SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K / A
(Amendment No. 1)
For the fiscal year ended April 30, 1996
SUBMITTED PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Cruise America, Inc.
11 West Hampton Avenue
Mesa, Arizona 85210-5258
Telephone: (602) 464-7300
Commission File No. 1-9471
I.R.S. No. 59-1403609
State of Incorporation: Florida
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
COMMON STOCK AMERICAN STOCK EXCHANGE
Securities registered pursuant to Section(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 and 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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The aggregate market value of voting stock held by non-affiliates as of July 5,
1996, was approximately $33,479,000. As of July 5, 1996, 5,741,068 shares of the
registrant's Common Stock were outstanding of which 4,251,356 were held by
non-affiliates of the registrant.
Indicate by check mark if disclosure of delinquent filers 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]
DOCUMENTS INCORPORATED BY REFERENCE
Information contained in the Registrant's proxy materials to be filed with the
Securities and Exchange Commission has been incorporated by reference in Part
III of this Annual Report on Form 10-K.
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The undersigned registrant hereby amends its Annual Report on Form 10-K for the
fiscal year ended April 30, 1996 by deleting Item 1 (Business) and Item 13
(Certain Relationships and Related Party Transactions) in their entirety and
replacing such items with the following:
ITEM 1. BUSINESS
General
Cruise America, Inc. believes it is the largest company in North America
specializing in the rental and sale of Recreational Vehicles (RVs). The Company
began sales and rental operations in Miami, Florida in 1972, with an initial
strategy to locate rental centers in metropolitan gateway cities which are
destinations for large numbers of domestic and international travelers. Since
that time, the Company has established 85 additional rental and/or sales
locations across the United States and Canada. At April 30, 1996, the Company
operated a total of 16 Hub offices, 70 Satellite offices, and a rental fleet of
2,366 recreational vehicles across North America.
RV rentals provide the consumer with the benefits of use without the burdens of
ownership, and make Recreational Vehicle vacations available to a broad range of
consumers. RVs combine transportation, lodging, and cooking facilities at a cost
which the Company believes provides an economical alternative to automobile
travel and related hotel and restaurant expenses. Additionally, recent
technological advances, including more aerodynamic design, lighter weight
construction and fuel-efficient engines, have substantially increased the
fuel-efficiency of RVs. The Company also rents and sells motorcycles and vans
from selected locations.
Besides rentals, the Company sells new and used RVs (including vehicles retired
from the rental fleet) from its Hub offices. The sales effort is marketed under
the name RV DEPOT and currently represents approximately 50% of total revenue.
The amounts of revenues, income and identifiable assets attributable to the
Company's foreign operations is set forth in Note 11 to Consolidated Financial
Statements included elsewhere in this Form 10-K.
Cruise America Rental System
Cruise America rents a wide variety of RVs at each of its 16 Hub and 70
Satellite offices across North America. The Company's peak rental fleet in the
year ended April 30, 1996 consisted of 3,099 RVs, of which 2,219 were
motorhomes, 759 were truck campers, 82 were motorcycles and 39 were vans and
trailers. The majority of vehicles available for rent were current model, one or
two year old vehicles.
Cruise America's RVs include a wide range of sizes from 18 to 31 feet. Cruise
America motorhomes and truck campers are fully self contained with kitchen and
bath facilities, heat and air conditioning as well as comfortable sleeping
arrangements. Most motorhomes have electric generators and many have microwave
ovens. Cruise America RVs are as easy to drive as a car with no special license
requirements. All vehicles are equipped with automatic transmission, power
steering and power brakes. Most vehicles also have cruise control.
Over the years, the Company's use of rental vehicles that can easily be disposed
of after the peak summer rental season has increased significantly. The Company
also began in the Spring of 1993 to purchase motorhomes that are designed such
that the coach portion can be easily removed from the old chassis and placed on
a new chassis. These two changes in the rental fleet are designed to reduce
maintenance and holding costs and increase the service life of the vehicles.
Virtually the entire rental fleet is now made up of these specially designed
RVs.
The Company purchases its rental fleet from several manufacturers, including
Chevrolet, Fleetwood, Damon, Four Winds, Holiday Rambler, Coachmen and
Winnebago. The Company believes it enjoys excellent relationships with its
suppliers, most of which have been suppliers to the Company for many years. The
Company believes, if the need arose, that it could equip its fleet with RVs from
other suppliers without any material adverse effect on its operations. Most of
the Company's rental vehicles are pledged as security under financing agreements
with banks and other financial institutions.
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Subject to certain deductible amounts and retention limits, the Company
maintains coverage to insure against claims based upon personal injury, property
damage and loss of Company property in connection with its business and
operations. In light of current insurance costs and the Company's experience,
the Company believes that its policy limits provide sufficient coverage and the
deductible amounts are reasonable.
Hub Offices
At April 30, 1996, the Company operated Hub offices from 16 locations in the
United States and Canada. Each office consists of full service rental
operations, new, used and fleet RV sales, fleet maintenance, and vehicle
storage. In addition, each Hub office provides management and marketing support
and other services to the Satellite offices within its respective service area.
Among the factors which the Company considers significant in the selection of
locations for Hub offices are population, demographics, proximity to major
airports, vacation destinations and favorable economic conditions within the
potential service area for the rental and sale of RVs.
Satellite Offices
At April 30, 1996, the Company operated 70 Satellite rental centers, called
Dealers. Dealers are independently owned and operated businesses that contract
to rent the Company's RVs. Typically, the Dealer also is engaged in a
complementary business such as car, truck or equipment rentals, or RV sales. The
Satellite office operator provides the facilities and all personnel for the
rental operation and is paid a commission on the rental revenue generated. The
Company provides each Dealer with vehicles, maintenance, service, forms,
supplies, advertising and management support.
Fleet Planning and Management
Fleet management is accomplished through the coordination of reservations, fleet
purchasing, fleet distribution, fleet sales, marketing and the motorhome
rechassis/refurbish operation. Information derived from each of these areas is
used to establish a fleet plan designed to maximize vehicle utilization.
Reservation information from local, central and international reservations is
used to schedule vehicle requirements and demands. This information is also used
to schedule routine maintenance and to establish pricing and one-way surcharges
in order to control vehicle utilization and availability. Expansion of the
rental fleet and the timing of vehicle purchases, as well as the distribution of
rental vehicles among rental centers, are determined in part by historical
reservation demand and anticipated demand as expressed to management by travel
wholesalers and travel agents.
Vehicle purchases are generally scheduled so that new vehicles are delivered
according to anticipated rental demand. The Company encourages one-way vehicle
flow into the sunbelt locations in the fall and into the snowbelt locations in
the spring.
Vehicles from the fleet are sold at all Hub locations. Fleet sales are
controlled at the Company's headquarters. Because fleet sales are seasonal and
regionalized, the Company maintains a wide selection of RVs during the peak
selling months in order to maximize sales.
Customer Service
The Company believes strongly in familiarizing the customer in all aspects of RV
usage. Each customer is given a full demonstration prior to rental as well as
extensive written instructions. Multilingual personnel are retained at major
gateway markets to assist foreign language speaking customers. On the road,
customers have access to 24- hour toll-free lines for assistance.
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All vehicles are cleaned, inspected and serviced prior to pickup, and detailed
quality control procedures are used to assure that vehicles are properly
prepared and maintained. The Company makes available to rental customers luggage
storage, kitchen supplies and utensils, linens, airport pickup and maps.
Advertising and Promotion
The Company's objective is to provide quality rental services at competitive
prices to both domestic and international customers. Rental services are
marketed directly to the consumer and through tour operators and travel agents.
The Company's rental marketing program is designed to level out rental demand
throughout the year in order to maximize vehicle utilization.
The Company's rental services are marketed internationally by commissioned
general sales agents and by approximately 300 travel wholesalers in their
brochures and related travel media in approximately 25 countries. The Company
also engages in direct advertisement in several foreign markets. Currently, the
Company's rental programs are featured in North American destination travel
brochures published in many countries throughout the world.
The Company also promotes its rental programs through travel agents, airlines,
automobile clubs and other targeted marketing groups. The Company has been a
participating sponsor in various fund raising and sporting events. In addition,
the Company offers special motorhome vacations and discounted rates designed to
stimulate business in the off-season.
The Company also conducts a balanced domestic advertising program for sales and
rentals, which includes advertisements in telephone directories, print media,
industry trade media, local newspaper displays, classified advertising and other
select publications. To a lesser extent, the Company advertises on radio and
television and through direct mail promotions. The Company also promotes its
products and services at RV shows, travel trade and consumer shows and other
special events.
Reservations
The Company's reservations department maintains toll-free customer telephone
service across the United States and Canada. The international reservations
department receives, confirms, processes and invoices international
reservations. Domestically, the reservations department also performs customer
credit qualification procedures and processes travel agent requests and
bookings.
Vehicle Service and Parts
The Company maintains or has access to fully-equipped service facilities at each
office to support its rental fleet. In addition, the Company's Mesa, Arizona
office maintains a retail service department, which is equipped to handle the
repair of virtually any type of RV. The parts department supports the rental,
sales and service functions of the Company, and also provides support to the Hub
and Satellite rental centers by stocking parts that are not readily available.
In addition, the parts department stocks accessory items usually sold to RV
owners. The parts department conducts mail order sales, both foreign and
domestic, for scarce or specialized RV parts. Parts are sold at both wholesale
and retail.
Competition
The Company believes it is the largest company in North America that specializes
in the rental and sale of RVs. The Company competes with other leisure and
vacation activities, many of which are more visible and familiar than the
Company's product. The Company competes in the rental and sale of RVs with
several firms, some of which operate in multiple locations. In addition, there
are local competitors that operate in single locations. Significant competitive
factors in the RV rental and sales industry include price, service, reliability,
quality of product, convenience, the ability to offer one-way rentals and
vehicle availability. The Company believes that it is competitive in all of
these categories.
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Employees
As of April 30, 1996, the Company had 311 full-time employees. The Company has
no contracts or collective bargaining agreements with labor unions and has never
experienced work stoppages. The Company's management considers its relations
with employees to be excellent.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
Not applicable.
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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.
CRUISE AMERICA, INC.
February 21, 1997 By: Randall Smalley
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Title: President
