<PAGE> 1
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 JANUARY 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
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
As of March 4, 1996, Holiday RV Superstores, Incorporated had outstanding
7,499,700 shares of Common Stock, par value $.01 per share.
<PAGE> 2
TABLE OF CONTENTS
Item Page
Part I
Financial Information
<TABLE>
<CAPTION>
<S> <C>
1. Financial Statements.......................................... 3
Consolidated Condensed Balance Sheets......................... 4
Consolidated Condensed Statements of Income................... 5
Consolidated 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
6. Exhibits and Reports on Form 8-K.............................. 13
</TABLE>
2
<PAGE> 3
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
ASSETS
<TABLE>
<CAPTION>
01/31/96 10/31/95
(Unaudited)
------------ ------------
<S> <C> <C>
CURRENT:
Cash and cash equivalents $ 2,320,075 $ 4,012,860
Accounts receivable:
Trade and contracts in transit 1,473,508 1,434,936
Other 488,874 428,718
Inventories 24,096,288 19,396,069
Refundable income taxes 21,756 39,333
Deferred income taxes 49,000 49,000
----------- -----------
TOTAL CURRENT ASSETS 28,449,501 25,360,916
PROPERTY AND EQUIPMENT,
less accumulated depreciation 4,219,821 3,947,401
OTHER ASSETS,
principally covenant not to complete 378,341 408,480
----------- -----------
TOTAL ASSETS $33,047,663 $29,716,797
=========== ===========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
3
<PAGE> 4
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
_____________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
01/31/96 10/31/95
(Unaudited)
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Floor plan contracts $17,675,461 $13,966,923
Accounts payable 688,720 901,911
Customer deposits 309,764 101,661
Accrued expenses 507,843 946,886
Current portion of capital lease
obligations 45,802 35,750
----------- -----------
TOTAL CURRENT LIABILITIES 19,227,590 15,953,131
LONG TERM LEASE OBLIGATIONS
less current portion 380,143 342,657
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 8,347,926 8,340,177
Less:
Treasury stock, at cost, 15,300 (18,193) (18,193)
Deferred compensation (72,505) (83,677)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 13,434,930 13,416,009
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $33,047,663 $29,716,797
=========== ===========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
4
<PAGE> 5
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
__________________________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
01/31/96 01/31/95
------------ ------------
<S> <C> <C>
SALES & SERVICE REVENUE $13,664,583 $15,533,669
COST OF SALES AND SERVICE 11,125,220 12,897,257
----------- -----------
Gross Profit 2,539,363 2,636,412
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,225,851 2,186,085
----------- -----------
Income from operations 313,512 450,327
INTEREST INCOME 88,371 94,679
INTEREST EXPENSE (388,289) (329,491)
----------- -----------
Income before income taxes 13,594 215,515
INCOME TAXES 5,845 83,835
----------- -----------
NET INCOME $ 7,749 $ 131,680
=========== ===========
EARNINGS PER SHARE
OF COMMON STOCK $ 0.00 $ 0.02
=========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON STOCK AND
COMMON STOCK EQUIVALENTS
OUTSTANDING 7,512,000 7,400,500
=========== ===========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
5
<PAGE> 6
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
________________________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
1 /31/96 1/31/95
------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 13,555,057 $ 15,512,983
Cash paid to suppliers and employees (14,547,390) (16,440,358)
Interest received 88,371 94,679
Interest paid (357,259) (248,792)
Income taxes paid (21,900) (65,947)
------------ -----------
Net cash used for operating activities (1,283,121) (1,147,435)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (511,204) (12,399)
Proceeds from the sale of equipment 108,696 ---
------------ -----------
Net cash used for investing activities (402,508) (12,399)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligations (7,156) (609)
------------ -----------
Net cash used for financing activities (7,156) (609)
Net cash used for operating, investing
and financing activities (1,692,785) (1,160,443)
Cash and cash equivalents, beginning of year 4,012,860 5,239,701
------------ -----------
CASH AND CASH EQUIVALENTS, END OF QUARTER $ 2,320,075 $ 4,079,258
============ ============
</TABLE>
See accompanying notes to the Consolidated Financial Statement
6
<PAGE> 7
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONCLUDED)
__________________________________________________________________________
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
1/31/96 1/31/95
------------- -------------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
USED FOR OPERATING ACTIVITIES:
Net income $ 7,749 $ 131,130
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization 90,907 99,106
Gain on disposal of property and equipment (10,798) ---
Cash provided by (used for):
Accounts receivable (98,728) (20,686)
Inventories (4,787,989) (3,153,575)
Prepaid expenses 17,577 59,575
Floor plan contracts 3,708,538 1,907,159
Accounts payable (213,191) (141,717)
Customer deposits 208,103 160,264
Accruals (205,289) (188,691)
------------ -----------
NET CASH USED FOR OPERATING ACTIVITIES ($1, 283,121) ($1,147,435)
============= ===========
</TABLE>
See accompanying notes to the consolidated condensed financial statements.
7
<PAGE> 8
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 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 three months ended
January 31, 1996 are not necessarily indicative of results to be expected for
the Fiscal year.
NOTE 2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
January 31, 1996 October 31, 1995
---------------- ----------------
<S> <C> <C>
New Vehicles $18,129,455 $14,307,290
New Marine 639,731 511,044
Used Vehicles 3,929,027 3,273,885
Used Marine 80,662 40,464
Parts and
Accessories 1,317,413 1,263,386
----------- -----------
$24,096,288 $19,396,069
=========== ===========
</TABLE>
8
<PAGE> 9
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 JANUARY 31, 1996 COMPARED TO JANUARY 31, 1995.
The Company continued to maintain a strong financial position and high
liquidity for the first quarter of Fiscal 96. Cash received from customers and
cash paid to suppliers and employees decreased 13% and 12% respectively from
the previous year due to a 12% decrease in revenue. Net cash used for
operations was $1.28 million, slightly more than the previous year of $1.15
million.
Net cash used for investing activities increased to $402,500 for the
quarter as compared to $12,400 in the previous year, due to funding the new
Bakersfield, California dealership construction.
The net results on the Company's cash position from all activities was a
decrease of $1.69 million as compared to a decrease of $1.16 million in the
previous year, resulting in a cash position of $2.3 million as of January 31,
1996 as compared to $4.1 million as of January 31, 1995. The primary reason
cash was $1.8 million less in 1996 as compared to 1995 was $1.2 million less
cash at the beginning of the year for 1996 as compared to the beginning of the
year for 1995.
Net working capital deceased to $9.2 million as of January 31, 1996
compared to $9.4 million as of January 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 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.
9
<PAGE> 10
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 January 31, 1996 the Company had maximum borrowing under the floor
plan contracts of $50 million of which approximately $35 million was not used.
In addition, the Company has a $1 million credit facility available for
financing the purchase of dealership real property. Management believes that
during the next twelve months, cash generated by operating activities, and cash
equivalents currently on deposit with financial institutions and financing
currently available from floor plan financing companies will be sufficient for
its capital and operating needs.
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED JANUARY 31, 1996 COMPARED TO
THE THREE MONTHS ENDED JANUARY 31, 1995.
Sales and service revenue decreased 12% to $13.7 million from $15.5
million primarily due to a decrease in new vehicle sales. New vehicle dollar
and unit sales decreased 17% and 15% respectively. The Company's management
believes these decreases are a continuation of a national downward sales trend
for new vehicles due to decreased consumer sentiment about the national
economy. Furthermore, severe weather conditions adversly affected sales for
some of the Company's dealerships, especially the California dealerships.
Management expects this trend to continue into the remaining quarters of Fiscal
1996, but to lesser degree.
Cost of sales, as a percent of revenue, decreased to 81.4% from 83.0%.
Gross profit decreased 3.7% to $2.54 million from $2.64 million. As a
percent of revenue, gross profit increased to 18.6% from 17.0% primarily due
to an increase in the average gross profit per new vehicle sold, resulting
from a companywide management focus on increasing gross profit on the sale of
new vehicles.
Selling, general and administrative (SG&A) expense increased 1.8% to $2.23
million from $2.19 million. As a percent of revenue, SG&A expenses increased
to 16.3% from 14.1%. The increase in SG&A expense was primarily due to start
up expense at the Company's new Las Cruces, New Mexico dealership. On a same
store basis, SG&A decreased 3.6%.
Income from operations decreased 30% to $313,500 from $450,300. As a
percent of revenue, income from operations decreased to 2.3% from 2.9%.
Interest income decreased to $88,400 from $94,700 due to the Company
having less cash to invest. Interest expense increased 17.8% to $388,300 from
$329,500 due to increased floor plan balances for new vehicle inventories
resulting primarily from the addition of "highline" diesel powered, bus type
RVs.
Income before income taxes decreased 94% to $13,594 from $215,515. As a
percent of revenue, income before income taxes decreased to 1% from 1.4%.
10
<PAGE> 11
The combined Federal and State income tax rate was 43% in Fiscal 96
compared to 38.9% in Fiscal 95. Income taxes for both periods varied from the
Federal statutory rates due to state income taxes.
Net income decreased 94% to $7,749 from $131,680. Net income, as a
percent of revenue, decreased to 0.1% from 0.8%.
Earnings per share decreased to 0 cents from 2 cents per share.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31, 1995 COMPARED TO
THE THREE MONTHS ENDED JANUARY 31, 1994.
Sales and service revenue increased 47% to $15.5 million from $10.5
million. The Company acquired selected assets from Venture Out, a California
Corporation, on August 1, 1994, consisting primarily of the assets of two RV
dealerships operating in Roseville (Sacramento) and Bakersfield, California.
Revenues from these two dealerships accounted for $3.6 million of the increase.
On a same store basis, sales and service revenue increased 13.1%. The revenue
increase, on a same stores basis, was primarily due to increased sales of new
recreational vehicles (RVs) reflecting continued growth in the demand for
motorized RVs in the Company's primary markets, the Southeastern states.
Cost of sales, as a percentage of revenue, decreased to 83.0% from 84.7%.
Gross profit increased 63.4% to $2.6 million from $1.6 million. As a
percent of revenue, gross profit increased to 17.0% from 15.3%. This increase
was primarily due to gross profit from the acquired stores, accounting for
$850,000 of the $1.0 million increase. On a same store basis, gross profit
increased 13%, primarily due to increased sales of new RVs and increased net
agency commission, up 52% as compared to Fiscal 95. The Company's management
attributes the increase in commissions due to more competition among the
lending institutions for the Company's referred customers, resulting in higher
commissions to the company.
Selling, general and administrative (SG&A) expenses increased 52% to $2.2
million from $1.4 million. As a percent of revenue, SG&A expenses increased to
14.1% compared to 13.6%. On a same store basis SG&A increased 3%, primarily as
a result of marketing and personnel expenses associated with the increase in
revenue.
Income from operations increased 158% to $450,000 from $175,000. As a
percent of revenue, income from operations increased to 2.9% from 1.7%.
Interest income increased 87% to $95,000 from $51,000 due to a higher
yield on funds invested. Interest expense increased 151% to $329,000 from
$131,000 as a result of an increase in the average balance of floor plan
contracts (accounting for approximately 77% of the increase expense) and an
increase in the rate charged on the contracts (approximately 23% of the
increase in the expense).
Income before income taxes increased 129% to $216,000 from $94,000. As a
percent of revenue, income before income taxes increased to 1.4% from 0.9%.
11
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The combined Federal and State income tax rate was 38.9% in Fiscal 95
compared to 37.5% in Fiscal 94. Income taxes for both periods varied from the
Federal statutory rates due to state income taxes.
Net income increased 124% to $131,680 from $58,802. Net income, as a
percentage of revenue increased to 0.8% from 0.6%.
Earnings per share increased to 2 cents from 1 cent.
12
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PART II
OTHER INFORMATION
There is no information to report under Items 1, 2, 3,4 and 5 of Part II
of this report.
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 on Form 8-K, November 29, 1995, under Item 6, reporting
the resignation from the Company's Board of Directors, of Mr. G. Lee
FitzGerald. Mr. FitzGerald's resignation letter was included as an exhibit to
the filing.
13
<PAGE> 14
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
- ----
March 12, 1996 /s/Newton C. Kindlund
------------------------------------
Newton C. Kindlund, President,
Chief Executive Officer
Principal Executive Officer
March 12, 1996 /s/Joanne M. Kindlund
------------------------------------
Joanne M. Kindlund, Executive
Vice President-Administration,
Secretary/Treasurer
Principal Administrative Officer
March 12, 1996 /s/W. Hardee McAlhaney
------------------------------------
W. Hardee McAlhaney, Vice President
Chief Financial Officer
Principal Financial and Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JAN-31-1996
<CASH> 2,320
<SECURITIES> 0
<RECEIVABLES> 1,474
<ALLOWANCES> 0
<INVENTORY> 24,096
<CURRENT-ASSETS> 28,450
<PP&E> 5,152
<DEPRECIATION> 932
<TOTAL-ASSETS> 33,048
<CURRENT-LIABILITIES> 19,228
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 13,360
<TOTAL-LIABILITY-AND-EQUITY> 33,048
<SALES> 13,665
<TOTAL-REVENUES> 13,665
<CGS> 11,125
<TOTAL-COSTS> 11,125
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 388
<INCOME-PRETAX> 14
<INCOME-TAX> 6
<INCOME-CONTINUING> 8
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
