SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 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 July 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-16448
HOLIDAY RV SUPERSTORES, INCORPORATED
I.R.S. # 59-1834763
State of Incorporation: Florida
Sand Lake West Executive Park
7851 Greenbriar Parkway
Orlando, Florida 32819
(407) 363-9211
Indicate by check mark whether the registrant (1) has filed
all reports by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.
YES X NO
As of August 30, 1995, Holiday RV Superstores, Incorporated had
outstanding 7,395,700 shares of Common Stock, par value $.01 per
share.
<PAGE>
<TABLE>
PART I
Financial Information
Item 1. Financial Statements
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
ASSETS
________
<CAPTION>
07/31/95 10/31/94
(Unaudited)
____________ ____________
<S> <C> <C>
Current:
Cash and cash equivalents $ 5,062,006 $ 5,239,701
Accounts receivable:
Trade and contracts in transit 1,404,865 1,263,422
Other 531,377 293,055
Inventories 17,608,295 17,193,896
Prepaid expenses 54,226 146,854
Deferred income taxes 63,000 63,000
____________ ____________
Total Current Assets 24,723,769 24,199,928
Property and Equipment,
less accumulated depreciation 2,462,890 1,710,567
Rental Fleet,
less accumulated depreciation ----- 531,280
Other Assets, principally covenant
not to compete 412,750 483,031
____________ _ ___________
TOTAL ASSETS $ 27,599,409 $ 26,924,806
============ ============
<FN>
See accompanying notes to the consolidated condensed
financial statements.
</TABLE>
<PAGE>
<TABLE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
<CAPTION>
07/31/95 10/31/94
(Unaudited)
____________ _____________
<S> <C> <C>
Current Liabilities:
Floor plan contracts $ 12,746,152 $ 13,169,621
Accounts payable 694,425 683,069
Customer deposits 199,167 211,193
Accrued expenses 591,256 814,355
____________ _____________
Total Current Liabilities 14,231,000 14,878,238
Deferred Income Taxes 97,000 97,000
Stockholders' Equity:
Common stock $.01 par - shares
authorized 10,000,000; issued
7,465,000 and 7,340,000 74,650 74,650
Additional paid-in capital 5,069,842 5,069,842
Retained earnings 8,203,025 6,881,184
Less:
Treasury stock, at cost, 69,300
and 68,300 shares (76,108) (76,108)
____________ ____________
Total Stockholders' Equity 13,271,409 11,949,568
____________ ____________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 27,599,409 $ 26,924,806
============ ============
<FN>
See accompanying notes to the consolidated condensed financial
financial statements.
</TABLE>
<PAGE>
<TABLE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
_____________________________________________________
(Unaudited)
<CAPTIONS>
Three Months Ended Six Months Ended
07/31/95 07/31/94 07/31/95 07/31/94
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Sales and Service
Revenue $17,549,343 $12,008,085 $57,041,053 $39,424,924
Cost of Sales and
Service 13,848,153 10,116,751 46,619,689 33,455,419
___________ ___________ ___________ ___________
Gross Profit 3,701,190 1,891,334 10,421,364 5,969,505
Selling, General
and Administrative
Expenses 2,606,670 1,545,073 7,541,693 4,710,610
___________ ___________ ___________ ____________
Income from
operations 1,094,520 346,261 2,879,671 1,258,904
Interest Income 106,161 70,730 276,340 155,346
Interest Expense 318,162 148,446 1,009,246 443,967
___________ ___________ ___________ ____________
Income before
income taxes 882,519 268,545 2,146,765 970,283
Income Taxes 339,419 101,054 824,924 364,936
___________ ___________ ___________ ____________
Net Income 543,100 167,491 1,321,841 605,347
=========== =========== =========== ============
Earnings Per Share
of Common Stock $ 0.07 $ 0.02 $ 0.18 $ 0.08
=========== =========== =========== ============
Weighted Average
Number of Common
Stock and Common
Stock Equivalents
Outstanding 7,398,300 7,271,700 7,400,800 7,271,700
=========== =========== =========== ==========
<FN>
See accompanying notes to the consolidated condensed
financial statements.
</TABLE>
<PAGE>
<TABLE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
_____________________________________________________
(Unaudited)
<CAPTION>
NINE MONTHS ENDED
JULY 31
1995 1994
___________ ___________
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $56,611,319 $38,962,094
Cash paid to suppliers and
employees (54,726,494) (37,521,347)
Interest received 276,340 155,346
Interest paid (935,723) (431,154)
Income taxes paid (880,784) (357,588)
____________ ___________
Net cash used for operating activities 344,658 807,351
Cash flows from investing activities:
Purchase of real property (806,935) ----
Purchase of equipment (78,363) (76,277)
Proceeds from the sale of rental
fleet and equipment 362,945 137,192
____________ ___________
Net cash (used for) provided by
investing activities (522,353) 60,915
Cash flows from financing activities:
Repayment of capital lease obligations ---- (3,646)
____________ ___________
Net cash used for financing ---- (3,646)
Net cash (used for) provided by operating,
investing and financing activities (177,695) 864,620
Cash and cash equivalents, beginning
of year 5,239,701 4,961,425
___________ ___________
Cash and cash equivalents, end of
quarter $ 5,062,006 $ 5,826,045
=========== ===========
See accompanying notes to the consolidated condensed
financial statements.
</TABLE>
<PAGE>
<TABLE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONCLUDED)
__________________________________________________________
(Unaudited)
<CAPTION>
NINE MONTHS ENDED
JULY 31
1995 1994
___________ ___________
<S> <C> <C>
Reconciliation of net income to net
cash provided by operating
activities
Net income $1,321,841 $ 605,347
Adjustments to reconcile net loss to
net cash used for operating activities:
Depreciation and amortization 222,224 255,761
Gain on disposal of property and ( 49,969) (22,263)
equipment and rental fleet
Cash (used for) provided by:
Accounts receivable (379,765) (440,567)
Inventories (215,063) (275,296)
Prepaid expenses 92,628 25,760
Floor plan contracts (423,469) 200,003
Accounts payable 11,356 79,072
Customer deposits (12,026) 6,469
Accruals (223,099) (177,527)
___________ ___________
Net cash used for operating activities: $ 344,658 $ 807,351
=========== ===========
<FN>
See accompanying notes to the consolidated condensed
financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
The unaudited financial statements presented herein have been
prepared in accordance with the instructions for Form 10-Q, and
do not include all of the information and disclosures required by
generally accepted accounting principles. These statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-K for the year ended October 31,
1994. The accompanying financial statements have not been examined
by an independent accountant in accordance with generally accepted
auditing standards, but in the opinion of management, such financial
statements include all adjustments, consisting only of normal
recurring adjustments and accruals and intercompany eliminations
necessary to summarize fairly the company's financial position and
results of operations. Due to the seasonality of the Company's
business, the results of operations for nine months ended July 31,
1995 are not necessarily indicative of results to be expected for the
Fiscal Year.
NOTE 2. INVENTORIES
<TABLE>
Inventories are summarized as follows:
<CAPTION>
July 31, 1995 October 31, 1994
______________ ________________
<S> <C> <C>
New Vehicles $12,928,107 $13,055,627
New Marine 388,179 422,615
Use Vehicles 3,026,959 2,525,036
Used Marine 18,509 34,842
Parts and
accessories 1,246,541 1,155,776
___________ ___________
$17,608,295 $17,193,896
=========== ===========
</TABLE>
NOTE: 3. SUPPLEMENTAL CASH FLOW INFORMATION
The change in inventory includes net non-cash transfers of
rental vehicles from inventory in the amount of $208,232 for the
nine months ended July 31, 1995 and $61,340 for the nine months
ended July 31, 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
Certain current accounts, such as accounts receivable,
inventories, and floor plan contracts, materially changed during
the period. These changes are a result of normal seasonality of
the business, except as discussed in the financial condition
section of this report.
FINANCIAL CONDITION AS OF JULY 31, 1995 COMPARED TO JULY 31, 1994
The Company continued to maintain a strong financial position and
high liquidity for the first nine months of Fiscal 95. Cash received
from customers and cash paid to suppliers and employees increased
dramatically, as compared to Fiscal 94, primarily as a result of
additional cash flows from two RV dealerships acquired on August 1,
1994 (Roseville and Bakersfield, California). Total cash flows from
operating activities decreased to $345,000 from $807,000 primarily due
to two factors increasing the use of cash; (1) increased used
inventories and, (2) payments to floor plan banks for unsold new
inventories for which floor plan contracts matured requiring cash
payments.
The number of used vehicles purchased by the Company as trades
on the sale of new vehicles during the first and second quarters were
higher than normal resulting in a build up of used inventories.
These used vehicles are typically sold in the third and fourth quart-
ers. The Company's management expects used inventories to decrease
in the fourth quarter reducing this need for cash.
The Company's management also expects the second primary use of
cash for operations, payments for matured floor plan contracts on
new inventories, to decrease in the fourth quarter due to the sale of
new inventory not floored, as a result of managerial emphasis on the
sale of these vehicles.
The Company used $807,000 for the purchase of real property for
the relocation of the Bakersfield dealership and the expansion of the
Atlanta dealership. This cash use was primarily offset by $363,000
of cash proceeds from the sale of the rental fleet resulting from the
Company's decision in the first quarter to discontinue rental
operations.
The net result to the Company's cash position from all activities
was a decrease of $178,000 resulting in a cash position of $5.06
million as of July 31, 1995 as compared to $5.83 million as of July
31, 1994.
Net working capital increased to $10.5 million as of July 31,
1995 compared to $9.6 million as of July 31, 1994.
The Company's principal long term committments consist of
obligations under operating leases. The Company also has a contingent
liability to repay a portion of agency commission (referral fees)
received principally from certain lending institutions whereby the
Company referred customers to one or more third party financing sources
and earned referral fees (agency commissions) if the lender consummated
a loan contract with the customer. In some cases, the Company is
required to pay back (chargeback) a pro rata amount of the referral
fee to the lender if the loan does not reach maturity for various
reasons such as foreclosure, refinancing, or loan pay-off, and only
if the charge back amount exceeds reserves retained by the lender.
The Company records agency commission income based upon the amount
earned less allowances for chargebacks. In determining the allowance,
The Company takes into consideration the total customer loans out-
standing and estimates the exposure for potential chargebacks associa-
ted with these loans. The Company estimates the probability for loan
pay-offs and the potential chargebacks to the Company related thereto.
The Company also considers current and expected future economic
conditions, the effects of the change in customer interest rates and
the aging of all customer loans outstanding when estimating potential
chargebacks to the Company.
Management expects the current allowance for chargebacks to be
sufficient to repay this chargeback contingency and does not expect
the ultimate liability to have a significant impact of the liquidity
of the Company.
As of July 31, 1995 the Company had maximum borrowing under the
floor plan contract of $25 million of which approximately $12 million
was not used.
The Company also has a $1 million credit facility to finance
planned improvements to the real property purchased for the relocation
of the Bakersfield dealership. Improvements to the real property
purchased for the expansion of the Atlanta dealership will be
significantly less than Bakersfield's new dealership and will be
financed with the company's cash.
Management believes that during the next twelve months, cash
generated by operating activities, cash and cash equivalents currently
on deposit with financial institutions and financing currently avail-
able from financing companies will be sufficient for its capital and
operating needs.
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED JULY 31, 1995
COMPARED TO THREE MONTHS ENDED JULY 31, 1994.
Sales and service revenue increaded 46% to $17.5 million from
$12.0 million due to revenue from the two dealerships acquired from
Venture Out on August 1, 1994 (Roseville and Bakersfield, California)
accounting for $6 million of the increase. On a same store basis
sales and service revenue decreased 5% due to a 13% decrease in new
vehicle sales.
The decline in new vehicle sales is a reflection of an
industry-wide slowdown in the sale of motor homes, the Company's
primary source of new sales. According to the Recreational Vehicle
Industry Association ("RVIA" Reston, Virginia), industry-wide
shipments from manufacturers of motor homes declined 6.2% for the
four month period ended April 30, 1995, (RV Trade Digest, July 1995).
Although this information is not totally comparable to the
Company's third quarter, Management feels it does reflect a trend of
decreasing motor home sales (shipments) that effected the Company's
third quarter results. Furthermore, Management feels this trend of
decreasing sales, of its primary revenue source new motor homes, will
continue for the fourth quarter of Fiscal 1995 and into Fiscal 1996.
Cost of sales, as a percentage of revenue, decreased to 78.9%
from 84.2%.
Gross profit increased 96% to $3.7 million from $1.9 million.
As a percent of revenue, gross profit increased to 21.1% from 15.8%
This increase, both in dollars and percent, was primarily due to
gross profit from the acquired stores accounting for $1.5 million of
the $1.8 million increase. On a same store basis, gross profit
increased 10%.
Selling, general and administrative (SG&A) expenses increased
69% to $2.6 million from $1.6 million. As a percent of revenue,
SG&A expenses increased to 14.9% from 12.9%. All the increase in
SG&A expenses, both in dollars and percent, resulted from the
additional expenses to operate the Roseville and Bakersfield Dealer-
ships and the Company's Western Division office.
Income from operations increased 216% to $1.1 million from
$346,000. As a percent of revenue, income from operations increased
to 6.2% from 2.9%
Interest income increased to $106,000 from $71,000 due to
higher yields on funds invested. Interest expense increased to
$318,000 from $148,000 as a result of an increase in the average
balance for floor plan contracts and an increase in the rate charged
on the contracts. The increase in average floor plan contracts was
primarily due to increased new inventories for the two acquired
dealerships.
Income before income taxes increased 229% to $883,000 from
$269,000. As a percent of revenue, income before income taxes
increased to 5.0% from 2.2%
The combined Federal and State income tax rate was 38.5% in
Fiscal 95 compared to 37.6% in Fiscal 94. Income taxes for both
periods varied from the Federal statutory rates due to state income
taxes.
Net income increased 224% to $543,100 from $167,491. Net
income, as a percent of revenue, increased to 3.1% from 1.4%.
Earnings per share increased to 7 cents from 2 cents.
RESULTS OF OPERATIONS FOR NINE MONTHS ENDED JULY 31, 1995
COMPARED TO NINE MONTHS ENDED JULY 31, 1994.
Sales and service revenue increased 45% to $57.0 million
primarily due to revenue from the two dealerships acquired from
Venture Out on August 1, 1994 (Roseville and Bakersfield, California)
accounting for $15.7 million of the $17.6 increased revenue. On
a same store basis sales and service revenue increased 5%. Same
store revenue was down 5% in the third quarter as a result of a trend
of decreasing motor home sales nationwide. The Company's management
feels this decreasing trend in sales of its primary revenue source,
new motor homes, will continue for the fourth quarter of Fiscal 1995
and into Fiscal 1996.
Cost of sales, as a percentage of revenue, decreased to 81.7%
from 84.9%.
Gross profit increased 74% to $10.4 million from $6.0 million.
As a percent of revenue, gross profit increased to 18.3% from 15.1%.
This increase, both in dollars and percent, was primarily due to
gross profit from the acquired stores accounting for $3.7 million
of the $4.5 million increase. On a same store basis, gross profit
increased 12%.
Selling, general and administrative (SG&A) expenses increased
60% to $7.5 million from $4.7 million. As a percent of revenue,
SG&A expenses increased to 13.2% compared to 11.9%. All the increase
in SG&A expenses, both in dollars and percent, resulted from addition-
al expenses to operate the Roseville and Bakersfield dealerships and
the Company's Western Division office.
Income from operations increased 129% to $2.9 million from
$1.3 million. As a percent of revenue, income from operations
increased to 5.0% from 3.2%
Interest income increased 78% to $276,000 from $155,000 due
primarily to a higher yield on funds invested. Interest expense
increased 127% to $1.0 million from $444,000 as a result of an
increase in the average balance of floor plan contracts and an
increase in the rate charged on the contracts. Increased average
floor plan contracts were primarily due to increased new inven-
tories for the two acquired dealerships.
Income before income taxes increased 121% to $2,146,765 from
$970,283. As a percentage of revenue, income before income taxes
increased to 3.8% from 2.5%
The combined Federal and State income tax rate was 38.4%
in Fiscal 95 compared to 37.6% in Fiscal 94. Income taxes for
both periods varied from the Federal statutory rates due to
state income taxes.
Net income increased 118% to $1,321,841 from $605,347. Net
income, as a percentage of revenue increased to 2.3% from 1.5%
Earnings per share increased to 18 cents from 8 cents.
<PAGE>
PART II
OTHER INFORMATION
There is no information to report under Items 1, 2, 3 and 5 of
Part II of this report.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders held May 22, 1995 all
members of the Board of Directors of the Company stood for re-
election and were re-elected, being the following individuals:
Avie Abramowitz Joanne M. Kindlund
Paul G. Clubbe Newton C. Kindlund
Franklin J. Hitt James P. Williams
Lawrence H. Katz W. Hardee McAlhaney
Roy W. Parker G. Lee FitzGerald
All members were re-elected without opposition, and by
unanimous vote.
A resolution was unanimously adopted to continue the engagement
of the accounting firm of BDO Seidman as Independent Public
Accountant for the Company for the Fiscal Year ending October 31,
1995.
The company did not solicit proxies for the meeting. A total
of 4,786,000 shares of Common Stock were represented and voted at
the meeting.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
No exhibits are required to be filed by the Company with this
report.
The Company filed no report on Form 8-K for the three months
ended July 31, 1995.
<PAGE>
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.
Date HOLIDAY RV SUPERSTORES, INCORPORATED
September 6,1995 /s/ W. Hardee McAlhaney
_____________________________________
W. Hardee McAlhaney, Vice President
Chief Financial Officer
Principal Financial and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JUL-31-1995
<CASH> 5062
<SECURITIES> 0
<RECEIVABLES> 1405
<ALLOWANCES> 0
<INVENTORY> 17608
<CURRENT-ASSETS> 24724
<PP&E> 3363
<DEPRECIATION> 900
<TOTAL-ASSETS> 27599
<CURRENT-LIABILITIES> 14231
<BONDS> 0
<COMMON> 75
0
0
<OTHER-SE> 13196
<TOTAL-LIABILITY-AND-EQUITY> 27599
<SALES> 57041
<TOTAL-REVENUES> 57041
<CGS> 46620
<TOTAL-COSTS> 46620
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1009
<INCOME-PRETAX> 2147
<INCOME-TAX> 825
<INCOME-CONTINUING> 1322
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1322
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
