<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 September 30, 1995
------------------
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
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
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 - 2,511,730 shares outstanding
as of November 8, 1995
<PAGE> 2
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1995 (Unaudited)
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Operations -
three and nine month periods ended
September 30, 1995 and 1994 (Unaudited) . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
nine month periods ended September 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 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . . . 10
Item 4. Submission of Matters to Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 5. Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . 10
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
- ---------
</TABLE>
<PAGE> 3
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
- -------------------------------------------------------- ------------- ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 539,759 $1,066,146
Receivables 618,028 509,552
Receivables - related parties 413,590 287,598
Inventories (Note 2) 762,874 569,543
Other current assets 26,922 3,500
---------- ----------
TOTAL CURRENT ASSETS 2,361,173 2,436,339
Property and equipment, net of
accumulated depreciation of $643,435
in 1995 and $573,593 in 1994 182,076 202,399
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 42,162 36,242
---------- ----------
$7,050,170 $7,139,739
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accruals $161,218 $130,493
Income taxes 122,685 160,771
Notes payable - banks 7,921 48,841
---------- ----------
TOTAL CURRENT LIABILITIES 291,824 340,105
Bonds payable 1,575,000 2,275,000
Deferred income taxes 14,766 14,766
---------- ----------
TOTAL LIABILITIES 1,881,590 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 2,432,101 1,734,523
---------- ----------
5,339,586 4,659,270
Less treasury stock at cost - 50,316 shares
in 1995 and 42,460 shares in 1994 (171,006) (149,402)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 5,168,580 4,509,868
---------- ----------
$7,050,170 $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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ----------------------
1995 1994 1995 1994
--------- -------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Net sales $578,461 $458,500 $1,874,935 $1,462,584
Commission income 89 - 17,634 -
-------- -------- ---------- ----------
578,550 458,500 1,892,569 1,462,584
-------- -------- ---------- ----------
OPERATING COSTS AND EXPENSES:
Cost of goods sold 385,967 311,406 1,180,561 1,021,027
Selling, general and
administrative 342,570 308,855 1,099,635 794,444
-------- -------- ---------- ----------
728,537 620,261 2,280,196 1,815,471
-------- -------- ---------- ----------
Operating loss (149,987) (161,761) (387,627) (352,887)
-------- -------- ---------- ----------
OTHER INCOME (EXPENSE):
Investment income - related party 481,739 354,667 1,407,972 1,338,282
Interest income - related parties 85,191 83,521 254,533 199,756
Interest expense - other (38,813) (58,169) (126,300) (150,339)
Other income 0 17,826 0 21,108
-------- -------- ---------- ----------
528,117 397,845 1,536,205 1,408,807
-------- -------- ---------- ----------
Income before income taxes 378,130 236,084 1,148,578 1,055,920
Income taxes 160,000 94,000 451,000 405,000
-------- -------- ---------- ----------
Net income $218,130 $142,084 $ 697,578 $ 650,920
======== ======== ========== ==========
Net income per share $ 0.08 $ 0.06 $ 0.26 $ 0.25
======== ======== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1995 1994
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 697,578 $ 650,920
Adjustments to reconcile net income to net
cash used in operations:
Depreciation 69,842 68,579
Provision for uncollectible accounts 5,999 7,500
Amortization 17,401 26,035
Investment income - related party (1,407,972) (1,338,282)
Changes in operating assets and liabilities:
(Increase) in receivables and other current asets (118,845) (92,530)
(Increase) decrease in inventories (193,331) 92,427
Increase (Decrease) in accounts payable
and accruals 30,725 (183)
(Decrease) in income taxes payable (38,086) (3,824)
----------- -----------
NET USED IN OPERATIONS (936,689) (589,358)
----------- -----------
INVESTING ACTIVITIES:
Fixed asset additions (49,520) (52,111)
Patent development (23,320) (5,179)
Distributions from partnership interest 1,388,921 1,271,693
Loans to related parties - -
----------- -----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 1,316,081 1,214,403
----------- -----------
FINANCING ACTIVITIES:
Repayment of bank and other loans (40,920) (54,253)
Early redemption of bonds due in 2004 (700,000) -
Loans to related parties (125,992) (291,731)
Repayment of loans to related parties - 389,357
Purchase of stock for the treasury and stock options (38,867) (135,820)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (905,779) (92,447)
----------- -----------
DECREASE IN CASH (526,387) 532,598
CASH, BEGINNING OF PERIOD 1,066,146 204,930
----------- -----------
CASH, END OF PERIOD $ 539,759 $ 737,528
=========== ===========
</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>
September 30, December 31,
1995 1994
------------ -----------
<S> <C> <C>
Raw materials $ 17,519 $ 645
Work-in-process 75,069 37,940
Finished goods 670,286 530,958
--------- ---------
$ 762,874 $ 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 September 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $ 9,239 $ 6,845 $26,736 $22,173
Costs and expenses 3,092 2,790 9,106 7,132
------- ------- ------- -------
Net income $ 6,147 $ 4,055 $17,630 $15,041
======= ======= ======= =======
Company's share of
net income $ 482 $ 354 $ 1,408 $ 1,338
======= ======= ======= =======
</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 third quarter.
Consolidated pretax earnings increased $142,000 or 60.1% for the quarter to
$378,000, while consolidated net income increased $76,000 or 53.5% over the
prior year quarter from $142,000 to $218,000. 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 income for the nine month
period increased $47,000 to $698,000.
Consolidated net sales increased 26% to $578,000 in the third quarter of 1995.
Nine month sales increased 28% over the prior period to $1,875,000. Sales
result primarily from the Company's Southeast Automotive wholesale subsidiary.
However, third quarter sales did include $20,000 representing the completion of
an engineering consulting contract. CEI anticipates additional significant
follow on work to this contract.
Consolidated General, administrative and sales expenses increased 10.9% in the
third quarter from $309,000 to $343,000. The Company opened its 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 $43,000 per month.
Sales of the company's Southeast automotive parts wholesale subsidiary
increased 16% to $552,831 in the third quarter due to improved economic
conditions and the continued introduction of new products. Southeast's cost of
goods sold decreased to 66.7% of net sales in the quarter from 67.9% in the
third quarter of 1994. Southeast's pretax earnings were $65,319 for the
quarter compared to $16,365 for the prior year quarter. Southeast's nine
months sales increased 32% to $1,839,000. Nine months pretax earnings
increased 126% to $296,000. Management expects continued improvement in this
business into 1996.
CEI earned $481,739 on its investment in AVM for the quarter, which equates to
an annualized return of 84.1%. Third quarter 1994 income from AVM was
$354,667. Nine month earnings from AVM were $1,408,000 compared to $1,338,000
for the prior year nine month period.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Current assets at September 30, 1995 were $2,361,000, a decrease of $75,000
from December 31, 1994. Positive cash flow allowed the Company to reduce
current liabilities by $48,000 to $291,824 while also retiring $700,000 of long
term debt. The Company expects to retire additional long term debt through the
balance of the year.
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
November 6, 1995 this stock was trading at a bid price of $.13 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 later in 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 September 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 2. CHANGES IN SECURITIES
During the third quarter of the fiscal year ending December 31, 1995 there were
no changes in the instruments defining the rights of the holders of any class
of registered securities, nor were the rights evidenced by any class of
registered securities limited or qualified by the issuance or modification of
any other class of securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
During the third quarter of the fiscal year ending December 31, 1995 there have
been no material defaults in the payment of principal, interest, or any other
material default with respect to any indebtedness, nor has there been any
arrearage in the payment of dividends of any class of stock.
ITEM 4. SUBMISSION OF MATTERS FOR A VOTE OF SECURITY
HOLDERS
During the third quarter of the fiscal year ending December 31, 1995, the
Company did not submit any matters to a vote of security holders.
ITEM 5. OTHER INFORMATION
The registrant has no other information to report which might otherwise be
reported under Form 8-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
11 Statement regarding computation of
earnings per share
27 Financial Data Schedule (for SEC use only)
</TABLE>
10
<PAGE> 11
(B) CURRENT REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the three month period
ended September 30, 1995.
11
<PAGE> 12
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)
/s/ Thomas G. Weber
Date: November 8, 1995 ---------------------------
Thomas G. Weber
Vice President
Secretary/Treasurer
Chief Financial Officer
12
<PAGE> 1
EXHIBIT 11
CONSULIER ENGINEERING, INC.
COMPUTATION OF EARNINGS PER SHARE
PRIMARY AND FULLY DILUTED
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C>
Net Income $ 218,130 $ 142,084 $ 697,578 $ 650,920
Tax effected
debt reduction (1) N/A N/A N/A 60,800
--------- --------- --------- ---------
Adjusted Net income $ 218,130 $ 142,084 $ 697,578 $ 711,720
========= ========= ========= =========
Shares used in
computation:
Weighted average
number of
common shares
outstanding 2,520,211 2,519,586 2,521,627 2,532,720
Common stock
equivalents
from assumed
issuance using
the treasury
stock method -
Stock options and
warrants 155,698 N/A (2) 152,057 283,479
---------- ---------- ---------- ----------
Primary shares O/S 2,675,909 2,803,065 2,673,684 2,816,199
========== ========== ========== ==========
Earnings per share: $ .08 $ .06 $ .26 $ .25
========== ========== ========== ==========
</TABLE>
NOTES:
(1) At September 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.
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 540
<SECURITIES> 0
<RECEIVABLES> 1,047
<ALLOWANCES> 15
<INVENTORY> 763
<CURRENT-ASSETS> 2,361
<PP&E> 826
<DEPRECIATION> 643
<TOTAL-ASSETS> 7,050
<CURRENT-LIABILITIES> 292
<BONDS> 1,575
<COMMON> 26
0
0
<OTHER-SE> 5,143
<TOTAL-LIABILITY-AND-EQUITY> 7,050
<SALES> 1,875
<TOTAL-REVENUES> 1,893
<CGS> 1,181
<TOTAL-COSTS> 1,181
<OTHER-EXPENSES> 1,100
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 126
<INCOME-PRETAX> 1,149
<INCOME-TAX> 451
<INCOME-CONTINUING> 698
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 698
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
