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 the First Quarter Ended July 31, 1995
Commission File Number 1-9471
CRUISE AMERICA, INC.
State of Florida I.R.S. No. 59-1403609
11 West Hampton Avenue
Mesa, Arizona 85210-5258
Telephone Number: (602) 464-7300
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 twelve (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 ninety (90) days.
YES X NO
----- -----
Common Stock, $.01 Par Value As
of July 31, 1995, 5,703,159 shares of registrants
common stock were outstanding of which 4,119,547
were held by non-affiliates of
the registrant.
<PAGE>
TABLE OF CONTENTS
CRUISE AMERICA, INC., AND SUBSIDIARIES
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets..... 1
Condensed Consolidated Statements of
Operations............................... 3
Condensed Consolidated Statements of
Cash Flows............................... 4
Notes to Condensed Consolidated Financial
Statements............................... 5
ITEM 2. Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations..................... 6
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CRUISE AMERICA, INC., AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
ASSETS
(In thousands)
(Unaudited)
7/31/95 4/30/95
--------- -------
Current Assets:
Cash and Cash Equivalents .................... $ 5,842 3,091
Accounts Receivable, Net ..................... 3,380 3,561
Inventories .................................. 15,094 17,235
Prepaid Expenses and Other
Current Assets .............................. 1,592 837
-------- -------
Total Current Assets ......................... 25,908 24,724
-------- -------
Rental Vehicles .............................. 95,937 63,713
Less Accumulated Depreciation ............... 14,703 12,398
-------- -------
Net Rental Vehicles ....................... 81,234 51,315
Property and Equipment ....................... 16,854 16,795
Less Accumulated Depreciation ............... 6,418 6,274
-------- -------
Net Property and Equipment ................ 10,436 10,521
Deposits and Other Assets .................... 2,638 2,818
-------- -------
$120,216 89,378
-------- -------
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CRUISE AMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDER'S EQUITY
(In thousands)
(Unaudited)
7/31/95 4/30/95
--------- -------
Current Liabilities:
Floor Plan Contracts ........................... $ 1,716 709
Current Installments of Rental Vehicle
Financing ..................................... 21,731 7,394
Current Installments of Long-Term Debt ......... 4,527 3,072
Accounts Payable and Accrued Expenses .......... 3,235 2,042
Customer Deposits .............................. 4,279 6,380
Income Taxes Payable ........................... 20 20
--------- -------
Total Current Liabilities ...................... 35,508 19,617
--------- -------
Rental Vehicle Financing, Excluding
Current Installments .......................... 32,857 23,228
Long-Term Debt,Excluding Current
Installments .................................. 22,380 23,892
Deferred Income Taxes .......................... 1,906 312
Stockholders' Equity:
Preferred Stock $1.00 par value;
1,000,000 shares authorized,
none issued or outstanding .................... -- --
Common Stock $.01 par value; 15,000,000
shares authorized, 5,703,000 and
5,694,000 issued and outstanding at
July 31, 1995 and April 30, 1995,
respectively .................................. 57 57
Additional Paid-in Capital ..................... 24,842 24,815
Retained Earnings (deficit) .................... 3,331 (1,908)
Cumulative Translation Adjustment .............. (665) (635)
--------- -------
Total Stockholder's Equity ..................... 27,565 22,329
--------- -------
Contingencies ..................................
$ 120,216 89,378
--------- -------
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CRUISE AMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands except per share data)
Three Months Ended
------------------
7/31/95 7/31/94
------- -------
Rental Revenue ............................. $19,408 15,738
Sales ...................................... 9,148 10,082
------- -------
Total Revenue ............................ 28,556 25,820
------- -------
Cost of Rentals ............................ 6,022 5,193
Costs of Sales ............................. 7,729 8,326
------- -------
Total Costs .............................. 13,751 13,519
------- -------
Gross Profit From
Operations ................................ 14,805 12,301
Interest Expense ........................... 1,770 1,432
Selling, General & Administrative Expenses.. 6,202 5,836
------- -------
Earnings before Income
Taxes ..................................... 6,833 5,033
Income Tax Expense ......................... 1,594 1,007
------- -------
Net Earnings ............................... $ 5,239 4,026
------- -------
Earnings Per Share ......................... $ .92 .71
------- -------
Average Common Shares
Outstanding ............................... 5,700 5,694
------- -------
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CRUISE AMERICA, INC., AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(In thousands)
Three Months Ended
------------------
7/31/95 7/31/94
-------- --------
Cash Flows from Operating Activities:
Net Earnings ................................. $ 5,239 4,026
Depreciation and Amortization ................ 3,696 3,282
Increase in Deferred Income Taxes ............ 1,594 1,007
Gain on Sale of Rental Vehicles .............. (277) (181)
Decrease(Increase)in Accounts
Receivable .................................. 181 (738)
Decrease in Inventories ...................... 2,141 4,590
Increase in Accounts
Payable & Accrued Expenses .................. 1,193 589
Increase (Decrease) in Floor
Plan Contracts .............................. 1,007 (1,992)
Decrease in Customer Deposits ................ (2,101) (1,861)
Other, Net .................................... (668) (975)
-------- --------
12,005 7,747
-------- --------
Cash Flows from Financing Activities:
Proceeds from Rental Vehicle
Borrowing ................................... 34,912 29,853
Repayment of Rental Vehicle
Borrowing ................................... (10,946) (3,466)
Repayment of Long Term Borrowing ............. (57) (1,569)
Issuance of Stock ............................. 27 --
-------- --------
23,936 24,818
-------- --------
Cash Flows from Investing Activities:
Purchase of Rental Vehicles .................. (35,781) (28,873)
Proceeds from Rental Vehicle Sales ........... 2,650 1,348
Purchase of Property and Equipment ........... (59) (41)
-------- --------
(33,190) (27,566)
-------- --------
Increase (Decrease) in Cash
& Cash Equivalents ........................... 2,751 4,999
Cash & Cash Equivalents at April 30 ............ 3,091 4,261
-------- --------
Cash & Cash Equivalents at
July 31 ...................................... $ 5,842 9,260
-------- --------
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CRUISE AMERICA, INC., AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Three Months Ended July 31, 1995
NOTE 1.
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all the adjustments (principally consisting of normal
recurring accruals) necessary to present fairly the financial position of Cruise
America, Inc., and Subsidiaries (the Company) as of July 31, 1995, and the
results of operations for the three month periods ended July 31, 1994, and 1995.
Certain items in the prior year financial statements have been reclassified to
conform with the current period presentations.
Effective May 1, 1995, the Company began allocating the cost of new motor homes
between the chassis and house components and is depreciating the components
using the straight-line and mileage methods over 9 year lives with residuals of
10 to 25%. The impact of this change is not expected to be material to operating
results for the year.
NOTE 2.
Supplemental Disclosures of Cash Flow Information (in thousands):
Three Months Ended July 31,
---------------------------
1995 1994
----- -----
Cash paid during the period for:
Income Taxes ................................. $ 0 0
Interest on Borrowings ....................... $ 917 1,238
NOTE 3.
The Company is a party to various claims, legal actions and complaints arising
in the ordinary course of business. In the opinion of management, the
disposition of these matters will not have a material adverse effect on the
financial condition of the Company.
<PAGE>
PART I.
ITEM 2
CRUISE AMERICA, INC., AND SUBSIDIARIES
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
Three Months ended July 31, 1995
SEASONALITY
The Company's business is seasonal. In the first and second fiscal quarters, the
Company historically records profits. In the third and fourth quarters, the
Company historically records losses. The Company's purchases of motorhomes for
the rental fleet are also seasonal, with the majority of purchases being made in
the first and fourth fiscal quarters. Due to the seasonality of rental and sales
operations, certain accounts fluctuate from quarter to quarter.
LIQUIDITY AND CAPITAL RESOURCES
As of July 31, 1995, the Company had current liabilities in excess of current
assets in the amount of $9,600,000. The Company's working capital, as presented,
includes a significant portion of Rental Vehicle Financing. The Company's
working capital does not, however, include any portion of the related assets -
Rental Vehicles, even though a significant portion of these vehicles are
expected to be sold during the year through the Company's normal fleet rotation.
The Company estimates that if these assets were classified as current assets,
the Company would not have a working capital deficit.
The Company believes that, during the next year, cash generated from operations
and financing available from banks and other financial institutions will be
sufficient for its capital and operating needs.
THREE MONTHS ENDED JULY 31, 1995 AS COMPARED WITH
THREE MONTHS ENDED JULY 31, 1994
Rental Revenue for the quarter ended July 31, 1995, was $19,408,000 compared to
15,738,000 reported for the quarter ended July 31, 1994. This improvement was
due to a 34% increase in revenue days offset in part by an 8% decrease in
revenue per day.
Sales for the quarter ended July 31, 1995, were $9,148,000, compared to
$10,082,000, for the same period a year ago. The Company limited wholesale sales
in the quarter as the need to dispose of older fleet vehicles has diminished.
Cost of Rentals as a percentage of Rental Revenue was 31% in 1995, compared to
33% in 1994. The improvement in the current year is due to the Company operating
its fleet at higher utilization levels, which has had the impact of reducing
costs as a percentage of revenue.
Cost of Sales as a percentage of Sales was 84% for the quarter ended July 31,
1995, compared to 83% in 1994. This increase is due to a slight change in the
mix of vehicles sold toward lower margin new vehicle sales.
Interest Expense for the quarter ended July 31, 1995, was $1,770,000 compared to
$1,432,000 in 1994. This increase is due primarily to increased average interest
rates.
Selling, General and Administrative Expenses were $6,202,000 in the first
quarter compared to $5,836,000 a year ago. This increase is due to increased
expenses incurred in order to meet the Company's increased rental demand.
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.
CRUISE AMERICA, INC.
August 28, 1995 Eric R. Bensen
----------------------------------
Eric R. Bensen
Vice President
Chief Financial Officer
August 28, 1995 Randall Smalley
----------------------------------
Randall Smalley
President
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> JUL-31-1995
<EXCHANGE-RATE> 1
<CASH> 5,842
<SECURITIES> 0
<RECEIVABLES> 3,380
<ALLOWANCES> 0
<INVENTORY> 15,094
<CURRENT-ASSETS> 25,908
<PP&E> 112,791
<DEPRECIATION> 21,121
<TOTAL-ASSETS> 120,216
<CURRENT-LIABILITIES> 35,508
<BONDS> 0
<COMMON> 57
0
0
<OTHER-SE> 27,508
<TOTAL-LIABILITY-AND-EQUITY> 120,216
<SALES> 9,148
<TOTAL-REVENUES> 28,556
<CGS> 7,729
<TOTAL-COSTS> 13,751
<OTHER-EXPENSES> 6,202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,770
<INCOME-PRETAX> 6,833
<INCOME-TAX> 1,594
<INCOME-CONTINUING> 5,239
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,239
<EPS-PRIMARY> 0.92
<EPS-DILUTED> 0.92
</TABLE>
