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 April 30, 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 required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.
YES X NO
As of May 30, 1996, Holiday RV Superstores, Incorporated
had outstanding 7,449,700 shares of Common Stock, par value $.01
per share.
<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>
PART I
Financial Information
Item 1. Financial Statements
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
ASSETS
________
<TABLE>
<CAPTION>
04/30/96 10/31/95
(Unaudited)
___________ ___________
<S> <C> <C>
Current:
Cash and cash equivalents $ 3,689,416 $ 4,012,860
Accounts receivable:
Trade and contracts in transit 1,852,931 1,434,936
Other 280,597 428,718
Inventories 23,556,922 19,396,069
Refundable income taxes ---- 39,333
Deferred income taxes 49,000 49,000
__________ __________
Total Current Assets $ 29,428,866 $ 25,360,916
Property and Equipment,
less accumulated depreciation 4,328,152 3,947,401
Other Assets,
principally covenant
not to compete 366,047 408,480
__________ __________
TOTAL ASSETS $ 34,123,065 $ 29,716,797
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
3
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
______________________________________
<TABLE>
<CAPTION>
04/30/96 10/31/95
(Unaudited)
----------- -----------
<S> <C> <C>
Current Liabilities:
Floor plan contracts $ 17,407,341 $ 13,966,923
Accounts payable 1,181,963 901,911
Customer deposits 264,988 101,661
Accrued expenses 742,866 946,886
Current portion of capital lease
obligations 47,003 35,750
___________ ___________
Total Current Liabilities 19,644,161 15,953,131
Long Term Capital Lease Obligations 367,860 342,657
less current portion
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 9,007,868 8,340,177
Less:
Treasury stock, at cost,
15,300 shares (18,193) (18,193)
Deferred compensation (61,333) (83,677)
___________ ___________
Total Stockholders' Equity $ 14,106,044 $ 13,416,009
__________ __________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 34,123,065 $ 29,716,797
=========== ===========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
4
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
_____________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
04/30/96 04/30/95 04/30/96 4/30/95
___________ __________ __________ __________
<S> <C> <C> <C> <C>
Sales & Service Revenue $ 25,922,459 $ 23,958,041 $ 39,587,042 $ 39,491,710
Cost of Sales And
Service 21,663,210 19,874,279 32,788,430 32,771,536
___________ __________ __________ __________
Gross Profit 4,259,249 4,083,762 6,798,612 6,720,174
Selling, General And
Administrative Expenses 2,932,648 2,748,938 5,158,499 4,935,023
__________ __________ __________ __________
Income from operations 1,326,601 1,334,824 1,640,113 1,785,151
Interest Income 94,382 75,500 182,753 170,179
Interest Expense 327,386 361,593 715,675 691,084
__________ __________ __________ __________
Income before 1,093,597 1,048,731 1,107,191 1,264,246
income taxes
Income Taxes 433,655 401,670 439,500 485,505
__________ __________ __________ __________
Net Income $ 659,942 $ 647,061 $ 667,691 $ 778,741
========== ========== ========== ==========
Earnings Per Share
of Common Stock $ 0.09 $ 0.09 $ 0.09 $ 0.11
========== ========== ========== ==========
Weighted Average
Number of Common Stock and
Common Stock Equivalents
Outstanding 7,457,000 7,398,300 7,505,000 7,400,800
========== ========== ========== ==========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
5
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
_______________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30
1996 1995
_____________ _____________
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 39,319,985 $ 39,287,931
Cash paid to suppliers and employees (38,211,694) (38,607,706)
Interest received 182,753 170,179
Interest paid (712,307) (610,217)
Income taxes paid (420,016) (348,684)
____________ ____________
Net cash provided by (used for)
operating activities 158,721 (108,497)
____________ ____________
Cash flows from investing activities:
Purchase of real property ---- (546,490)
Purchase of property,
plant and equipment (461,972) (38,121)
Proceeds from the sale
of rental fleet ---- 175,350
_____________ _____________
Net cash used for
investing activities (461,972) (409,261)
Cash flows from financing activities: _____________ _____________
Repayment of capital lease
obligations (20,193) ----
_____________ _____________
Net cash used for financing activities (20,193) ----
Net cash used for operating,
investing and financing activities (323,444) (517,758)
Cash and cash equivalents, beginning
of period 4,012,860 5,239,701
_____________ _____________
Cash and cash equivalents,
end of period $ 3,689,416 $ 4,721,943
============= =============
</TABLE>
See accompanying notes to the consolidated condensed financial statement.
6
<PAGE>
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
_______________________________________________________
(Unaudited)
SIX MONTHS ENDED
APRIL 30
1996 1995
___________ ___________
<TABLE>
<CAPTION>
<S> <C> <C>
Reconciliation of net income to net cash
provided by (used for) operating activities:
Net income $ 667,691 $ 778,741
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 192,129 169,622
(Gain) loss on disposal of property and
equipment and rental fleet 2,817 (24,016)
Cash provided by(used for):
Accounts receivable (269,874) (179,763)
Inventories (4,160,853) (1,385,905)
Prepaid expenses 39,333 93,187
Other Assets 7,701 ----
Floor plan contracts 3,440,418 473,701
Accounts payable 280,052 (1,437)
Customer deposits 163,327 (31,420)
Accruals (204,020) (1,207)
__________ __________
Net cash provided by (used for) operating
activities: $ 158,721 $ (108,497)
========== ==========
</TABLE>
See accompanying notes to the Consolidated Condensed Financial Statements.
7
<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 six months ended April 30, 1996 are
not necessarily indicative of results to be expected for the fiscal year.
NOTE 2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
April 30, 1996 October 31, 1995
______________ ________________
<S> <C> <C>
New Vehicles $17,763,506 $14,307,290
New Marine 600,356 511,044
Used Vehicles 3,651,713 3,273,885
Used Marine 100,634 40,464
Parts and Accessories 1,440,713 1,263,386
____________ ____________
$23,556,922 $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 $364,532 for the six months ended
April 30, 1995.
8
<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 April 30, 1996 compared to April 30, 1995.
The Company continued to maintain a strong financial position and high
liquidity for the first six months of Fiscal 96. There were no significant
changes in the net cash flows for operating, investing and financing
activities. Purchase of plant and equipment for the new Las Cruces,
New Mexico dealership, and the relocation of the Bakersfield, California
dealership in Fiscal 96, used $462,000, and the purchase of the real
estate for Bakersfield, California dealership in Fiscal 95 used $546,000.
Currently, there are no commitments for significant uses of cash for
investing activities.
The net result to the Company's cash position from all activities was a
decrease of $323,000 resulting in a cash position of $3.7 million as of
April 30, 1996 as compared to $4.7 million as of April 30, 1995.
Net working capital decreased to $9.8 million as of April 30,1996 compared
to $10.2 million as of April 30, 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 payback (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 outstanding
and estimates the exposure for potential chargebacks associated 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 on the liquidity of the Company.
9
<PAGE>
As of April 30, 1996 the Company increased it's maximum borrowing
availability, under the floor plan contracts, to $52 million, of which
approximately $34 million was not used. This increase resulted from the
addition of floor plan credit lines from two financial institutions. 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 financing companies will be sufficient for its capital and operating
needs.
RESULTS OF OPERATIONS
Results of operations for three months ended April 30, 1996 compared to
the three months ended April 30, 1995.
Sales and service revenue increased 8% to $25.9 million from $24.0
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 5%, primarily as a result of a decline
nationwide in the sale of new recreation vehicles (RVs). According to the
Recreation Vehicle Industry Association (Reston, VA), towables and motorhome
RV shipments to dealers has declined 6.2% for the three month period ended
March, 1996.
Gross profit increased 4% to $4.3 million from $4.1 million. As a percent
of revenue, gross profit decreased to 16.4% from 17.0% primarily due to
lower gross profits from the sale of new RVs.
Selling, general and administrative (SG&A) expenses increased 7% to $2.93
million from $2.75 million due to the expenses of the new Las Cruces
dealership. On a same dealership basis SG&A decreased 4%.
Income from operations remained the same at $1.33 million.
Income before income taxes increased 4% to $1,094,000 from $1,049,000.
As a percent of revenue, income before income taxes decreased slightly to
4.2% from 4.4%.
The combined Federal and State income tax rate was 39.7% in Fiscal 96
compared to 38.3% in Fiscal 95.
Net income increased 2% to $660,000 from $647,000. As a percent of
revenue, net income decreased slightly to 2.5% from 2.7%.
Earnings per share were the same for both periods, 9 cents.
10
<PAGE>
Results from operations for the six months ended April 30, 1996 compared to
the six months ended April 30, 1995.
Sales and service revenue increased slightly to $39.6 million from $39.5
million. On a same dealership basis, sales and service revenue decreased
9%, primarily as a result of a decline nationwide in the sale of RVs.
Gross profit increased 1% to $6.8 million from $6.7 million. On a same
dealership basis, gross profit decreased 11%. As a percent of revenue,
gross profit increased to 17.2% from 17.0%. However, this percentage
decreased in the quarter ended April 30, 1996, as compared to April 30, 1995
due to lower gross profits from the sale of new RVs. The Company's
management expects this trend to continue through the remaining quarters of
Fiscal 96 due to increased competition resulting from a nationwide decrease
in the sale of new RVs.
Selling, general and administrative (SG&A) expenses increased 4.5% to $5.2
million compared to $4.9 million as a result of the additional expenses
for the new Las Cruces dealership which opened in October, 1995.
On a same dealership basis, SG&A decreased 5%.
Income from operations decreased 8% to $1.63 million from $1.79 million.
As a percent of revenue, income from operations decreased to 4.1% from 4.5%.
Income before income taxes decreased 12.4% to $1,107,000 from $1,264,000.
As a percent of revenue, income before income taxes decreased to 2.8% from
3.2%.
The combined Federal and State income tax rate was 39.7% in Fiscal 96
compared to 38.4% in Fiscal 95.
Net income decreased 14.3% to $667,691 from $778,741. Net income, as a
percent of revenue decreased to 1.7% from 2.0%.
Earnings per share decreased to 9 cents from 11 cents.
11
<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 of 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
April 30, 1996.
12
<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
June 6, 1996 /s/ Newton C. Kindlund
_____________________________
Newton C. Kindlund, President
Chief Executive Officer
Principal Executive Officer
June 6, 1996 /s/ W. Hardee McAlhaney
___________________________________
W. Hardee McAlhaney, Vice President
Chief Financial Officer
Principal Financial and Accounting Officer
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<CASH> 3689
<SECURITIES> 0
<RECEIVABLES> 2134
<ALLOWANCES> 0
<INVENTORY> 23557
<CURRENT-ASSETS> 29429
<PP&E> 5334
<DEPRECIATION> 1006
<TOTAL-ASSETS> 34123
<CURRENT-LIABILITIES> 19644
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 14031
<TOTAL-LIABILITY-AND-EQUITY> 34123
<SALES> 39587
<TOTAL-REVENUES> 39587
<CGS> 32788
<TOTAL-COSTS> 32788
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 716
<INCOME-PRETAX> 1107
<INCOME-TAX> 439
<INCOME-CONTINUING> 668
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 668
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
