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 March 31, 1997
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 ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes ____ No _____
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 March 31, 1997
Common Stock, $.01 par value 22,688,333 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following consolidated financial statements, in the opinion of management,
reflect all adjustments 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.
Index to Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1996 and March 31, 1997.
Consolidated Statements of Operations Three Months ended March 31, 1997
and 1996.
Consolidated Statements of Stockholders' Equity (Deficit) as of December 31,
1996 and March 31, 1997.
Consolidated Statements of Cash Flows, Three Months ended March 31, 1997
and 1996.
Notes to Consolidated Financial Statements.
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Material Changes in Financial Condition.
March 31, 1997 Compared to December 31, 1996
On December 21, 1995 the Corporation acquired all of the outstanding stock of
OMC and LMI. During most of 1996, the transaction was accounted for as an
acquisition in progress. On October 3, 1996; the sellers of Olympic Mills
and the Corporation agreed to modify the terms of the acquisition agreement.
Under these new terms, the acquisition of Olympic Mills has been deemed to
have been consummated for financial reporting terms.
During the period Current assets increased by $1,593,317 caused by a decrease
in cash of $2,121 and accounts receivable of $988,856 and increases
inventories of $1,324,185; due from affiliates of $165,240 and other assets
of $1,094,869. Current liabilities increased by $3,269,668; due primarily to
increases in accounts payable of $1,376,715, accrued liabilities of $333,879,
current maturities of $1,170,535 and taxes payable of $387,832. These
increases funded the increase in current assets and the net loss. The
current ratio was 1.17 : 1, less than the Corporation's goal. The
Corporation is seeking additional equity or long term debt to refinance the
Preferred Stock owned by the sellers of Olympic Mills.
During the period total assets increased by $1,443,386 and total liabilities
increased by $1,294,559. At the end of the period assets were 1.62 times
liabilities.
Stockholders' equity increased by $148,827. This was caused by a decrease in
accumulated deficit of $9,677 and an increase in paid in capital of $137,399;
due to the sale of shares of Common Stock in a Private Placement. The
Corporation now has an Accumulated deficit of $7,530,094.
Results of Operations.
For the three months ended March 31, 1997 the Corporation had net loss of
$74,339 ( $.00 per share ), compared to a net income of $552,472 ( $.03 per
share ) for the same period of 1996. Sales for the period were $1,777,143
less than for the same period of 1996. This was due primarily to a decrease
in purchases by the U. S. Military. Cost of goods decreased substantially
in proportion to the decrease in sales. Selling and general and administrative
costs increased by $303,949. Other expenses increased primarily due to an
increase in interest expense.
In February, 1997; the Department of Defense ("DOD") informed the Corporation
that they would not exercise their second year option for the purchase of
tee-shirts. During 1996, this contract accounted for $11,000,000 in sales
and was very profitable to the Corporation. Management spent time and effort
in an attempt to revive the contract but they were not successful. The non-
exercise was based on the needs of the DOD and not on any performance of the
Corporation. Due to an act of Congress, the DOD was forced to purchase one
half of its tee-shirt needs from the Committee for the Blind and the U.S.
Prison System. Management of the Corporation feels that this law is
ill-conceived and is actively lobbing for its repeal. Management will shift
emphasis to sales in the U.S. Market, in an effort to make up for this loss
of business.
Projected Results of Operations
THE PROJECTIONS AND ANALYSIS WERE PREPARED BY MANAGEMENT OF THE
CORPORATION AND HAVE NOT BEEN REVIEWED BY INDEPENDENT SOURCES.
THERE IS NO ASSURANCE THAT THE RESULTS CAN OR WILL BE ACHIEVED.
In the Corporation's Form 10-K for the year ended December 31, 1996, the
Corporation made projections as to the business of the Corporation for 1997.
In order to evaluate the accuracy of such projections, the Corporation has
prepared the following analysis.
For the three month period ended March 31, 1997; the Corporation's projected
Results of Operations compared to actual was as follows:
Projected Actual Variance
Sales $8,271,166 $8,019,109 ( $252,057 )
Cost of goods 6,418,704 6,500,525 81,821
Selling, general
and Administrative 1,833,787 1,461,208 ( 372,579 )
---------- ---------- ----------
Gross profit 18,675 57,376 38,701
Other income ( expense ) (67,938) (131,714) (63,776)
---------- ---------- ----------
Net income ( $49,263 ) ( $74,338 ) ( $25,075 )
During the period the Corporation's operations were approximately as projected.
A deficit in sales and increase in Cost of goods were made up for be a savings
in Selling, general and administrative expenses. Net income was $25,075 less
than projected.
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 its retail
operations. In the opinion of management none of these will effect the
corporation.
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)
January 5, 1998 By: /s/ Dennis D. Bradford
Dennis D. Bradford
Chairman of the Board
Chief Financial Officer
COACHMAN INCORPORATED
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
March 31, December 31,
1997 1996
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,420 $ 5,541
Accounts Receivable:
Trade, Net of Allowance 3,687,603 4,676,459
Related parties 17,234 8,764
Other, Principally Govt Incentives 1,092,995 1,092,995
Notes receivable from affiliates 199,484 42,714
Inventories 13,570,293 12,246,108
Investment in equity securities 40,000 40,000
Other current assets 1,252,498 157,629
----------- -----------
Total Current Assets 19,863,527 18,270,210
Property & Equipment, Net 8,222,905 6,606,225
Intangibles 1,532,748 3,249,786
Notes receivable:
Officer 104,512 135,266
Affiliates 349,611 356,570
Investment in affiliated entities 76,038 76,038
Deferred Tax asset 1,594,000 1,653,000
Debt issue costs, Net 502,543 565,709
Other assets 159,151 48,845
----------- -----------
Total Other Assets 12,541,508 12,691,439
----------- -----------
TOTAL ASSETS $32,405,035 $30,961,649
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $ 4,866,329 $ 3,489,614
Related parties 4,441 3,734
Accrued liabilities: 1,372,403 1,038,524
Current maturities 10,135,477 8,964,942
Income Tax Payable 537,202 149,370
----------- -----------
Total Current Liabilities 16,915,852 13,646,184
Deferred Tax Liability 412,642 800,475
Long Term Debt 2,654,804 2,482,080
Minority Interest in subsidiary 1,760,000
----------- -----------
19,983,298 18,688,739
STOCKHOLDERS' EQUITY:
Preferred Stock - $.01 Par Value;
200,000 authorized; 12,971 Shares 130 130
Outstanding in 1997 & 1996
Common Stock - $.01 Par Value; 228,459 226,708
25,000,000 shares authorized;
22,688,333 shares outstanding in 1997
and 22,670,833 shares outstanding in 1996
Additional paid-in capital 20,088,243 19,950,844
Accumulated deficit (7,530,094) (7,539,771)
Net unrealized gain on marketable
securities (5,000) (5,000)
Payments towards redemption of (360,001) (360,001)
Class AA Preferred Stock
----------- -----------
Total Stockholders' Equity 12,421,737 12,272,910
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $32,405,035 $30,961,649
=========== ===========
COACHMAN INCORPORATED
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
THREE MONTHS ENDED
March 31, March 31,
1997 1996
----------- -----------
Revenues:
Trade Sales $ 8,000,371 $ 9,796,252
Other 18,738 --
----------- -----------
8,019,109 9,796,252
Costs & Expenses
Cost of Goods Sold 6,500,526 7,918,885
Selling, G&A Expenses 1,461,208 1,157,259
----------- -----------
7,961,734 9,076,144
Other Income (Expense):
Interest income 11,774 12,130
Interest expense (320,616) (185,019)
Other income 177,128 4,408
Gain on sale of assets -- 845
----------- -----------
(131,714) (167,636)
----------- -----------
Income (Loss) before taxes (74,339) 552,472
Income Taxes
----------- -----------
Net Income/(Loss) $ (74,339) $ 552,472
=========== ===========
Average outstanding common shares 22,671,552 21,335,197
Net income/(loss) per average outstanding
common share (0.00) 0.03
COACHMAN INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
THREE MONTHS ENDED
March 31, March 31,
1997 1996
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (74,339) $ (240,378)
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 166,874 20,365
Gain on sale of marketable equity
securities 0 0
(Increase) Decrease in Accounts receivable 980,386 5,930
(Increase) Decrease in Inventory (1,324,185) 11,446
(Increase) Decrease in Other current assets (1,094,869) 23,389
Increase (Decrease) in Accounts payable and
Accrued liabilities 1,711,300 29,362
----------- -----------
Net Cash Provided by (Used in)
Operating Activities 365,167 (149,886)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net loan repayments from affiliates 149,811 8,628
Capital expenditures (100,358) (34,648)
Loans to officers -- (1,680)
Sale of marketable equity securities 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 49,453 (27,700)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock -- 186,900
Principal payments on note payable
and long-term debt (416,741) 0
----------- -----------
Net Cash Provided by (Used in)
Financing Activities (416,741) 186,900
----------- -----------
Net Increase (Decrease) in Cash (2,121) 9,314
CASH, beginning of period 5,541 32,777
----------- -----------
CASH, end of period 3,420 42,091
=========== ===========
<TABLE>
COACHMAN INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997
Net Unreal-
ized Gains
(Losses) on Payments
Paid-in Noncurrent Common Toward
Capital Marketable Stock Redemption Total
Preferred Common in Excess Equity & Warrants of Class AA Accumulated Stockholders
Stock Stock of Par Securities Capital Pref Stock Deficit Equity
- --------- -------- ----------- ---------- ---------- ----------- ------------ -----------
<C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996
$130 $226,708 $18,514,965 $(5,000) $1,435,879 $(360,001) ($7,539,771) $12,272,910
Common Stock Issued
1,751 221,415 223,166
Net income for the three months
ended March 31, 1997 (74,339) (74,339)
- --------- -------- ----------- ---------- ---------- ----------- ------------ ------------
Balance, March 31, 1997
$130 $228,459 $18,726,380 $(5,000) $1,435,879 $(360,001) ($7,614,110) $12,421,737
========= ======== =========== ========== ========== =========== ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,420
<SECURITIES> 40,000
<RECEIVABLES> 5,451,439
<ALLOWANCES> 0
<INVENTORY> 13,570,293
<CURRENT-ASSETS> 19,863,527
<PP&E> 8,222,905
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,405,035
<CURRENT-LIABILITIES> 16,915,852
<BONDS> 0
0
130
<COMMON> 228,459
<OTHER-SE> 12,193,148
<TOTAL-LIABILITY-AND-EQUITY> 32,405,035
<SALES> 8,000,371
<TOTAL-REVENUES> 8,208,011
<CGS> 6,500,526
<TOTAL-COSTS> 7,961,734
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 320,616
<INCOME-PRETAX> (74,339)
<INCOME-TAX> 0
<INCOME-CONTINUING> (74,339)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (74,339)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
