Consolidated Statements of Cash Flows for the Years See Shareholder Annual Report
Ended December 31, 1999, 1998 and 1997 Page 9
Notes to Consolidated Financial Statements See Shareholder Annual Report
Page 10
Report of Independent Auditors See Shareholder Annual Report
(Crowe, Chizek and Company LLP) Page 14
</TABLE>
(a) 3. EXHIBITS
The exhibits filed with this Form 10-K are listed in the exhibit index
located on page 12.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the three months ended December
31, 1999.
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SIGNATURES
Following the requirements of Section 13 or 15(d) 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)
March 29, 2000 By: /S/ MARC A. DOSMANN
-----------------------
Marc A. Dosmann
Vice President - CFO
(Principal Financial and Accounting Officer)
Following the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Edward J. Hussey
------------------------------------
Edward J. Hussey President, Director, Chairman of
the Board of Directors
(Principal Executive Officer)
March 29, 2000
/s/ Edward Joseph Hussey Director, Vice President, Secretary
------------------------------------- & Assistant Treasurer
Edward Joseph Hussey March 29, 2000
/s/ Michael F. Hussey Director and Vice President - Finance
-------------------------------------- March 29, 2000
Michael F. Hussey
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<TABLE>
<CAPTION>
EXHIBIT INDEX
PAGE
<S> <C>
3(a) Articles of Incorporation of the Company. *
(File #0-5555, Form 10-K for the year ended December 31, 1984)
3(b) Amendment to Articles of Incorporation. *
(File #0-5555, Form 10-Q for the quarter ended March 31, 1985, Exhibit 4).
3(c) By-laws of the Company. *
(File #0-5555, Form 10-K for the year ended December 31, 1987)
10(a) Employment Agreement between the Company *
and Edward Joseph Hussey dated September 14, 1993
(File #0-5555, Form 10-K for the year ended December 31, 1993).
10(b) Employment Agreement between the Company and Michael F. Hussey *
dated September 14, 1993 (File #0-5555, Form 10-K for the year
ended December 31, 1993).
10(c) Split-Dollar Insurance Plan effective June 11, 1993 between the *
Company and Nancy A. Parrish and Michael F. Hussey, Trustees for
the Edward Joseph Hussey 1993 Irrevocable Trust (File #0-5555,
Form 10-K for the year ended December 31, 1993)
10(d) Split-Dollar Insurance Plan effective June 11, 1993 between *
the Company and Nancy A. Parrish and John P. Hussey, Trustees
for the Michael F. Hussey 1993 Irrevocable Trust (File #0-55555,
Form 10-K for the year ended December 31, 1993)
13 Annual Report to Shareholders for 1999
(Except for those portions of this report which are expressly
incorporated by reference in this Form 10-K, the information contained
in such 1999 Annual Report to Shareholders is not deemed "filed" as
part of this Form 10-K).
</TABLE>
21 List of Subsidiaries
27 Financial Data Schedule
* Incorporated by reference
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THE COMPANY
LIBERTY HOMES, INC. and Subsidiaries design, manufacture and sell a broad line
of single and multi-section manufactured homes to numerous independent dealers
throughout most of the United States and to consumers at the Company's retail
operations located in Statesville, North Carolina and Elkhart, Indiana. The
Company currently operates manufacturing plants in Syracuse, Indiana; Yoder,
Kansas; Dorchester, Wisconsin; Leola, Pennsylvania; Sheridan, Oregon; Ocala,
Florida; Statesville, North Carolina; Hamilton, Alabama; and Tuscumbia, Alabama.
Corporate offices, including engineering and design facilities, are located in
Goshen, Indiana.
SELECTED FINANCIAL DATA
as of or for the year ending December 31,
(Amounts in Thousands Except per Share Data)
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<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Sales $ 176,314 $ 184,920 $ 167,837 $ 168,139 $ 164,753
Net income $ 2,162 $ 4,562 $ 3,034 $ 4,553 $ 6,356
Net income per share $ .55 $ 1.15 $ .74 $ 1.06 $ 1.42
Total assets $ 75,088 $ 77,219 $ 71,482 $ 72,166 $ 69,127
Long term obligations -- -- -- -- --
Cash dividends per share:
Class A common stock $ .28 $ .28 $ .28 $ .28 $ .28
Class B common stock $ .28 $ .28 $ .28 $ .28 $ .28
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES - Cash and cash equivalents and short-term
investments as of December 31, 1999 and 1998 totaled $17,090,000 and
$23,741,000, respectively. Working capital was $31,803,000 at year end 1999 and
$31,075,000 at year end 1998. There was no bank debt, bonds or notes payable at
December 31, 1999 and 1998. Historically, the Company's financing needs have
been met through funds generated internally.
The Company invested $2,963,000 in capital expenditure programs during 1999. An
expansion of the Ocala, Florida manufacturing facility was begun and mostly
completed during the year. The remaining projects were spread throughout the
Company and included improvements to production efficiency, retail operations
and replacement of existing equipment.
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Additionally, the Company continued to repurchase shares of its Class A and
Class B Common Stock under a program initiated in 1994. During 1999, the Company
repurchased a total of 39,000 Class A shares and 9,000 Class B shares. At the
end of 1999, a total of 643,000 Class A Common Shares and 24,000 Class B Common
Shares had been repurchased and cancelled. The Company plans to continue such
repurchases on the open market or in negotiated transactions at management's
discretion.
During 2000, the Company anticipates that cash flow from operations and cash
reserves will be sufficient to meet the requirements for capital expenditures,
working capital, stock repurchases and dividend payments.
RESULTS OF OPERATIONS - Net sales in 1999 were $176,314,000, a $8,606,000 or 5%
decrease from 1998 net sales of $184,920,000. Net sales in 1998 increased by
$17,083,000 or 10% from $167,837,000 in 1997. The decrease in net sales from
1998 to 1999 coincided with a downturn in sales in the manufactured housing
industry caused by overproduction of homes relative to retail sales in the prior
periods and a tightening of credit by finance companies.
The Company's product mix of single-section homes and multi-section homes has
stabilized. During 1999 and 1998, 55% of the homes sold by the Company were
homes comprised of two or more sections.
Gross profit was $22,330,000 or 13% of net sales in 1999, $25,702,000 or 14% of
net sales in 1998 and $20,246,000 or 12% of net sales in 1997. Changes in sales
volume and the fixed nature of some of the Company's manufacturing costs account
for much of the variance of gross profit. Wood product and gypsum price
increases during 1999 also caused gross profit deterioration.
Selling, general and administrative expenses amounted to $19,204,000 in 1999,
$19,024,000 in 1998 and $16,366,000 in 1997. During 1999, these expenses fell in
the Company's manufacturing operations while rising in the retail and
development operations.
Interest and other income was $1,139,000 in 1999, $1,286,000 in 1998 and
$1,027,000 in 1997 and primarily results from interest income earned from the
Company's investment of cash. Variances are due to varying interest rates and
the amount of cash available to invest.
Net income of $2,162,000 in 1999 compared to $4,562,000 in 1998 and $3,034,000
in 1997. Net income during 1999 fell from 1998 as a result of lower sales and
increased material costs, particularly lumber products and gypsum board, which
due to competitive conditions could not be reflected in increased selling
prices.
OUTLOOK AND RISK FACTORS - Nationally the manufactured housing industry
experienced a manufacturing slump during 1999. Annual production statistics
reported by the Manufactured Housing Institute show a 7% drop in home
production. Manufacturers' production during prior periods exceeded retail
consumer demand and the resulting
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inventory levels during 1999 negatively impacted orders to the nation's
manufacturers during the year.
The Company produces only to dealer orders. Sales backlogs are traditionally
short and dealer inventories do not fluctuate substantially. Therefore, order
activity at the Company is indicative of the day to day retail sales activity of
its products. The Company believes consumer housing needs and favorable retail
financing for its homes has had a positive impact on the Company. However,
changes affecting retail customer demand, such as cost, availability of
favorable credit and unemployment, will have an immediate effect on the
Company's operations.
In a practice common to the industry, the Company participates in dealer
financing programs which require it to repurchase homes which remain unsold and
in dealer inventory for a period of up to one year after delivery to the dealer,
if the dealer defaults on its financing obligations. Repurchased units are
resold, although some discounting may be necessary and some loss may occur.
Losses on such repurchases are not expected to be material during 2000.
The U.S. Department of Housing and Urban Development (HUD) regulates the
manufactured housing industry. HUD has in the past issued regulations which
affected the content and therefore cost of manufactured homes. Such increases in
cost can have an adverse effect on the industry and the Company. However, the
Company is unable to quantify the direct impact on the Company's sales. The
likelihood of future regulatory activity by HUD is unknown and consequently
there can be no assessment of potential future adverse effects of new HUD
regulations if such regulations do occur.
FORWARD LOOKING INFORMATION - The discussion above contains forward looking
statements regarding industry and company outlooks and risk factors. All such
forward looking statements are subject to a number of material factors. These
factors include, without limitation, the availability of financing credit at
both the wholesale and retail level, the availability of a competent workforce,
the regulation of the industry at the federal, state and local levels and the
condition of the economy and its effect on consumer confidence.
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CAPITAL STOCK
The Company's Class A and Class B Common Stock are traded on the NASDAQ Stock
Market. As of March 17, 2000, there were approximately 295 holders of record of
the Company's Class A Common Stock and approximately 218 holders of record of
the Company's Class B Common Stock. The following table shows the high and low
closing price per share for the Company's Class A and Class B Common Stock for
each of the quarters in 1999 and 1998 as well as cash dividends declared in each
quarter in 1999 and 1998.
<TABLE>
<CAPTION>
PRICE PER SHARE ($) Cash Dividends
1999 1998 PER SHARE
---- ---- ---------
HIGH LOW HIGH LOW 1999 1998
------ ------ ------ ----- ------ ------
First Quarter:
<S> <C> <C> <C> <C> <C> <C>
Class A Common 11 1/4 9 1/8 10 3/4 9 $.07 $.07
Class B Common 11 10 3/4 11 10 $.07 $.07
Second Quarter:
Class A Common 10 7 7/8 11 3/4 9 5/8 $.07 $.07
Class B Common 10 5/8 7 3/8 11 3/8 11 $.07 $.07
Third Quarter:
Class A Common 9 15/16 6 3/8 15 1/4 9 3/8 $.07 $.07
Class B Common 9 5/8 8 15 10 1/4 $.07 $.07
Fourth Quarter:
Class A Common 9 1/32 6 5/8 11 15/16 10 5/8 $.07 $.07
Class B Common 8 7/8 7 13/16 12 10 1/2 $.07 $.07
</TABLE>
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[LOGO]
March 17, 2000
To Our Shareholders:
During 1999, Liberty Homes, Inc. generated net sales of $176,314,000. This
amount represents a decrease of $8,606,000 from the prior year. Net income for
1999 decreased to $2,162,000 from $4,562,000 in 1998. The year provided many
challenges to the industry and to the Company. The decrease in net sales
coincided with a downturn in sales in the manufactured housing industry caused
by overproduction of homes relative to retail sales in the prior periods and a
tightening of credit by finance companies. Net income fell as a result of the
lower sales and increased material costs, particularly wood products and gypsum
board, which due to competitive conditions could not be reflected in increased
selling prices.
The Company continued to repurchase shares of its Class A and Class B Common
Stock during the year by repurchasing a total of 39,000 Class A shares and 9,000
Class B shares. Also, the Company continued to pay its regular dividend of $.28
per share for the year.
Once again, we want to take this opportunity to thank our shareholders,
employees and suppliers for their efforts and continuing support.
Very truly yours,
LIBERTY HOMES, INC.
/s/ Edward J. Hussey
- -----------------------
Edward J. Hussey
President
pkm
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CONSOLIDATED BALANCE SHEET
December 31, 1999 and 1998 (Amounts in Thousands)
ASSETS
<TABLE>
<CAPTION>
1999 1998
------ ------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 10,555 $ 18,441
Short term investments 6,535 5,300
Receivables 10,248 9,107
Inventories 15,327 13,171
Deferred tax asset 2,240 2,500
Income taxes refundable 715 --
Prepayments and other 1,988 1,609
----------------- -----------------
Total current assets 47,608 50,128
----------------- -----------------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,926 1,524
Buildings and improvements 28,241 26,662
Machinery and equipment 20,742 19,760
----------------- -----------------
50,909 47,946
Less accumulated depreciation 23,429 20,855
----------------- -----------------
27,480 27,091
----------------- -----------------
$ 75,088 $ 77,219
================= =================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
LIBERTY HOMES, INC.
LIABILITIES
<TABLE>
<CAPTION>
1999 1998
---- ----
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable $ 2,216 $ 2,699
Dividends payable 273 277
Income taxes payable -- 1,136
Accrued compensation & payroll taxes 2,479 2,897
Other accrued liabilities 10,837 12,044
----------------- -----------------
Total current liabilities 15,805 19,053
----------------- -----------------
DEFERRED INCOME TAXES 2,420 2,270
----------------- -----------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,341 969
----------------- -----------------
CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
CAPITAL STOCK:
Class A, $1 par value, Authorized - 7,500,000 shares
Issued and outstanding -
2,198,000 in 1999 and 2,224,000 in 1998 2,198 2,224
Class B, $1 par value, convertible
to Class A, authorized - 3,500,000 shares
Issued and outstanding -
1,706,000 in 1999 and 1,728,000 in 1998 1,706 1,728
OTHER CAPITAL 83 83
RETAINED EARNINGS 51,535 50,892
----------------- -----------------
55,522 54,927
----------------- -----------------
$ 75,088 $ 77,219
================= =================
</TABLE>
7
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
For the Years Ended December 31, 1999, 1998 and 1997 (Amounts in Thousands,
Except per Share Data)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net sales $176,314 $184,920 $167,837
Cost of sales 153,984 159,218 147,591
------------------ ------------------ ------------------
Gross profit 22,330 25,702 20,246
Selling, general and
administrative expenses 19,204 19,024 16,366
------------------ ------------------ ------------------
Operating income 3,126 6,678 3,880
Interest and other income 1,139 1,286 1,027
------------------ ------------------ ------------------
Income before minority interest and income taxes 4,265 7,964 4,907
Minority interest in consolidated subsidiaries (353) (384) (86)
Income tax expense (1,750) (3,018) (1,787)
------------------ ------------------ ------------------
Net income $ 2,162 $ 4,562 $ 3,034
================== ================== ==================
Net income per outstanding common share
Class A - basic $.55 $1.15 $0.74
Class A - fully diluted .55 1.15 0.74
Class B - basic .55 1.15 0.74
Class B - fully diluted .55 1.15 0.74
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1999, 1998 and 1997 (Amounts in Thousands)
CLASS A CLASS B
COMMON COMMON OTHER RETAINED
STOCK STOCK CAPITAL EARNINGS TOTAL
Balance, January 1, 1997 $ 2,477 $ 1,746 $ 83 $ 48,117 $ 52,423
Repurchase and cancellation
of Class A & Class B Shares (215) (15) (2,133) (2,363)
Net income for the year 3,034 3,034
Cash dividends-$.28 per share (1,133) (1,133)
-------------- --------------- -------------- ------------ -------------
Balance December 31, 1997 2,262 1,731 83 47,885 51,961
Conversion from Class B to 3 (3)
Class A
Repurchase and cancellation
of Class A Shares (41) (445) (486)
Net income for the year 4,562 4,562
Cash dividends-$.28 per share
(1,110) (1,110)
-------------- --------------- -------------- ------------ -------------
Balance December 31, 1998 2,224 1,728 83 50,892 54,927
Conversion from Class B to A 13 (13)
Repurchase and cancellation
of Class A & Class B Shares (39) (9) (424) (472)
Net income for the year 2,162 2,162
Cash dividends-$.28 per share (1,095) (1,095)
-------------- --------------- -------------- ------------ -------------
Balance December 31, 1999 $ 2,198 $ 1,706 $ 83 $ 51,535 $ 55,522
============== =============== ============== ============ =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
8
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS For the Years Ended December 31, 1999, 1998
and 1997 (Amounts in Thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 2,162 $ 4,562 $ 3,034
---------------- ---------------- ----------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,574 2,685 2,406
Deferred income taxes 410 (178) 50
Minority interest 353 384 86
Changes in assets and liabilities:
Receivables (1,141) (804) 237
Inventories (2,156) (1,189) (1,771)
Prepayments and other (379) (159) (258)
Accounts payable (483) 359 (1,017)
Accrued liabilities (1,629) 903 122
Accrued income taxes (1,851) 966 281
---------------- ---------------- ----------------
Total adjustments (4,302) 2,967 136
---------------- ---------------- ----------------
Net cash from (used in) operating activities (2,140) 7,529 3,170
---------------- ---------------- ----------------
Cash flows from (used in) investing activities:
Additions to property, plant & equipment (2,963) (3,282) (2,697)
Disposal of (investment in) short term investments (1,235) (50) 7,400
---------------- ---------------- ----------------
Net cash from (used in)
investing activities (4,198) (3,332) 4,703
---------------- ---------------- ----------------
Cash flows used in financing activities:
Cash dividends paid (1,095) (1,110) (1,133)
Minority interest contributed capital 19 43 246
Retirement of common stock (472) (486) (2,363)
---------------- ---------------- ----------------
Net cash used in financing activities (1,548) (1,553) (3,250)
---------------- ---------------- ----------------
Net increase (decrease) in cash and cash equivalents (7,886) 2,644 4,623
Cash and cash equivalents, beginning of year 18,441 15,797 11,174
---------------- ---------------- ----------------
Cash and cash equivalents, end of year $ 10,555 $ 18,441 $ 15,797
================ ================ ================
Supplemental disclosures of cash flow
information - cash paid during
the year for income taxes $ 3,191 $ 2,301 $ 1,503
================ ================ ================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries Statesville Housing Center, Inc. and Irish Homes,
Inc., and its majority owned subsidiaries, Waverlee Homes, Inc., and Gipper
Development Company, LLC. Upon consolidation, all inter-company accounts,
transactions and profits have been eliminated.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments which are converted
to known amounts of cash on a daily basis. These investments are carried at cost
which approximates market value.
SHORT-TERM INVESTMENTS
At December 31, 1999 and 1998, short term investments consisted primarily of
certificates of deposit with original maturities of 90 days to 12 months and
readily convertible to cash. These investments are carried at cost which
approximate fair market value. The Company intends to hold the certificates of
deposit until maturity. The Company's investments were maintained in three
financial institutions at December 31, 1999.
INVENTORIES
Inventories, consisting principally of raw materials, are stated at the lower of
cost or market, with cost determined on a first-in, first-out basis.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recorded at cost. Depreciation is taken over
the estimated useful life of the asset and is provided principally on the
straight-line method. When assets are retired or disposed, the related cost and
accumulated depreciation is removed from the accounts and any resulting gain or
loss is included in operations. Operations are charged with all maintenance,
repairs and rearrangement expenses, while betterments and renewals which
increase the productive capacity of assets are capitalized and depreciated.
PRODUCT WARRANTY COSTS
Estimated warranty obligations are provided at the time of sale.
INCOME TAXES
The Company accounts for income taxes using the asset and liability method.
Under this method, deferred income taxes are recognized for the tax consequences
of temporary differences by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax bases of ending assets and liabilities. The effect on deferred taxes of
a change in tax rates is recognized in income in the period that includes the
enactment date.
EARNINGS PER SHARE
Basic earnings per share is computed based on weighted average Class A and Class
B shares outstanding. Diluted earnings per share further includes the effect of
dilutive options and warrants, if any.
10
<PAGE>
REVENUE RECOGNITION
Revenue is recognized when title is transferred upon shipment.
DELIVERY COSTS
Revenues and expenses related to delivery of the Company's products are included
in cost of sales in the statement of operations.
NATURE OF BUSINESS, RISKS AND UNCERTAINTIES
The Company designs, manufactures and sells at wholesale a broad line of single
and multi-section manufactured homes to numerous independent dealers in the
United States who utilize floorplan financing arrangements with lending
institutions. Continued availability of credit to these dealers is vital to the
Company's business. The Company considers itself to be in the industry segment
of manufacturing homes as other operations are immaterial.
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain assets, liabilities, revenues and expenses. Such estimates
primarily relate to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual amounts may differ
from estimated amounts. The most notable assumptions included in the financial
statements involve product warranty costs, potential repurchase obligations on
dealer floorplan financing arrangements and reserves set for the Company's
self-funded workers' compensation insurance program and group medical benefit
plan. The Company maintains excess loss coverage on the workers' compensation
and medical benefit programs through various insurance contracts.
2. CAPITAL STOCK:
The shares of Class A Common Stock have no voting rights and are not
convertible; the shares of Class B Common Stock have voting rights of one vote
per share and are convertible into Class A Common Stock on a one for one basis.
The Class A Shares may carry a preferential dividend rate. However, in no event
will the dividend rate be less than the Class B shares. The weighted average of
all shares outstanding in 1999, 1998 and 1997 was 3,916,000 shares, 3,972,000
shares and 4,085,000 shares, respectively. The Board of Directors has approved a
stock repurchase program authorizing the Company to repurchase up to 800,000
outstanding shares of its Class A and Class B Common Shares on the open market
or in negotiated transactions at management's discretion. At December 31, 1999,
643,000 shares of Class A Common Stock and 24,000 shares of Class B Common Stock
had been repurchased and canceled under this program.
3. INCOME TAXES:
The deferred taxes in the accompanying balance sheet includes the following
amounts of deferred tax assets and liabilities:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Deferred tax asset $ 2,240 $ 2,500 $ 2,206
Deferred tax (liability) $ (2,420) $ (2,270) $ (2,154)
---------------- --------------- ---------------
Net deferred tax asset (liability) $ (180) $ 230 $ 52
================ =============== ===============
</TABLE>
11
<PAGE>
The tax effects of principal temporary differences and carry forwards are shown
in the following table:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Nondeductible accruals & reserves $ 2,166 $ 2,435 $ 2,152
Accelerated tax depreciation $ (2,346) $ (2,205) $ (2,100)
----------------- ----------------- -----------------
$ (180) $ 230 $ 52
================= ================= =================
The components of income tax expense are as follows:
(Amounts in Thousands) 1999 1998 1997
---- ---- ----
Current:
Federal $1,225 $2,795 $1,687
State 115 401 50
Deferred:
Federal 338 (148) 39
State 72 (30) 11
-------------- --------------- ----------------
$1,750 $3,018 $1,787
============== =============== ================
</TABLE>
Income tax expense is based on consolidated income before taxes adjusted for
non-taxable income and non-deductible expense. The tax expense reconciles with
the statutory United States federal income tax rate in 1999, 1998 and 1997 as
follows:
<TABLE>
<CAPTION>
INCOME TAX EXPENSE
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Income taxes at statutory
federal rate 34% $1,502 $2,767 $1,668
State income taxes, net of
federal tax effect 123 245 119
Other 125 6 --
------------- ------------ ------------
$1,750 $3,018 $1,787
============= ============ ============
Effective Tax Rate 40% 37% 36%
============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
4. OTHER ACCRUED LIABILITIES:
Other accrued liabilities at December 31, 1999 and 1998 are as follows:
(Amounts in Thousands) 1999 1998
---- ----
<S> <C> <C>
Dealer Rebates $6,097 $ 6,219
Product Warranty 1,764 1,764
Insurance 1,488 1,828
Other 1,488 2,233
------------------ -----------------
$ 10,837 $12,044
================== =================
</TABLE>
12
<PAGE>
5. CONTINGENT LIABILITIES:
REPURCHASE OBLIGATIONS
The Company is contingently liable as of December 31, 1999 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 has provided for
losses on homes as of December 31, 1999 for which it has received or expects
notification of repurchase. The Company believes any additional losses incurred
under outstanding repurchase agreements in excess of the accrual established as
of December 31, 1999, will not have a significant impact on the financial
condition of the Company.
OTHER CONTINGENCIES
Letters of Credit totaling $500,000 have been issued in conjunction with the
Company's self-funded workers' compensation program.
The Company is party to various legal proceedings from the normal course of
operations. The Company has provided for anticipated losses resulting from the
litigation. In management's opinion, the Company has adequate legal defenses and
does not believe these suits will materially affect the Company's operations or
financial position.
6. RETIREMENT PLAN:
The Company has a 401(k) retirement plan which covers substantially all
employees. The Company has agreed to match a portion of the employee
contributions made to the plan. The expense for this plan for the year ended
December 31, 1999, 1998 and 1997 was $210,000, $239,000 and $222,000,
respectively.
7. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
The Company's results of operations in 1999 and 1998 by quarter are as follows:
(Amounts in Thousands except per share data):
<TABLE>
<CAPTION>
Quarter Ended
------------------------------------------------------------ Year
Ended
MAR 31 JUN 30 SEP 30 DEC 31 DEC. 31
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
1999:
Net sales $44,350 $49,133 $47,259 $35,572 $176,314
Gross profit 5,809 7,052 5,675 3,794 22,330
Net Income (loss) 599 1,361 628 (426) 2,162
Net Income (loss) per Class A Share
Basic and Fully Diluted .15 .35 .16 (.11) .55
Net Income (loss) per Class B Share
Basic and Fully Diluted .15 .35 .16 (.11) .55
1998:
Net sales $ 42,886 $ 46,320 $ 48,897 $ 46,817 $184,920
Gross profit 5,340 6,816 6,433 7,113 25,702
Net income 580 1,326 1,062 1,594 4,562
Net Income per Class A Share
Basic and Fully Diluted 0.14 0.34 0.27 0.40 1.15
Net Income per Class B Share
Basic and Fully Diluted 0.14 0.34 0.27 0.40 1.15
</TABLE>
13
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Liberty Homes, Inc.
Goshen, Indiana
We have audited the accompanying consolidated balance sheets of Liberty Homes,
Inc. and Subsidiaries as of December 31, 1999 and 1998 and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Liberty Homes, Inc.
and Subsidiaries as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999 in conformity with generally accepted accounting principles.
Crow , Chizek and Company LLP
----------------------------------
/s/Crowe, Chizek and Company LLP
Elkhart, Indiana
February 15, 2000
14
<PAGE>
<TABLE>
<CAPTION>
BOARD OF DIRECTORS
NAME PRINCIPAL OCCUPATION AND EMPLOYER
<S> <C>
Edward J. Hussey Chairman of the Board and President of Liberty Homes, Inc.
Edward Joseph Hussey Vice President, Secretary and Assistant Treasurer of Liberty Homes, Inc. and
Shareholder in the law firm of Hodges & Davis PC, Merrillville, Indiana
Michael F. Hussey Vice President - Finance and Assistant Secretary of Liberty Homes, Inc.
David M. Huffine President of I.M. Homes, Inc., Rocky Ford, Colorado
Mitchell Day President of Day Equipment Corporation, Goshen, Indiana
OFFICERS
Edward J. Hussey, President
Edward Joseph Hussey, Vice President and Secretary
Michael F. Hussey, Vice President - Finance and Assistant Secretary
Marc A. Dosmann, Vice President and Chief Financial Officer
Bruce A. McMillan, Vice President - Sales
Ron Atkins, Vice President - Purchasing
Nader Tomasbi, Vice President - Engineering and Design
Ralph D. Ray, Treasurer
Brian L. Christner, Controller
Dorothy L. Peterson, Assistant Treasurer
REGISTRAR & TRANSFER AGENT
Harris Bank, Shareholder Services
Chicago, Illinois
(312) 461-3309
AUDITORS
Crowe, Chizek and Company LLP
Elkhart, Indiana
LEGAL COUNSEL
Hodges & Davis PC
Merrillville, Indiana
Barnes & Thornburg
Fort Wayne, Indiana
ANNUAL REPORT ON FORM 10-K
The Liberty Homes, Inc. Annual Report on Form 10-k filed with the
Securities and Exchange Commission is available to shareholders at no
charge upon written request to Liberty Homes, Inc., PO Box 35, Goshen,
Indiana 46527, Attention Marc A. Dosmann.
</TABLE>
15
<PAGE>
Exhibit 21
LIST OF SUBSIDIARIES
Waverlee Homes, Inc., incorporated in Alabama
Irish Homes, Inc., incorporated in Indiana
Gipper Development Company, LLC, organized in Indiana
Statesville Housing Center, Inc., incorporated in North Carolina
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 17,090
<SECURITIES> 0
<RECEIVABLES> 10,248
<ALLOWANCES> 0
<INVENTORY> 15,327
<CURRENT-ASSETS> 47,608
<PP&E> 50,909
<DEPRECIATION> 23,429
<TOTAL-ASSETS> 75,088
<CURRENT-LIABILITIES> 15,805
<BONDS> 0
0
0
<COMMON> 3,904
<OTHER-SE> 51,618
<TOTAL-LIABILITY-AND-EQUITY> 75,088
<SALES> 176,314
<TOTAL-REVENUES> 176,314
<CGS> 153,984
<TOTAL-COSTS> 19,204
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,265
<INCOME-TAX> 1,750
<INCOME-CONTINUING> 2,162
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,162
<EPS-BASIC> .55
<EPS-DILUTED> .55
</TABLE>
