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, 1996
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 re-
quired to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
As of August 26, 1996, Holiday RV Superstores, Incorporated had out-
standing 7,449,700 shares of Common Stock, par value $.01 per share.
</PAGE>
<PAGE>
TABLE OF CONTENTS
Item Page
Part I
Financial Information
<TABLE>
<CAPTION>
<S> <C>
1. Financial Statements................................................ 3
Consolidated Condensed Balance Sheets ...............................3
Consolidated Condensed Statements of Income .........................5
Consolidated Condensed Statement of Cash Flows.......................6
Notes to Consolidated Condensed Financial
Statements ................................................... 8
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .......................... 9
Part II
Other Information
4. Submission of Matters to a Vote of Securities Holders.............. 12
6. Exhibits and Reports on Form 8-K....................................12
</TABLE>
2
</PAGE>
<PAGE>
PART I
Financial Information
Item 1. Financial Statements
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_________________________________________________________________
ASSETS
--------
<TABLE>
<CAPTION>
07/31/96 10/31/95
(Unaudited)
___________ __________
<S> <C> <C>
Current:
Cash and cash equivalents $ 5,269,258 $ 4,012,860
Accounts receivable:
Trade and contracts in transit 1,217,675 1,434,936
Other 223,489 428,718
Inventories 21,278,081 19,396,069
Refundable income taxes ---- 39,333
Deferred income taxes 49,000 49,000
____________ __________
Total Current Assets 28,037,503 25,360,916
Property and Equipment,
less accumulated depreciation 4,261,710 3,947,401
Other Assets,
principally covenant not to compete 348,736 408,480
___________ ___________
TOTAL ASSETS $ 32,647,949 $ 29,716,797
============ ============
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
3
</PAGE>
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
__________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
07/31/96 10/31/95
(Unaudited)
___________ __________
<S> <C> <C>
Current Liabilities:
Floor plan contracts $ 15,978,786 $ 13,966,923
Accounts payable 989,397 901,911
Customer deposits 225,107 101,661
Accrued expenses 604,681 946,886
Current portion of capital
lease obligations 48,394 35,750
___________ ___________
Total Current Liabilities 17,846,365 15,953,131
Long Term Capital Lease Obligations
less current portion 355,077 342,657
Deferred Income Taxes 5,000 5,000
Stockholders' Equity:
Common stock $.01 par - shares authorized
10,000,000; issued 7,465,000 74,650 74,650
Additional paid-in capital 5,103,052 5,103,052
Retained earnings 9,332,159 8,340,177
Less:
Treasury stock, at cost, 15,300 shares (18,193) (18,193)
Deferred compensation (50,161) (83,677)
___________ __________
Total Stockholders' Equity 14,441,507 13,416,009
___________ __________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 32,647,949 $ 29,716,797
============ ============
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
4
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<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
__________________________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
07/31/96 07/31/95 07/31/96 07/31/95
__________ ___________ __________ __________
<S> <C> <C> <C> <C>
Sales & Service Revenue $ 18,498,279 $ 17,549,343 $ 58,085,32 $ 57,041,053
Cost of Sales And Service 15,094,331 13,848,153 47,882,761 46,619,689
__________ __________ __________ __________
Gross Profit 3,403,948 3,701,190 10,202,560 10,421,364
Selling, General And
Administrative Expenses 2,566,271 2,606,670 7,724,770 7,541,693
__________ __________ __________ _________
Income from operations 837,677 1,094,520 2,477,790 2,879,671
Interest Income 90,897 106,161 273,650 276,340
Interest Expense 389,783 318,162 1,105,458 1,009,246
__________ __________ __________ __________
Income before income
taxes 538,791 882,519 1,645,982 2,146,765
Income Taxes 214,500 339,419 654,000 824,924
__________ __________ __________ __________
Net Income $ 324,291 $ 543,100 $ 991,982 $1,321,841
=========== ========== ========== =========
Earnings Per Share
of Common Stock $ 0.04 $ 0.07 $ 0.13 $ 0.18
========== ========== =========== =========
Weighted Average Number
of Common Stock and
Common Stock Equivalents
Outstanding 7,500,500 7,398,300 7,549,000 7,400,800
========= ========= ========= =========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
5
</PAGE>
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
_______________________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JULY 31
1996 1995
____________ ____________
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 58,549,993 $ 56,111,319
Cash paid to suppliers and employees ( 55,229,353) ( 54,726,494)
Interest received 273,650 276,340
Interest paid (1,096,498) (935,723)
Income taxes paid (701,246) (880,784)
____________ ____________
Net cash provided by operating activities 1,796,546 344,658
____________ ____________
Cash flows from investing activities:
Purchase of real property ----- (806,935)
Purchase of property, plant and equipment (506,888) (78,363)
Proceeds from the sale of rental fleet ----- 362,945
___________ ____________
Net cash used for
investing activities (506,888) (522,353)
___________ ____________
Cash flows from financing activities:
Repayment of capital lease obligations (33,260) -----
___________ ____________
Net cash used for financing activities (33,260) -----
Net cash provided by (used for) operating,
investing and financing activities 1,256,398 (177,695)
Cash and cash equivalents, beginning of period 4,012,860 5,239,701
___________ ___________
Cash and cash equivalents, end of period $ 5,269,258 $ 5,062,006
=========== ==========
</TABLE>
See accompanying notes to the consolidated condensed financial statement.
6
</PAGE>
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
___________________________________________________________________
(Unaudited)
NINE MONTHS ENDED
JULY 31
1996 1995
__________ __________
<TABLE>
<CAPTIONS>
<S> <C> <C>
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 991,982 $ 1,321,841
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 293,899 222,224
(Gain) loss on disposal of property and equipment
and rental fleet 42,182 (49,969)
Cash provided by (used for):
Accounts receivable 422,490 (379,765)
Inventories (1,882,012) (215,063)
Prepaid expenses 39,333 92,628
Other Assets 8,082 ----
Floor plan contracts 2,011,863 423,469
Accounts payable 87,486 (11,356)
Customer deposits 123,446 (12,026)
Accruals (342,20) (223,099)
__________ __________
Net cash provided by operating activities: $ 1,796,546 $ 344,658
========== ==========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
7
</PAGE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to 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, 1995. 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 inter-company 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 three and nine months ended July 31, 1996 are not
necessarily indicative of results to be expected for the fiscal year.
NOTE 2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
July 31, 1996 October 31, 1995
_____________ ________________
<CAPTION>
<S> <C> <C>
New Vehicles $16,118,411 $14,307,290
New Marine 546,792 511,044
Used Vehicles 3,128,444 3,273,885
Used Marine 106,447 40,464
Parts and Accessories 1,377,987 1,263,386
----------- -----------
$21,278,081 $19,396,069
=========== ===========
</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.
8
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<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 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, 1996 compared to July 31, 1995.
The Company continued to maintain a strong financial position and high
liquidity for the first nine months of 96. Net cash provided by all
activities was $1.2 million in 96 compared to use of $177,000 in 95.
This net increase in cash was primarily the result of two operating
activities; (1) a decrease in accounts receivable resulting from lower
contracts in transit (receivables from lending institutions financing the
Company's customer purchases of RV's), and (2) no increase in used
inventories using the company's cash. As a result of these two operating
activities not requiring the Company's cash, the Company was able to
overcome a $330,000 decrease in net income and increased it's net
cash provided by operating activities by $1.7 million.
Investing activities, including the purchase of plant and equipment for
the new Las Cruces, New Mexico dealership, and the completion of
construction and relocation of the dealership in Bakersfield California,
used $500,000 cash in 96. In 95 investing activities used approximately the
same amount of cash resulting from $880,000 used for the purchase and
construction of Bakersfield, offset by $360,000 cash provided by the
liquidation of the Company's rental fleet.
The net effect to the Company's cash position from all activities was
an increase of $1.2 million in 96 resulting in an cash position of $5.2
million as of July 31, 1996.
Net working capital decreased slightly to $10.2 million as of
July 31, 1996 compared to $10.5 million as of July 31, 1995.
The Company's principal long term commitments 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 of earned
less allowances for chargebacks. In determining the allowance, the Company
takes into consideration the total customer loans outstanding and estimates
the exposure for potential chargebacks associated with these loans. The
Company estimates the probability for loan payoffs and the potential charge-
backs 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
9
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<PAGE>
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 on the liquidity of the Company.
As of July 31, 1996 the Company increased it's maximum borrowing avail-
ability, under the floor plan contracts, with five financial companies,
totaling $52 million, of which approximately $36 million was not used. The
Company's management strategy is to diversify its credit sources and
increase it's credit availability to finance future expansions or
acquisitions. Management believes during the next twelve months, cash
generated by operating activities, cash and cash equivalents currently on
deposit with financial institutions and financing currently available from
financial companies will be sufficient for its capital and operating needs.
RESULTS OF OPERATIONS
Results of operations for three months ended July 31, 1996 compared to
the three months ended July 31, 1995.
Sales and service revenue increased 5.4% to $18.5 million from $17.6
million. This increase was due to revenue from the new Las Cruces, New
Mexico dealership which opened in October, 1995. On a same dealership basis,
sales and service revenue decreased 10% primarily due to changes in key
management positions at three of the Company's largest dealerships. Changes
in key management at dealerships performing well typically have an adverse
effect on the revenue and profitability of the dealership.
Gross profit decreased 8% to $3.4 million from $3.7 million. As a
percent of revenue gross profit decreased to 18.4% from 21.1%. On a same
dealership basis, gross profit decreased 22%. These decreases were due to
lower gross profit for all revenue sources with new and used RV sales having
the greatest impact.
Selling, general and administrative (SG&A) expenses decreased 1.5% to
$2.57 million from $2.61 million. On a same dealership basis SG&A decreased
14% due to decreased expenses associated with lower revenues.
Income from operations decreased 24% to $838,000 from $1.1 million. As
a percent of revenue, income from operations deceased to 4.5% from 6.2%.
Interest expense increased 23% to $390,000 from $318,000, primarily due
to interest expense for inventory at the new Las Cruces dealership.
Income before income taxes decreased 39% to $ 539,000 from $883,000. As
a percent of revenue, income before income taxes decreased to 2.9%
from 5.0%.
The combined Federal and State income tax rate was 39.8% in Fiscal 96
compared to 38.5% in Fiscal 95.
10
</PAGE>
<PAGE>
Net income decreased 40% to $324,000 from $543,000. As a percent of
revenue, net income decreased to 1.8% from 3.1%.
Earnings per share decreased to 4 cents from 7 cents.
Results from operations for the nine months ended July 31, 1996 compared to
the nine months ended July 31, 1995.
Sales and service revenue increased 2% to $58.1 million from $57.0
million due to revenue from the new Las Cruces, New Mexico dealership opened
October, 1995. On a same dealership basis, sales and service revenue
declined 9%, primarily due to changes in key management positions at three
of the Company's largest dealerships. Changes in key management at dealer-
ships performing well typically have an adverse effect on the revenues and
profitability of the dealerships. The Company's management has either
replaced or is currently replacing all vacant dealership key management
positions and expects improved revenue as a result. However, the Company's
management does not expect the new managers to have a positive effect on
the Company's revenue and net profit until first quarter, Fiscal 97.
Gross profit decreased 2% to $10.2 million from $10.4 million. As a
percent of revenue, gross profit decreased to 17.6 % from 18.3%. On a same
dealership basis, gross profit decreased 15%. These decreases were due to
lower gross profit for all revenue sources with new and used RV sales having
the greatest impact.
Selling, general and administrative (SG&A) expenses increased 2.0% to
$7.7 million from $7.5 million. As a percent of revenue, SG&A decreased
slightly to 13.2% from 13.3%. On a same dealership basis, SG&A decreased
8% due to decreased expenses associated with lower revenue.
Income from operations decreased 14% to $2.5 million from $2.9 million.
As a percent of revenue, income from operations decreased to 4.3% from 5.0%.
Interest expense increased 10% to $1.1 million from $1.0 million,
primarily due to interest expense for inventory at the new Las Cruces
dealership.
Income before income taxes decreased 23% to $1.65 million from $2.15
million. As a percentage of revenue, income before income taxes decreased
to 2.8% from 3.8%.
The combined Federal and State income tax rate was 39.7% in Fiscal 96
combined Federal and State income tax rate was 39.7% in Fiscal 96 compared
to 38.4% in Fiscal 95.
Net income decreased 25% to $992,000 from $1.3 million. As a percent
of revenue, net income decreased to 1.7% from 2.3%.
Earnings per share decreased to 13 cents from 18 cents.
11
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<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 20, 1996 the following
individuals were elected to the Board of Directors:
Paul G. Clubbe Joanne M. Kindlund
Roy W. Parker Newton C. Kindlund
Harvey M. Alper W. Hardee McAlhaney
James P. Williams
A resolution was unanimously adopted to continue the engagement of the
accounting firm BDO Seidman, LLP as Independent Certified Public Accountant
for the Company for the Fiscal Year ending October 31, 1996.
The company did not solicit proxies for the meeting. A total of
4,491,930 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, 1996.
12
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<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 10, 1996 /S/ W. Hardee McAlhaney
___________________________________
W. Hardee McALhaney, Vice President
Chief Financial Officer
Principal Financial and Accounting Officer
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 5269
<SECURITIES> 0
<RECEIVABLES> 1441
<ALLOWANCES> 0
<INVENTORY> 21279
<CURRENT-ASSETS> 28038
<PP&E> 5263
<DEPRECIATION> 1001
<TOTAL-ASSETS> 32648
<CURRENT-LIABILITIES> 17846
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 14367
<TOTAL-LIABILITY-AND-EQUITY> 32648
<SALES> 58085
<TOTAL-REVENUES> 58085
<CGS> 47883
<TOTAL-COSTS> 47883
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1105
<INCOME-PRETAX> 1646
<INCOME-TAX> 654
<INCOME-CONTINUING> 992
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 992
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
