<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K
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Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended July 31, 1999, Commission File Number 1-9235
THOR INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 93-0768752
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
419 W. Pike Street, Jackson Center, Ohio 45334-0629
- ---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (937) 596-6849
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
Common Stock (par value $.10) New York Stock Exchange
- ----------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act: None
- --------------------------------------------------------------------------------
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 the filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent files pursuant to Item 405 of
Regulation S-K 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
The aggregate market value of voting securities of the registrant held by
non-affiliates of the registrant on October 8, 1999, was $166,573,482 based upon
closing price on the New York Stock Exchange for such date. The number of common
shares of registrant's stock outstanding as of October 15, 1999, was 12,139,660.
Documents incorporated by reference:
Portions of the Proxy Statement for the Annual Meeting of Shareholders to be
held on December 6, 1999, are incorporated by reference in Part III.
1
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Thor Industries, Inc. (the "Company"), founded in 1980, produces and sells a
wide range of recreation vehicles and small and mid-size buses in the United
States and Canada.
The Company's principal operating subsidiaries are Airstream, Inc.
("Airstream"); Dutchmen Manufacturing, Inc. ("Dutchmen"); Four Winds
International, Inc. ("Four Winds"); Thor America, Inc. ("Thor America"); Komfort
Corp. ("Komfort"); Thor Indiana, Inc. ("Thor Indiana"); Aero Manufacturing, Inc.
("Aero"); Citair, Inc. ("Citair"); Thor California, Inc. ("Thor California");
ElDorado National Kansas, Inc. ("ElDorado Kansas"); ElDorado National
California, Inc. ("ElDorado California") and Champion Bus, Inc. ("Champion").
During fiscal 1998 the Company shut down its losing bus operation in Brown City,
Michigan and sold its Thor West operations to that company's management. The
selling price of certain assets and liabilities of Thor West was $1,011,954. As
part of the transaction, Thor agreed to guarantee $750,000 of debt of the
acquirer and assumed a $750,000 unsecured subordinated note. The note has a
three year term and bears interest at 10%. This sale was made on no less
favorable terms than if it had been sold to an unaffiliated third party.
On December 31, 1997 the Company sold its Henschen Axle manufacturing operation
for approximately $2.9 million cash. On February 9, 1998 the Company purchased
for $9.7 million cash substantially all the assets of Champion Motor Coach (now
Champion Bus), a builder of small and mid-size buses.
The Company, a Delaware corporation, is the successor to a corporation of the
same name which was incorporated in Nevada on July 29, 1980. Its principal
executive office is located at 419 West Pike Street, Jackson Center, Ohio 45334,
and its telephone number is (937) 596-6849.
RECREATION VEHICLES
AIRSTREAM
Airstream manufactures and sells premium and medium-high priced travel trailers
and motorhomes under the trade names "Airstream Classic," and "Land Yacht".
Airstream Classic vehicles are distinguished by their rounded shape and bright
aluminum finish and, in management's judgment, constitute the most recognized
product in the industry. Airstream, responding to the demands of the market for
a lighter, lower-cost product, also manufactures and sells the Airstream
"Safari" and "Bambi" travel trailers.
DUTCHMEN
Dutchmen manufactures and sells conventional travel trailers and fifth wheels
under the trade names "Dutchmen" and "Four Winds." It has become one of the
largest-selling brands in the United States due to its reputation for a quality
product sold at a lower price.
AERO
Aero manufactures and sells lightweight, European-styled travel trailers and
fifth wheels designed for towing behind cars, mini vans, sport utility vehicles
and trucks. The Company manufactures folding camping trailers, which it sells
under the "Dutchmen" and "Skamper" trade names.
FOUR WINDS
Four Winds manufactures and sells conventional Class C and Class A motorhomes.
Its products are sold under the "Four Winds," "Hurricane," "Infinity,"
"WindSport," "Dutchmen" and "Chateau" trade names.
THOR AMERICA
Thor America (formerly Thor Pennsylvania) manufactures and sells moderately
priced travel trailers and fifth wheels under the trade names "Citation" and
"Chateau."
THOR INDIANA
Thor Indiana manufactures and sells laminated fifth wheels and travel trailers
under the brand names "Signature" and "Fifth Avenue."
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ITEM 1. BUSINESS (CONTINUED)
CITAIR
Citair is one of the largest Canadian producers of moderately-priced travel
trailers, fifth wheels, Class C motorhomes and truck campers. It operates under
the name "General Coach" and sells under the trade names "Citation" and
"Corsair."
KOMFORT
Komfort manufactures and sells travel trailers and fifth wheels and sells
primarily in the western United States and western Canada.
THOR CALIFORNIA
Thor California manufactures and sells conventional travel trailers and fifth
wheels under the brand names "Wanderer" and "Tahoe" primarily in the western
United States.
BUSES
ELDORADO NATIONAL
ElDorado National is a manufacturer of small and mid-size buses for transit,
airport car rental and hotel/motel shuttles, paramedical transit for hospitals
and nursing homes, tour and charter operations, and other uses.
The Company builds buses under model names such as "Aerolite," "AeroElite,"
"Aerotech," "Escort," "MST," "Transmark," and "EZ Rider." Its plants are located
in Salina, KS and Chino, CA.
CHAMPION BUS
On February 9, 1998 the Company purchased substantially all of the assets of
Champion Motor Coach, Inc. from Champion Enterprises, Inc. Champion Motor Coach
is now called Champion Bus, Inc. Champion builds small and mid-size buses under
model names such as "Challenger," "Contender," "SoLo," "CTS," "Crusader," and
"Defender".
Management believes that Thor Bus (ElDorado National and Champion) is the
largest manufacturer of small and mid-size commercial buses in North America.
PRODUCT LINE SALES SEGMENT
The table below sets forth the contribution of each of the Company's product
lines to net sales in each of the last three years.
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
($000)
Amount % Amount % Amount %
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Recreation vehicles $588,936 73 $547,485 77 $485,010 78
Buses 216,870 27 168,115 23 139,425 22
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Total Net Sales $805,806 100 $715,600 100 $624,435 100
-----------------------------------------------------
</TABLE>
Further information concerning business segments is included in Note M of the
Notes to the Consolidated Financial Statements.
RECREATION VEHICLES:
The Company manufactures and sells a wide variety of RVs throughout the United
States and Canada, as well as related parts and accessories.
RV classifications are based upon standards established by the Recreation
Vehicle Industry Association ("RVIA"). The principal types of RVs produced by
the Company include conventional travel trailers, fifth wheels, fold-down
camping trailers, Class A and Class C motorhomes.
3
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ITEM 1. BUSINESS (CONTINUED)
Travel trailers are non-motorized vehicles which are designed to be towed by
passenger automobiles, pickup trucks or vans. Travel trailers provide
comfortable, self-contained living facilities for short periods of time. The
Company produces "conventional," "fifth wheel" and "fold-down" travel trailers.
Conventional and fold-down camping trailers are towed by means of a frame hitch
attached to the towing vehicle. Fifth wheel trailers, designed to be towed by
pickup trucks, are constructed with a raised forward section that is attached to
the bed area of the pickup truck.
A motorhome is a self-powered vehicle built on a motor vehicle chassis. The
interior typically includes a driver's area, kitchen, bathroom, and dining and
sleeping areas. Motorhomes are self-contained with their own lighting, heating,
cooking, refrigeration, sewage holding and water storage facilities, so that
they can be lived in without being attached to utilities.
Class A motorhomes, constructed on medium-duty truck chassis, are supplied
complete with engine and drive train components by motor vehicle manufacturers
such as Workhorse Custom Chassis, Spartan, Ford or Freightliner. The living area
and driver's compartment are designed, manufactured, and installed by the
Company. Conventional Class C motorhomes are built on a Ford and General Motors
small truck or van chassis which includes an engine, drive train components, and
a finished cab section. The Company constructs a living area which has access to
the driver's compartment and attaches it to the cab. Although they are not
designed for permanent or semi-permanent living, RVs do provide comfortable
living facilities for short periods of time.
Management believes its products are competitive, both in terms of price and
quality, with those of its competitors in each category of the RV market.
PRODUCTION. In order to minimize finished inventory, the Company's RVs generally
are produced to order. The Company's facilities are designed to provide
efficient assembly line manufacturing of its products. The Company believes that
its production facilities are sufficient for its current production levels.
Capacity increases can be achieved at relatively low cost, largely by increasing
the number of production employees, adding additional shifts, or acquiring
additional facilities.
The Company purchases in finished form many of the components used in the
production of RVs. The principal raw materials used in the manufacturing
processes for motorhomes and travel trailers are aluminum, lumber, plywood,
plastic, fiberglass, and steel purchased from numerous suppliers.The Company
believes that, except for chassis, substitute sources for raw materials and
components are available with no material impact on the Company's operations.
The Company is able to obtain the benefit of volume price discounts for many of
its purchases of raw materials and components by centralized purchasing.
The relationship between Thor and its chassis suppliers is similar to all
buyer/vendor relationships and no special contractual commitment is engaged in
by either party. Historically Ford and General Motors resort to an allocation
basis industry wide during restriction of supply. These allocations would be
based on previously purchased chassis volumes. Sales of motor homes and small
buses rely on these chassis and would be affected accordingly.
Generally, all of the Company's operating subsidiaries introduce new or improved
lines or models of RVs each year. Changes typically include new sizes and
floorplans, different decors or design features, and engineering improvements.
SEASONALITY. Since RVs are used primarily by vacationers and campers, the
Company's sales of its RVs are seasonal and, in most geographical areas, tend to
be significantly lower during the winter months than in other periods. As a
result, sales of RVs historically are lowest during the Company's second fiscal
quarter, which ends January 31.
MARKETING AND DISTRIBUTION. The Company markets its RVs through independent
dealers located throughout the U.S. and Canada. Each of the Company's RV
subsidiaries maintains its own dealer
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ITEM 1. BUSINESS (CONTINUED)
organization, with few dealers carrying more than one product line offered by
the Company. Presently there are approximately 800 dealers carrying the
Company's products in the U.S. and Canada. The Company believes that close
working relationships between its management personnel and the many independent
dealers provide the Company with valuable information on customer preferences
and the quality and marketability of the Company's products. Additionally, by
maintaining substantially separate dealer networks for each of its subsidiaries,
the Company's products are more likely to be competing against competitor's
products in similar price ranges rather than the Company's other products.
Each of the Company's operating subsidiaries has an independent sales force to
call on its dealers. The Company's most important sales promotions occur at the
major RV shows for dealers which take place throughout the year at different
locations across the country. The Company benefits from the RV awareness
advertising and major marketing programs geared towards first-time buyers
sponsored by RVIA in national print media and television. The Company engages in
a limited amount of consumer-oriented advertising for its RVs, primarily through
industry magazines, the distribution of product brochures, and direct mail
advertising campaigns.
In its selection of dealers, the Company emphasizes the individual dealer's
financial strength to maintain a sufficient inventory of the Company's products,
as well as its reputation, experience, and ability to provide service. Many of
the Company's dealers carry one or more competitor's line of RVs. Each operating
company has sales agreements with its dealers and these agreements are subject
to annual review. No single dealer accounted for more than 5% of the Company's
consolidated net sales of RVs during the year.
Substantially all of the Company's sales to dealers are made on terms requiring
cash on delivery or within 10 days thereafter. The Company generally does not
finance dealer purchases. Most dealers are financed on a "floorplan" basis by a
bank or finance company which lends the dealer all or substantially all of the
wholesale purchase price and retains a security interest in the vehicles
purchased. As is customary in the RV industry, upon the request of a lending
institution financing a dealer's purchase of the Company's products and after
completion of a credit investigation of the dealer involved, the Company will
execute a repurchase agreement. Repurchase agreements provide that, for up to 12
months after a unit is financed and in the event of default by the dealer, the
Company will repurchase the unit repossessed by the financing institution for
the amount then due, which is usually less than 100% of dealer's cost. The risk
of loss under repurchase agreements is spread over numerous dealers and is
further reduced by the high resale value of the units which the Company would be
required to repurchase. In the Company's experience, losses under repurchase
agreements have not been significant and management believes any future losses
under the agreements would not have a material adverse effect on the Company.
During fiscal 1999 the losses incurred due to repurchase were approximately
$682,000.
Thor entered the retail recreation vehicle financing business in March, 1994.
Thor Credit Corporation is a captive finance company owned by Thor Industries
and Deutsche Financial Services, a major national financial institution engaged
in recreation vehicle financing.
In March 1996, Thor and Cruise America, Inc. formed a joint venture, CAT Joint
Venture LLC, to make short-term rentals of motorized vehicles to the public.
BACKLOGS. As of July 31, 1999, the backlog for recreation vehicle orders was
approximately $105,084,000.
WARRANTIES. The Company currently provides retail purchasers of its RVs with a
standard limited warranty for one year against defects in materials and
workmanship, and two years on certain major components separately warranted by
the suppliers. Certain components, such as the chassis and engines of the
Company's motorhomes, are warranted by their manufacturers for periods specified
by those manufacturers. The Company's subsidiaries also offer at least a
two-year structural warranty.
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ITEM 1. BUSINESS (CONTINUED)
BUSES:
The Company's line of small and mid-size buses are sold under the names ElDorado
National and Champion Bus. ElDorado National's trade names include "Aerolite,"
"AeroElite," "Aerotech," "Escort FE," "Escort RE," "Transmark," "MST" and "EZ
Rider." Champion's trade names include "Challenger," "Contender," "CTS,"
"Crusader," "Defender," and "SoLo." The Company's line of mid-size buses
consists of airport shuttle buses, intra- and inter-urban mass transportation
buses, and buses for tourist uses.
PRODUCTION. The Company's production facilities in Salina, Kansas; Chino,
California; and Imlay City, Michigan, are designed to provide efficient assembly
line manufacturing of its bus products. The vehicles are produced according to
specific orders which are normally obtained by dealers.
Some of the chassis, all of the engines and auxiliary units, and some of the
seating and other components used in the production of buses are purchased in
finished form. The Chino, California, facility assembles chassis for its rear
engine buses from industry standard components and assembles the buses directly
on the chassis.
The principal raw materials used in the manufacturing of buses are fiberglass,
steel, aluminum, plywood, and plastic. Most of the raw materials and components
needed are purchased from numerous suppliers. The Company purchases most of its
bus chassis from Ford and General Motors and most of its engines from Cummins.
The Company believes that, except for chassis, raw materials and components
could be purchased from other sources, if necessary, with no material impact on
the Company's operations.
MARKETING AND DISTRIBUTION. The Company markets its product line through a
network of 65 independent dealers in the United States and Canada. The Company
selects dealers using criteria similar to those used in selecting RV dealers.
During fiscal 1999, only one dealer, Creative Bus Sales Inc. of Fountain Valley,
California at 11% accounted for more than 10% of the Company's net bus revenue.
The Company also sells its buses directly to certain national accounts such as
major rental car companies, hotel chains, and transit authorities.
Terms of sale are typically cash on delivery or through national floorplan
financing institutions. Sales to some state transportation agencies and other
government agencies may be on longer terms. During fiscal 1999 there were no
losses due to repurchase of buses.
BACKLOG. As of July 31, 1999 the backlog for bus orders was approximately
$131,927,000.
WARRANTIES. The Company currently provides purchasers of its buses with a
limited warranty for one year or 12,000 miles against defects in materials and
workmanship, excluding only certain specified components which are warranted
separately by suppliers. The Company provides a five-year or 75,000 mile
warranty on the Company-assembled body structure of its "Aerotech" buses.
Chassis and engines are warranted for one year or 12,000 miles by their
manufacturers.
REGULATION
The Company is subject to the provisions of the National Traffic and Motor
Vehicle Safety Act and the safety standards for bus, RVs, and components, which
have been promulgated thereunder by the Department of Transportation. Because of
its sales in Canada, the Company is also governed by similar laws and
regulations issued by the Canadian Government.
The Company is a member of RVIA, a voluntary association of RV manufacturers
which promulgates RV safety standards. The Company places an RVIA seal on each
of its RVs to certify that such standards have been met.
Both federal and state authorities have various environmental control standards
relating to air, water, and noise pollution which affect the business and
operation of the Company. For example, these standards, which are generally
applicable to all companies, control the Company's choice of paints, discharge
of air compressor waste water, and noise emitted by factories. The Company
relies upon certifications obtained by chassis manufacturers with respect to
compliance by the Company's vehicles with all applicable emission control
standards.
The Company is also subject to the regulations promulgated by the Occupational
Safety and Health Administration ("OSHA"). The Company's plants are periodically
inspected by federal agencies
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ITEM 1. BUSINESS (CONTINUED)
concerned with health and safety in the work place, and by RVIA, to ensure that
the Company's products comply with applicable governmental and industry
standards.
The Company believes that its products and facilities comply in all material
respects with applicable vehicle safety, environmental, RVIA, and OSHA
regulations.
COMPETITION
The RV industry is characterized by relative ease of entry, although the codes,
standards, and safety requirements introduced in recent years are a deterrent to
new competitors. The need to develop an effective dealer network also acts as a
barrier to entry. The RV market is intensely competitive with a number of other
manufacturers selling products which compete directly with those of the Company.
Competition in the industry is based upon price, design, value, quality, and
service. The Company believes that the quality, design, and price of its
products and the warranty coverage and service it provides is such that its
products compete favorably for retail purchasers. The Company estimates that it
is the second largest RV manufacturer.
The Company estimates that it has a 34% market share of the U.S. and Canadian
small and mid-size bus market. Other competitors offer lines of buses which
compete with all of the Company's products. Price, quality, and delivery are the
primary competitive factors. As with its RVs, the Company believes that the
quality, design, and price of its products, the warranty coverage and service it
provides, and the loyalty of its customers is such that its products compare
favorably with similarly priced products of its competitors.
TRADE NAMES AND PATENTS
The Company has registered United States and Canadian trade names or licenses
under the trade names of others, covering the principal trade names and model
lines under which its products are marketed. The Company is not dependent upon
any patents or technology licenses in the conduct of its business.
EMPLOYEE RELATIONS
At July 31, 1999, the Company had approximately 3,087 employees in the United
States and 263 in Canada. Of these 3,350 employees, 367 are salaried. Citair's
and Thor America's approximately 384 hourly employees are currently represented
by certified labor organizations. Citair's and Thor America's current labor
agreements covering their operations expire at various times between September
2000 and October, 2003. The Company's employees at other facilities are not
represented by certified labor organizations. The Company believes it maintains
a good working relationship with its employees.
RESEARCH AND DEVELOPMENT
During the fiscal years 1999, 1998 and 1997, the Company spent approximately
$545,000, $847,000 and $768,000 respectively, on research and development
activities.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
AND EXPORT SALES
Canadian sales from operations in Canada and export sales to Canada from United
States operations amounted to approximately 3.5% and 5.2%, respectively, of the
Company's total net sales to unaffiliated customers in fiscal year 1999.
FORWARD LOOKING STATEMENTS
This annual report includes "forward looking statements" that involve
uncertainties and risks. There can be no assurance that actual results will not
differ from the Company's expectations. Factors which could cause materially
different results include, among others, the success of new product
introductions, the pace of acquisitions and cost structure improvements,
competitive and general economic conditions, and the other risks set forth in
the Company's filings with the Securities and Exchange Commission.
ITEM 2. PROPERTIES
The Company owns or leases approximately 2,136,000 square feet of plant and
office space. Management believes that the Company's present facilities,
consisting primarily of steel clad, steel or wood frame, or
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PROPERTIES (CONTINUED)
masonry construction, and the machinery and equipment contained therein, are
well maintained and in good condition. The Company believes that it would be
able to obtain replacement premises at acceptable costs for its leased premises
should its leases not be renewed. The following table describes the location,
number and size of the Company's facilities as of July 31, 1999.
<TABLE>
<CAPTION>
Approximate
No. of Building Area
Location Owned or Leased Buildings Square Feet
- -------- --------------- --------- -----------
RVs
<S> <C> <C> <C>
Jackson Center, OH (Airstream) (1).......................Leased...............11................304,000
Middleburg, PA (Thor America).............................Owned................3................116,000
Hensall, Ontario, Canada (Citair).........................Owned................1.................97,000
Oliver, B.C., Canada (Citair).............................Owned................1.................55,000
Oliver, B.C., Canada (Citair) (5)........................Leased................1.................11,000
Ontario, CA (Thor West) (2)..............................Leased................1................111,000
Middlebury, IN (Dutchmen).................................Owned................1.................20,000
Goshen, IN (Dutchmen).....................................Owned................6................261,000
Syracuse, IN (Fold Down)..................................Owned................1.................46,000
Syracuse, IN, (Aero)......................................Owned................2.................67,000
Syracuse, IN, (Aero) (11)................................Leased................1.................52,000
Bristol, IN (Thor Indiana) (7)...........................Leased................6................106,000
Elkhart, IN (Four Winds)..................................Owned................4................184,000
Milwaukie, OR (Komfort) (8)..............................Leased................1.................57,000
Moreno Valley, CA (Thor California) (9)..................Leased................4................166,000
BUSES
Salina, KS (ElDorado Kansas)..............................Owned................2.................93,000
Salina, KS (ElDorado Kansas) (10)........................Leased................1..................8,000
Salina, KS (ElDorado Kansas) (12)........................Leased................1.................23,000
Salina, KS (ElDorado Kansas) (3).........................Leased................1.................23,000
Salina, KS (ElDorado Kansas) (6).........................Leased................1.................53,000
Chino, CA (ElDorado California) (4)......................Leased.............. 1.................64,000
Chino, CA (ElDorado California) (4)......................Leased.............. 1.................10,000
Chino, CA (ElDorado California) (4)......................Leased................1..................8,000
Imlay City, Michigan (Champion Bus).......................Owned................5................201,000
-------------------------
Total.........................................................................58..............2,136,000
-------------------------
-------------------------
</TABLE>
(1) Airstream locations are occupied under net subleases which expire in 2002.
(2) This location is occupied under a ten-year net lease with the right of
first refusal if a sale is proposed by lessor. The lease expires in 2001
with an option to renew for two consecutive five-year terms. Sublet through
term of lease as part of Thor West divestment.
(3) This location is occupied under a net lease which expires in 1999.
(4) This location is occupied under a net lease which expires in 1999 with a
1-year renewal option.
(5) This location is occupied under a net lease which is on a month to month
basis.
(6) This location is occupied under a net lease which expires in 2002.
(7) This location is occupied under a net lease which expires in 2005 with an
option to extend for 5 years.
(8) This location is occupied under a net lease which expires in 2005 with an
option to extend for 5 years.
(9) This location is occupied under a net lease which expires in 2008 with an
option to extend for 5 years
(10) This location is occupied under a net lease which is on month to month
basis with 60 day notice.
(11) This location is occupied under a net lease which expires in 2001.
(12) This location is occupied under a net lease which expires in 1999 with
annual renewal option on year to year basis.
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ITEM 3. LEGAL PROCEEDINGS
The Company is involved in certain litigation arising out of its operations in
the normal course of business. The Company believes that no such litigation will
have a material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters submitted.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(A) MARKET INFORMATION
The Company's Common Stock is traded on the New York Stock Exchange. Set forth
below is the range of high and low prices for the common stock for each quarter
during the Company's two most recent fiscal years, as quoted in the New York
Stock Exchange Monthly Market Statistics and Trading Reports.
<TABLE>
Fiscal 1999 Fiscal 1998
----------- -----------
High Low High Low
--------------------------------------
<S> <C> <C> <C> <C>
First Quarter....................... $26.25 $20.00 $21.92 $16.63
Second Quarter...................... 27.00 20.63 23.42 19.21
Third Quarter....................... 31.50 22.25 26.67 24.38
Fourth Quarter...................... 30.63 24.38 28.44 24.38
</TABLE>
(B) HOLDERS
As of October 15, 1999, the number of holders of record of the Company's common
stock was 214.
(C) DIVIDENDS
The Company paid quarterly dividends of $.02 a share during 1999. The Company
paid quarterly dividends of $.03 ($.02 after adjustment for stock split) a share
during its quarter ended October 31, 1997 and January 31, 1998. A 3-for-2 common
stock split was declared effective April 6, 1998 and in the April 30, 1998 and
July 31, 1998 quarters a $.02 a share dividend was paid. Any payment of cash
dividends in the future will be at the discretion of the Company's Board of
Directors and will depend upon the financial condition, capital requirements,
and earnings of the Company, as well as other factors which the Board of
Directors may deem relevant.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Fiscal years ended July 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
-----------------------------------------------------------------
INCOME STATEMENT DATA: ($000, except per share amounts)
<S> <C> <C> <C> <C> <C>
Net sales ................ $ 805,806 $ 715,600 $ 624,435 $ 602,078 $ 562,681
Net income ............... 30,766 19,395 16,423 14,851 13,790
Earnings per common share:
Basic ................. 2.53 1.59 1.32 1.12 1.03
Diluted ............... 2.52 1.58 1.31 1.12 1.03
Dividends per common share .08 .08 .08 .08 .08
BALANCE SHEET DATA:
Total assets ............. $ 245,912 $ 213,981 $ 170,969 $ 173,818 $ 148,461
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Net sales in fiscal 1999 totaled $805,805,904 versus $715,600,390 in fiscal
1998. Net income in fiscal 1999 totaled $30,766,195 versus $19,395,228 in 1998.
Basic earnings per common share were $2.53 in 1999 versus $1.59 in 1998. The
consolidated statements of income for the years ended July 31, 1999, 1998 and
1997 shown as a percentage of sales are:
<TABLE>
Fiscal years ended July 31,
------------------------------
1999 1998 1997
------------------------------
<S> <C> <C> <C>
Net sales .................................. 100.0% 100.0% 100.0%
Cost of products sold ...................... 87.0 88.5 89.5
------------------------------
Gross profit ............................... 13.0 11.5 10.5
Selling, general and administrative expenses 6.6 6.6 6.2
------------------------------
Operating income ........................... 6.4 4.9 4.3
Other income (net) ......................... .3 .1 .1
Loss on divestment of subsidiaries ......... (.2) (.4) --
------------------------------
Income before income taxes ................. 6.5 4.6 4.4
Provision for income taxes ................. 2.7 1.9 1.8
------------------------------
Net income ................................. 3.8% 2.7% 2.6%
------------------------------
- --------------------------------------------------------------------------------
</TABLE>
1999 VS. 1998
Net sales totaled $805,805,904 up 12.6% from $715,600,390 in the same period
last year. Income before income taxes was $52,435,679, up 58.7% from $33,050,894
last year. Of this $19,384,785 increase in income before income taxes,
$4,459,874 represents increase in income of Champion Bus, Inc. acquired February
9, 1998, $5,810,116 represents reduced losses of Thor West in 1999 of $2,539,292
versus $8,349,408 in 1998 and $1,836,883 represents reduced losses of ElDorado
National Michigan in 1999 of $35,014 versus $1,871,897 in 1998. Included in 1998
income is a gain on the sale of Henschen Industrial of $1,269,000. In general
the Company did not materially adjust its sales prices in fiscal 1999.
Recreation vehicle revenues of $588,936,150 were 7.6% higher than last years
$547,484,994. Recreation vehicle revenues were 73% of total Company revenue
compared to 77% last year. Recreation vehicle revenues were up primarily due to
increased unit sales. Bus revenues of $216,869,754 were 29% higher than last
years $168,115,396. Bus revenues were 27% of total Company revenue compared to
23% last year. Bus revenues included sales of $55,990,999 of Champion Bus, Inc.
versus $25,809,948 in 1998 and sales of $1,458,418 in 1999 versus $8,851,486 in
1998 of ElDorado National Michigan, which was shut down effective 7/31/98.
Manufacturing gross profit increased as a percentage of sales from 11.5% in 1998
to 13.0% in 1999 due primarily to higher volumes, the ElDorado National Michigan
and Thor West losses last year. Selling, general and administrative expense and
amortization of intangibles increased to $53,338,397, 6.6% of sales, from
$47,505,569, 6.6% of sales, primarily due to increased income related
compensation and selling expenses related to increased volume.
Interest income increased by $1,314,102 primarily due to investment of cash.
Interest expense decreased by $131,713. The combined income tax rate was 41.3%
in both the current and prior year.
1998 VS. 1997
Net sales totaled $715,600,390 up 14.6% from $624,435,108 in the same period in
1997. Net income increased to $19,395,228, compared to $16,422,767 in 1997.
Included in the net income for fiscal 1998 was a pre-tax gain on the sale of
Airstream, Inc.'s Henschen operation of $1,269,000 and the pre-tax loss on the
divestment of Thor West of $3,990,000. The cumulative effect of these disposals
reduced basic earnings per share by approximately $.15 per share. In general,
the Company did not adjust its sales prices materially in fiscal 1998.
Recreation vehicle revenues of $547,484,994 were 13% higher than $485,010,470 in
1997. Recreation vehicle revenues were 77% of total Company revenue compared to
78% in 1997. Bus revenues of $168,115,396 were 21% higher than 1997 revenues of
$139,424,638. Bus revenues were 23% of total Company revenue compared to 22% in
1997. Manufacturing gross profit increased as a percentage of sales from 10.5%
in 1997 to 11.5% in 1998. As a percentage of sales, selling, general and
administrative cost increased due primarily to increased income related
compensation and selling expenses related to increased volume.
Interest income decreased by $2,725 and interest expense decreased by $387,984.
10
<PAGE> 11
The combined income tax rate was 41.3% compared to 40.6% in 1997. The net loss
on divestment of a subsidiary increased the combined tax rate in 1998 by
approximately .6% due to the write-off of $2,139,000 of non-deductible goodwill.
LIQUIDITY
On July 31, 1999, Thor had $68,865,635 in cash and cash equivalents, compared to
$43,531,805 on July 31, 1998. Working capital on July 31, 1999, was $123,094,097
compared to $99,139,080 on July 31, 1998. Inventory valued at current cost on
July 31, 1999, exceeded LIFO inventory by $3,661,235. The Company has no long
term debt.
The Company currently has a $30,000,000 revolving line of credit. There were no
borrowings on the line at July 31, 1999. 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 30, 1999.
During fiscal 1999 Thor purchased 133,000 shares of its common stock, increasing
treasury stock by $2,910,501.
The Company believes that internally generated funds and the revolving credit
agreement already in place will be sufficient to meet current needs and
anticipated capital requirements. Capital expenditures of $7,448,325 were
primarily for expansion of the Company's Dutchmen, Four Winds and Thor
California manufacturing facilities. Additional funds to complete these
expansions will be approximately $2,900,000. The Company anticipates additional
capital expenditures in 2000 of approximately $5,400,000 primarily to expand its
Komfort and Thor California RV operations and its bus operations in total.
Amortization of intangibles decreased from $1,904,394 for the year ended July
31, 1998 to $1,474,838 for the year ended July 31, 1999 because certain
intangibles became fully amortized.
YEAR 2000 ISSUES
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions in operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remedy their own Year 2000 issue.
The Company's total Year 2000 project costs include the estimated costs and time
associated with the impact of third party's Year 2000 issues on the Company, and
are based on presently available information. However, there can be no guarantee
that the systems of other companies on which the Company's systems rely will be
timely converted, or that a failure to convert by another company, or a
conversion that is incompatible with the Company's systems, would not have a
material adverse effect on the Company. The Company believes it has no exposure
to contingencies related to the Year 2000 issue for the products it has sold.
The Company has completed its critical Year 2000 projects. The total cost of the
Year 2000 project is estimated at $343,000, substantially all of which was to
purchase revised software and hardware, and was funded through operating cash
flows.
The Company believes that manual systems could serve as backup for any systems
used internally. The Company also plans to store on spreadsheets or have manual
documents on all data necessary to run its day to day operations on an interim
basis during the initial month of year 2000.
ACCOUNTING PRONOUNCEMENTS
The following Statements of Financial Accounting Standards (SFAS) were issued by
the Financial Accounting Standards Board. The impact of adopting these
statements has not been determined.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
was issued in June 1998. The statement requires derivatives to be recorded on
the balance sheet as assets or liabilities, measured at fair value. Gains or
losses resulting from changes in fair value of the derivatives are recorded
depending upon whether the instruments meet the criterion for hedge accounting.
This statement is effective for fiscal years beginning after June 15, 2000.
11
<PAGE> 12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
-------------------------------------------------------
OCTOBER 31 JANUARY 31 APRIL 30 JULY 31
-------------------------------------------------------
($000, except per share amounts)
1999
<S> <C> <C> <C> <C>
Net sales................................... $ 189,177 $ 165,533 $ 223,708 $ 227,388
Gross profit................................ 23,022 20,985 29,818 31,081
Net income (1) ............................ 6,992 5,452 8,950 9,372
Earnings per common share:
Basic.................................... .57 .45 .73 .78
Diluted.................................. .57 .44 .73 .78
Dividends paid per common share............. .02 .02 .02 .02
MARKET PRICES PER COMMON SHARE:
High .................................... $ 26.25 $ 27.00 $ 31.50 $ 30.63
Low ..................................... $ 20.00 $ 20.63 $ 22.25 $ 24.38
-------------------------------------------------------
1998
Net sales................................... $ 165,458 $ 134,510 $ 206,902 $ 208,730
Gross profit................................ 18,776 14,701 23,427 25,697
Net income (1) ............................ 5,553 3,442 6,135 4,265
Earnings per common share:
Basic.................................... .45 .28 .50 .35
Diluted.................................. .45 .28 .50 .35
Dividends paid per common share:............ .02 .02 .02 .02
MARKET PRICES PER COMMON SHARE:
High .................................... $ 21.92 $ 23.42 $ 26.67 $ 28.44
Low ..................................... $ 16.63 $ 19.21 $ 24.38 $ 24.38
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
(1) Net income in the fourth quarter was increased by $535,000 in 1999 and
decreased by $2,249,000 in 1998 due to adjustments to physical inventory,
warranty reserves, management incentives and a $2,766,000 net loss for the
divestment of Thor West.
12
<PAGE> 13
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors and Executive Officers of the Registrant
is included in the definitive Proxy Statement, dated on or about October 29,
1999, filed with the Commission pursuant to Regulation 14A, which portion of
said Proxy Statement is hereby incorporated by reference.
ITEM 11. MANAGEMENT REMUNERATION
The information required in response to this Item is contained under the caption
EXECUTIVE OFFICERS in the definitive Proxy Statement, dated on or about October
29, 1999, filed with the Commission pursuant to Regulation 14A, which portion of
said Proxy Statement is hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information required in response to this Item is contained under the caption
ELECTION OF DIRECTORS for Security Ownership of Management and under the caption
OWNERSHIP OF COMMON STOCK for principal shareholders, of the definitive Proxy
Statement, dated on or about October 29, 1999, filed with the Commission
pursuant to Regulation 14A, which portion of said Proxy Statement is hereby
incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required in response to this Item is contained under the caption
CERTAIN RELATIONS AND TRANSACTIONS WITH MANAGEMENT in the definitive Proxy
Statement, dated on or about October 29, 1999, filed with the Commission
pursuant to Regulation 14A, which portion of said Proxy Statement is hereby
incorporated by reference.
13
<PAGE> 14
PART IV
ITEM 14. FINANCIAL STATEMENT SCHEDULES, EXHIBITS,
AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(A) 1. FINANCIAL STATEMENTS PAGE
<S> <C>
Independent Auditors' Report..................................................................17
Consolidated Balance Sheets, July 31, 1999 and 1998.......................................18, 19
Consolidated Statements of Income for the Years Ended
July 31, 1999, 1998 and 1997...............................................................20
Consolidated Statements of Stockholders' Equity for the
Years Ended July 31, 1999, 1998 and 1997...................................................21
Consolidated Statements of Cash Flows for the Years Ended
July 31, 1999, 1998 and 1997...............................................................22
Notes to Consolidated Financial Statements for the Years Ended
July 31, 1999, 1998 and 1997............................................................23-28
(A) 2. FINANCIAL STATEMENT SCHEDULE AS OF JULY 31, 1999, AND FOR
EACH OF THE THREE YEARS IN THE PERIOD ENDED JULY 31, 1999:
Schedule II--Valuation and Qualifying Accounts................................................29
All other schedules have been omitted as not required or not applicable
under the instructions.
(A) 3. EXHIBITS
(3) ARTICLES OF INCORPORATION AND BY-LAWS
(a) Registrant's Restated Certificate of..................................................*
Incorporation. (Filed as Exhibit 3(a)
to Registration Statement No. 33-13827.)
(b) Registrant's By-laws. (Filed as Exhibit 3(b).........................................*
to Registration Statement No. 33-13827.)
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
INCLUDING INDENTURES
(a) Form of Common Stock Certificate......................................................*
(Filed as Exhibit 4(a) to 10-K dated July 31, 1987.)
</TABLE>
*Incorporated by reference.
14
<PAGE> 15
EXHIBITS (CONTINUED)
(21) SUBSIDIARIES OF THE REGISTRANT
The subsidiaries of the Registrant, excluding
those which, considered in the aggregate as
a single subsidiary, would not constitute a
significant subsidiary as of July 31, 1999, are:
Airstream, Inc. (a Nevada corporation)
Thor America, Inc. (a Pennsylvania corporation)
Citair, Inc. (a Pennsylvania corporation)
Citair does business in Canada under the name "General Coach."
Dutchmen Manufacturing, Inc. (a Delaware corporation)
Aero Manufacturing, Inc. (a Delaware corporation)
Thor Indiana, Inc. (a Delaware corporation)
Four Winds International, Inc. (a Delaware corporation)
Thor California, Inc. (a Delaware corporation)
Komfort Corp. (a Delaware corporation)
ElDorado National California, Inc. (a California corporation)
ElDorado National Kansas, Inc. (a Kansas corporation)
Champion Bus, Inc. (a Delaware corporation)
(27) FINANCIAL DATA SCHEDULES
(1) Financial data schedule for year ended July 31, 1999.
15
<PAGE> 16
SIGNATURES
Pursuant to 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.
THOR INDUSTRIES, INC.
(Signed) /S/ Wade F.B. Thompson
----------------------------------------
Wade F. B. Thompson
Chairman, President, and Chief Executive Officer
Date 10/27/99
--------------------------------------------
Pursuant to 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.
(Signed) /S/ Peter B. Orthwein (Signed) /S/ Walter L. Bennett
--------------------------- -------------------------------------
Peter B. Orthwein Walter L. Bennett
Vice Chairman, Treasurer Chief Financial Officer
(Director) (Principal Financial Officer & Principal
Accounting Officer)
Date 10/27/99 Date 10/27/99
------------------------------- -----------------------------------------
(Signed) /S/ Wade F.B. Thompson (Signed) /S/ Alan Siegel
--------------------------- -------------------------------------
Wade F. B. Thompson Alan Siegel
Chairman, President, and Chief Executive Director
Officer (Principal Executive Officer
and Director)
Date 10/27/99 Date 10/27/99
------------------------------- -----------------------------------------
(Signed) /S/ William C. Tomson
---------------------------
William C. Tomson
Director
Date 10/27/99
-------------------------------
16
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND STOCKHOLDERS--THOR INDUSTRIES, INC.
We have audited the accompanying consolidated balance sheets of Thor Industries,
Inc., and subsidiaries (the "Company") as of July 31, 1999 and 1998, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended July 31, 1999. Our audits also
included the financial statement schedule listed in the index of item 14(a)(2).
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule 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
mis-statement. 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, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of July 31, 1999 and
1998, and the results of their operations and their cash flows for each of the
three years in the period ended July 31, 1999, in conformity with generally
accepted accounting principles. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Dayton, Ohio
October 1, 1999
17
<PAGE> 18
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS, JULY 31, 1999 AND 1998
- ---------------------------------------------------------------------------------
--------------------------------
ASSETS 1999 1998
- ------ --------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ....................... $ 68,865,635 $ 43,531,805
Accounts receivable:
Trade, less allowance for doubtful accounts--
$63,485 in1999 and $115,435 in 1998 ......... 52,167,539 56,275,459
Other ....................................... 1,667,486 1,850,844
Inventories (Note B) ............................ 72,850,279 66,717,687
Deferred income taxes and other (Note D) ........ 6,572,972 5,328,903
--------------------------------
TOTAL CURRENT ASSETS ............................ 202,123,911 173,704,698
--------------------------------
PROPERTY, PLANT AND EQUIPMENT:
Land ............................................ 1,400,995 1,400,995
Buildings and improvements ...................... 19,010,749 14,871,672
Machinery and equipment ......................... 14,122,834 14,083,765
--------------------------------
Total cost ...................................... 34,534,578 30,356,432
Accumulated depreciation ........................ 12,218,224 12,912,386
--------------------------------
NET PROPERTY, PLANT AND EQUIPMENT ............... 22,316,354 17,444,046
--------------------------------
INVESTMENT IN JOINT VENTURES (NOTE J) ........... 3,419,101 3,369,968
--------------------------------
OTHER ASSETS:
Goodwill ........................................ 11,251,342 11,761,553
Noncompete agreements ........................... 2,235,010 3,011,798
Trademarks ...................................... 2,020,319 2,208,158
Other ........................................... 2,545,698 2,480,722
--------------------------------
TOTAL OTHER ASSETS .............................. 18,052,369 19,462,231
--------------------------------
TOTAL ........................................... $245,911,735 $213,980,943
- ---------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
18
<PAGE> 19
<TABLE>
<CAPTION>
-------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
- ------------------------------------ -------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable ................................................... $ 48,290,096 $ 49,382,369
Accrued liabilities:
Compensation and related items .................................. 13,676,462 11,181,046
Product warranties .............................................. 11,543,598 10,063,753
Other ........................................................... 5,519,658 3,938,450
-------------------------------
TOTAL CURRENT LIABILITIES ........................................... 79,029,814 74,565,618
-------------------------------
Deferred income taxes and other liabilities (Note D) ................ 1,508,756 1,200,955
-------------------------------
Contingent liabilities (Note G) ..................................... --
STOCKHOLDERS' EQUITY (NOTE H):
Preferred stock--authorized 1,000,000 shares; none outstanding ...... --
Common stock--par value of $.10 a share;
authorized, 20,000,000 shares;
issued 13,715,147 shares in 1999 and 13,692,697 in 1998, at cost .. 1,371,515 1,369,270
Additional paid-in capital .......................................... 25,684,380 25,316,643
Foreign currency translation ........................................ (1,198,511) (1,184,939)
RETAINED EARNINGS ................................................... 162,018,698 132,227,188
Restricted stock plan ............................................... (216,168) (137,544)
-------------------------------
Total ............................................................... (187,659,914) 157,590,618
Less 1,566,637 treasury shares in 1999 and 1,433,637 in 1998, at cost (22,286,749) (19,376,248)
-------------------------------
TOTAL STOCKHOLDERS' EQUITY .......................................... 165,373,165 138,214,370
-------------------------------
TOTAL ............................................................... $ 245,911,735 $ 213,980,943
- --------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
19
<PAGE> 20
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED JULY 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------------------------
-------------------------------------------------
1999 1998 1997
-------------------------------------------------
<S> <C> <C> <C>
NET SALES ................................... $ 805,805,904 $ 715,600,390 $ 624,435,108
Cost of products sold ....................... 700,900,070 632,999,085 558,666,678
-------------------------------------------------
GROSS PROFIT ................................ 104,905,834 82,601,305 65,768,430
Selling, general and administrative expenses 51,863,559 45,601,175 36,381,235
Amortization of intangibles ................. 1,474,838 1,904,394 2,084,312
-------------------------------------------------
OPERATING INCOME ............................ 51,567,437 35,095,736 27,302,883
OTHER INCOME (EXPENSE):
Interest income ........................... 2,183,391 869,289 872,014
Interest expense .......................... (115,957) (247,670) (635,654)
Other ..................................... 613,334 54,539 97,958
Loss on divestment of subsidiaries (Note L) (1,812,526) (2,721,000) --
-------------------------------------------------
TOTAL OTHER INCOME (EXPENSE) .............. 868,242 (2,044,842) 334,318
-------------------------------------------------
INCOME BEFORE INCOME TAXES .................. 52,435,679 33,050,894 27,637,201
Income taxes (Note D) ....................... 21,669,484 13,655,666 11,214,434
-------------------------------------------------
NET INCOME .................................. $ 30,766,195 $ 19,395,228 $ 16,422,767
=================================================
EARNINGS PER COMMON SHARE (NOTE A)
Basic ....................................... $ 2.53 $ 1.59 $ 1.32
Diluted ..................................... 2.52 1.58 1.31
</TABLE>
See notes to consolidated financial statements.
20
<PAGE> 21
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED JULY 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------------------------------------------------------
TREASURY STOCK COMMON STOCK ADDITIONAL RESTRICTED FOREIGN
------------------------------------------------------- PAID-IN STOCK CURRENCY
SHARES AMOUNT SHARES AMOUNT CAPITAL PLAN TRANSLATION
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
July 31, 1996 412,439 $ 5,815,196 9,099,247 $ 909,925 $ 25,105,120 -- $ (641,856)
Net income -- -- -- -- -- -- --
Shares purchased 543,319 13,561,052 -- -- -- -- --
Cash dividends
$.12 per common share -- -- -- -- -- -- --
Foreign currency
translation adjustment -- -- -- -- -- -- 12,310
----------------------------------------------------------------------------------------------------
July 31, 1997 955,758 19,376,248 9,099,247 909,925 25,105,120 -- (629,546)
Net income -- -- -- -- -- -- --
Stock option activity -- -- 36,100 3,610 513,070 -- --
Restricted stock activity -- -- 5,150 515 154,950 (155,465) --
Stock split 477,879 -- 4,552,200 455,220 (456,497) -- --
Cash dividends - $.08
per common share -- -- -- -- -- -- --
Foreign currency
translation adjustment -- -- -- -- -- -- (555,393)
Compensation expense -- -- -- -- -- 17,921 --
----------------------------------------------------------------------------------------------------
July 31, 1998 1,433,637 19,376,248 13,692,697 1,369,270 25,316,643 (137,544) (1,184,939)
Net income -- -- -- -- -- -- --
Shares purchased 133,000 2,910,501 -- -- -- -- --
Stock option activity -- -- 17,000 1,700 241,910 -- --
Restricted stock activity -- -- 5,450 545 125,827 (126,372) --
Cash dividends - $.08
per common share -- -- -- -- -- -- --
Foreign currency
translation adjustment -- -- -- -- -- -- (13,572)
Compensation expense -- -- -- -- -- 47,748 --
----------------------------------------------------------------------------------------------------
July 31, 1999 1,566,637 $ 22,286,749 13,715,147 $ 1,371,515 $ 25,684,380 $ (216,168) $ (1,198,511)
====================================================================================================
</TABLE>
<TABLE>
<CAPTION>
COMPRE-
RETAINED HENSIVE
EARNINGS INCOME
-------------------------------
<S> <C> <C>
July 31, 1996 $ 98,380,961
Net income 16,422,767 $ 16,422,767
Shares purchased -- --
Cash dividends
$.12 per common share (993,518) --
Foreign currency
translation adjustment -- 12,310
-------------------------------
July 31, 1997 113,810,210 $ 16,435,077
=============
Net income 19,395,228 $ 19,395,228
Stock option activity -- --
Restricted stock activity -- --
Stock split -- --
Cash dividends - $.08
per common share (978,250) --
Foreign currency
translation adjustment -- (555,393)
Compensation expense -- --
-------------------------------
July 31, 1998 132,227,188 $ 18,839,835
=============
Net income 30,766,195 $ 30,766,195
Shares purchased -- --
Stock option activity -- --
Restricted stock activity -- --
Cash dividends - $.08
per common share (974,685) --
Foreign currency
translation adjustment -- (13,572)
Compensation expense -- --
-------------------------------
July 31, 1999 $ 162,018,698 $ 30,752,623
===============================
</TABLE>
See notes to consolidated financial statements.
21
<PAGE> 22
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JULY 31, 1999, 1998 AND 1997
- ---------------------------------------------------------------------------------------------------
----------------------------------------------
1999 1998 1997
----------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME ...................................... $ 30,766,195 $ 19,395,228 $ 16,422,767
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation ............................... 2,255,956 2,464,843 2,376,832
Amortization of intangibles ................ 1,474,838 1,904,394 2,084,312
Deferred income taxes ...................... (382,386) (2,672,630) 387,316
Loss on divestment of subsidiary ........... 1,812,526 3,990,000 --
Gain on divestment of subsidiary ........... -- (1,269,000) --
CHANGES IN ASSETS AND LIABILITIES,
NET OF EFFECTS FROM ACQUISITIONS AND DIVESTMENTS:
Accounts receivable ............................. 4,041,278 (2,214,503) (2,655,459)
Inventories ..................................... (10,901,788) 3,812,032 2,119,629
Deferred taxes and other ........................ (1,007,998) (290,390) 509,456
Accounts payable ................................ 292,026 8,769,480 3,912,715
Accrued liabilities ............................. 7,474,363 6,833,229 (2,302,492)
Other ........................................... 225,348 (391,926) (669,083)
----------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES ....... 36,050,358 40,330,757 22,185,993
----------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ...... (7,448,325) (2,088,698) (1,794,253)
Disposals of property, plant and equipment ...... 124,991 289,742 680,471
Acquisitions--net of cash acquired .............. -- (9,670,735) --
Proceeds from divestment of subsidiary .......... 261,954 2,934,973 --
----------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES ........... (7,061,380) (8,534,718) (1,113,782)
----------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends .................................. (974,685) (978,250) (993,518)
Net decrease in line of credit .................. -- -- (6,515,000)
Purchase of treasury shares ..................... (2,910,501) -- (13,561,052)
Proceeds from issuance of common stock .......... 243,610 516,680 --
----------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES ........... (3,641,576) (461,570) (21,069,570)
----------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ......... (13,572) (555,393) 12,310
----------------------------------------------
Net increase in cash and cash equivalents ....... 25,333,830 30,779,076 14,951
Cash and cash equivalents, beginning of year .... 43,531,805 12,752,729 12,737,778
----------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR .......... $ 68,865,635 $ 43,531,805 $ 12,752,729
==============================================
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid ............................... $ 23,353,329 $ 12,332,383 $ 12,126,600
Interest paid ................................... 115,957 247,670 635,654
NON-CASH TRANSACTIONS:
Issuance of restricted stock .................... 126,372 155,465 --
Note from divestment of subsidiary .............. 750,000 -- --
</TABLE>
See notes to consolidated financial statements.
22
<PAGE> 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JULY 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
PRINCIPLES OF CONSOLIDATION--The accompanying consolidated financial statements
include the accounts of Thor Industries, Inc. and its wholly-owned domestic and
foreign subsidiaries. Investments in two unconsolidated 50% owned companies are
accounted for by the equity method. All intercompany balances and transactions
are eliminated in consolidation.
CASH AND CASH EQUIVALENTS--Interest-bearing deposits and other investments with
maturities of three months or less when purchased are considered cash
equivalents.
INVENTORIES--Inventories are stated at the lower of cost or market, determined
principally by the last-in, first-out (LIFO) basis.
DEPRECIATION--Property, Plant and Equipment is recorded at cost and depreciated
using the straight-line method over the estimated useful lives of the assets as
follows:
Buildings and improvements--ten to thirty-nine years
Machinery and equipment--three to ten years
OTHER ASSETS--Other assets are amortized using the straight-line method over the
estimated lives of the assets as follows:
Goodwill--twenty or thirty years
Noncompete agreements--five or ten years
Trademarks--ten or twenty years
The Company periodically reviews long-term assets for impairment.
PRODUCT WARRANTIES--Estimated warranty costs are provided at the time of sale of
the warranted products.
REVENUE RECOGNITION--Revenues from the sale of recreation vehicles and buses are
recognized when title passes to dealers, distributors, or contract buyers.
ESTIMATES--The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
FOREIGN CURRENCY TRANSLATION--Assets and liabilities of Canadian operations
reported in the consolidated balance sheets have been translated at current
exchange rates. Revenues and expenses reported in the consolidated statements of
income have been translated at the average exchange rate for the year.
Transaction gains and losses are not significant.
STOCK OPTIONS--The Company measures cost for stock options issued to employees
using the method of accounting prescribed by APB Opinion No. 25, "Accounting for
Stock Issued to Employees."
23
<PAGE> 24
EARNINGS PER SHARE--Earnings per share is computed by dividing net income by the
following:
<TABLE>
<CAPTION>
-------------------------------------
1999 1998 1997
-------------------------------------
<S> <C> <C> <C>
Weighted average shares outstanding for
basic earnings per share ............ 12,179,962 12,227,307 12,458,337
Stock options ......................... 42,712 41,914 52,063
-------------------------------------
Total for diluted shares .............. 12,222,674 12,269,221 12,510,400
-------------------------------------
</TABLE>
COMPREHENSIVE INCOME--Effective July 31, 1999, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income". The Company's difference between net earnings
and comprehensive earnings relates to the changes in foreign currency
translation adjustment.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," was issued in June 1998. The
statement requires derivatives to be recorded on the balance sheet as assets or
liabilities, measured at fair value. Gains or losses resulting from changes in
fair value of the derivatives are recorded depending upon whether the
instruments meet the criterion for hedge accounting. This statement is effective
for fiscal years beginning after June 15, 2000.
RE-CLASSIFICATIONS--Certain reclassifications have been made in the 1998 and
1997 consolidated financial statements to conform to the presentation used in
1999.
B. INVENTORIES
- --------------------------------------------------------------------------------
Major classifications of inventories are:
<TABLE>
<CAPTION>
As of July 31,
--------------------------
1999 1998
--------------------------
<S> <C> <C>
Finished products ....................... $ 4,128,011 $ 4,724,367
Work in process ......................... 20,959,710 19,858,127
Raw materials ........................... 31,479,371 27,771,403
Chassis ................................. 19,944,422 17,217,486
--------------------------
Total ................................... 76,511,514 69,571,383
Less excess of FIFO costs over LIFO costs 3,661,235 2,853,696
--------------------------
Total inventories ....................... $72,850,279 $66,717,687
==========================
</TABLE>
C. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Company has a $30,000,000 unsecured revolving line of credit. There was no
outstanding balance at July 31, 1999 and 1998. The loan agreement contains
certain covenants and the Company must maintain certain financial ratios. The
line of credit bears interest below the prime rate (6.0% at July 31, 1999) and
expires on November 30, 1999.
24
<PAGE> 25
D. INCOME TAXES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
--------------------------------------------
1999 1998 1997
--------------------------------------------
CURRENT:
<S> <C> <C> <C>
Federal................................................ $17,769,357 $13,122,320 $ 8,568,239
State and local........................................ 3,397,346 2,468,150 1,933,350
Foreign................................................ 885,167 737,826 325,529
--------------------------------------------
Total current.......................................... 22,051,870 16,328,296 10,827,118
Total deferred......................................... (382,386) (2,672,630) 387,316
--------------------------------------------
Income taxes........................................... $21,669,484 $13,655,666 $11,214,434
============================================
</TABLE>
<TABLE>
<CAPTION>
July 31, July 31,
1999 1998
------------------------------
A SUMMARY OF DEFERRED INCOME TAXES IS:
CURRENT DEFERRED TAX ASSET (LIABILITY):
<S> <C> <C>
Inventory basis ....................................................... $ (911,344) $(1,422,218)
Employee benefits ..................................................... 360,430 351,618
Self-insurance ........................................................ 766,435 722,696
Product warranties .................................................... 3,861,327 3,522,313
Loss on divestment of subsidiary ...................................... 578,449 1,045,208
Other ................................................................. (274,524) (351,431)
------------------------------
TOTAL CURRENT DEFERRED TAX ASSET
INCLUDED IN DEFERRED INCOME TAXES AND OTHER ........................... 4,380,773 3,868,186
------------------------------
LONG-TERM DEFERRED TAX ASSET (LIABILITY):
Property basis ........................................................ (1,022,685) (1,454,048)
Other ................................................................. (150,391) 411,173
------------------------------
TOTAL LONG-TERM DEFERRED TAX LIABILITY
INCLUDED IN DEFERRED INCOME TAXES AND OTHER LIABILITIES................ (1,173,076) (1,042,875)
------------------------------
NET DEFERRED TAX ASSET ................................................ $ 3,207,697 $ 2,825,311
==============================
</TABLE>
The differences between income taxes at the federal statutory rate and the
actual income taxes are as follows:
<TABLE>
<CAPTION>
-------------------------------------------
1999 1998 1997
-------------------------------------------
<S> <C> <C> <C>
Provision at statutory rates ........................... $ 18,352,488 $ 11,567,813 $ 9,673,020
State and local income taxes, net of federal tax benefit 2,208,275 1,604,298 1,210,178
Amortization of intangibles ............................ 321,866 212,936 269,869
Non-deductible loss on divestment of subsidiary ........ 351,293 --
Other .................................................. 786,855 (80,674) 61,367
-------------------------------------------
Income taxes ........................................... $ 21,669,484 $ 13,655,666 $ 11,214,434
===========================================
</TABLE>
Income before income taxes includes foreign income of $2,158,651in 1999,
$1,878,422 in 1998 and $603,473 in 1997.
25
<PAGE> 26
E. LEASES
- --------------------------------------------------------------------------------
The Company has operating leases principally for land, buildings and equipment.
Minimum future rental payments required under these operating leases are $
8,443,345, which includes the following amounts due in each of the next five
years ending July 31: $1,846,402 in 2000; $1,572,655 in 2001; $1,232,560 in
2002; $874,948 in 2003; $861,072 in 2004 and $2,055,708 thereafter. Rent expense
was $2,220,929 in 1999, $2,616,539 in 1998 and $2,541,033 in 1997.
F. PROFIT SHARING PLANS
- --------------------------------------------------------------------------------
The Company has six 401(k) plans for full-time employees at six subsidiaries and
a 401(k) plan for domestic union employees at another subsidiary. Contributions
to the union negotiated 401(k) plan are based on hours worked; contributions to
one non-union plan are at the discretion of the Board of Directors. There are no
Company contributions to the five remaining non-union 401(k) plans. Total
expense for these plans was $219,942 in 1999, $164,217 in 1998 and $148,646 in
1997.
G. CONTINGENT LIABILITIES
- --------------------------------------------------------------------------------
It is customary practice for companies in the recreation vehicle industry to
enter into agreements with financing institutions to provide financing to their
dealers. Generally, the agreements provide for the repurchase of products from
the financing institution in the event of a dealer's default. Although the total
contingent liability approximated $193,923,000 at July 31, 1999, the risk of
loss under the agreements is spread over numerous dealers and is further reduced
by the resale value of the units which the Company would be required to
repurchase. Losses under these agreements have not been significant in the
periods presented in the accompanying consolidated financial statements, and
management believes any future losses under the agreements will not have a
significant effect on consolidated financial position or results of operations.
The Company obtains certain vehicle chassis from automobile manufacturers under
converter pool agreements. The agreements generally provide that the
manufacturer will supply chassis at the Company's various production facilities
under the terms and conditions as set forth in the agreement. The manufacturer
does not transfer the certificate of origin to the Company and, accordingly, the
Company accounts for the chassis as consigned, unrecorded inventory. Typically,
chassis are converted and delivered to customers within 90 days of delivery. If
the chassis is not converted within 90 days of delivery to the Company, the
Company purchases the chassis, and at that time the Company records the
inventory. At July 31, 1999, chassis on hand accounted for as consigned,
unrecorded inventory was approximately $7,314,000.
H. STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Officers and key employees have been granted stock options under the 1988
Incentive Stock Option Plan. No further options may be granted under this plan.
The Company applies APB Opinion No. 25 and related Interpretations in accounting
for the plan. Accordingly, no compensation cost has been recognized for the
stock option plan.
A summary of option transactions under the Incentive Stock Option Plan is as
follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
1999 1998 1997
----------------------------------------------------------------------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 153,000 $ 14.33 193,650 $ 14.33 150 $ 5.33
Granted -- -- 193,500 14.33
Exercised (17,000) 14.33 (36,150) 14.33 -- --
Canceled (3,000) 14.33 (4,500) 14.33 -- --
----------------------------------------------------------------------------------
Outstanding at end of year 133,000 $ 14.33 153,000 $ 14.33 193,650 $ 14.32
==================================================================================
Exercisable at year-end 71,500 $ 14.33 27,000 $ 14.33 150 $ 5.33
----------------------------------------------------------------------------------
Weighted average fair value
of options granted -- -- -- $ 6.02
</TABLE>
26
<PAGE> 27
The assumptions used in determining the fair value of options granted during
1997 are as follows: Expected volatility 25.52%; Expected life of grant 6 years;
Risk-free interest rate 6.27%; Expected dividend rate 0.50%
The following summarizes information about stock options outstanding at July 31,
1999.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
NUMBER WEIGHTED-AVERAGE NUMBER SHARES AVAILABLE
EXERCISE OUTSTANDING REMAINING WEIGHTED-AVERAGE EXERCISABLE EXERCISE FOR FUTURE
PRICES AT JULY 31, 1999 CONTRACTUAL LIFE EXERCISE PRICE AT JULY 31 1999 PRICE GRANTS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$14.33 133,000 8 years $14.33 71,500 $14.33 0
=================================================================================================================
</TABLE>
Had compensation cost for the Company's grants been determined based on the fair
value at the grant dates for awards under those plans consistent with the method
of SFAS No. 123, the Company's net income and earnings per common share would
have been as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------
<S> <C> <C> <C>
Net income
As reported .............................. $ 30,766,195 $ 19,395,228 $ 16,422,767
Pro forma ................................ 30,626,400 19,255,433 16,282,972
Earnings per common share--basic
As reported .............................. $ 2.53 $ 1.59 $ 1.32
Pro forma ................................ 2.51 1.57 1.31
Earnings per common share--diluted
As reported .............................. $ 2.52 $ 1.58 $ 1.31
Pro forma ................................ 2.51 1.57 1.30
</TABLE>
On September 29, 1997, the Board of Directors approved a stock award plan which
allows for the granting of up to 150,000 shares of restricted stock to selected
executives. Restrictions expire 50% after 5 years following the date of issue,
and the balance after six years. As of July 31, 1999, the Company issued 13,175
shares of restricted stock under the plan and 136,825 shares remain outstanding.
Compensation cost related to the plan which is being amortized over the
restriction period was $47,748 and $17,921 in 1999 and 1998, respectively.
I. RESEARCH AND DEVELOPMENT
- --------------------------------------------------------------------------------
Research and development expenses were approximately $545,000 in 1999, $847,000
in 1998, and $768,000 in 1997.
J. JOINT VENTURES
- --------------------------------------------------------------------------------
In March 1996, the Company and Cruise America, Inc. formed a joint venture, CAT
Joint Venture LLC, to rent recreation vehicles to the public. The Company's
total investment of $2,306,263 includes a subordinated note receivable of
$1,910,000 due in 2000. In March 1994, the Company and a financial services
company formed a joint venture, Thor Credit Corporation, to finance the sales of
recreation vehicles to consumer buyers. The Company's total investment of
$1,112,838 includes a note receivable of $350,000. These investments are
accounted for using the equity method.
K. ACQUISITION
- --------------------------------------------------------------------------------
On February 9, 1998, the Company purchased certain assets and liabilities of
Champion Motor Coach, Inc. (now Champion Bus, Inc.). The cash price of the
acquisition was approximately $9,671,000 which was paid from internal funds. The
revenues and operating results of the entity are reflected in the consolidated
statements of income of Thor Industries from time of acquisition forward.
27
<PAGE> 28
L. DIVESTMENT OF SUBSIDIARIES
- --------------------------------------------------------------------------------
The Company sold its Thor West operations in December 1998. A loss of $3,990,000
was recognized as of July 31, 1998. An additional loss of $1,812,526 was
recognized during 1999. Thor West's net sales and loss before income taxes
included in the consolidated statements of income was, for fiscal 1998,
$29,156,641 and $4,359,408, respectively, and, for fiscal 1999, $4,050,351 and
$726,766, respectively. As part of the transaction the Company agreed to
guarantee $750,000 of debt of the acquirer. On December 31, 1997, the Company
sold for $2,934,973 certain assets and liabilities of Henschen Corp., a division
of Airstream, Inc. The transaction resulted in a one time pre-tax gain of
approximately $1,269,000.
M. BUSINESS SEGMENTS
- --------------------------------------------------------------------------------
The Company operates in principally two industries - recreation vehicles and
small and midsize buses. Manufacturing and sales are conducted in the United
States and, to a much lesser extent, in Canada. Operating income is total
revenue less cost of sales and operating expenses. Identifiable assets are those
assets used in the operation of each industry segment. Corporate assets
primarily consist of cash, deferred income tax assets, the cash value of
Company-owned life insurance, and investments accounted for under the equity
method.
<TABLE>
<CAPTION>
------------------------------------------
1999 1998 1997
------------------------------------------
NET SALES: ($000) ($000) ($000)
- ----------
<S> <C> <C> <C>
Recreation vehicles
Towables $ 353,456 $ 333,619 $ 306,548
Motorized 227,902 204,494 167,452
Other 7,578 9,372 11,010
Buses 216,870 168,115 139,425
------------------------------------------
TOTAL $ 805,806 $ 715,600 $ 624,435
==========================================
OPERATING INCOME:
- -----------------
Recreation vehicles $ 38,437 $ 28,479 $ 22,267
Buses 18,606 10,138 7,289
Corporate (5,476) (3,521) (2,253)
------------------------------------------
TOTAL $ 51,567 $ 35,096 $ 27,303
==========================================
IDENTIFIABLE ASSETS:
- --------------------
Recreation vehicles $ 108,343 $ 96,920 $ 100,672
Buses 52,203 57,247 48,460
Corporate 85,366 59,814 21,837
------------------------------------------
TOTAL $ 245,912 $ 213,981 $ 170,969
==========================================
DEPRECIATION AND AMORTIZATION EXPENSE:
- --------------------------------------
Recreation vehicles $ 3,075 $ 3,444 $ 3,668
Buses 656 925 793
------------------------------------------
TOTAL $ 3,731 $ 4,369 $ 4,461
==========================================
CAPITAL EXPENDITURES:
- ---------------------
Recreation vehicles $ 6,839 $ 1,749 $ 1,217
Buses 609 340 577
------------------------------------------
TOTAL $ 7,448 $ 2,089 $ 1,794
==========================================
</TABLE>
28
<PAGE> 29
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JULY 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------- -------- -------- -------- --------
Additions
Balance at Charged to Write-offs Balance
Beginning Costs and Net of at End of
Description of Period Expenses Recoveries Period
--------------------------------------------------------------
<S> <C> <C> <C> <C>
YEAR ENDED JULY 31, 1999:
Allowance for doubtful accounts .......... $ 115,435 $ 261,126 $ (313,076) $ 63,485
==============================================================
Accumulated amortization of
goodwill and other intangibles ........... $20,737,628 $ 1,474,838 $(3,811,812) $18,400,654
==============================================================
YEAR ENDED JULY 31, 1998:
Allowance for doubtful accountss ......... $ 516,535 $ 14,017 $ (415,117) $ 115,435
==============================================================
Accumulated amortization of
goodwill and other intangibles (1) ....... $16,693,704 $ 4,043,924 -- $20,737,628
==============================================================
YEAR ENDED JULY 31, 1997:
Allowance for doubtful accounts .......... $ 52,190 $ 491,755 $ (27,410) $ 516,535
==============================================================
Accumulated amortization of
goodwill and other intangibles ........... $14,609,392 $ 2,084,312 -- $16,693,704
==============================================================
</TABLE>
(1) Includes write-off of intangibles of Thor West of $2,139,530.
29
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> JUL-31-1999
<CASH> 68,865,635
<SECURITIES> 0
<RECEIVABLES> 53,835,025
<ALLOWANCES> 0
<INVENTORY> 72,850,279
<CURRENT-ASSETS> 202,123,911
<PP&E> 34,534,578
<DEPRECIATION> 12,218,224
<TOTAL-ASSETS> 245,911,735
<CURRENT-LIABILITIES> 79,029,814
<BONDS> 0
0
0
<COMMON> 1,371,515
<OTHER-SE> 164,001,650
<TOTAL-LIABILITY-AND-EQUITY> 245,911,735
<SALES> 805,805,904
<TOTAL-REVENUES> 805,805,904
<CGS> 700,900,070
<TOTAL-COSTS> 754,238,467
<OTHER-EXPENSES> 613,334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,067,434)
<INCOME-PRETAX> 52,435,679
<INCOME-TAX> 21,669,484
<INCOME-CONTINUING> 30,766,195
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,766,195
<EPS-BASIC> 2.53
<EPS-DILUTED> 2.52
</TABLE>
