SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED April 30, 1996 COMMISSION FILE NUMBER 1-9235
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THOR INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 93-0768752
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
419 West Pike Street, Jackson Center, OH 45334
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(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 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
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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 4/30/96
----- ----------------------
Common stock, par value 8,686,808 shares
$.10 per share
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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ASSETS
------
(Unaudited)
-----------
April 30, 1996 July 31, 1995
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Current assets:
Cash and cash equivalents...................$4,099,730..........$6,820,796
Accounts receivable:
Trade.....................................46,044,787..........37,447,506
Other......................................1,527,603.............500,388
Inventories.................................55,587,990..........56,113,536
Prepaid expenses.............................4,327,067...........3,632,568
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Total current assets...................111,587,177.........104,514,794
----------- -----------
Property:
Land.........................................1,135,524...........1,030,524
Buildings and improvements..................11,070,446...........9,833,498
Machinery and equipment.....................14,843,341..........13,601,025
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Total cost..............................27,049,311..........24,465,047
Accumulated depreciation and amortization...10,602,821...........9,619,796
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Property, net...............................16,446,490..........14,845,251
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Other assets:
Goodwill....................................15,369,045..........15,812,885
Non compete..................................5,153,688...........5,875,860
Trademarks...................................2,940,170...........3,184,174
Other........................................5,880,834...........4,227,937
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Total other assets......................29,343,737..........29,100,856
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TOTAL ASSETS................................$157,377,404........$148,460,901
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable...............................$3,300,000........$ -
Accounts payable............................21,111,431..........18,443,654
Accrued liabilities:
Taxes..................................... - .......... -
Compensation and related items.............9,333,811..........10,711,604
Product warranties.........................5,675,866...........5,956,520
Other......................................3,245,757...........4,251,782
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Total current liabilities...................42,666,865..........39,363,560
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Other liabilities................................997,407...........1,194,032
Stockholders' equity:
Common stock - authorized
10,000,000 shares; issued 9,099,247
shares @ 4/30/96 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..................(650,990)...........(772,606)
Retained earnings...........................94,164,273..........84,585,329
Cost of treasury shares 412,439
shares @ 4/30/96; 188,239
shares @ 7/31/95...........................(5,815,196).........(1,924,459)
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Total stockholders' equity....................113,713,132........107,903,309
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...$157,377,404.......$148,460,901
=========== ===========
See notes to consolidated financial statements
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 1996 AND 1995
------------------------------------------------------------------
THREE MONTHS ENDED APRIL 30 NINE MONTHS ENDED APRIL 30
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1996 1995 1996 1995
---- ---- ---- ----
Net sales $169,174,078 $163,081,543 $440,474,240 $416,621,025
Cost of
products sold 151,361,505 145,390,075 393,786,759 366,198,962
----------- ----------- ----------- -----------
Gross profit 17,812,573 17,691,468 46,687,481 50,422,063
Selling, general,
and administrative
expenses 10,904,905 11,599,813 29,234,526 31,475,652
---------- ---------- ---------- ----------
Operating income 6,907,668 6,091,655 17,452,955 18,946,411
Interest income 192,097 199,900 688,669 494,592
Interest expense (171,389) (117,350) (421,480) (249,579)
Other income (expense)(118,182) 115,553 (27,005) 156,067
--------- ------- -------- -------
Income before
income taxes 6,810,194 6,289,758 17,693,139 19,347,491
Provision for
income taxes 2,807,666 2,544,290 7,313,915 7,610,132
--------- --------- --------- ---------
Net income $4,002,528 $3,745,468 $10,379,224 $11,737,359
========= ========= ========== ==========
Average common
shares outstanding 8,758,944 8,911,708 8,850,910 8,921,075
- ------------------- --------- --------- --------- ---------
Earnings per
common share $.46 $.42 $1.17 $1.32
- ------------- ==== ==== ===== =====
Dividends paid
per common share $.03 $.03 $.09 $.09
- ----------------- ==== ==== ==== ====
See notes to consolidated financial statements
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 1996 AND 1995
-------------------------------------------------
(Unaudited)
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1996 1995
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Cash flows from operating activities:
Net income....................................$10,379,224......11,737,359
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation....................................1,690,328.......1,469,633
Amortization....................................2,149,123.......2,026,450
Changes in non cash assets and liabilities
- ------------------------------------------
Accounts receivable............................(9,624,496).....(5,607,293)
Inventories.......................................525,546......(9,890,000)
Prepaid expenses and other.......................(789,322).....(1,321,151)
Accounts payable................................2,667,777........(839,695)
Accrued liabilities............................(2,861,097).....(2,800,423)
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Net cash provided (used)
in operating activities.....................4,137,073......(5,225,120)
----------------------- --------- -----------
Cash flows from investing activities:
Purchase of property, plant & equipment........(3,322,370).....(3,986,881)
Disposals of property, plant & equipment 33,632..........92,688
Acquisitions-net of cash acquired............... - ......(5,123,698)
Investment in leasing joint venture............(2,300,000)...... -
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Net cash used in investing activities..........(5,588,738).....(9,017,891)
- ------------------------------------- ----------- -----------
Cash flows from financing activities:
Cash dividends...................................(800,280).......(802,526)
Net proceeds from (payments of)
notes payable...................................3,300,000.......8,870,000
Purchase of treasury stock.....................(3,890,737).......(882,139)
Net cash provided (used)
by financing activities....................(1,391,017)......7,185,335
----------------------- ----------- ---------
Effect of exchange rate changes on cash...........121,616.........126,574
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Net decrease in cash and equivalents...........(2,721,066).....(6,931,102)
Cash and equivalents, beginning of year.........6,820,796......13,563,673
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Cash and equivalents, end of period............$4,099,730......$6,632,571
========== ==========
Supplemental cash flow information:
Income taxes paid..............................$7,283,250......$7,908,649
Interest paid.....................................421,480.........249,579
See notes to consolidated financial statements
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
---------------------
Quarter Ended April 30, 1996 vs.
Quarter Ended April 30, 1995
- -------------------------------
Net sales for the quarter totaled $169,174,078, up 3.7% from $163,081,543 in
the same period last year. This sales increase was due primarily to product
mix and increased unit sales. Primarily as a result of higher sales, income
before income taxes rose 8.3% to $6,810,194 compared to $6,289,758 in the
same period last year. In general, the Company did not adjust sales prices
during the quarter ended April 30, 1996.
Recreation vehicle revenues of $143,126,703 were 3.4% higher than last year
and were 84.6% of total company revenues compared to 84.9% last year.
Bus revenues of $26,047,375 were 5.6% higher than last year and were 15.4%
of total company revenues compared to 15.1% last year.
Manufacturing gross profit decreased to 10.5% of sales from 10.8% last year.
This decrease in gross margin percentage was due primarily to very competitive
pricing in a soft recreation vehicle market.
Primarily as a result of increased sales, operating income rose 13.4% to
$6,907,668, compared to $6,091,655 in the same period last year. Selling and
administrative expenses decreased to $10,904,905, 6.4% of sales, from
$11,599,813, 7.1% of sales.
Interest income decreased by $7,803 and interest expense increased by $54,039.
This increase in interest expense was due primarily to additional borrowing
because of extended bus receivables.
The combined income tax rate was 41.2% compared to 40.5% last year. Last
year's rates reflect favorable utilization of foreign tax credits.
Nine Months Ended April 30, 1996 vs.
Nine Months Ended April 30, 1995
- -----------------------------------
Net sales for the nine months totaled $440,474,240, up 5.7% from $416,621,025
in the same period last year. This sales increase was due primarily to
product mix and increased unit sales. Income before income taxes was
$17,693,139 compared to $19,347,491 in the same period last year. This
decline was due primarily to very competitive pricing in a soft recreation
vehicle market. In general, the Company did not adjust sales prices during
the nine months ended April 30, 1996.
Recreation vehicle revenues of $363,668,416 were 4.7% higher than last year
and were 82.6% of total company revenues compared to 83.4% last year. Bus
revenues of $76,805,824 were 10.9% higher than last year and were 17.4% of
total company revenues compared to 16.6% last year.
Manufacturing gross profit decreased to 10.6% of sales from 12.1% last year.
This decrease in gross profit was due primarily to very competitive pricing
in a soft recreation vehicle market.
Operating income totaled $17,452,955, down 7.9% from $18,946,411 in the same
period last year. Selling and administrative expenses decreased to
$29,234,526, 6.6% of sales, from $31,475,652, 7.6% of sales.
Interest income increased by $194,077 and interest expense increased by
$171,901. This increase in interest expense was due primarily to
additional borrowing because of higher than normal chassis inventory and
extended bus receivables.
The combined income tax rate was 41.3% compared to 39.3% 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 April 30, 1996, Thor had $4,099,730 in cash and cash equivalents,
compared to $6,820,796 on July 31, 1995.
Working capital at April 30, 1996 was $68,920,312 compared to $65,151,234
at July 31, 1995. Inventory valued at current cost at April 30, 1996
exceeded the LIFO inventory by $2,927,597.
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 April 30, 1996 was $3,300,000. 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 April 30, 1996. Amortization of
intangibles increased from $2,026,450 at April 30, 1995, to $2,149,123 at
April 30, 1996 due to acquisitions 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.
During the nine months of fiscal 1996, Thor purchased 224,200 shares of its
common stock, increasing treasury stock by $3,890,737. On March 14, 1996,
Thor entered into a limited liability company agreement, as a 50% partner
with Cruise America, Inc., for the purpose of renting recreation vehicles to
the public. Thor's investment involved $300,000 cash for equity and
$2,000,000 cash for a subordinated note bearing interest at prime plus .25%
maturing on March 31, 2000. No other material items have affected the cash
flow of Thor Industries during the nine months ended April 30, 1996.
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.
<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)
-----------
April 30, 1996 July 31, 1995
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Raw materials $39,324,615 $42,951,596
Work in process 11,162,021 10,761,474
Finished goods 8,028,951 4,761,063
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Total 58,515,587 58,474,133
Less excess of FIFO
costs over LIFO costs 2,927,597 2,360,597
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Total Inventories $55,587,990 $56,113,536
3. During the third quarter of fiscal 1996, the company entered into a
limited liability company agreement, as a 50% partner for the purpose of
renting recreation vehicles. The company invested $300,000 cash for
equity and $2,000,000 in a subordinated note bearing a variable rate of
interest at prime plus .25% through March 2000.
The Company also has a 50% interest in an entity that provides financing
for recreation vehicles.
The operations of these equity investments were not material to the
consolidated financial statements of the Company.
PART II
No Reports
<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)
JUNE 6, 1996 WADE F. B. THOMPSON
DATE __________________ ______________________________________
Wade F. B. Thompson
Chairman of the Board, President
and Chief Executive Officer
JUNE 6, 1996 WALTER L. BENNETT
DATE __________________ ______________________________________
Walter L. Bennett
Senior Vice President
Secretary (Chief Accounting Officer)
<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> APR-30-1996
<CASH> 4099730
<SECURITIES> 0
<RECEIVABLES> 47572390
<ALLOWANCES> 0
<INVENTORY> 55587990
<CURRENT-ASSETS> 111587177
<PP&E> 27049311
<DEPRECIATION> 10602821
<TOTAL-ASSETS> 157377404
<CURRENT-LIABILITIES> 42666865
<BONDS> 0
<COMMON> 909925
0
0
<OTHER-SE> 112803207
<TOTAL-LIABILITY-AND-EQUITY> 157377404
<SALES> 440474240
<TOTAL-REVENUES> 440474240
<CGS> 393786759
<TOTAL-COSTS> 423021285
<OTHER-EXPENSES> 27005
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 421480
<INCOME-PRETAX> 17693139
<INCOME-TAX> 7313915
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10379224
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 0
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