<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 APRIL 30, 1997
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, 1997, Holiday RV Superstores, Incorporated had
outstanding 7,435,700 shares of Common Stock, par value $.01 per share.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page
<S> <C> <C>
Part I
Financial Information
1. Financial Statements............................................................................... 3
Consolidated Condensed Balance Sheets ............................................................. 4
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 Security Holders............................................... 13
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>
04/30/97 10/31/96
(Unaudited)
----------- -------------
<S> <C> <C>
CURRENT:
Cash and cash equivalents $ 5,854,036 $ 5,617,707
Accounts receivable:
Trade and contracts in transit 1,100,511 506,804
Other 462,899 254,861
Inventories 22,823,177 23,196,007
Refundable income taxes ---- 7,919
Deferred income taxes 147,000 147,000
------------ ------------
TOTAL CURRENT ASSETS 30,387,623 29,730,298
PROPERTY AND EQUIPMENT,
less accumulated depreciation 4,344,656 4,350,649
OTHER ASSETS,
principally covenant not to compete 301,850 330,200
------------ ------------
TOTAL ASSETS $ 35,034,129 $ 34,411,147
============ ============
</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>
04/30/97 10/31/96
(Unaudited)
------------ -------------
<S> <C> <C>
CURRENT LIABILITIES:
Floor plan contracts $ 17,178,493 $ 17,504,302
Accounts payable 1,080,196 547,375
Customer deposits 173,015 76,405
Accrued expenses 681,006 1,103,729
Current portion of capital lease obligations 58,643 49,737
------------ ------------
TOTAL CURRENT LIABILITIES 19,171,353 19,281,548
LONG TERM CAPITAL LEASE OBLIGATIONS
less current portion 308,709 345,962
DEFERRED INCOME TAXES 11,000 11,000
STOCKHOLDERS' EQUITY:
Common stock $.01 par - shares authorized
10,000,000; issued 7,465,000 74,650 74,650
Additional paid-in capital 5,109,071 5,109,071
Retained earnings 10,424,047 9,672,109
Less:
Treasury stock, at cost, 15,300 shares (46,430) (46,430)
Deferred compensation (18,271) (36,763)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 15,543,067 14,772,637
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 35,034,129 $ 34,411,147
============ ============
</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 Six Months Ended
04/30/97 04/30/96 04/30/97 04/30/96
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
SALES & SERVICE REVENUE $ 21,431,451 $ 25,922,459 $ 36,833,865 $ 39,587,042
COST OF SALES AND SERVICE 17,547,310 21,663,210 30,196,985 32,788,430
------------- ------------- -------------- --------------
Gross Profit 3,884,141 4,259,249 6,636,880 6,798,612
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,684,890 2,932,648 4,920,760 5,158,499
------------- ------------- -------------- --------------
Income from operations 1,199,251 1,326,601 1,716,120 1,640,113
INTEREST INCOME 103,481 94,382 207,805 182,753
INTEREST EXPENSE 319,605 327,386 694,987 715,675
------------- ------------- -------------- --------------
Income before income taxes 983,127 1,093,597 1,228,938 1,107,191
INCOME TAXES 381,600 433,655 477,000 439,500
------------- ------------- -------------- --------------
NET INCOME $ 601,527 $ 659,942 $ 751,938 $ 667,691
============= ============= ============== ==============
EARNINGS PER SHARE
OF COMMON STOCK $ 0.08 $ 0.09 $ 0.10 $ 0.09
============= ============= ============== ==============
WEIGHTED AVERAGE NUMBER OF COMMON
STOCK AND COMMON STOCK EQUIVALENTS
OUTSTANDING 7,470,000 7,457,000 7,474,000 7,505,000
============= ============= ============== ==============
</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>
SIX MONTHS ENDED
APRIL 30
1997 1996
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 36,031,680 $ 39,319,985
Cash paid to suppliers and employees (34,637,222) (38,211,694)
Interest received 207,805 182,753
Interest paid (684,144) (712,307)
Income taxes paid (485,578) (420,016)
-------------- --------------
Net cash provided by operating activities 432,541 158,721
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (168,865) (461,972)
Proceeds from the sale of equipment 1,000 -----
-------------- --------------
Net cash used for investing activities (167,865) (461,972)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligations (28,347) (20,193)
-------------- --------------
Net cash used for financing activities (28,347) (20,193)
Net cash provided by (used for)operating, investing
and financing activities 236,329 (323,444)
Cash and cash equivalents, beginning of period 5,617,707 4,012,860
-------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,854,036 $ 3,689,416
============== ==============
</TABLE>
See accompanying notes to the consolidated condensed financial statement
6
<PAGE> 7
HOLIDAY RV SUPERSTORES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30
1997 1996
------------- -------------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 751,938 $ 667,691
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 227,230 192,129
(Gain) loss on disposal of property and equipment
and rental fleet (440) 2,817
Cash provided by(used for):
Accounts receivable (801,745) (269,874)
Inventories 372,830 (4,160,853)
Prepaid expenses 7,919 39,333
Other assets (6,090) 7,701
Floor plan contracts (325,809) 3,440,418
Accounts payable 532,821 280,052
Customer deposits 96,610 163,327
Accruals (422,723) (204,020)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES: $ 432,541 $ 158,721
=========== ===========
</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, 1996. 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, 1997 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, 1997 October 31, 1996
-------------- ----------------
<S> <C> <C>
New Vehicles $17,150,052 $17,581,630
New Marine 729,918 750,147
Used Vehicles 3,242,500 3,320,401
Used Marine 100,010 117,164
Parts and Accessories 1,600,697 1,426,665
------------ -----------
$22,823,177 $23,196,007
=========== ===========
</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 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.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward looking statements.
The Company wishes to caution investors that any forward looking statements made
by or on behalf of the Company are subject to uncertainties and other factors
that could cause actual results to differ materially from such statements. The
uncertainties and other factors include, but are not limited to, the factors
listed in the Company's Form 10-K for the year ended October 31, 1996 (many of
which have been discussed in prior SEC filings by the Company.) Though the
Company has attempted to list the factors it believes to be important to its
business the Company wishes to caution investors that other factors may prove to
be important in affecting the Company's results of operations. New factors
emerge from time to time and it is not possible for management to predict all of
such factors, nor can it assess the impact of each such factor on the business
or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from forward looking statements.
Investors are further cautioned not to place undue reliance on any forward
looking statements as they speak only of the Company's view as of the date the
statement was made. The Company undertakes no obligation to publicly update or
revise any forward looking statements, whether as a result of new information,
future events, or otherwise.
FINANCIAL CONDITION AS OF APRIL 30, 1997 COMPARED TO APRIL 30, 1996.
The Company continued to maintain a strong financial position and high
liquidity for the first six months of fiscal 97. Changes in cash flows
resulted primarily from lower revenue and lower cost to provide goods and
services associated with lower revenue. Cash used for accounts receivable
increased $532,000 to $802,000 to finance short term receivables due from
finance companies providing retail financing for the Company's customers.
Inventory decreases of $373,000 provided cash used primarily to pay off
corresponding floor plan contracts of $326,000. In fiscal 96 inventory
increases used $4.2 in cash of which only $3.4 million of cash was provided by
floor plan contracts. The $720,000 increase not financed by floor plan
contracts was primarily due to increased used RV inventory not floored. The
Company's policy is not to floor plan used inventory.
Cash used for investing activities decreased from $462,000
used the prior year to fund the Bakersfield California dealership construction,
to $169,000 used this year for the acquisition of additional undeveloped real
property to expand the Bakersfield dealership, and to fund improvements to a
newly leased dealership facility in Fort Myers, Florida.
9
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The net results on the Company's cash from all activities was an increase
of $236,000 compared to a use of $323,000 in the prior year. These changes
resulted in a cash position of $5.8 million as of April 30, 1997 as compared to
$3.7 million as of April 30, 1996.
Net working capital increased to $11.2 million as of April 30, 1997,
compared to $10.5 million as of April 30, 1996.
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) the referral fee to the lender if
the loan is paid off or foreclosed in the first six (6) months of the term of
the loan, if the chargeback 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 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.
The Company has $57 million maximum borrowing available under floor plan
contracts of which $40 million was not used.
The Company's management feels it can obtain additional debt financing at
reasonable interest rates for expansion and/or diversification of its
operations. Currently, management has no expansion or diversification
prospects requiring a secondary stock offering or conversion of the financing
debt to common stock. Management does intend to continue to issue common stock
and/or options on common stock as a partial payment for acquisitions when cost
effective. However, management expects the dilutive effect on the common
stockholders of the Company resulting from issuing such common stock or options
to be minimal.
Management believes that during the next twelve months cash generated by
operating activities, cash and cash equivalents on deposit with financial
institutions and financing currently available from floor plan financing
companies will be sufficient for its capital and operating needs for its
existing operations.
10
<PAGE> 11
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED APRIL 30, 1997 COMPARED TO THE
THREE MONTHS ENDED APRIL 30, 1996.
Sales and service revenue decreased 17% to $21.4 million from $25.9 million
due to lower revenue from the eastern dealerships. Revenue was down in all
major revenue sources except service related revenue was up 3%.
According to Automotive News (May 12, 1997), total shipments to dealers
from manufacturers were down 1.7% and motorhome shipments down 10.3%, for the
first three months of calendar 1997. This general downward trend and increased
competition in the Company's eastern markets accounts for the decrease in the
Company's revenue in fiscal 97. Consequently the Company's management has made
a number of strategic changes in store management, marketing strategy, and
relocated the Ft. Myers dealership to an upgraded facility with higher
visibility.
As a result of these changes management feels the eastern dealerships will
become more competitive. However, management does not feel the Company's
revenue for the remaining two quarters of fiscal 97 will exceed last year's
revenue due to a continued decrease in the overall demand for it's products and
increased competition in it's eastern markets.
Gross profit decreased 8.8% to $3.9 million from $4.3 million. As a
percent of revenue, gross profit increased to 18.1% from 16.4% primarily as a
result of increased margins on used RVs sold.
Selling, general and administrative (SG&A) expenses decreased 8.4% to $2.68
million from $2.93 million due to lower expenses resulting from lower revenue.
As a percent of revenue, SG&A increased to 12.5% from 11.3%.
Income from operations decreased 9.6% to $1.2 million from $1.3 million.
As a percent of revenue, income from operations increased to 5.6% from 5.1%.
Interest income increased 9.6% to $103,000 from $94,000. Interest expense
decreased slightly to $320,000 from $327,000.
Income before income taxes decreased 10.1% to $983,000 from $1,094,000. As
a percent of revenue, income before income taxes increased to 4.6% from 4.2%.
The combined Federal and State income tax rate was 38.8% compared to 39.6%.
Income taxes for both periods varied from the Federal statutory rates due to
State Income Taxes.
Net income decreased 8.9% to $601,527 from $659,942. As a percent of
revenue, net income increased to 2.8% from 2.5%.
Earnings per share decreased to 8 cents from 9 cents.
11
<PAGE> 12
RESULTS FROM OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 1997 COMPARED TO THE
SIX MONTHS ENDED APRIL 30, 1996.
Sales and service revenue decreased 7% to $36.8 million from $39.6
million. Revenue was down primarily due to an 11% decrease in new RV and
Marine sales. Revenue from the sale of used RVs and Marine, and service
related revenue, increased 2% and 3% respectively.
Gross profit decreased 2.4% to $6.6 million compared to $6.8 million. As a
percent of revenue, gross profit increased to 18.0% from 17.2% primarily due to
increased margins from the sale of used RVs.
Selling, general and administrative (SG&A) expenses decreased 4.6% to $4.9
million from $5.2 million, due to lower expenses resulting from low revenue.
As a percent of revenue, SG&A increased to 13.4% from 13.0%.
Income from operations increased 4.6% to $1.72 million from $1.64 million.
As a percent of revenue, income from operations increased to 4.7% from 4.1%.
Interest income increased 13.7% to $208,000 from $183,000. Interest
expense decreased 3% to $695,000 from $716,000.
Income before income taxes increased 11% to $1,228,938 from $1,107,191. As
a percent of revenue, income before income taxes increased to 3.3% from 2.8%.
The combined Federal and State income tax rate was 38.8% compared to 39.7%.
Net income increased 12.6% to $751,938 from $667,691. As a percent of
revenue net income increased to 2.0% from 1.7%.
Earnings per share increased to 10 cents from 9 cents.
12
<PAGE> 13
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 19, 1997 the following
individuals were re-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
The company did not solicit proxies for the meeting. A total of 4,543,736
shares of Common Stock were represented and voted at the meeting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
27 Financial Data Schedule (for SEC use only).
FORM 8-K
The Company filed no report on Form 8-K for the three months
ended April 30, 1997.
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
June 9, 1997 /S/ Newton C. Kindlund
--------------------------------------
Newton C. Kindlund, President
Chief Executive Officer
Principal Executive Officer
June 9, 1997 /S/ W. Hardee McAlhaney
--------------------------------------
W. Hardee McAlhaney, Vice President
Chief Financial Officer
Principal Financial and
Accounting Officer
June 9, 1997 /S/ Joanne M. Kindlund
--------------------------------------
Joanne M. Kindlund, Secretary
Treasurer
Principal Secretary and Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> APR-30-1997
<CASH> 5,854
<SECURITIES> 0
<RECEIVABLES> 1,564
<ALLOWANCES> 0
<INVENTORY> 22,823
<CURRENT-ASSETS> 30,387
<PP&E> 5,576
<DEPRECIATION> 1,231
<TOTAL-ASSETS> 35,034
<CURRENT-LIABILITIES> 17,178
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 15,468
<TOTAL-LIABILITY-AND-EQUITY> 35,034
<SALES> 36,833
<TOTAL-REVENUES> 36,833
<CGS> 30,197
<TOTAL-COSTS> 30,197
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 695
<INCOME-PRETAX> 1,229
<INCOME-TAX> 477
<INCOME-CONTINUING> 752
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 752
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
