CAVALIER HOMES INC
10-Q, 1995-05-15
MOBILE HOMES
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                                   FORM 10-Q


                        SECURITIES & EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark One)

[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1995

                                       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 1-9792

                              Cavalier Homes, Inc.
             (Exact name of Registrant as specified in its charter)

           Delaware                                         63-0949734
(State or other jurisdiction of                            (IRS Employer
 incorporation or organization)                         Identification Number)


            Highway 41 North & Cavalier Road, Addison, Alabama 35540
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (205) 747-1575
              (Registrant's telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last year)


     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 close of the latest practicable date.

          Class                                    Outstanding at May 12, 1995
 Common Stock $.10 Par Value                              4,698,352 Shares







                                      -1-



<PAGE>


                              CAVALIER HOMES, INC.
                                AND SUBSIDIARIES




                                     INDEX

                                                                       Page No.
Part I.   Financial Information (Unaudited)

          Consolidated Condensed Balance Sheets -
          March 31, 1995 and December 31, 1994                                3

          Consolidated  Condensed  Statements  of
          Income - Thirteen  Weeks ended March 31, 1995
          and April 1, 1994                                                   4

          Consolidated Condensed Statements of
          Cash Flows - Thirteen Weeks ended March 31, 1995
          and April 1, 1994                                                   5

          Notes to Consolidated Condensed Financial Statements                6

          Management's Discussion and Analysis of
          Financial Condition and Results of Operations                       8

Part II.  Other Information

          Item 6.   Exhibits                                                 10

          Signatures                                                         11


































                                      -2-

<PAGE>
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                                       March 31,    December 31,
                                                          1995          1994
ASSETS                                                (Unaudited)    (Audited)
CURRENT ASSETS:                                      ------------  ------------
   Cash                                             $   4,452,270 $  16,034,922
   Investment Securities:
          Debt Securities held to maturity              2,201,698     1,956,301
          Equity Securities available for sale          2,665,291     1,680,072
   Accounts Receivable, less allowance for
          losses of $650,000 (1995 and 1994)           15,622,909     2,856,661
   Installment contracts receivable - current             310,546       281,310
   Inventories                                         11,372,569     9,734,314
   Deferred Income Taxes                                2,755,467     2,648,844
   Other Current Assets                                   987,690       602,355
                                                     ------------  ------------
          TOTAL CURRENT ASSETS                         40,368,440    35,794,779

PROPERTY, PLANT AND EQUIPMENT (Net)                    13,799,246    13,194,655

INSTALLMENT CONTRACTS RECEIVABLE, less
  allowance for credit loss of $371,569 (1995)
  and $350,000 (1994)                                  11,426,887     9,193,858

GOODWILL, less accumulated amortization of
  $199,000 (1995) and $104,000 (1994)                   2,273,894     2,368,552

MARKETABLE SECURITIES HELD TO MATURITY                  2,175,206     2,427,526

OTHER ASSETS                                              859,789       783,265
                                                     ------------  ------------
                                                    $  70,903,462 $  63,762,635
                                                     ============  ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Current portion of long-term debt                $     623,244 $     378,802
   Accounts Payable                                     9,161,328     6,090,552
   Amounts Payable Under Dealer Incentive Program       3,055,412     4,400,717
   Accrued wages and related withholdings               2,233,727     1,463,558
   Accrued Incentive Compensation                       1,245,128     2,181,301
   Estimated Warranties                                 4,600,000     4,200,000
   Accrued Insurance                                    2,621,070     2,018,357
   Other Accrued Expenses                               2,517,104     2,201,286
   Accrued Income Taxes                                 1,274,358       284,657
                                                     ------------  ------------
        Total Current Liabilities                      27,331,371    23,219,230

DEFERRED INCOME TAXES                                     924,731       875,868

LONG-TERM DEBT                                          4,815,653     3,207,168

SHAREHOLDERS' EQUITY:
   Preferred Stock, $.01 Par Value; Authorized
      500,000 shares, none issued
   Common Stock, $.10 Par Value; Authorized
      15,000,000 shares; issued 4,718,803 (1995)
      and 4,715,678 (1994) shares                         471,880       471,568
   Additional Paid-In Capital                          22,047,924    22,053,641
   Retained Earnings                                   15,361,748    13,985,005
   Treasury Stock, at cost (20,451 shares)                (49,845)      (49,845)
                                                     ------------  ------------
       TOTAL SHAREHOLDERS' EQUITY                      37,831,707    36,460,369
                                                     ------------  ------------
                                                    $  70,903,462 $  63,762,635
                                                     ============  ============

See Notes to Consolidated Condensed Financial Statements

                                      -3-
<PAGE>

                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)



                                                        Thirteen Weeks Ended
                                                       March 31,      April 1,
                                                         1995          1994
                                                     ------------  ------------
REVEUNES:
   Net sales                                        $  57,813,549 $  46,673,930
   Financial services                                     333,638       108,707
                                                     ------------  ------------
                                                       58,147,187    46,782,637
                                                     ------------  ------------
COST OF SALES                                          48,842,637    39,731,046

SELLING, GENERAL AND ADMINISTRATIVE:
  Manufacturing                                         6,680,576     5,286,681
  Financial Services                                      189,277        92,293
                                                     ------------  ------------
                                                       55,712,490    45,110,020
                                                     ------------  ------------
OPERATING PROFIT                                        2,434,697     1,672,617
                                                     ------------  ------------
OTHER INCOME(EXPENSE):
  Interest expense:
     Manufacturing                                         (1,406)         (868)
     Financial services                                  (115,875)         -
  Other, net                                              209,184        43,743
                                                     ------------  ------------
INCOME BEFORE INCOME TAXES                              2,526,600     1,715,492

INCOME TAXES                                            1,009,000       686,000
                                                     ------------  ------------
NET INCOME                                          $   1,517,600 $   1,029,492
                                                     ============  ============
NET INCOME PER SHARE                                $        0.32 $        0.28
                                                     ============  ============
WEIGHTED AVERAGE SHARES OUTSTANDING                     4,770,433     3,618,026
                                                     ============  ============




















See Notes to Consolidated Condensed Financial Statements

                                      -4-
<PAGE>

                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                                         Thirteen Weeks Ended
                                                        March 31,      April 1,
                                                          1995          1994
OPERATING ACTIVITIES:                                ------------  ------------
Net income                                          $   1,517,600 $   1,029,492
Adjustments to reconcile net income to net
  cash used in operating activities:
     Depreciation and amortization                        580,917       294,537
     Provision for credit losses, repurchase
        commitments and other items                        21,569        59,994
     (Gain)loss on sale of property, plant
        and equipment                                      (9,711)       49,650
     Equity in undistributed earnings of
        partnership investment                            (46,159)      (51,503)
     Changes in assets and liabilities provided(used)
       cash, net of effects of acquisition in 1993:
       Accounts receivable                            (12,766,248)   (8,953,057)
       Inventories                                     (1,638,255)   (1,057,649)
       Accounts payable                                 3,070,776     3,493,947
       Amounts payable under dealer incentive
        programs                                       (1,345,306)     (386,251)
       Estimated warranties                               400,000       200,000
       Other assets and liabilities                     1,236,913     1,378,076
                                                     ------------  ------------
           Net cash used in operating activities       (8,977,904)   (3,942,764)
                                                     ------------  ------------
INVESTING ACTIVITIES:
Proceeds from the sale of property, plant,
  and equipment                                            25,700         1,143
Capital expenditures                                   (1,200,389)     (566,678)
Distribution from partnership investment                  138,356        55,000
Purchases of investment securities                       (991,246)         -
Purchases and originations of installment
  contracts                                            (2,471,098)   (1,136,754)
Principal collected on installment contracts              187,264        29,882
                                                     ------------  ------------
     Net cash used in investing activities             (4,311,413)   (1,617,407)
                                                     ------------  ------------
FINANCING ACTIVITIES:
Net borrowings under line of credit                     2,000,000          -
Payments on long-term debt                               (147,073)         -
Cash dividends                                           (140,857)      (68,568)
Net proceeds from issuance of common stock                  3,999        38,698
Other                                                      (9,404)         -
                                                     ------------  ------------
     Net cash provided by financing activities          1,706,665       (29,870)
                                                     ------------  ------------
NET DECREASE IN CASH                                  (11,582,652)   (5,590,041)

CASH, BEGINNING OF PERIOD                              16,034,922    10,325,137
                                                     ------------  ------------
CASH, END OF PERIOD                                 $   4,452,270 $   4,735,096
                                                     ============  ============


See Notes to Consolidated Condensed Financial Statements

                                      -5-
<PAGE>


                                    PART I.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
               FOR THE THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995
                               AND APRIL 1, 1994

 1. BASIS OF PRESENTATION
    *  The accompanying  consolidated  condensed financial  statements have been
       prepared  in  compliance  with  Form  10-Q  instructions  and thus do not
       include  all of the  information  and  footnotes  required  by  generally
       accepted accounting principles for complete financial statements.  In the
       opinion  of  the  Company,   these  statements  contain  all  adjustments
       necessary to present fairly the Company's  financial position as of March
       31, 1995, and the results of its operations for the thirteen week periods
       ended  March  31,  1995 and  April 1,  1994  and its cash  flows  for the
       thirteen  week  periods  ended  March  31,  1995 and April 1,  1994.  All
       adjustments are of a normal recurring nature.

    *  The results of  operations  for the thirteen  weeks ended March 31, 1995,
       are not necessarily indicative of the results to be expected for the full
       year.

    *  Inventories  consist  primarily  of raw  materials  and are stated at the
       lower of cost (first-in, first-out method) or market.

    *  The Company accounts for its investment securities in accordance with the
       provisions  of  Statement  of  Financial  Accounting  Standard  No.  115,
       Accounting for Certain  Investments in Debt and Equity  Securities.  Debt
       securities  to be held until  maturity  are  recorded at  original  cost.
       Equity securities available for sale are stated at fair value.

    *  Certain amounts from the 1994 period have been reclassified to conform to
       the 1995 period presentation.  These  reclassifications  had no effect on
       results of operations or shareholders' equity.

    *  Primary and fully  diluted net income per share are  computed by dividing
       net  earnings by the  weighted  average  number of shares of common stock
       outstanding  during the thirteen  week periods after giving effect to the
       equivalent  shares which are issuable  upon the exercise of stock options
       determined by the treasury stock method.


2. SUPPLEMENTAL CASH FLOW DISCLOSURES            Thirteen Weeks Ended
                                                March 31,      April 1,
                                                  1995          1994
                                             -------------- -------------
      Cash paid for:  Interest               $    117,281   $        868
                      Income taxes                 72,258         76,852

3. CREDIT ARRANGEMENTS
   *   In February 1994, the Company executed a $13 million revolving, warehouse
       and term-loan  agreement (the "Credit Facility") with its primary lender.
       The Credit  Facility  contains a revolving  line of credit which provides
       for borrowings  (including letters of credit) of up to 80% and 50% of the
       Company's  eligible (as defined)  accounts  receivable  and  inventories,
       respectively,  up to a maximum of $5 million.  Interest is payable  under
       the  revolving  line of credit at the bank's  prime rate (9% at March 31,
       1995).

       The Credit Facility also provides for borrowings of up to 80% of eligible
       (as  defined)  installment  sale  contracts  held by Cavalier  Acceptance
       Corporation ("CAC"), the Company's wholly owned financing subsidiary,  up
       to a maximum of $8 million.  Under the warehouse  component of the Credit
       Facility,  interest is payable at the bank's prime rate plus 1%.  Amounts
       advanced under the warehouse  facility may be converted to a series of $2
       million notes with a term of seven years. Interest on term notes is fixed
       for a period of five  years from  issuance  at a rate based on the weekly
       yield on  treasury  securities  adjusted  to a constant  maturity of five
       years,  averaged over the preceding 13 weeks,  plus 2.4%,  and floats for
       the remaining  two years at a rate  (subject to certain  limits) equal to
       the bank's prime rate plus 0.75%.

                                      -6-



<PAGE>


                                    PART I.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
               FOR THE THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995
                               AND APRIL 1, 1994

 3. CREDIT ARRANGEMENTS - Continued
       The Credit Facility  contains certain  restrictive  covenants which limit
       the aggregate of dividend payments and purchases of treasury stock to 50%
       of  consolidated  net  income  for the two  most  recent  years.  Amounts
       outstanding  under  the  Credit  Facility  are  secured  by the  accounts
       receivable and inventories of the Company, loans purchased and originated
       by CAC and the  capital  stock of certain of the  Company's  consolidated
       subsidiaries.

       As of March 31,  1995,  the Company had  $5,438,897  borrowed  under this
       credit facility.

4. STOCKHOLDERS' EQUITY
   *   A dividend of $.03 per share was paid on  February  15, 1995 and $.02 per
       share was paid on November  15,  1994,  August 15,  1994,  May 16,  1994,
       February 15, 1994,  and November 15, 1993, to  shareholders  of record on
       January 31,  1995,  October 31,  1994,  July 29,  1994,  April 29,  1994,
       January 29, 1994, and October 4, 1993, respectively.

5. COMMITMENTS AND CONTINGENCIES
   *  It  is customary  practice in the  manufactured  housing industry to enter
      into  repurchase and other recourse  agreements with lending  institutions
      which   have   provided    wholesale  floor  plan  financing  to  dealers.
      Substantially   all  of  the  Company's  sales  are made pursuant to these
      agreements with dealers located primarily in the  Southeastern  portion of
      the United States.   These  agreements  generally  provide for  repurchase
      of the  Company's  products from the lending institutions  for the balance
      due them in the event of  repossession  upon a dealer's default.  Although
      the  Company  is  contingently  liable for approximately $57 million under
      these  agreements as of March 31, 1995,   such  contingency  is reduced by
      the resale value  of  the homes which are  required to be  repurchased. In
      addition  to these  repurchase commitments, the Company has also  executed
      limited   guarantees   associated with lines of credit utilized by certain
      dealers  to  finance  inventory  purchases.  The  Company has  provided an
      allowance  for  losses  of  $650,000  at  March  31, 1995,  based on prior
      experience  and current  market conditions. Management expects no material
      loss in excess of the allowance.

   *  The   Company's  workmen's  compensation,  product  liability  and general
      liability   insurance   coverages  are  provided  under   incurred   loss,
      retrospectively  rated  premium   plans.  Under these  plans,  the Company
      incurs insurance  expenses  based upon various  rates   applied to current
      payroll  costs and sales.  Annually,  such insurance  expenses is adjusted
      by  the  carrier  for  loss  experience  factors  subject  to  minimum and
      maximum  premium   calculations.   At  March  31,  1995,  the  Company  is
      contingently liable for future retrospective premium adjustments  up  to a
      maximum of $4,900,000 in the event that  additional  losses  are  reported
      related to prior periods.  The Company has recorded an estimated liability
      of approximately $970,000 related to such incurred but not reported claims
      at March 31, 1995. Management expects no material loss  in  excess of this
      allowance.

   *   The Company and certain of its equity partners have jointly and severally
       guaranteed  certain short-term debt with a balance of $1,700,000 at March
       31, 1995, of a partnership in which the Company owns a 33% interest.

   *   The Company is engaged in various  litigation  which is routine in nature
       and in management's  opinion, will have no material adverse effect on the
       Company's financial statements.





                                      -7-
<PAGE>


                                    PART I.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 March 31, 1995

GENERAL

The  principal  business of the Company  since its inception has been the design
and production of manufactured  homes.  In early 1992, the Company,  through its
wholly owned subsidiary Cavalier Acceptance Corporation("CAC"), commenced retail
installment sale financing operations.  As of the end of 1993, the operations of
CAC became significant enough to require segment reporting by the Company.

The Company's business is cyclical and seasonal and is influenced by many of the
same  national and regional  demographic  factors that affect the United  States
housing market generally. According to industry statistics, after a ten year low
in shipments of homes in 1991, the industry has recovered  significantly posting
increases  in  shipments  of  24%,  21%  and  20%  for  1992,   1993  and  1994,
respectively,  as compared to the prior year.  Industry statistics for the first
quarter of 1995  indicate a continued  trend in the increase of  shipments.  The
Company attributes the upturn in the manufactured  housing industry to increased
consumer  confidence,  wider acceptance of manufactured  housing, a reduction in
the  availability  of alternative  housing,  increased  availability of consumer
financing and an improvement in the overall economy.

Accordingly,   as  business  conditions  have improved  the Company has expanded
its manufacturing  operations to increase and improve its capacity.  During 1993
the Company acquired  Homestead Homes, Inc. in February and opened an additional
manufacturing  facility  in  Addison,  Alabama in May.  During  1994 the Company
opened  a  manufacturing  facility  in  Winfield,   Alabama  in  May,  opened  a
manufacturing facility in Fort Worth, Texas in July and acquired Astro Mfg. Co.,
Inc. in October.

RESULTS OF OPERATIONS

Net Sales.  For the quarter  ended March 31, 1995 net sales were $57.8  million,
representing  a 24% increase  compared to the first quarter of 1994 net sales of
$46.7 million.  The Company believes that the significant  increase in its sales
for the  periods  was  primarily  the result of the  continuation  of  improving
industry trends,  combined with aggressive  marketing programs instituted by the
Company in prior  periods and the  increase in  manufacturing  capacity  for the
period.  Actual  shipments of homes during the first  quarter of 1995  increased
16.5% to 2,751 homes from 2,362 homes shipped in the first quarter of 1994.

Gross Profit on Sales. Gross profit (derived by deducting cost of sales from net
sales)  increased to $9.0 million,  or $15.5% of net sales for the first quarter
of 1995, as compared to $6.9 million,  or 14.9% of net sales for the same period
last year.  The  increase  in gross  profit was  primarily  attributable  to the
increased sales volume for the periods made possible by increased  manufacturing
capability  and  a  reduction  of  expenses  associated  with  the  start-up  of
manufacturing facilities from the previous year.

Financial  Services Revenue.  Financial services revenue (derived primarily from
interest on installment  contracts held by CAC) was  approximately  $334,000 for
the quarter ended March 31, 1995 as compared to  approximately  $109,000 for the
same period last year. The increase in financial  services revenue was primarily
due to an  increase in the  Company's  loan  portfolio  to  approximately  $12.1
million at the end of the first  quarter of 1995, as compared to $4.2 million at
the end of the first quarter of 1994.

Selling,  General,  and  Administrative.  Selling,  general  and  administrative
expense  increased to  approximately  $6.9 million  during the first  quarter of
1995, or 11.8% of total revenues,  as compared to approximately $5.4 million, or
11.5% of total  revenues for the same period last year. The increase in selling,
general and administrative expense was primarily attributable to the increase in
sales, combined with increased expenses due to additional personnel, the opening
of additional  manufacturing facilities and increased administrative expenses of
CAC consistent with its growth.


                                      -8-
<PAGE>


                                    PART I.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 March 31, 1995


Net  Income.  Net income for the first  quarter of 1995 was  approximately  $1.5
million,  an increase of approximately 47% over the same period in 1994 when net
income was approximately $1.0 million.  The increase in net income was primarily
due to increased  sales.  Net income per share for the first quarter of 1995 was
$.32 per share compared to $.28 per share for the comparable period of 1994.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31,  1995,  the  Company had working  capital of $13.0  million,  as
compared  to $12.6  million as of December  31,  1994.  The  increase in working
capital for the period is primarily  due to  continued  strength in earnings for
the period and  long-term  borrowings  under the Credit  Facility.  The ratio of
current assets to current  liabilities was 1.47:1 as of March 31, 1995, compared
to 1.54:1 as of December 31, 1994.  The Company had long-term debt of $5,438,897
as of March  31,  1995 and  $3,585,970  as of  December  31,  1994 both of which
represented borrowings under the Company's Credit Facility.

The  Company's   primary   business  segment  is  the  production  and  sale  of
manufactured  housing.  In 1992, the Company began the operations of CAC to fund
installment sale contracts to the retail customers of the Company's  Independent
Exclusive Dealers.  As of March 31, 1995, the Company's portfolio of installment
sale  contracts was  approximately  $12.1 million  funded  primarily  with funds
derived from  internally  generated  working  capital,  funds  received from the
public offering of the Company's  common stock during 1994 and borrowings  under
the Credit  Facility.  Consistent  with the current  intention of the Company to
expand further the operations of CAC, the Company entered into a Credit Facility
with its primary lender (see footnote 3 to the Consolidated  Condensed Financial
Statements included herein) to provide additional funds for CAC's growth.

On October 14, 1994 and January 31, 1995 the Company  borrowed  $3.7 million and
$2.0 million,  respectively,  under the Credit  Facility in order to continue to
fund  the  operations  of CAC and to  minimize  the  interest  rate  risk of the
Company's loan portfolio.  The Company expects to continue to borrow funds under
the  Credit  Facility  to  finance  the  continuing  operations  of CAC.  As the
operations  of CAC  continue to expand the Company  anticipates  that it will be
able to increase its borrowing  capacity under the Credit Facility.  The term of
the Credit Facility,  which is renewable annually, was due to expire in February
1995 but has been extended until June 30, 1995.  Although the Company intends to
renew the Credit Facility and anticipates an increase in the credit available to
the Company thereunder,  there can be no assurance that the Credit Facility will
be  renewed  or that  such  additional  financing  will be  available  on  terms
acceptable to the Company.

The  Company's  capital  expenditures  were  approximately  $1.2 million for the
thirteen  weeks ended March 31, 1995 as compared to $567,000 for the  comparable
period of 1994.  Capital  expenditures  during  these  periods  included  normal
property,  plant and equipment  additions and replacements and the expansion and
modernization of certain of the Company's manufacturing facilities.

The Company  believes  that  existing  cash and  investment  balances  and funds
available under the Credit Facility,  together with cash provided by operations,
will be adequate to fund the Company's  operations  and expansion  plans for the
next twelve months.  In order to provide  additional funds that may be necessary
for continued pursuit of the Company's growth strategies and for operations over
the longer term, the Company may incur, from time to time,  additional short and
long-term bank  indebtedness  and may issue, in public or private  transactions,
its equity and debt  securities,  the availability and terms of which may depend
upon market and other  conditions.  There can be no assurance that such possible
additional financing will be available on terms acceptable to the Company.

                                      -9-
<PAGE>


                                    PART II.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                               OTHER INFORMATION
                                 March 31, 1995


ITEM 6 EXHIBITS

       The  exhibits  required  to  be  filed with this report are listed below.
       The Company will furnish upon request the exhibit listed upon the receipt
       of $15.00  per  exhibit,  plus  $.50 per  page,  to cover the cost to the
       Company of providing the exhibit.


       (a)(11)   Computation of Net Income per Common Share.


       (b)       The Company did not file a Current Report  on  Form 8-K  during
                 the quarter for which this report was filed.











































                                      -10-
<PAGE>


                                    PART II.
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                               OTHER INFORMATION
                                 March 31, 1995



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.


                                    Cavalier Homes, Inc.
                                    Registrant




Date: May 12, 1995                        /s/ Jerry F. Wilson
      ------------------                  ----------------------------
                                          Jerry F. Wilson - President



Date: May 12, 1995                        /s/ David A. Roberson
      ------------------                  ----------------------------
                                          David A. Roberson -
                                             Chief Financial Officer


































                                      -11-
<PAGE>

                             PART II. - EXHIBIT 11
                     CAVALIER HOMES, INC. AND SUBSIDIARIES
                   COMPUTATION OF NET INCOME PER COMMON SHARE


                                                        Thirteen Weeks Ended
                                                       March 31,      April 1,
                                                          1995          1994
                                                     ------------  ------------
PRIMARY AND FULLY DILUTED
     Net Income                                     $   1,517,600 $   1,029,492
                                                     ============  ============
SHARES:

Primary
  Average common shares outstanding                     4,697,276     3,429,141

  Dilutive effect if stock options
   were exercised                                          73,157       188,885
                                                     ------------  ------------
  Average common shares outstanding
    as adjusted (primary)                               4,770,433     3,618,026
                                                     ============  ============
Fully Diluted
  Average common shares outstanding                     4,770,433     3,618,026

  Additional dilutive effect if
    stock options were excercised
    (fully)                                                  -             -
                                                     ------------  ------------
  Average common shares outstanding
    as adjusted (fully diluted)                         4,770,433     3,618,026
                                                     ============  ============
Primary and Fully Diluted Net
  Income per Common Share                           $        0.32 $        0.28
                                                     ============  ============
















                                      -12-




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