SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED OCTOBER 31, 2000 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 45334-0629
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (937) 596-6849
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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 10/31/00
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Common stock, par value 11,986,460 shares
$.10 per share
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
(UNAUDITED)
OCTOBER 31, 2000 JULY 31, 2000
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<S> <C> <C>
Current assets:
Cash and cash equivalents $ 26,048,736 $ 59,655,251
Investments - short term 34,248,796 18,308,194
Accounts receivable:
Trade 56,867,865 50,970,187
Other 1,998,540 973,265
Inventories 92,877,947 89,545,213
Deferred income taxes and other 10,427,227 5,835,370
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Total current assets 222,469,111 225,287,480
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Property:
Land 5,683,179 5,573,144
Buildings and improvements 25,345,629 24,330,742
Machinery and equipment 20,446,904 17,926,415
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Total cost 51,475,712 47,830,301
Accumulated depreciation and amortization 15,321,511 14,525,634
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Property, net 36,154,201 33,304,667
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Investments:
Joint ventures 2,636,441 2,628,282
Investments available for sale 3,864,341 3,486,150
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Total Investments 6,500,782 6,114,432
Other assets:
Goodwill 10,613,578 10,741,131
Noncompete agreements 784,546 1,132,614
Trademarks 1,801,146 1,844,981
Other 4,194,265 3,706,087
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Total other assets 17,393,535 17,424,813
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TOTAL ASSETS $ 282,517,629 $ 282,131,392
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 45,410,204 $ 49,824,276
Accrued liabilities:
Taxes 6,003,867 4,599,864
Compensation and related items 9,715,969 13,356,378
Product warranties 12,046,286 11,878,469
Other 5,004,149 6,719,049
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Total current liabilities 78,180,475 86,378,036
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Other liabilities 957,473 549,080
Stockholders' equity:
Common stock - authorized 20,000,000 shares;
issued 13,745,497 shares @ 10/31/00 and 13,743,997
shares @ 7/31/00; par value of $.10 per share 1,374,550 1,374,400
Additional paid in capital 26,190,365 26,169,020
Accumulated other comprehensive income (loss) (2,636,466) (2,620,712)
Retained earnings 205,322,588 197,171,503
Restricted stock plan (278,726) (297,305)
Cost of treasury shares 1,759,037 shares @ 10/31/00
and 7/31/00 (26,592,630) (26,592,630)
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Total stockholders' equity 203,379,681 195,204,276
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 282,517,629 $ 282,131,392
============= =============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
(UNAUDITED)
2000 1999
---- ----
<S> <C> <C>
Net sales $205,182,694 $221,020,752
Cost of products sold 178,786,757 191,451,261
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Gross profit 26,395,937 29,569,491
Selling, general, and
administrative expenses 13,968,466 13,867,160
Loss on divestment of subsidiary -- 221,121
Interest income 1,420,344 817,586
Interest expense 101,129 39,766
Other income 441,437 228,071
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Income before income taxes 14,188,123 16,487,101
Provision for income taxes 5,797,309 6,827,193
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Net income $ 8,390,814 $ 9,659,908
============ ============
AVERAGE COMMON SHARES OUTSTANDING 11,986,297 12,148,235
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EARNINGS PER COMMON SHARE:
Basic $.70 $.80
==== ====
Diluted $.70 $.79
==== ====
DIVIDENDS PAID PER COMMON SHARE $.02 $.02
==== ====
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
(UNAUDITED)
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,390,814 $ 9,659,908
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 833,965 672,290
Amortization 519,456 446,987
Loss on divestment of subsidiary -- 221,122
Purchase of trading investments (29,326,442) --
Proceeds from sale of trading investments 13,542,607 --
CHANGES IN NON CASH ASSETS AND LIABILITIES:
Accounts receivable (6,922,953) (5,182,842)
Inventories (3,332,734) (6,778,978)
Prepaid expenses and other (5,165,757) (4,881,881)
Accounts payable (4,414,072) (6,613,099)
Accrued liabilities (3,783,489) 2,039,141
Other liabilities 270,205 60,465
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NET CASH USED IN OPERATING ACTIVITIES (29,388,400) (10,356,887)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant & equipment (3,673,146) (2,559,977)
Disposals of property, plant & equipment 10,421 4,127
Purchase of available-for-sale investments (215,938) (1,440,481)
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NET CASH USED IN INVESTING ACTIVITIES (3,878,663) (3,996,331)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (239,729) (242,793)
Purchase of treasury stock -- (560,234)
Proceeds from issuance of common stock 21,495 136,135
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NET CASH USED IN FINANCING ACTIVITIES (218,234) (666,892)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (121,218) 215,211
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Net decrease in cash and equivalents (33,606,515) (14,804,899)
Cash and equivalents, beginning of year 59,655,251 68,865,635
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CASH AND EQUIVALENTS, END OF PERIOD $ 26,048,736 $ 54,060,736
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $ 3,988,161 $ 1,105,900
Interest paid 101,129 39,766
NON CASH TRANSACTIONS:
Issuance of restricted stock -- 165,100
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet at July 31, 2000 is taken from the audited
consolidated financial statements. The accompanying interim unaudited
consolidated financial statements reflect all adjustments consisting of
only normal recurring adjustments, which are, in the opinion of
management, necessary to present fairly the consolidated financial
position, operating results, and cash flows for such unaudited periods.
2. Major classifications of inventories are:
<TABLE>
<CAPTION>
(UNAUDITED)
OCTOBER 31, 2000 JULY 31, 2000
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<S> <C> <C>
Raw materials $36,145,579 $36,010,315
Chassis 25,308,858 29,122,188
Work in process 24,803,934 21,412,340
Finished goods 11,707,422 7,881,216
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Total 97,965,793 94,426,059
Less excess of FIFO costs
over LIFO costs 5,087,846 4,880,846
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Total inventories $92,877,947 $89,545,213
=========== ===========
</TABLE>
3. Earnings Per Share
<TABLE>
<CAPTION>
Three Months Three Months
ended ended
October 31, 2000 October 31, 1999
---------------- ----------------
<S> <C> <C>
Weighted average shares outstanding
for basic earnings per share 11,986,297 12,148,235
Stock options 41,206 57,415
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Total - For diluted shares 12,027,503 12,205,650
============= =============
</TABLE>
4. Stockholders' Equity
<TABLE>
<CAPTION>
Three Months Three Months
ended ended
October 31, 2000 October 31, 1999
---------------- ----------------
<S> <C> <C>
Net Income $ 8,390,814 $ 9,659,908
Foreign currency translation adjustment (121,218) 215,211
Unrealized appreciation on investments 105,464 208,647
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Comprehensive Income $ 8,375,060 $ 10,083,766
============= =============
</TABLE>
5. Segment Information
<TABLE>
<CAPTION>
Three Months Three Months
ended ended
October 31, 2000 October 31, 1999
---------------- ----------------
<S> <C> <C>
Net Sales:
Recreation vehicles
Towables $ 82,896,955 $ 93,044,286
Motorized 51,839,148 67,573,924
Other 1,204,247 2,135,606
Buses 69,242,344 58,266,936
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Total $ 205,182,694 $ 221,020,752
============= =============
Income Before Income Taxes:
Recreation vehicles $ 8,098,116 $ 11,898,005
Buses 5,348,474 4,874,876
Corporate 741,533 (285,780)
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Total $ 14,188,123 $ 16,487,101
============= =============
</TABLE>
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
October 31, 2000 July 31, 2000
---------------- -------------
<S> <C> <C>
Identifiable Assets:
Recreation vehicles $110,706,543 $118,700,398
Buses 88,751,597 66,250,635
Corporate 83,059,489 97,180,359
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Total $282,517,629 $282,131,392
============ ============
</TABLE>
6. In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101 (SAB 101), "Revenue Recognition in Financial
Statements", which provides guidance on applying accounting principles
generally accepted in the United States of America, for recognizing
revenue. SAB 101 is effective for the fourth quarter of fiscal years
beginning after December 15, 1999. The impact, if any, of adopting SAB 101
on our consolidated financial position, results of operations and cash
flows, has not been determined.
7. The Company adopted the provisions of SFAS No. 133, "Accounting for
Derivative Instruments & Hedging Activities," as amended on August 1,
2000. The Company has performed a review of all contracts to properly
identify all derivative financial instruments and any embedded derivative
financial instruments. No such derivatives were identified. Therefore, the
adoption of SFAS No. 133 had no effect on the Company's financial
statements.
8. Investments - The Company classifies its debt and equity securities as
trading or available-for-sale. Trading securities are bought and held
principally for the purpose of selling them in the near term. All
securities not included in trading are classified as available-for-sale.
Trading and available-for-sale investments are recorded at fair value.
Unrealized holding gains and losses on trading investments are included in
earnings. Unrealized holding gains and losses, net of the related tax
effect, on available-for-sale investments are excluded from earnings and
are reported as a separate component of accumulated other comprehensive
income, net of income taxes until realized. Realized gains and losses from
the sale of available-for-sale investments are determined on a
specific-identification basis. Dividend and interest income are recognized
when earned.
At October 31, 2000, the Company held equity investments with a fair value
of $3,864,342 and cost basis of $6,016,394. The investments are classified
as available-for-sale and included in other investments. Gross unrealized
losses were $2,152,052.
The Company has certain corporate debt investments that are classified as
trading investments and reported as Investments - short term. Included in
other income are net realized gains on trading investments of $87,324.
6
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
----------------------------------
QUARTER ENDED OCTOBER 31, 2000 VS.
QUARTER ENDED OCTOBER 31, 1999
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Net sales for the first quarter totaled $205,182,694, down 7.2% from
$221,020,752 in the same period last year. Income before income taxes was
$14,188,123, down 13.9% from $16,487,101 last year. The decrease in income
before income taxes of $2,298,978 was primarily attributed to reduced recreation
vehicle revenues of $26,813,466, which resulted in an approximate $3,800,000
reduction in income before income tax. This reduction in RV income before tax
was offset by increased bus revenues of $10,975,408 which generated an
additional $473,598 in income before taxes. In addition no losses were incurred
on divestment of operations in the first quarter of this year versus $221,122 in
last year. Net interest income increased by approximately $541,000.
Recreation vehicle revenues of $135,940,350 were 16.5% lower than last years
$162,753,816 and accounted for 66.3% of total Company revenues compared to 73.6%
last year. Recreation vehicles revenues were down due to softness in the overall
market. Bus revenues of $69,242,344 were 18.8% higher than last years
$58,266,936 and accounted for 33.7% of total Company revenues compared to 26.4%
last year. Bus revenues were up primarily due to increased unit sales and
product mix.
Manufacturing gross profit decreased as a percentage of sales from 13.4% in the
first quarter ended October 31, 1999 to 12.9% at October 31, 2000 due primarily
to lower recreation vehicle volumes. There were no appreciable price increases
during the quarter ended October 31, 2000. Selling, general, and administrative
expenses and amortization of intangibles increased to $13,968,466, 6.8% of sales
from $13,867,160, 6.3% of sales, primarily due to increased selling expenses.
Interest income increased by $602,758 primarily due to increased investable cash
and higher returns during the quarter compared to last year. Interest expense
increased by $61,363, primarily due to an increase in the bus chassis pool.
The combined income tax rate was 40.9% for the quarter ended October 31, 2000
compared to 41.4% last year due primarily to tax savings generated by the
Company's foreign sales corporation.
FINANCIAL CONDITION AND LIQUIDITY
As of October 31, 2000 Thor had $60,297,532 in cash, cash equivalents and short
term investments, compared to $77,963,445 on July 31, 2000.
Working capital on October 31, 2000, was $144,288,636 compared to $138,909,444
on July 31, 2000. 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 of
credit at October 31, 2000. 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, 2001. The Company believes that
internally generated funds and the revolving credit agreement will be sufficient
to meet current needs and anticipated capital requirements. Capital expenditures
of $3,673,146 in the quarter were primarily for the continued expansion of the
Komfort RV facility and the expansion of the Company's bus operations. The
Company anticipates additional capital expenditures in 2001 of approximately
$19,600,000 primarily for the continued expansion of its Komfort facility and
bus operations.
FORWARD LOOKING STATEMENTS
This report includes certain statements that are "forward looking" statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934 as amended. These forward
looking statements 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, competition and general economic conditions. The Company
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward looking statements contained herein or to reflect any change in
expectations of the Company after the date hereof or any change in events,
conditions or circumstances on which any statement is based.
7
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
----------------------------------
(CONTINUED)
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in foreign currency related
to its operations in Canada. However, because of the size of Canadian
operations, a hypothetical 10% change in the Canadian dollar as compared to the
U.S. dollar would not have a significant impact on the Company's financial
position or results of operations. The Company is also exposed to market risks
related to interest rates because of its investments in corporate debt
securities. A hypothetical 10% change in interest rates would not have a
significant impact on the Company's financial position or result's of
operations.
PART II
Item 6. Exhibits and Reports on Form 8-K
a.) Exhibit
N/A
b.) Reports on Form 8-K
N/A
8
<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)
DATE 12/7/00 /s/ WADE F. B. THOMPSON
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Wade F. B. Thompson
Chairman of the Board, President
and Chief Executive Officer
DATE 12/7/00 /s/ WALTER L. BENNETT
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Walter L. Bennett
Senior Vice President
Secretary (Chief Financial Officer)
