SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
---------
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED January 31, 1996 COMMISSION FILE NUMBER 1-9235
---------------- ------
THOR INDUSTRIES, INC.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 93-0768752
------------- ---------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
419 West Pike Street, Jackson Center, OH 45334
---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 596-6849
- --------------------------------------------------- --------------
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 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 issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at 1/31/96
----- ----------------------
Common stock, par value 8,885,008 shares
$.10 per share
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
(Unaudited)
-----------
January 31, 1996 July 31, 1995
---------------- -------------
Current assets:
Cash and cash equivalents......................$4,941,810 $6,820,796
Accounts receivable:
Trade........................................38,818,742 37,447,506
Other.........................................1,338,599 500,388
Inventories....................................56,230,067 56,113,536
Prepaid expenses................................4,909,353 3,632,568
--------- ---------
Total current assets............................106,238,571 104,514,794
----------- -----------
Property:
Land...........................................1,030,524 1,030,524
Buildings and improvements....................10,973,899 9,833,498
Machinery and equipment.......................14,376,548 13,601,025
---------- ----------
Total cost.................................26,380,971 24,465,047
Accumulated depreciation and amortization.....10,220,917 9,619,796
---------- ----------
Property, net..............................16,160,054 14,845,251
---------- ----------
Other assets:
Goodwill......................................15,533,015 15,812,885
Non compete....................................5,394,412 5,875,860
Trademarks.....................................3,021,505 3,184,174
Other..........................................3,913,909 4,227,937
--------- ---------
Total other assets...............................27,862,841 29,100,856
---------- ----------
TOTAL ASSETS...................................$150,261,466 $148,460,901
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable...................................$1,400,000 $ -
Accounts payable................................18,052,077 18,443,654
Accrued liabilities:
Taxes............................................. - -
Compensation and related items..................7,218,729 10,711,604
Product warranties..............................5,793,976 5,956,520
Other...........................................3,405,266 4,251,782
--------- ---------
Total current liabilities.....................35,870,048 39,363,560
========== ==========
Other liabilities...................................965,032 1,194,032
Stockholders' equity:
Common stock - authorized
10,000,000 shares;issued 9,099,247
shares @ 1/31/96 and 9,099,247
shares @ 7/31/95; par value of
$.10 per share.......................909,925 909,925
Additional paid in capital......................25,105,120 25,105,120
Foreign currency translation......................(651,046) (772,606)
Retained earnings...............................90,428,296 84,585,329
Cost of treasury shares 214,239
shares @ 1/31/96; 188,239 shares
@ 7/31/95......................................(2,365,909) (1,924,459)
----------- -----------
Total stockholders' equity.....................113,426,386 107,903,309
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......$150,261,466 $148,460,901
============ ============
See notes to consolidated financial statements
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JANUARY 31, 1996 AND 1995
-------------------------------------------------------------------
THREE MONTHS ENDED JANUARY 31 SIX MONTHS ENDED JANUARY 31
----------------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
Net sales................$119,780,958 $114,369,627 $271,300,162 $253,539,482
Cost of products sold.....107,541,336 101,074,660 242,425,254 220,808,887
----------- ----------- ----------- -----------
Gross profit...............12,239,622 13,294,967 28,874,908 32,730,595
Selling, general, and
administrative expenses.....8,639,801 9,426,671 17,847,242 19,428,820
--------- --------- ---------- ----------
Operating income............3,599,821 3,868,296 11,027,666 13,301,775
Interest income...............254,846 128,761 496,572 294,692
Interest expense............(163,451) (104,133) (250,091) (132,229)
Other expense...............(277,179) (283,508) (391,202) (406,505)
--------- --------- --------- ---------
Income before income taxes..3,414,037 3,609,416 10,882,945 13,057,733
Provision for income taxes..1,449,589 1,400,997 4,506,249 5,065,842
--------- --------- --------- ---------
Net income.................$1,964,448 $2,208,419 $6,376,696 $7,991,891
========== ========== ========== ==========
Average common shares outstanding 8,888,062 8,917,965 8,895,894 8,925,606
- --------------------------------- --------- --------- --------- ---------
Earnings per common share $.22 $.25 $.72 $.90
- ------------------------- ==== ==== ==== ====
Dividends paid per common share $.03 $.03 $.06 $.06
- ------------------------------- ==== ==== ==== ====
See notes to consolidated financial statements
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996 AND 1995
--------------------------------------------------
(Unaudited)
-----------
1996 1995
---- ----
Cash flows from operating activities:
Net income.......................................$6,376,696 7,991,891
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation......................................1,105,654 953,906
Amortization......................................1,432,749 1,340,640
Changes in non cash assets and liabilities
- ------------------------------------------
Accounts receivable..............................(2,209,447) 3,041,287
Inventories........................................(116,531) (10,706,314)
Prepaid expenses and other.......................(1,467,338) (433,517)
Accounts payable...................................(391,577) (7,785,105)
Accrued liabilities..............................(4,730,935) (6,250,167)
----------- -----------
Net cash used in operating activities..................(729) (11,847,379)
- ------------------------------------- ----- ------------
Cash flows from investing activities:
Purchase of property, plant & equipment..........(2,458,269) (2,488,121)
Disposals of property, plant & equipment.............33,632 30,794
Net cash used in investing activities............(2,424,637) (2,457,327)
- ------------------------------------- ----------- -----------
Cash flows from financing activities:
Cash dividends.....................................(533,730) (535,197)
Net proceeds from (payments of) notes payable.....1,400,000 7,600,000
Purchase of treasury stock.........................(441,450) (882,139)
--------- ---------
Net cash provided by financing activities...........424,820 6,182,664
- ----------------------------------------- ------- ---------
Effect of exchange rate changes on cash.............121,560 (86,330)
------- --------
Net decrease in cash and equivalents.............(1,878,986) (8,208,372)
Cash and equivalents, beginning of year...........6,820,796 13,563,673
--------- ----------
Cash and equivalents, end of period $4,941,810 $5,355,301
========== ==========
Supplemental cash flow information:
Income taxes paid................................$4,664,300 $5,579,081
Interest paid.......................................250,091 132,229
See notes to consolidated financial statements
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
---------------------
Quarter Ended January 31, 1996 vs.
Quarter Ended January 31, 1995
- ----------------------------------
Net sales for the quarter totaled $119,780,958, up 4.7% from $114,369,627 in
the same period last year. Income before income taxes was $3,414,037 compared
to $3,609,416 in the same period last year. This decline was primarily due to
very competitive pricing in a soft recreational vehicle market.
Recreation vehicle revenues of $95,708,546 were 4.1% higher than last year
and were 79.9% of total company revenues compared to 80.4% last year. Bus
revenues of $24,072,412 were 7.5% higher than last year and were 20.1% of total
company revenues compared to 19.6% last year.
Manufacturing gross profit decreased to 10.2% of sales from 11.6% last year.
This decrease in gross profit was due primarily to very competitive pricing
in a soft recreational vehicle market.
Operating income totaled $3,599,821, down 6.9% from $3,868,296 in the same
period last year. Selling and administrative expenses decreased to $8,639,801,
7.2% of sales, from $9,426,671, 8.2% of sales.
Interest income incrased by $126,085 and interest expense increased by $59,318.
This increase in interest expense was due primarily to extended bus receivables.
The combined income tax reate was 42.5% compared to 38.8% last year. Last
year's rates reflect favorable utilization of foreign tax credits.
Six Months Ended January 31, 1996 vs.
Six Months Ended January 31, 1995
- -------------------------------------
Net sales for the six months totaled $271,300,162, up 7.0% from $253,539,482
in the same period last year. Income before income taxes was $10,882,945
compared to $13,057,733 in the same period last year. This decline was due
primarily to very competitive pricing in a soft recreational vehicle market.
Recreation vehicle revenues of $220,541,713 were 5.5% higher than last year
and were 81.3% of total company revenues compared to 82.4% last year. Bus
revenues of $50,758,449 were 13.9% higher than last year and were 18.7% of
total company revenues compared to 17.6% last year.
Manufacturing gross profit decreased to 10.6% of sales from 12.9% last year.
This decrease in gross profit was due primarily to very competitive pricing
in a soft recreational market.
Operating income totaled $11,027,666, down 17.1% from $13,301,775 in the same
period last year. Selling and administrative expenses decreased to
$17,847,242, 6.6% of sales, from $19,428,820, 7.7% of sales.
Interest income increased by $201,880 and interest expense increased by
$117,862. This increase in interest expense was due primarily to higher than
normal chassis inventory and extended bus receivables.
The combined income tax rate was 41.4% compared to 38.8% last year. Last
year's rates reflect favorable utilization of foreign tax credits.
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
---------------------
(Continued)
Financial Condition and Liquidity
- ---------------------------------
As of January 31, 1996, Thor had $4,941,810 in cash and cash equivalents,
compared to $6,820,796 on July 31, 1995.
Working capital at January 31, 1996 was $70,368,523 compared to $65,151,234
at July 31, 1995. Inventory valued at current cost at January 31, 1996
exceeded the LIFO inventory by $2,738,597.
The Company currently has a $25,000,000 revolving line of credit with Harris
Trust and Savings Bank and Bank One. The amount borrowed under this line as
of January 31, 1996 was $1,400,000. The loan agreement contains certain
covenants, including restrictions on additional indebtedness, and the
Company must maintain certain financial ratios. The line of credit bears
interest at negotiated rates below prime and expires on November 29, 1996.
The Company had no long term debt as of January 31, 1996. Amortization of
intangibles increased from $1,340,640 at January 31, 1995, to $1,432,749 at
January 31, 1996 due to acqusition in fiscal 1995.
On March 1, 1995, the Company purchased for cash certain assets and liabilities
of Skamper Corporation, and on March 27, 1995, the Company purchased for cash
certain assets of Lake Capital Corporation, doing business as Komfort Trailer.
The total cash price of both acquisitions was approximately $5,124,000. The
revenues and operating results of each entity is reflected in the consolidated
statement of income of Thor Industries from time of acquisition forward.
The Company believes that internally generated funds and the revolving credit
agreement already in place will be sufficient to meet current operating needs
and anticipated capital requirements.
During the six months of fiscal 1996, Thor purchased 26,000 shares of its
common stock, increasing treasury stock by $441,450.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. The accompanying consolidated financial statements, which are unaudited,
reflect all adjustments consisting of only normal recurring adjustments,
which are, in the opinion of management, necessary to present fairly the
consolidated operating results for such unaudited periods.
2. Major classifications of inventories are:
(Unaudited)
-----------
January 31,1996 July 31,1995
--------------- ------------
Raw materials..............$39,198,292 $42,951,596
Work in process.............10,063,514 10,761,474
Finished goods...............9,706,858 4,761,063
--------- ---------
Total..................58,968,664 58,474,133
Less excess of FIFO costs
over LIFO costs........2,738,597 2,360,597
--------- ---------
Total inventories..........$56,230,067 $56,113,536
=========== ===========
PART II
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Annual Meeting of Shareholders on December 4, 1995
Matters Voted on by Shareholders:
---------------------------------
1.) Election of Directors: Peter B. Orthwein, William C. Tomson
Results of Voting by Shareholders:
----------------------------------
For Against Abstain
--- ------- -------
Item 1 8,206,727 -0- 4,520
<PAGE>
SIGNATURES
----------
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.
THOR INDUSTRIES, INC.
(Registrant)
MARCH 13, 1996 WADE F. B. THOMPSON
DATE ________________ ________________________________________
Wade F. B. Thompson
Chairman of the Board, President
and Chief Executive Officer
MARCH 13, 1996 WALTER L. BENNETT
DATE ________________ ________________________________________
Walter L. Bennett
Senior Vice President
Secretary (Chief Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 4941810
<SECURITIES> 0
<RECEIVABLES> 40157341
<ALLOWANCES> 0
<INVENTORY> 56230067
<CURRENT-ASSETS> 106238571
<PP&E> 26380971
<DEPRECIATION> 10220917
<TOTAL-ASSETS> 150261466
<CURRENT-LIABILITIES> 35870048
<BONDS> 0
<COMMON> 909925
0
0
<OTHER-SE> 112516461
<TOTAL-LIABILITY-AND-EQUITY> 150261466
<SALES> 271300162
<TOTAL-REVENUES> 271300162
<CGS> 242425254
<TOTAL-COSTS> 260272496
<OTHER-EXPENSES> 391202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 250091
<INCOME-PRETAX> 10882945
<INCOME-TAX> 4506249
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6376696
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0
</TABLE>
