<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1995
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Commission file number 0-17756
-------
Consulier Engineering, Inc.
--------------------------------------------------------------------------------
(Exact Name of Small Business Issuer in Its Charter)
Florida 59-2556878
------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
169 Tequesta Drive - Suite 31E
Tequesta, FL 33469
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(407) 745-9149
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(Issuer's Telephone Number, Including Area Code)
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Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
periods 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding for each of the issuer's classes
of common equity as of the last practical date:
Common Stock $.01 Par Value - 2,519,586 shares outstanding as of August 8, 1995
<PAGE> 2
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
------------------------------
PAGE
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1995 (Unaudited)
and December 31, 1994 . . . . . . . . . . . 3
Consolidated Statement of Operations -
three and six month periods ended June 30,
1995 and 1994 (Unaudited) . . . . . . . . . 4
Consolidated Statements of Cash Flows -
six month periods ended June 30, 1995
and 1994 (Unaudited) . . . . . . . . . . . . 5
Notes to Consolidated Financial
Statements (Unaudited) . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . 8
PART II. OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings . . . . . . . . . . . . . 10
Item 4. Submission of Matters to Vote of Security
Holders . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . 10
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . 11
---------
</TABLE>
<PAGE> 3
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 1995 1994
---------------------------------------------- ----------- -----------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 738,176 $1,066,146
Receivables 686,406 509,552
Receivables - related parties 366,652 287,598
Inventories (Note 2) 712,673 569,543
Other current assets 0 3,500
---------- ----------
TOTAL CURRENT ASSETS 2,503,907 2,436,339
Property and equipment, net of
accumulated depreciation of $620,067
in 1995 and $573,593 in 1994 179,192 202,399
Limited partnership interest (Note 3) 2,292,403 2,292,403
Notes receivable - related parties 2,172,356 2,172,356
Patents and other assets 39,588 36,242
---------- ----------
$7,187,446 $7,139,739
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------
CURRENT LIABILITIES:
Accounts payable and accruals $ 110,665 $ 130,493
Income taxes 106,271 160,771
Notes payable - banks 8,690 48,841
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TOTAL CURRENT LIABILITIES 225,626 340,105
Bonds payable 1,975,000 2,275,000
Deferred income taxes 14,766 14,766
---------- ----------
TOTAL LIABILITIES 2,215,392 2,629,871
---------- ----------
Stockholders' equity:
Common stock - par value $.01; shares
authorized 5,000,000, issued and
outstanding 2,562,046 shares 25,620 25,620
Additional paid-in capital 2,881,865 2,899,127
Retained earnings 2,213,971 1,734,523
---------- ----------
5,121,456 4,659,270
Less treasury stock at cost - 42,460 shares
in 1995 and 1994 (149,402) (149,402)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 4,972,054 4,509,868
---------- ----------
$7,187,446 $7,139,739
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------------
1995 1994 1995 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Net sales $735,721 $467,856 $1,296,474 $1,004,084
Commission income - - 17,545 -
-------- -------- ---------- ----------
735,721 467,856 1,314,019 1,004,084
-------- -------- ---------- ----------
OPERATING COSTS AND EXPENSES:
Cost of goods sold 461,413 322,001 794,594 709,621
Selling, general and
administrative 368,339 283,790 757,065 485,589
-------- -------- ---------- ----------
829,752 605,791 1,551,659 1,195,210
-------- -------- ---------- ----------
Operating loss (94,031) (137,935) (237,640) (191,126)
-------- -------- ---------- ----------
OTHER INCOME (EXPENSE):
Investment income - related party 545,372 356,585 926,233 983,615
Interest income - related parties 121,591 61,123 167,369 116,235
Interest expense - other (79,685) (43,645) (87,487) (92,170)
Other income 1,973 3,282 1,973 3,282
-------- -------- ---------- ----------
589,251 377,345 1,008,088 1,010,962
-------- -------- ---------- ----------
Income before income taxes 495,220 239,410 770,448 819,836
Income taxes 185,500 92,000 291,000 311,000
-------- -------- ---------- ----------
Net income $309,720 $147,410 $ 479,448 $ 508,836
======== ======== ========= ==========
Net income per share $ 0.12 $ 0.06 $ 0.18 $ 0.19
======== ======== ========= ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1995 1994
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 479,448 $ 508,836
Adjustments to reconcile net income to net
cash used in operations:
Depreciation 46,475 44,324
Provision for uncollectible accounts 5,999 1,500
Amortization 11,526 17,200
Investment income - related party (926,233) (983,615)
Changes in operating assets and liabilities:
(Increase) in receivables (106,086) (56,148)
(Increase) decrease in inventories (143,130) 85,623
Increase in accounts payable
and accruals (19,828) (9,633)
Increase in income taxes payable (54,500) (31,824)
---------- ----------
NET USED IN OPERATIONS (706,329) (423,737)
---------- ----------
INVESTING ACTIVITIES:
Fixed asset additions (23,267) (36,290)
Patent development (14,873) (1,195)
Distributions from partnership interest 852,967 957,730
Loans to related parties 0 152,485
---------- ----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 814,827 1,072,730
---------- ----------
FINANCING ACTIVITIES:
Repayment of bank and other loans (40,151) (32,547)
Early redemption of bonds due in 2004 (300,000) -
Repayment of loans to related parties - (66,581)
Purchase of stock for the treasury and stock options (17,263) (135,820)
---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (357,414) (234,948)
---------- ----------
DECREASE IN CASH (248,916) 414,045
CASH, BEGINNING OF PERIOD 1,066,146 204,930
---------- ----------
CASH, END OF PERIOD $ 817,230 $ 618,975
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB and Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) considered necessary for a fair presentation have been
included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on
Form 10-KSB for the year ended December 31, 1994.
The consolidated financial statements include Consulier Engineering, Inc. (the
"Company") and its wholly-owned subsidiaries, Southeast Automotive Acquisition
Corporation and Consulier Business Services, Inc. All intercompany balances
and transactions have been eliminated.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market. Major classes of inventory are summarized as
follows:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Raw materials $ 17,519 $ 645
Work-in-process 69,445 37,940
Finished goods 625,709 530,958
--------- ----------
$ 712,673 $ 569,543
========= ==========
</TABLE>
6
<PAGE> 7
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3. LIMITED PARTNERSHIP INVESTMENT
The Company has a limited partnership interest in Adams, Viner & Mosler, Ltd.
("AVM") representing approximately 13 percent of the capital of the partnership
at June 30, 1995 and 15 percent at December 31, 1994. This investment is
accounted for under the equity method. The following summarizes the operations
of AVM (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $ 9,416 $ 8,019 $17,497 $15,328
Costs and expenses 2,826 1,376 6,014 4,342
------- ------- ------- -------
Net income $ 6,590 $ 6,643 $11,483 $10,986
======= ======= ======= =======
Company's share of
net income $ 545 $ 357 $ 926 $ 984
======= ======= ======= =======
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Consulier Engineering, Inc. ("CEI") experienced an excellent second quarter.
Net income more than doubled over the prior year quarter from $147,410 to
$309,720, and consolidated pretax earnings increased $256,000 to $589,251.
This was due to record operating results from the company's Southeast
automotive parts wholesale subsidiary, and to improved return on the company's
investment in Adams, Viner & Mosler, Ltd., ("AVM"), a government bond dealer.
Consolidated net sales increased 57% in the second quarter of 1995 relative to
the second quarter of 1994. Six month sales increased 29% over the prior
period to $1,286,000. Sales result primarily from the Company's Southeast
Automotive wholesale subsidiary.
Consolidated General, administrative and sales expenses increased 29.8% in the
second quarter from $283,790 to $368,339. The Company opened a new product
development/marketing office in Tequesta, Florida midway through the second
quarter of 1994. Additional staff and consultants were hired to develop
proprietary technology and generate product development resulting in expenses
of approximately $42,000 per month.
Sales of the company's Southeast automotive parts wholesale subsidiary
increased 65% to $730,358 in the second quarter due to improved economic
conditions and the continued introduction of new products. Southeast's cost of
goods sold decreased to 60.9% of net sales in the quarter from 64.1% in the
second quarter of 1994. Southeast's pretax earnings were $130,962 for the
quarter compared to $52,659 for the prior year quarter. Management expects
continued improvement in this business through the balance of the year.
CEI earned $545,372 on its investment in AVM for the quarter, an annualized
return of 95.2%. In the second quarter of 1994 income from AVM was $239,410.
Six month earnings from AVM were $926,000 compared to $984,000 for the prior
year six month period.
LIQUIDITY AND CAPITAL RESOURCES
Current assets at June 30, 1995 were $2,504,000, an increase of $68,000 from
December 31, 1994. Positive cash flow allowed the Company to reduce current
liabilities by $114,000 to $225,626 while also retiring $300,000 of long term
debt. The Company expects to retire additional long term debt through the
balance of the year.
8
<PAGE> 9
FUTURE OUTLOOK
Consulier is actively developing its potential products and patented
technologies. An expenditure of $500,000 has been budgeted for the
development and marketing of products and technology over the twelve month
period ending May 15, 1996. Several products are in the final stages of
development and are expected to begin being marketed later this year.
Consulier expects continued improvement in the operating results of its
automotive parts wholesale distribution business due to expanded product lines
and the signing of new supply contracts. Southeast intends to continue to
expand its business through the introduction of new product lines and
development of a wider customer base.
Consulier has an option to purchase one million shares of restricted U.S.
Electricar ("Electricar") common stock at a price of $.50 per share. On August
2, 1995 this stock was trading at a bid price of $.25 per share. Electricar is
in a very speculative business involving the development and manufacturing of
battery operated electric vehicles, and has been experiencing cash flow
problems. The restriction on the common shares for which Consulier has an
option will be lifted in part in November 1995 and in full in November 1996.
CEI is also entitled to receive production royalties from Electricar on sales
of vehicles using the composite monocoque construction technology. No
royalties have been received to date. The first royalty payment would be due
in the third quarter of 1995. Management is not certain that royalties will
be paid since Electricar may not have sufficient cash to meet its obligations.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of June 30, 1995, there were no legal proceedings pending against the
Company or its subsidiaries nor did the Company have any knowledge of any
proceedings which were being contemplated.
ITEM 4. SUBMISSION OF MATTERS FOR A VOTE OF SECURITY HOLDERS
During the second quarter of the fiscal year ending December 31, 1995, the
Company did not submit any matters to a vote of security holders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS
QUARTERLY REPORT ON FORM 10-QSB
EXHIBIT DESCRIPTION
------- -----------
11 Statement regarding computation of earnings per share
27 Financial Data Schedule (for SEC use only)
(B) CURRENT REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the three months ended
June 30, 1995.
10
<PAGE> 11
SIGNATURE
In accordance with the requirements of the Exchange Act, Consulier Engineering,
Inc. has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONSULIER ENGINEERING, INC.
---------------------------
(Registrant)
Date: August 8, 1995 /s/ Thomas G. Weber
---------------------------
Thomas G. Weber
Vice President
Secretary/Treasurer
Chief Financial Officer
11
<PAGE> 1
EXHIBIT 11
CONSULIER ENGINEERING, INC.
COMPUTATION OF EARNINGS PER SHARE
PRIMARY AND FULLY DILUTED
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Income $ 309,720 $ 147,410 $ 479,448 $ 508,836
Tax effected
debt reduction (1) N/A N/A N/A 23,590
---------- ---------- ---------- ----------
Adjusted Net income $ 309,720 $ 147,410 $ 479,448 $ 532,426
========== ========== ========== ==========
Shares used in
computation:
Weighted average
number of
common shares
outstanding 2,522,346 2,531,118 2,522,346 2,539,696
Common stock
equivalents
from assumed
issuances using
the treasury
stock method -
Stock options and
warrants 149,759 N/A (2) 154,864 243,479
---------- ---------- ---------- ----------
Primary shares O/S 2,672,105 2,531,118 2,677,210 2,783,175
========== ========== ========== ==========
Earnings per share: $ .12 $ .06 $ .18 $ .19
========== ========== ========== ==========
</TABLE>
NOTES:
(1) At June 30, 1994 under the modified treasury stock method proceeds from
the issuance of options and warrants exceeded the cost of repurchasing
20% of outstanding shares at average market price for the period.
Accordingly, a debt reduction and the investment of funds in Treasury
securities was assumed. Income was therefore adjusted net of the related
tax effect.
(2) For the three month period ended September 30, 1994 the modified treasury
stock method was anti-dilutive. Therefore, weighted average common
shares were used in computing earnings per share.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 738
<SECURITIES> 0
<RECEIVABLES> 1,068
<ALLOWANCES> 15
<INVENTORY> 713
<CURRENT-ASSETS> 2,503
<PP&E> 799
<DEPRECIATION> 620
<TOTAL-ASSETS> 7,187
<CURRENT-LIABILITIES> 226
<BONDS> 1,975
<COMMON> 26
0
0
<OTHER-SE> 4,946
<TOTAL-LIABILITY-AND-EQUITY> 7,187
<SALES> 1,296
<TOTAL-REVENUES> 1,314
<CGS> 795
<TOTAL-COSTS> 795
<OTHER-EXPENSES> 486
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> 770
<INCOME-TAX> 291
<INCOME-CONTINUING> 479
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 479
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
