FORM 10-Q
SECURITIES AND 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 June 30, 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 1-9593
COACHMAN INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 73-1244422
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 N.W. 63rd, Suite 500, Oklahoma City, OK 73116
(Address of principal executive offices) (Zip Code)
(405)-840-4667
Registrant's telephone number, including area code
Not applicable
(Former name, former address and former fiscal year,
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) for 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 ____ No __X__
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1995
Common Stock, $.01 par value 8,278,142 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following financial statements, in the opinion of management,
reflect all adjustments (none of which was other than a normal recurring
adjustment) necessary for a fair presentation of results of operations for
such periods. Results for interim periods should not be considered
indicative of results for a full year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Material Changes in Financial Position
June 30, 1995 and December 31, 1994
From December 31, 1994 through June 30, 1995 current Assets decreased
$117,433 due to decrease in cash of $10,200 and inventory of $61,063.
During the quarter the Company also sold $56,250 of the ILEX stock
which it held. Other Assets decreased by $54,590 due to repayment of
Notes Receivable of $17,449, Amortization of Deferred Costs of $4,249
and a decrease in Other Assets of $32,892.
From December 31, 1994 through June 30, 1995 Total Liabilities increased
by $101,199 due primarily to an increase in Accrued Liabilities.
On May 19, 1995 the Corporation executed a letter of intent for the
purchase of Olympic Mills Corporation, a vertical textile and clothing
manufacturer in Puerto Rico. In 1994 Olympic Mills had sales in excess
of $31,000,000 and net earnings in excess of $2,000,000. In order to
proceed with the transaction the Corporation will have to secure a loan in
an amount of $15,000,000 and raise new equity in an amount of at least
$5,000,000. This acquisition will change the nature, size and business of
the Corporation dramatically.
During July, 1995, the Corporation executed an agreement to purchase
Olympic Mills Corporation for $12,500,000 cash, 6,000,000 shares of
Common Stock and subordinated notes of $2,000,000. Closing is
anticipated during the third quarter.
Material Changes in Results of Operations
Three Months Ended June 30, 1995 compared to Three Months Ended
June 30, 1994.
The Retail Operations were Sales of $189,430; Cost of Goods Sold of
$110,946 or 58%; Operating Expenses of $160,203 and Loss from Retail
Operations of $81,719 compared to a profit of $43,606 in 1994. The gross
margins of 42% are low compared with the Corporations goals. Overall
sales and income were low due to low inventory levels. Additional
financing to bring inventory levels to $500,000 is needed.
General and Administrative Expenses decreased by $97,806 due to
downsizing of management and administrative personnel. Additional
savings are planned for the balance of the year. Depreciation and
Amortization increased interest, expense decreased and the corporation
gained $17,309 on the sale of the ILEX stock.
Six Months Ended June 30, 1995 compared to Six Months Ended June 30,
1994.
Retail sales decreased by $578,742, cost of goods sold decreased by
$267,042 operating expenses decreased by $29,203. For the six months
Retail Operations lost $117,700 compared to a profit of $64,797 for the
same period of 1994. General and Administrative Expenses decreased by
$153,314 compared to the same period of 1994.<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Corporation is not a party to any current, pending or threatened
material legal proceedings. The Corporation's subsidiary Caribbean
Outfitters, Inc. is a party to a number of suits related to the closing of all
Florida Operations. In the opinion of management none of these will
effect the corporation.
Item 5. Other Information.
On June 23, 1995 the Corporation executed an Agreement to Purchase
Olympic Mills Corporation of Guaynabo, Puerto Rico. The purchase
which should close during the third quarter of 1995 will significantly
change the nature and size of the Corporations business.
On June 27, 1995 the Company entered into an agreement to acquire
Olympic Mills Corporation ("Olympic Mills"), a privately held vertically
integrated textile and apparel manufacturing company in Puerto Rico. The
purchase price is $12,500,000 cash, 6,000,000 shares of Common Stock of
the Company and $2,000,000 of subordinated debt. Olympic Mills is
Puerto Rico's leading manufacturer of underwear, t-shirts, school uniforms
and polo shirts. Olympic Mills operates two vertical mills and a cut and
sew operation. Olympic Mills had sales in excess of $31,000,000 in 1994
and net income of over $2,000,000. The acquisition agreement calls for
a closing of August 31, 1995 with an extension to September 30, 1995
upon the Company paying an additional $100,000 in earnest money to the
sellers.
SIGNATURES
FORM 10-Q
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.
COACHMAN INCORPORATED
(Registrant)
August 14, 1995 By: /s/ Dennis D. Bradford
Dennis D. Bradford
Chairman of the Board
Chief Financial Officer
<TABLE>
COACHMAN INCORPORATED
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
<CAPTION>
June 30, December 31,
1995 1994
---------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 22,577 $ 32,777
Accounts Receivable:
Trade 12,776 25,317
Related parties 12,657 2,658
Notes Receivablable:
Officer 29,299 27,619
Affiliates 35,702 35,702
Inventory 167,792 228,855
Marketable equity securities 112,500 168,750
Prepaid Expenses 2,626 1,884
---------- ----------
Total Current Assets $ 395,929 $ 523,562
OTHER ASSETS:
Property and equipment, net of accumulated
depreciation of $357,707 in 1995 and
$320,145 in 1994 $ 308,016 $ 309,105
Notes receivable:
Officer 94,447 92,767
Affiliates 419,207 436,656
Investment in condominium time-share
memberships 60,000 60,000
Investments in affiliated entities 30,638 30,638
Deferred costs, net of accumulated amortization
of $24,184 in 1995 and $19,936 in 1994 19,118 23,367
Deposits 68,517 67,345
Other 0 34,655
---------- ----------
Total Other Assets 999,943 1,054,533
---------- ----------
TOTAL ASSETS $1,395,872 $1,578,095
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable:
Related party $ 154,150 $ 154,150
Other 124,092 139,189
Current maturities of long-term debt 289,785 289,785
Accounts payable:
Trade 676,213 657,127
Related parties 82,071 58,771
Accrued liabilities:
Taxes 15,594 15,112
Interest 238,178 195,128
Other 177,945 147,567
---------- ---------
Total Current Liabilities 1,758,028 1,656,829
LONG-TERM DEBT 339,195 339,196
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value; authorized
200,000 shares; issued and outstanding 48 48
4,750 shares at June 30, 1995
Common Stock, $.01 par value; authorized 82,781 74,210
25,000,000 shares, issued and outstanding
8,278,142 shares at June 30, 1995 and
7,421,000 in 1994
Additional paid-in capital 7,997,787 7,819,458
Accumulated deficit (8,781,967) (8,311,646)
----------- -----------
Total Stockholders' Equity (701,351) (417,930)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,395,872 $1,578,095
========== ===========
</TABLE>
<TABLE>
COACHMAN INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
AND THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Retail sales $ 189,430 $ 468,298 $ 424,810 $1,003,552
Management fees from affiliates 17,720 18,293 33,306 33,831
Time share commissions -- -- 2,293 --
---------- ---------- ---------- ----------
207,150 486,591 460,409 1,037,383
Expenses:
Cost of retail goods sold 110,946 228,827 226,587 493,629
Retail operating expenses 160,203 195,865 315,923 445,126
Time share commission expenses 0 0 6,372 0
General and administrative 164,324 262,130 360,845 514,159
Depreciation and amortization
---------- ---------- ---------- ----------
455,097 692,709 949,716 1,468,388
---------- ---------- ---------- ----------
Loss From Operations (247,947) (206,118) (489,307) (431,005)
---------- ---------- ---------- -----------
Other Income (Expense):
Interest income 12,100 57,892 24,405 69,507
Interest expense (22,811) (55,417) (46,929) (70,879)
Other income 11,406 0 24,201 0
Other expense 0 (54,681) 0 (56,748)
Gain on sale of security 17,309 0 17,309 0
---------- ---------- ---------- -----------
18,004 (52,206) 18,986 (58,120)
---------- ---------- ---------- -----------
Income (Loss) Before Income
Taxes (229,943) (258,324) (470,321) (489,125)
Income Taxes -- -- -- --
---------- ---------- ---------- ----------
Net Income (Loss) $(229,943) $(258,324) $(470,321) $(489,125)
Net Income (Loss) Per Common Share:
Primary (0.03) (0.04) (0.06) (0.08)
Fully Diluted (0.03) (0.04) (0.05) (0.07)
Weighted Average Shares Outstanding:
Primary 8,062,668 6,341,000 8,062,668 6,341,000
Fully Diluted 8,651,418 6,929,750 8,651,418 6,929,750
</TABLE>
<TABLE>
COACHMAN INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<CAPTION>
SIX MONTHS ENDED
June 30, June 30,
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (479,321) (489,125)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation and amortization 39,989 5,887
Partnership loss
(Increase) Decrease in Accounts 12,541 (3,888)
receivable-trade
(Increase) Decrease in Inventory 61,063 (74,159)
(Increase) Decrease in Prepaids and Other 32,741 (24,604)
Increase (Decrease) in Accounts payable and
Accrued liabilities 116,296 222,585
--------- ---------
Net Cash Provided by (Used in)
Operating Activities (207,691) (360,046)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net loan repayments from affiliates 7,450 40,270
Capital expenditures (34,651) (140,111)
Loans to officers (3,360) 17,307
Sale of Security 56,250 0
--------- ----------
Net Cash Provided by (Used in)
Investing Activities 25,689 (82,534)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 186,900 250,000
Proceeds from note payable 0 77,341
Principal payments on note payable
and long-term debt (15,098) 0
---------- ---------
Net Cash Provided by (Used in)
Financing Activities 171,802 327,341
---------- ---------
Net Increase (Decrease) in Cash (10,200) (115,239)
CASH, beginning of period 32,777 174,969
---------- ---------
CASH, end of period 22,577 59,730
========== =========
</TABLE>
<TABLE>
COACHMAN INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<CAPTION>
Net Unreal-
ized Gains
(Losses) on
Paid-in Noncurrent
Capital Marketable Total
Preferred Common in Excess Equity Accumulated Stockholders
Stock Stock of Par Securities Deficit Equity
--------- ------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1993 $0 $58,125 $6,921,143 $60,938 ($5,788,954) $1,251,252
Common Stock Issued 16,085 443,323 459,408
Preferred Stock Issued 48 474,992 475,040
Net Unrealized loss on
noncurrent marketable
equity securities (60,938) (60,938)
Partical Reduction-
Deferred Loan Costs (20,000) (20,000)
Net loss for 1994 (2,522,692) (2,522,692)
------ -------- ----------- --------- ------------ ------------
Balance
December, 31, 1994 $48 $74,210 $7,819,458 $0 ($8,311,646) ($417,930)
Common Stock Issued 8,571 178,329 186,900
Net loss for the six months
ended June 30, 1995 (470,321) (470,321)
------ -------- ---------- --------- ------------ -----------
Balance
June 30, 1995 $48 $82,781 $7,997,787 $0 ($8,781,967) ($701,351)
====== ======== =========== ========= ============= ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 22577
<SECURITIES> 112500
<RECEIVABLES> 90434
<ALLOWANCES> 0
<INVENTORY> 167792
<CURRENT-ASSETS> 395929
<PP&E> 665723
<DEPRECIATION> 357707
<TOTAL-ASSETS> 1395872
<CURRENT-LIABILITIES> 1758028
<BONDS> 0
<COMMON> 82781
0
48
<OTHER-SE> 7997787
<TOTAL-LIABILITY-AND-EQUITY> 1395872
<SALES> 424810
<TOTAL-REVENUES> 526324
<CGS> 226587
<TOTAL-COSTS> 226587
<OTHER-EXPENSES> 723129
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46929
<INCOME-PRETAX> (470321)
<INCOME-TAX> 0
<INCOME-CONTINUING> (470321)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (470321)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.05)
</TABLE>
