<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED April 30, 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
------------------ ------------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at 4/30/00
----- ----------------------
Common stock, par value 12,105,260 shares
$.10 per share
<PAGE> 2
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
ASSETS
------
(UNAUDITED)
--------------
APRIL 30, 2000 JULY 31, 1999
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<S> <C> <C>
Current assets:
Cash and cash equivalents $31,741,915 $68,865,635
Investments short term 17,653,506 --
Accounts receivable:
Trade 73,179,245 52,167,539
Other 1,585,072 1,667,486
Inventories 88,950,438 72,850,279
Deferred income taxes and other 8,310,059 6,572,972
------------ ------------
Total current assets 221,420,235 202,123,911
------------ ------------
Property:
Land 1,873,891 1,400,995
Buildings and improvements 24,280,642 19,010,749
Machinery and equipment 17,261,476 14,122,834
------------ ------------
Total cost 43,416,009 34,534,578
Accumulated depreciation and amortization 13,917,592 12,218,224
------------ ------------
Property, net 29,498,417 22,316,354
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Investments:
Joint ventures 3,213,501 3,419,101
Investments available for sale 10,434,524 --
------------ ------------
Total investments 13,648,025 3,419,101
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Other assets:
Goodwill 10,868,684 11,251,342
Non compete 1,408,213 2,235,010
Trademarks 1,888,815 2,020,319
Other 2,861,746 2,545,698
------------ ------------
Total other assets 17,027,458 18,052,369
------------ ------------
TOTAL ASSETS $281,594,135 $245,911,735
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $53,448,506 $48,290,096
Accrued liabilities:
Taxes 2,746,840 --
Compensation and related items 12,021,792 13,676,462
Product warranties 11,977,407 11,543,598
Other 6,876,568 5,519,658
------------ ------------
Total current liabilities 87,071,113 79,029,814
------------ ------------
Other liabilities 4,341,056 1,508,756
Stockholders' equity:
Common stock - authorized 20,000,000 shares;
issued 13,730,997 shares @ 4/30/00 and13,715,147
shares @ 7/31/99; par value of $.10 per share 1,373,100 1,371,515
Additional paid in capital 25,984,030 25,684,380
Foreign currency translation (1,006,662) (1,198,511)
Retained earnings 187,752,150 162,018,698
Restricted Stock (315,884) (216,168)
Unrealized appreciation on investments 91,298 --
Cost of treasury shares 1,625,737 shares @
4/30/00; 1,566,637 shares @ 7/31/99 (23,696,066) (22,286,749)
------------ ------------
Total stockholders' equity 190,181,966 165,373,165
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $281,594,135 $245,911,735
============ ============
</TABLE>
See notes to consolidated financial statements
<PAGE> 3
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 2000 AND 1999
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<TABLE>
<CAPTION>
(UNAUDITED)
-----------
THREE MONTHS ENDED APRIL 30 NINE MONTHS ENDED APRIL 30
-------------------------------- -------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $243,942,573 $223,707,917 $658,672,789 $578,417,861
Cost of products sold 211,541,705 193,890,089 571,736,766 504,592,481
----------- ----------- ----------- -----------
Gross profit 32,400,868 29,817,828 86,936,023 73,825,380
Selling, general, and
administrative expenses 15,197,243 14,335,033 42,595,389 37,713,316
Loss on divestment of subsidiary 1,120,248 538,339 2,048,325 1,131,007
Interest income 848,267 367,910 2,402,117 1,410,526
Interest expense 53,323 16,751 164,388 71,498
Other income (expense) 65,797 (20,724) 322,321 115,240
----------- ----------- ----------- -----------
Income before income taxes 16,944,118 15,274,891 44,852,359 36,435,325
Provision for income taxes 6,853,913 6,325,041 18,391,904 15,040,988
----------- ----------- ----------- -----------
Net income $10,090,205 $8,949,850 $26,460,455 $21,394,337
=========== ========== =========== ===========
Average common shares outstanding 12,105,260 12,166,608 12,121,163 12,191,195
---------------------------------
Earnings per common share
-------------------------
Basic $.83 $.73 $2.18 $1.75
==== ==== ===== =====
Diluted $.83 $.73 $2.17 $1.75
==== ==== ===== =====
Dividends paid per common share $.02 $.02 $.06 $.06
------------------------------- ==== ==== ==== ====
</TABLE>
See notes to consolidated financial statements
<PAGE> 4
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 2000 AND 1999
-------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
-----------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $26,460,455 $21,394,337
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 2,065,712 1,654,482
Amortization 1,340,959 1,113,004
Loss on divestment of subsidiary 2,048,325 --
Deferred income taxes 2,700,000 --
Changes in non cash assets and liabilities
------------------------------------------
Accounts receivable (20,929,292) (9,891,615)
Inventories (16,100,159) (13,247,623)
Prepaid expenses and other (1,959,016) 432,325
Accounts payable 5,158,410 54,581
Accrued liabilities 834,564 6,271,503
Other liabilities 267,092 169,011
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Net cash provided by operating activities 1,887,050 7,950,005
----------------------------------------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant & equipment (9,244,208) (5,277,924)
Disposals of property, plant & equipment 58,753 38,569
Purchase of investments (28,016,979) --
Proceeds from sale of subsidiary -- 261,954
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Net cash used in investing activities (37,202,434) (4,977,401)
------------------------------------- ------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (727,003) (730,371)
Purchase of treasury stock (1,409,317) (2,707,213)
Proceeds from issuance of common stock 136,135 --
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Net cash used in financing activities (2,000,185) (3,437,584)
------------------------------------- ------------- ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 191,849 (992,814)
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Net increase (decrease) in cash and equivalents (37,123,720) (1,457,794)
Cash and equivalents, beginning of year 68,865,635 43,531,805
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CASH AND EQUIVALENTS, END OF PERIOD $31,741,915 $42,074,011
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid 13,449,400 14,206,835
Interest paid 164,388 71,498
NON-CASH TRANSACTIONS:
Issuance of restricted stock 165,100 126,372
Note from Mountain High Coachworks, Inc. -- 750,000
</TABLE>
See notes to consolidated financial statements
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. The accompanying consolidated financial statements, which are unaudited,
reflect all adjustments consisting of only normal recurring adjustments,
which are, in the opinion of management, necessary to present fairly the
consolidated operating results for such unaudited periods.
2. Major classifications of inventories are:
<TABLE>
<CAPTION>
(Unaudited)
-----------
April 30, 2000 July 31, 1999
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<S> <C> <C>
Raw materials $36,461,952 $31,479,371
Chassis 25,251,507 19,944,422
Work in process 20,344,371 20,959,710
Finished goods 11,174,843 4,128,011
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Total 93,232,673 76,511,514
Less excess of FIFO costs over LIFO costs 4,282,235 3,661,235
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Total inventories $88,950,438 $72,850,279
=========== ===========
</TABLE>
3. Earnings Per Share:
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
April 30, 2000 April 30, 1999 April 30, 2000 April 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding for basic
earnings per share 12,105,260 12,166,608 12,121,163 12,191,195
Stock options 55,170 69,606 57,546 64,734
----------- ---------- ----------- ----------
Total - For diluted shares 12,160,430 12,236,214 12,178,709 12,255,929
========== ========== ========== ==========
</TABLE>
4. Comprehensive Income:
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
April 30, 2000 April 30, 1999 April 30, 2000 April 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Income $10,090,205 $8,949,850 $26,460,455 $21,394,337
Foreign currency
translation adj. (137,168) (997,839) 191,849 (992,814)
Unrealized appreciation
on investments 240,248 -- 91,298 --
----------- ---------- ----------- -----------
Comprehensive Income $10,193,285 $7,952,011 $26,743,602 $20,401,523
=========== ========== =========== ===========
</TABLE>
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
CONTINUED
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5. Segment Information:
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
ended ended ended ended
April 30, 2000 April 30, 1999 April 30, 2000 April 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Sales:
Recreation vehicles
Towables $113,633,048 $100,971,749 $282,776,422 $245,950,996
Motorized 75,193,766 64,857,826 198,738,977 167,050,108
Other 1,984,273 1,962,809 5,965,022 5,481,535
Buses 53,131,486 55,915,533 171,192,368 159,935,222
------------ ------------ ------------ ------------
Total $243,942,573 $223,707,917 $658,672,789 $578,417,861
============ ============ ============ ============
Income Before Income Taxes:
Recreation vehicles $13,793,890 $12,060,976 $33,753,767 $26,645,213
Buses 3,427,319 4,618,402 12,599,574 11,962,615
Corporate (277,091) (1,404.487) (1,500,982) (2,172,503)
------------ ------------ ------------ ------------
Total $16,944,118 $15,274,891 $44,852,359 $36,435,325
============ ============ ============ ============
April 30, 2000 July 31, 1999
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Identifiable Assets:
Recreation vehicles $126,888,900 $108,343,111
Buses 65,953,111 52,203,114
Corporate 88,752,124 85,365,510
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Total $281,594,135 $245,911,735
============ ============
</TABLE>
6. In December 1998, the Company sold certain assets and liabilities of the
Company's Thor West operations for $1,011,954 to the management of Thor
West. Thor West's net sales and loss from operation included in the nine
months ended April 30, 1999 consolidated statements of income of Thor
Industries, Inc. are $4,050,351 and $(726,746), respectively.
As part of the transaction, the Company agreed to guarantee $750,000 of
secured debt of the acquirer, Mountain High Coachworks, and during the
first quarter of fiscal 2000, pursuant to an agreement to discontinue
purchasing and consigning chassis to Mountain High Coachworks, the Company
agreed to guarantee up to $1,000,000 of financing on chassis purchased
through Ford Motor Credit.
At April 30, 2000 the Company has a reserve recorded of $1,275,881 for
anticipated losses related to the dissolution of Mountain High Coachworks.
7. 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. The effect on the Company's financial statements has not
yet been determined.
8. The Company classifies its investments in accordance with Statement of
Financial Accounting Standards No. 115, "Accounting for investments in
Debt & Equity Securities," which requires that all applicable investments
be categorized as either trading, available-for-sale or held-to-maturity
securities. At April 30, 2000, the Company held equity securities with a
fair value of $10,434,524 and cost basis of $10,343,226. The securities
are classified as available-for-sale and included in other investments.
Unrealized holding gain of $91,298 is reported as a separate component of
Stockholders' Equity net of deferred income taxes. There were no sales of
investments during the nine months ended April 30, 2000. In addition, the
Company has certain debt securities that are classified as trading
securities and reported as investments short term. The change in net
unrealized appreciation is included in income during the quarter.
<PAGE> 7
PART II
Item 6. Exhibits and Reports on Form 8-K
a.) Exhibit
N/A
b.) Reports on Form 8-K
N/A
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
------------------------------------------------------------------------
OPERATIONS
----------
Quarter Ended April 30, 2000 vs. Quarter Ended April 30, 1999
-------------------------------------------------------------
Net sales for the third quarter totaled $243,942,573 up 9.0% from $223,707,917
in the same period last year. Income before income taxes was $16,944,118, up
10.9% from $15,274,891 in the same period last year. The increase in income
before taxes, $1,669,227 is primarily attributed to increased sales, increase in
net interest income of approximately $443,000 and offset by an increase in costs
associated with the divestment of a former subsidiary of approximately $582,000.
Recreation vehicle revenues of $190,811,087 were 13.7% higher than last year and
were 78.2% of total company revenues compared to 75.0% last year. Recreation
vehicle revenues were up primarily due to increased unit sales. Bus revenues of
$53,131,486 were down 5.0% compared to last year and were 21.8% of total company
revenue compared to 25.0% last year. This revenue decline was due largely to a
chassis shortage, which has since improved. There were no price increases in the
quarter ended April 30, 2000. Selling, general and administrative expense and
amortization of intangibles increased to $15,197,243, 6.2% of sales from
$14,335,033, 6.4% of sales primarily due to increased income related
compensation and selling expense related to increased volume. Net interest
income increased by approximately $443,000 primarily due to increased investable
cash and higher returns during the current period compared to the prior years.
During the third quarter of fiscal 2000, the Company reserved $1,120,000 for
losses it anticipates incurring related to the dissolution of a former operation
sold in 1998. The combined income tax rate was 40.5% in the current year
compared to 41.4% last year primarily due to the recording of tax savings
generated by the Company's Foreign Sales Corporation.
Nine Months Ended April 30, 2000 vs. Nine Months Ended April 30, 1999
---------------------------------------------------------------------
Net sales for the nine months totaled $658,672,789, up 13.9% from $578,417,861
in the same period last year. Income before income taxes was $44,852,359, up
23.1% from $36,435,325 in the same period last year. Of the $8,417,034 increase
in income before taxes, $190,572 represents increased losses related to Thor
West in 2000 of $2,048,325 versus loss from operation of $726,746 and a
$1,131,007 loss on divestment in 1999. Approximately $898,000 represents the
increase in net interest income and the remaining increase is attributable to
increased sales. Recreation vehicle revenues of $487,480,421 were 16.5% higher
than last year and were 74.0% of total company revenue compared to 72.3% last
year. Recreation vehicle revenues were up primarily due to increased unit sales.
Bus revenues of $171,192,368 were 7.0% higher than last year and were 26.0% of
total company revenues compared to 27.7% last year. Manufacturing gross profits
increased to 13.2% compared to 12.8% last year due primarily to higher volumes.
Price increases averaged 1.5% for the nine months ended April 30, 2000. Selling,
general and administrative expenses and amortization of intangibles increased to
$42,595,389, 6.5% of sales, from $37,713,316, 6.5% of sales, primarily due to
increased income related compensation and selling expenses related to increased
volumes. Net interest income increased by approximately $898,000 primarily due
to increased investable cash and higher returns during the current period
compared to the prior years. The combined income tax rate was 41.0% in the
current year compared to 41.3% last year primarily due to the recording of tax
savings generated by the Company's Foreign Sales Corporation.
<PAGE> 8
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
------------------------------------------------------------------------
OPERATIONS CONTINUED
--------------------
Financial Condition and Liquidity
---------------------------------
As of April 30, 2000, the Company had $49,395,421 in cash, cash equivalents and
short term investments, compared to $68,865,635 on July 31, 1999. Working
capital at April 30, 2000 was $134,349,122 compared to $123,094,097 at July 31,
1999. Inventory valued at current cost at April 30, 2000 exceeded the LIFO
inventory by $4,282,235.
On April 30, 2000, the Company had a $30,000,000 revolving line of credit with
Harris Trust and Savings Bank. There were no borrowings at April 30, 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
30, 2000. The Company had no long term debt as of April 30, 2000.
During the nine months of fiscal 2000, Thor purchased 59,100 shares of its
common stock, increasing treasury stock by $1,409,317. During the same nine
months proceeds from stock options exercised totaled $136,135.
The Company believes internally generated funds and the revolving credit
agreement already in place will be sufficient to meet current operating needs
and anticipated capital requirements. Capital expenditures year-to-date of
$9,244,000 were primarily for the expansion of the Four Winds and ElDorado
Kansas manufacturing facilities, and the purchase of land and buildings formerly
leased by Airstream. The Company anticipates additional capital expenditures in
fiscal 2000 of approximately $1,790,000 primarily to expand its Komfort, Thor
California and ElDorado Kansas plants.
Amortization of intangibles increased from $1,113,003 for the period ended April
30, 1999 to $1,340,959 for the period ended April 30, 2000.
Year 2000 Disclosure
--------------------
The Company did not experience any significant Year 2000 issues in its
information technology ("IT") systems or non-information technology systems
through April 30, 2000. No major business processes, operations or customer
deliveries were disrupted as a result of the Year 2000 issue.
Through April 30, 2000, the total cost associated with the Year 2000 projects
was approximately $343,000, substantially all of which was to purchase revised
software and hardware, and was funded through operating cash flows.
This 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.
<PAGE> 9
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.
<TABLE>
<CAPTION>
THOR INDUSTRIES, INC.
(Registrant)
<S> <C>
DATE June 12, 2000 (Signed) /s/ Wade F. B. Thompson
------------------------------ ----------------------------------
Wade F. B. Thompson, Chairman of the Board,
President and Chief Executive Officer
DATE June 12, 2000 (Signed) /s/ Walter L. Bennett
------------------------------ -----------------------------------
Walter L. Bennett, Senior Vice President,
Secretary (Chief Accounting Officer)
</TABLE>
