SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
( X ) Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1994 or
( ) Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______ to _______
Commission File Number 1-7444
OAKWOOD HOMES CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0985879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2225 S. Holden Road (P.O. Box 7386), Greensboro, North Carolina
(Address of principal executive offices)
27417-0386
(Zip Code)
(910) 855-2400
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
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, 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 July 31, 1994.
Common Stock, Par Value $.50 Per Share . . . . . . . . . . 20,467,847
(1)
<PAGE>
PART I. FINANCIAL INFORMATION
QUARTERLY REPORT ON FORM 10-Q
CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 1994
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
Greensboro, North Carolina
The consolidated financial statements included herein
have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and
disclosures normally included in annual financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the
Company believes that the disclosures contained herein
are adequate to make the information presented not
misleading. These consolidated financial statements
should be read in conjunction with the financial
statements and the notes thereto included in the
Company's latest annual report on Form 10-K.
(2)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except per share data)
Three Months Ended
June 30,
1994 1993
<S> <C> <C>
Revenues
Net Sales $115,313 $73,611
Financial services income 14,837 13,014
Other income 3,436 2,626
Total revenues 133,586 89,251
Costs and expenses
Cost of sales 80,656 50,820
Selling, general and administrative expenses
Non-financial services 27,983 17,220
Financial services 1,735 1,713
Provision for losses on credit sales 2,599 1,886
Interest expense
Non-financial services 111 129
Financial services 5,828 6,290
Total costs and expenses 118,912 78,058
Income before income taxes 14,674 11,193
Provision for income taxes 5,479 4,269
Net income $ 9,195 $ 6,924
Earnings per share
Primary $ .43 $ .33
Fully diluted $ .43 $ .33
Dividends paid per share $ .02 $ .02
Average shares outstanding
Primary 21,325 21,213
Fully diluted 21,359 21,239
</TABLE>
(3)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except per share data)
Nine Months Ended
June 30,
1994 1993
<S> <C> <C>
Revenues
Net Sales $272,792 $170,500
Financial services income 44,181 36,116
Other income 8,703 7,043
Total revenues 325,676 213,659
Costs and expenses
Cost of sales 190,269 118,131
Selling, general and administrative expenses
Non-financial services 69,157 41,706
Financial services 5,454 4,898
Provision for losses on credit sales 6,630 4,557
Interest expense
Non-financial services 313 839
Financial services 18,023 18,749
Total costs and expenses 289,846 188,880
Income before income taxes 35,830 24,779
Provision for income taxes 13,043 9,089
Net income $ 22,787 $15,690
Earnings per share
Primary $ 1.07 $ .83
Fully diluted $ 1.07 $ .79
Dividends paid per share $ .06 $ .06
Average shares outstanding
Primary 21,370 18,831
Fully diluted 21,388 20,034
</TABLE>
(4)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except per share data)
June 30, September 30,
ASSETS 1994 1993
<S> <C> <C>
Cash and cash equivalents $ 27,878 $ 23,904
Receivables, principally installment contracts 364,568 424,710
Inventories:
Manufactured homes 80,863 52,105
Work-in-process, materials and supplies 6,154 4,288
Land/homes under development 1,254 697
88,271 57,090
Manufactured housing communities 8,143 4,088
Property, plant and equipment 38,988 27,702
Deferred income taxes 4,077 1,564
Other assets 17,069 17,970
$548,994 $557,028
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Short-term borrowings $ 20,000 $ 26,800
Notes and bonds payable 218,854 255,765
Accounts and payable and accrued liabilities 48,175 39,079
Reserve for contingent liabilities 2,996 3,009
Other long-term obligations 7,164 3,499
Stockholders' investment:
Common stock, $.50 par value 10,231 10,172
Additional paid in capital 144,107 143,578
Retained earnings 97,467 75,905
251,805 229,655
Less: Loan to ESOP 0 (779)
Total stockholders' investment 251,805 228,876
$548,994 $557,028
</TABLE>
(5)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
For the Nine Months Ended
June 30,
1994 1993
<S> <C> <C>
Operating activities:
Net income $ 22,787 $ 15,690
Items not requiring (providing) cash:
Depreciation and amortization 3,218 2,794
Deferred income taxes (2,513) (1,147)
Provision for losses on credit sales,
net of actual losses 3,114 2,094
(Increase) in other receivables (4,857) (184)
(Increase) in inventories (31,181) (15,968)
Increase in accounts payable and accrued
liabilities 9,096 9,405
Increase in other long-term obligations 3,665 450
Cash used by operations 3,329 13,134
Installment receivables issued (232,223) (139,030)
Purchase of installment loan portfolio (604) (28,807)
Sale of installment loans 256,785 31,433
Receipts on installment receivables 38,250 35,425
Cash provided (used) by operating activities 65,537 (87,845)
Investing activities:
Additions to property, plant and equipment (13,867) (4,316)
Additions to manufactured housing communities (4,062) (22)
Other (65) (950)
Cash used by investing activities (17,994) (5,288)
Financing activities:
Net borrowings (repayments) on short-term
credit facilities (6,800) 31,000
Issuance of notes and bonds payable 0 43,036
Payments on notes and bonds (36,132) (35,720)
Cash dividends (1,225) (1,075)
Proceeds from exercise of stock options 588 3,449
Proceeds from public offering of common stock 0 53,602
Other 0 4
Cash provided (used) by financing activities (43,569) 94,296
Net increase in cash and cash equivalents 3,974 1,163
Cash and cash equivalents:
Beginning of period 23,904 17,200
End of period $ 27,878 $ 18,363
</TABLE>
(6)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. The consolidated financial statements reflect all
adjustments, which included only normal recurring adjustments,
which are, in the opinion of management, necessary to present
fairly the results of operations for the periods presented.
Results of operations for any interim period are not
necessarily indicative of results to be expected for a full
year.
2. Effective October 1, 1993, the Company adopted
prospectively Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("FAS 109"), which
requires use of an asset and liability method to account for
deferred income taxes. Prior to fiscal 1994, the Company
accounted for income taxes using the deferred method. Adoption
of FAS 109 had the effect of increasing the Company's net
deferred income tax asset by approximately $214,000 ($.01 per
share) at October 1, 1993 which has been reflected as a
reduction in the provision for income taxes for the quarter
ended December 31, 1993.
3. The Company is contingently liable as guarantor on
installment sale contracts sold to unrelated financial
institutions on a full or limited recourse basis. The amount
of this contingent liability was approximately $113 million at
June 30, 1994.
(7)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Industry developments
In July 1994, new Department of Housing and
Urban Development ("HUD") regulations took effect
which require that manufactured homes built after July
13, 1994 be constructed to more stringent standards
than homes built prior to that date. Such regulations
relate principally to methods of construction and
installation and are designed to enhance the homes'
ability to withstand high winds. The construction and
installation standards vary depending on the area
("Zone I,II or III") into which the home is delivered,
with Zone II and Zone III standards being
significantly more stringent than the prior minimum
construction standards mandated by federal law, with
Zone III standards being somewhat more stringent than
Zone II standards. Standards for Zone I currently are
the same as existing standards; however, HUD has
stated its intention to issue new Zone I standards by
January 1, 1995. Of the Company's 145 sales centers,
approximately 10 currently deliver in more than two-
thirds of their home sales into Zones II and III, and
approximately 15 sales centers deliver a lesser
portion of their unit sales into these Zones. The
remaining 120 sales centers deliver homes only into
Zone I and are not currently affected. Approximately
15% of the Company's calendar 1993 home sales would
have been affected had the new standards been in
effect in calendar 1993.
The Company intends to increase retail prices
to cover the costs of complying with the new
standards, including profit on those costs. The
increase in the average retail price of single-section
and multi-section homes resulting from such cost
increases is approximately 15% and 8%, respectively,
for both Zones II and III. The increase in the retail
price of multi-section homes is less than the increase
in the price of single-section homes because some new
materials required by the standards (for example,
roofing and siding materials) were standard features
of the Company's multi-section homes before enactment
of the new standards.
HUD has also issued new thermal standards for
manufactured housing, relating principally to
insulation ratings and the use of storm windows. The
new thermal regulations, which are effective for homes
manufactured beginning October 26, 1994, vary
depending upon which of three geographic areas into
which the home is delivered. About 15% of the
Company's calendar 1993 unit sales were delivered into
the northernmost thermal zone, for which the new
standards are most stringent; approximately 75% of
calendar 1993 unit sales were delivered into the
central zone and approximately 10% were delivered into
the southernmost zone, for which the new standards
represent the least change from existing standards.
The Company intends to increase retail prices to
recover these costs and maintain its gross margins.
While the Company is
(8)
<PAGE>
continuing to study the new regulations and its plan
for compliance is not yet complete, based on
information currently available, management believes
that the increase in retail prices arising from
adoption of the new thermal standards will be range
from approximately 3% in the southern region to 8% in
the northern region for single-section homes, and from
approximately 3% in the southern region to 5% in the
northern region for multi-section homes.
The Company does not believe that the cost
increases necessitated by the new wind and thermal
standards will have a material adverse effect on the
Company's sales or gross margins.
Three months ended June 30, 1994 compared to three
months ended June 30, 1993
The following table summarizes certain key sales
statistics for the quarters ended June 30, 1994 and 1993:
1994 1993
Sales dollar volume (in millions) $ 115.3 $ 73.6
New units sold 3,742 2,754
Used units sold 439 310
Average new single-section sales price $24,100 $21,700
Average new multi-section sales price $43,200 $38,600
Weighted average sales centers 140 114
New unit sales per sales center 27 24
Total sales dollar volume increased 57%,
reflecting a 36% increase in new unit volume and increases
of 11% and 12% in the average new unit sales prices of
single-section and multi-section homes, respectively. New
unit volume increased due to a 23% increase in the weighted
average number of sales centers open during the period and
a 13% increase in average new unit sales per sales center.
Same store dollar sales rose 37% over last year. The
increase in the average new unit sales price reflects price
increases required to offset rising lumber prices,
increasing sales in the Southwest market where the average
size home sold is larger than in the Southeast market, and
higher selling prices in the Southeast due to a change in
product mix toward higher-end homes. Sales in the
Southwest comprised 28% of total new manufactured housing
sales dollars in the third quarter of 1994 compared to 11%
last year. The Company has been successful in recovering
increased lumber costs from its customers through higher
selling prices and does not expect fluctuating lumber
prices to have a material adverse effect on its results of
operations.
Gross profit as a percentage of sales was 30.1% in
the current period compared to 31% in the prior year.
Margins rose in the Southeast, principally due to
manufacturing efficiencies resulting from higher production
levels, offset by the effects of the Company's expansion
into the Southwest, where a substantial portion of homes
are sourced from third party manufacturers. Of the total
new unit sales volume in the third quarter, 75% was
manufactured by the
(9)
<PAGE>
Company compared to 82% in the third quarter last year.
During the current period the Company operated at or near
its production capacity on a single shift basis at four of
its operating plants. At June 30, 1994, a fifth plant
acquired in January 1993 was operating at approximately 80%
of capacity. Production at
the Company's new Texas facility commenced in October, 1993
and at June 30, 1994, this plant was operating at approximately
65% capacity. During the first quarter of fiscal 1994 the
Company began construction of an additional plant in Texas
and during the third quarter began construction of a plant
in Tennessee to further support the Company's expansion
into the Southwest and Midwest markets. Production at
these facilities is expected to commence during the fourth
quarter of fiscal 1994. In April 1994, the Company
purchased a third plant in Texas; production in this
existing facility should commence in the fourth quarter of
fiscal 1994 following completion of certain renovations.
Management does not expect a significant improvement in
gross margins to be realized from the additional
manufacturing plants until at least fiscal 1995 because of
the start-up costs associated with bringing new production
capacity on line.
Financial services income increased 14% as a
result of the increase in the outstanding serviced loan
portfolio from $480 million at June 30, 1993 to $709
million at June 30, 1994, offset slightly by a decrease in
the weighted average interest rate. Credit sales
represented approximately 85% and 84% of the Company's
sales dollar volume in fiscal 1994 and 1993, respectively,
of which approximately 94% and 95%, respectively, was
originated by the Company's credit subsidiary. Financial
services income for the fiscal 1994 quarter also reflects
earnings on the Company's retained interests in REMIC
securitizations consummated in July and October 1993 and in
April 1994 which were structured as sales of receivables.
The Company's earnings on its retained interests in these
REMICs are reflected as a single amount within financial
services income, as compared to presenting interest income
on the installment sale contracts conveyed to the REMICs as
interest income, and interest expense on REMIC interests
purchased by investors as interest expense, for REMIC
securitizations structured as collateralized borrowings.
Structuring REMIC securitizations as sales of receivables
will cause slower rates of growth in interest income and
interest expense compared to that which would occur if such
securitizations were structured as collateralized
borrowings.
Other income increased 31%, principally due to
increased insurance commissions resulting from an
improvement in the percentage of total sales for which
physical damage coverage was written by the Company's
agency and the overall increase in sales, offset by
decreases in insurance commissions from favorable loss
experience and the continuing decline in endorsement fee
income resulting from the Company's emphasis on internal
financing of credit sales.
Total selling, general and administrative expenses
increased 57%, from $18,933,000 (21.2% of revenues) in 1993
to $29,718,000 (22.2% of revenues)
(10)
<PAGE>
in 1994 primarily as a result of higher sales volumes and
increased servicing costs associated with the increased
size of the Company's servicing portfolio. Selling, general
and administrative expense for the 1994 quarter also
includes a provision of approximately $1 million (.8% of
revenues) relating to long-term incentive compensation to
key members of management, payable in fiscal 1996 if
certain earnings performance targets are achieved. The
amounts of such incentive compensation are directly related to the
Company's earnings for the three year period ending in
fiscal 1996, and such amounts will be reduced to zero if
certain minimum earnings are not achieved. Long-term
incentive compensation previously was provided principally
in the form of stock options, and accordingly did not
result in a charge to earnings.
The provision for losses on credit sales rose 38%
over the prior period. The Company provides for estimated
future losses on current period retail credit sales
financed by the Company or sold to financial institutions
on a recourse basis. The amounts provided are based on the Company's
historical loss experience, current repossession trends and costs, and
management's assessment of the current credit quality of
the installment sale contract portfolio. Accordingly, the
provision for losses on credit sales is not necessarily
directly related to current period sales.
Financial services interest expense decreased
because the Company has begun structuring its REMIC
securitizations as sales of receivables instead of as
collateralized borrowings, as more fully described above.
The Company's effective income tax rate was 37.3%
in fiscal 1994 compared to 38.1% in fiscal 1993.
Nine months ended June 30, 1994 compared to nine months
ended June 30, 1993
The following table summarizes certain key sales
statistics for the nine months ended June 30, 1994 and 1993:
1994 1993
Sales dollar volume (in millions) $ 272.8 $ 170.5
New units sold 9,182 6,526
Used units sold 1,175 755
Average new single-section sales price $23,600 $21,000
Average new multi-section sales price $42,200 $37,800
Weighted average sales centers 133 110
New unit sales per sales center 69 59
Total sales dollar volume increased 60%,
reflecting a 41% increase in new unit volume and increases
of 12% in the average new unit sales prices of both single-
section and multi-section homes. New unit volume increased
due
(11)
<PAGE>
to a 21% increase in the weighted average number of sales
centers open during the period and a 17% increase in
average new unit sales per sales center. Same store dollar
sales rose 36% from 1993. The increase in the average new
unit sales price reflects price increases required to
offset rising lumber prices, increasing sales in the
Southwest market where the average
size home sold is larger than in the Southeast market, and
higher selling prices in the Southeast due to a change in
product mix toward higher-end homes. Sales in the
Southwest comprised 25% of total new manufactured housing
sales dollars in the first nine months of 1994 compared to
9% last year.
Gross profit as a percentage of sales was 30.3% in
the current period compared to 30.7% in the prior year.
Margins rose in the Southeast, principally due to manufacturing
efficiencies resulting from higher production levels,
partially offset by the effects of the Company's expansion
into the Southwest, where a substantial portion of homes
are sourced from third party manufacturers. Of the total
year-to-date new unit sales volume, 76% was manufactured by
the Company compared to 84% last year.
Financial services income increased 22% as a
result of the increase in the outstanding serviced loan
portfolio from $480 million at June 30, 1993 to $709
million at June 30, 1994, offset slightly by a decrease in
the weighted average interest rate. Credit sales
represented approximately 86% and 83% of the Company's
sales dollar volume in fiscal 1994 and 1993, respectively,
of which approximately 94% and 92%, respectively, was
originated by the Company's credit subsidiary.
Other income increased 24%, principally due to
increased insurance commissions resulting from an
improvement in the percentage of total sales for which
physical damage coverage was written by the Company's
agency and the overall increase in sales, offset by
decreases in insurance commissions
from favorable loss experience and the continuing decline
in endorsement fee income resulting from the Company's
emphasis on internal financing of credit sales.
Total selling, general and administrative expenses
increased 60%, from 46,604,000 (21.8% of revenues) in 1993
to $74,611,000 (22.9% of revenues) in 1994 primarily as a
result of higher sales volumes and increased servicing
costs associated with the increased size of the Company's
servicing portfolio. The 1994 period also includes a
provision of approximately $2.4 million relating to long-
term incentive compensation plan adopted in 1994. The plan
provides for cash bonuses to key management payable in
1996, the amount of which are directly related to the
Company's earnings for the three year period ending in
fiscal 1996. Previous long-term incentive compensation
plans was provided principally in the form of stock
options, and accordingly did not result in a charge to
earnings.
(12)
<PAGE>
The provision for losses on credit sales rose 45%
over the prior period. The Company provides for estimated
future losses on current period retail credit sales
financed by the Company or sold to financial institutions
on a recourse basis. The amounts provided are based on the
Company's historical loss experience, current repossession trends
and costs, and management's assessment of the current credit quality of
the installment sale contract portfolio. Accordingly, the
provision for losses on credit sales is not necessarily
directly related to current period sales.
Non-financial services interest expense decreased
primarily due to the redemption or conversion of the
Company's 6-1/2% and 7-1/2% convertible subordinated
debentures in November and December 1992. Financial
services interest expense decreased because the Company has
begun structuring its REMIC securitizations as sales of
receivables instead of as collateralized borrowings, as
more fully described above.
The Company's effective income tax rate (excluding
the $214,000 reduction in income tax expense arising from
the adoption of FAS 109) was 37% in fiscal 1994 compared to
36.7% in fiscal 1993. The increase over fiscal 1993 was
the result of higher state income taxes and an increase in
the federal income tax rate.
Liquidity and Capital Resources
The Company's financial position at June 30, 1994
reflects the normal seasonal increase in inventories in
preparation for the summer selling season. In addition,
the Company's retail expansion has resulted in increased
investment in inventories. Of the $31 million increase in
inventories since September 30, 1993, approximately $16
million relates to the 25 new sales centers opened during
the nine months ended June 30, 1994. Short-term borrowings
principally reflect outstanding advances on the Company's
warehouse lines of credit used to finance installment sale
contracts prior to securitization or other permanent
financing. Borrowings outstanding at June 30, 1994 were
liquidated using a portion of the proceeds of the Company's
July 1994 REMIC securitization described below.
Receivables, which consist principally of
installment sale contracts, decreased principally as a
result of the Company's structuring of installment sale
contract securitizations as sales of receivables rather
than as collateralized borrowings. During the nine months
ended June 30, 1994, the Company originated approximately
$232 million of installment sale contracts and sold
approximately $266 million of installment sale contracts,
including approximately $263.4 million of contracts via two
REMIC securitizations. Investors purchased an average of
97% of the interests in the REMIC trusts for approximately
$254.5 million cash; the Company retained an average of 3%
interest in the trusts. In July 1994, approximately $99.2
million of contracts were
(13)
<PAGE>
sold via a REMIC securitization; investors purchased 92% of
the interests in the REMIC trust for approximately $91.3
million cash, and the Company retained an 8% interest in
the trust. Management believes that financing for
installment sale contracts remains readily available and
anticipates completing an additional securitization in
calendar 1994.
Management believes that the availability of
permanent financing for installment sale contracts, the
Company's short-term credit facilities and cash generated
by operations are sufficient to provide for the Company's
short-term liquidity needs.
The Company continues to monitor the credit and
equity markets and evaluate the sources and cost of the
long-term capital required to finance the demands of both
planned expansion and higher operating levels within
existing operations. The Company will seek to raise
additional equity or long-term debt based upon anticipated
business demands, management's assessment of existing and
future conditions in the capital markets, and management's
assessment of the appropriate components of the Company's
capital structure.
Potential business combination
On June 24, 1994, the Company signed a letter of
intent to acquire Golden West Homes, an independent
producer of manufactured housing headquartered in Santa
Ana, California. The letter of intent provides that Oakwood
will issue 700,000 shares of its common stock (equal to
approximately 3.4% of its currently outstanding shares) in
exchange for all of the outstanding shares of Golden West.
Consummation of the acquisition is anticipated prior to
September 30, 1994, and is subject to conditions, including
completion of due diligence, negotiation of a definitive
agreement and approval of the transaction by Oakwood's and
Golden West's Boards of Directors and by the shareholders
of Golden West.
Golden West operates manufacturing plants in
Albany, Oregon and Sacramento and Perris, California. A
recently acquired fourth plant in Fort Morgan, Colorado is
expected to begin production in the fall of 1994. Golden
West manufactures principally multi-section homes and had
net sales and net income of approximately $97 million and
$1 million, respectively, for the twelve months ended March
31, 1994.
(14)
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(4) Agreement to Furnish Copies of Instruments
with Respect to Long-term Debt
(10.1) Form of Performance Unit Agreement dated
November 16, 1993
(10.2) Schedule identifying omitted Performance
Unit Agreements which are substantially
identical to the Form of Performance Unit
Agreement and the target number of
performance units under Performance Unit
Agreements
(11) Statement Re Computation of Earnings Per
Share
b) Reports on Form 8-K
No reports on Form 8-K were filed for the quarter
ended June 30, 1994.
Items 1, 2, 3, 4 and 5 are inapplicable and are omitted.
(15)
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 12, 1994
OAKWOOD HOMES CORPORATION
BY: s/C. Michael Kilbourne
C. Michael Kilbourne
Vice President
(Principal Financial Officer)
(Duly Authorized Officer)
(16)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
ITEM 6(a)
FORM 10-Q
QUARTERLY REPORT
For the quarter ended Commission File Number
June 30, 1994 1-7444
OAKWOOD HOMES CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description
<S> <C>
4 Agreement to Furnish Copies of Instruments with
respect to Long-Term Debt (page of the
sequentially numbered pages)
10.1 Form of Performance Unit Agreement dated
November 16, 1993
10.2 Schedule identifying omitted Performance
Unit Agreements which are substantially
identical to the Form of Performance Unit
Agreement and the target number of
performance units under Performance Unit
Agreements
11 Statement Re Computation of Earnings Per Share
(page of the sequentially numbered pages)
</TABLE>
(17)
EXHIBIT 4
AGREEMENT TO FURNISH COPIES OF INSTRUMENTS
WITH RESPECT TO LONG-TERM DEBT
The Registrant has entered into certain agreements with respect to
long-term indebtedness which do not exceed ten percent of the total assets of
the Registrant and its subsidiaries on a consolidated basis. The Registrant
hereby agrees to furnish a copy of such agreements to the Commission upon
request of the Commission.
OAKWOOD HOMES CORPORATION
By: s/C. Michael Kilbourne
C. Michael Kilbourne
Vice President
EXHIBIT 10.1
OAKWOOD HOMES CORPORATION
PERFORMANCE UNIT AGREEMENT
DATE: November 16, 1993
_______________________
_______________________
_______________________
Dear _______________:
At the direction of the Compensation Committee of the Board
of Directors of Oakwood Homes Corporation (the "Company"), you
are hereby notified that you have been granted a Performance Unit
Award pursuant to the Company's 1990 Long Term Performance Plan
(the "Plan"), and subject to all the terms and conditions set
forth therein.
You are hereby awarded _________ Performance Units, each
such unit to have the value of One Dollar ($1.00) (the "Target
Award"), subject to the terms and conditions of the Plan and to
adjustment pursuant to certain performance criteria set forth
below. The date of the grant of this Award is the date of this
Agreement. This Award has been granted to you to stimulate your
efforts on behalf of the Company's business. The consideration
for the Award is your continuous performance of services for the
Company or a parent or a subsidiary from the date of this Agree-
ment through November 16, 1996.
The total number of Performance Units subject to the Target
Award shall be deemed earned in full provided that the aggregate
net income of the Company for the three fiscal years ended
September 30, 1996 ("Program Net Income") is $97,846,000, such
amount being equal to the aggregate net income of the Company for
the three fiscal years ended September 30, 1996 if the Company
achieved a compound increase of 15% per year over the Company's
net income for its fiscal year ended September 30, 1993 ("Base
Net Income"). The Company's net income for 1993 was $24,502,000
and this shall be the Base Net Income. If Program Net Income
exceeds $97,846,000, then for every 100 basis points by which the
compound annual growth rate of Program Net Income over Base Net
Income exceeds 15%, you shall earn an additional number of
Performance Units equal to 25% of the Target Award amount. If
Program Net Income falls below $97,846,000, then for every 100
basis points by which the compound annual growth rate of Program
Net Income over Base Net Income is less than 15%, the number of
Performance Units earned by you shall be 33-1/3% less than the
Target Award amount, so that you shall earn no Performance Units
if Program Net Income represents a 12% or lower compound annual
growth rate over Base Net Income. The total number of Perfor-
mance Units earned shall be prorated appropriately in the event
that increases or shortfalls in compound growth rates amount to
fewer than 100 basis points.
<PAGE>
Program Net Income shall equal the consolidated net income
of the Company before provision for the compensation to be paid
pursuant to this Agreement and other Performance Unit Agreements
awarded on the date hereof. Program Net Income shall be deter-
mined by the Compensation Committee in writing by reference to
the net income shown for the three fiscal years ended September
30, 1996 on the certified consolidated financial statements of
the Company prepared in accordance with generally accepted
accounting principles and after taking into account the adjust-
ments provided by the preceding sentence; provided, however, that
the Compensation Committee may, in its discretion, order other
adjustments to Program Net Income or the calculation thereof to
take account of significant transactions that externally affect
the Company's net income, such as mergers, acquisitions and stock
or other offerings.
Exhibit A attached hereto provides an illustration of how
your Performance Units will be adjusted based on several assumed
amounts of Program Net Income. The cash value of the Performance
Units earned pursuant to this Award shall be paid after certifi-
cation in writing by the Compensation Committee as soon as
practicable after November 16, 1996, or as soon as practicable
after the availability of audited financial statements for the
fiscal year ending September 30, 1996, whichever occurs last.
Enclosed is a copy of the Plan, which covers the Award
granted to you. You should familiarize yourself with all of the
provisions of the Plan. Your Award is in all respects subject to
the terms and conditions of the Plan and the following:
1. Your Award is payable during your lifetime only to you.
2. You shall forfeit all rights to receive payment for any
Performance Units under this Award unless you remain in
the continuous employment of the Company from the date
hereof through November 16, 1996, unless your employ-
ment is terminated due to your death or Disability (as
such term is defined in Paragraph 2(h) of the Plan)
occurring after November 16, 1994. If your employment
is terminated by reason of your death or Disability
occurring after November 16, 1994, then (i) Program Net
Income and the compound annual growth rate of Program
Net Income over Base Net Income shall be determined on
the basis of the number of full fiscal years of the
Company that have elapsed between September 30, 1993,
and the date of termination, (ii) the Target Award
amount shall be adjusted by multiplying it by a frac-
tion the numerator of which is the number of full
fiscal years that have elapsed between September 30,
1993, and the date of termination and the denominator
of which is three, and (iii) all other provisions of
this Award and the Plan shall apply except that payment
of the Award shall be
2
<PAGE>
made as soon as possible after death or Disability and after
the Compensation Committee's written certification.
3. Your Award is not transferable, except that in the
event of your death, the right to receive payment of
the Performance Units, if any, earned under this Award
may be transferred according to the terms of your Will
or the provisions of the applicable laws of descent and
distribution.
4. Nothing in this Agreement shall in any manner restrict
or affect the right of the Company to terminate your
employment at any time for any reason, with or without
cause.
Any questions or disputes with respect to the interpretation
or application of this Award shall be decided by the Compensation
Committee, whose decision shall be final. This Award is subject
to the conditions that (i) it may be amended at any time by the
Compensation Committee and (ii) it (or the program it is awarded
under) must be approved by the shareholders of the Company, each
in the event that the Compensation Committee determines, on
advice of counsel, that amendment of this Award or the program,
or the securing of shareholder approval, is necessary or advis-
able in order to assure that payments of Performance Units
hereunder are exempt from the limits of Section 162(m) of the
Internal Revenue Code.
By your signature on this Agreement, you have accepted this
Award and you have represented that you understand and agree that
neither the granting of the Award nor any action thereunder
involves any statement or representation of any kind by the
Company as to its business, affairs, earnings or assets, or as to
any future increase or decrease in the market value of the
Company's stock, or as to the tax status or tax consequences of
the grant of this Award, including without limitation Federal and
State income, inheritance, estate and transfer taxes.
OAKWOOD HOMES CORPORATION
By:
Gwendalyn C. Scott
Vice President and Secretary
3
<PAGE>
I hereby accept the foregoing Award and agree to all the
terms and conditions set forth therein and in the Oakwood Homes
Corporation 1990 Long Term Performance Plan under which it is
granted.
[SEAL]
Nicholas J. St. George
Exhibit A
1990 Oakwood Long Term Performance Plan, as amended
4
<PAGE>
Exhibit A
SAMPLE ILLUSTRATIONS OF PERFORMANCE UNIT EARNINGS
A. Program Net Income (rounded to the nearest thousand dollars)
at Stated Compound Growth Rates From Base Net Income:
12% - $ 92,601,000
13% - $ 94,327,000
14.25% - $ 96,516,000
15% - $ 97,846,000
16.3% - $100,179,000
20% - $107,025,000
B. Performance Units that you will earn (rounded to the nearest
hundred Units) at Stated Compound Growth Rates:
12%
or Less 13% 14.25% 15% 16.3% 20% *
-0- _______ _______ _______ _______ _______
* The Performance Units would continue to increase at the indicated rates
if Program Net Income exceeded a 20% compound growth rate.
EXHIBIT 10.2
SCHEDULE IDENTIFYING OMITTED
PERFORMANCE UNIT AGREEMENTS
Name Number of Performance Units
Nicholas J. St. George 1,102,000
A. Steven Michael 580,000
C. Michael Kilbourne 372,000
Robert D. Harvey, Sr. 356,000
Larry M. Walker 170,000
Larry D. Gilmore 170,000
J. Michael Stidham 170,000
Jeffrey D. Mick 130,000
Douglas R. Muir 130,000
James D. Casterline 114,000
TOTAL UNITS 3,294,000
<PAGE>
EXHIBIT 11
OAKWOOD HOMES CORPORATION
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Weighted average number
of common shares outstanding 20,456 20,269 20,419 17,844
Add: Dilutive effect of stock
options, computed using
the treasury stock
method 869 944 951 987
Weighted average number of
common and common equivalent
shares outstanding 21,325 21,213 21,370 18,831
Net income $ 9,195 $ 6,924 $22,787 $15,690
Earnings per common
share-primary $ 0.43 $ 0.33 $ 1.07 $ 0.83
Weighted average number of
common shares outstanding 20,456 20,269 20,419 17,844
Add: Dilutive effect of stock
options, computed using
the treasury stock method 903 970 969 1,094
Add: Additional shares assumed
to be outstanding from
conversion of convertible
securities 0 0 0 1,096
Weighted average number of
common shares outstanding
assuming full dilution 21,359 21,239 21,388 20,034
Net income $ 9,195 $ 6,924 $22,787 $15,690
Add: Interest on convertible
securities, net of
income taxes 0 0 0 237
Net income, as adjusted $ 9,195 $ 6,924 $22,787 $15,927
Earnings per common
share-fully diluted $ 0.43 $ 0.33 $ 1.07 $ 0.79
</TABLE>
