<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 March 31, 1995
--------------
Commission file number 0-17756
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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
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(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 May 8, 1995
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<PAGE> 2
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1995 (Unaudited)
and December 31, 1994 . . . . . . . . . . . . . . 3
Consolidated Statement of Operations -
three months ended March 31,
1995 and 1994 (Unaudited) . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
three months ended March 31, 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 . . . . . . . . . . . . . .11
Item 4. Submission of Matters to Vote of Security
Holders . . . . . . . . . . . . . . . . . .11
Item 6. Exhibits and Reports on Form 8-K . . . . . . .11
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . .13
</TABLE>
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CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1995 1994
- ---------------------------------------------- ----------- ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash $1,050,332 $1,066,146
Receivables 544,523 509,552
Receivables - related parties 327,657 287,598
Inventories (Note 2) 747,099 569,543
Other current assets 3,500 3,500
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TOTAL CURRENT ASSETS 2,673,111 2,436,339
Property and equipment, net of
accumulated depreciation of $599,874
in 1995 and $573,593 in 1994 188,913 202,399
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 31,963 36,242
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$7,358,746 $7,139,739
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ----------------------------------------------
CURRENT LIABILITIES:
Accounts payable and accruals $ 277,599 $ 130,493
Income taxes 101,272 160,771
Notes payable - banks 27,775 48,841
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TOTAL CURRENT LIABILITIES 406,646 340,105
Bonds payable 2,275,000 2,275,000
Deferred income taxes 14,766 14,766
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TOTAL LIABILITIES 2,696,412 2,629,871
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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 1,904,251 1,734,523
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4,811,736 4,659,270
Less treasury stock at cost - 42,460 shares
in 1995 and 1994 (149,402) (149,402)
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TOTAL STOCKHOLDERS' EQUITY 4,662,334 4,509,868
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$7,358,746 $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
MARCH 31,
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1995 1994
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<S> <C> <C>
REVENUES:
Net sales $ 560,753 $ 536,228
Commission income 17,545 -
--------- ---------
578,298 536,228
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OPERATING COSTS AND EXPENSES:
Cost of goods sold 333,181 387,620
Selling, general and
administrative 388,726 201,799
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721,907 589,419
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Operating loss (143,609) (53,191)
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OTHER INCOME (EXPENSE):
Investment income - related party 380,861 627,030
Interest income - related parties 45,778 55,112
Interest expense - other (7,802) (48,525)
Other income 0 0
--------- ---------
418,837 633,617
--------- ---------
Income before income taxes 275,228 580,426
Income taxes 105,500 219,000
--------- ---------
Net income $ 169,728 $ 361,426
========= =========
Net income per share $ 0.06 $ 0.14
========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
CONSULIER ENGINEERING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1995 1994
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<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 169,728 $ 361,426
Adjustments to reconcile net income to net
cash used in operations:
Depreciation 26,281 21,362
Provision for uncollectible accounts 999 1,500
Amortization 5,386 8,600
Investment income - related party (380,861) (627,030)
Changes in operating assets and liabilities:
Increase in receivables (20,010) (117,300)
(Increase) decrease in inventories (177,556) 106,887
Increase (decrease) in accounts payable
and accruals 147,106 (55,663)
Increase (decrease) in income taxes payable (59,499) 167,176
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NET USED IN OPERATIONS (288,426) (133,042)
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INVESTING ACTIVITIES:
Fixed asset additions (12,795)
Patent development (1,107) (1,195)
Distributions from partnership interest 364,901 401,368
Loans to related parties (40,059) (303,501)
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NET CASH PROVIDED BY INVESTING ACTIVITIES 310,940 96,672
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FINANCING ACTIVITIES:
Repayment of bank and other loans (21,066) (16,124)
Purchase of stock for the treasury and stock options (17,262) (33,188)
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (38,328) (49,312)
---------- ----------
DECREASE IN CASH (15,814) (85,682)
CASH, BEGINNING OF PERIOD 1,066,146 204,930
---------- ----------
CASH, END OF PERIOD $1,050,332 $ 119,248
========== ==========
</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>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Raw materials $ 10,948 $ 645
Work-in-process 42,281 37,940
Finished goods 693,310 530,958
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$747,099 $ 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 14 percent of the capital of the partnership
at March 31, 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
March 31,
1995 1994
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<S> <C> <C>
Revenues $ 8,081 $ 8,019
Costs and expenses 3,188 1,376
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Net income $ 4,893 $ 6,643
======= =======
Company's share of
net income $ 381 $ 627
======= =======
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Consolidated net sales increased 8% in the first quarter of 1995 relative to
the first quarter of 1994. Sales result primarily from the Company's Southeast
Automotive wholesale subsidiary. Southeast sales increased 18% to $555,496 in
the first quarter due to improved economic conditions and due to the continued
introduction of new products. In the third quarter of 1994 Southeast signed
supply contracts with four major customers which added an additional $17,545 in
commission revenue to first quarter operating results.
Southeast's cost of goods sold decreased to 56.2% of net sales in the quarter
from 62.3% in the first quarter of 1994. This decrease was due primarily to
change in the sales product mix. Consolidated cost of sales decreased from
72.3% of sales in 1994 to 40.6% of sales in 1995. At the end of the first
quarter of 1994 the Company discontinued its high performance engine business
which had been losing money.
General, administrative and sales expenses increased 92.6% in the first quarter
from $201,799 to $388,726. 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
existing proprietary technology and generate new product development.
First quarter operating losses increased by $90,418 due to the opening of the
above mentioned new office, and due to other increases in corporate general,
administrative and sales expenses. These increases were offset in part by
improved operating results in the automotive parts wholesale business, and by
reduced costs due to the discontinuance of the engine repair business.
Income from the automotive parts business improved to a record $100,138 for the
quarter versus income of $62,449 for the prior year. Management expects
continued improvement in this business through the balance of the year.
Pretax income decreased $191,698 due to the increased operating loss and due to
a decrease in income from the Company's investment in AVM. The Company earned
$380,861 on its investment in AVM which represents an annualized return of
66.4%. In the first quarter of 1994 income from AVM was $627,030. In 1994 the
total 12 month return on the Company's investment was 75.2%.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Current assets increased $237,000 from December 31, 1994 to March 31, 1995.
Increases of $176,000 in inventories and $75,000 in receivables were offset by
a $16,000 reduction in cash. Current liabilities increased $67,000 from
December 31, 1994 to March 31, 1995 due to a $147,000 increase in payables
offset by reductions in income taxes payable and notes payable to banks.
Consulier does not anticipate any material capital additions during the balance
of 1995. Current cash flow from the Company's investment in AVM and from
Southeast is more than adequate. The Company expects to begin paying down some
of its long term debt through the balance of the year.
FUTURE OUTLOOK
Consulier is actively pursuing the development of potential products and
patented technologies. The Board of Directors authorized the expenditure of
$500,000 for the development and marketing of products and technology over the
twelve month period ending May 15, 1995. These development expenditures have
been funded from returns on the Company's investment in AVM. Development
expenditures are expected to continue at this level through the balance of
1995. 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 further expand
its business through the further introduction of new product lines and
development of a wider customer base.
Management believes that the Company's positive cash flow will continue. This
conclusion assumes continued returns from the Company's investment in AVM, and
the continued improvement in the Southeast automotive products wholesale
business.
Based on the results of AVM's operations over the past five years and its
future outlook, the Company expects the income from its investment in AVM to
continue to contribute significantly to its net income. However, because of
the nature of AVM's business and the general condition of the national economy,
there can be no guarantee that net income will continue at levels attained
since the investment was made on April 1, 1990.
9
<PAGE> 10
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 May 4,
1995 this stock was trading at a bid price of $.50 per share. Electricar is in
a very speculative business involved in the development of battery operated
electric vehicles. Electricar 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.
The Company 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.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of March 31, 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 first quarter of the fiscal year ending December 31, 1995, the
Company submitted the following matters to a vote of security holders at its
annual shareholders meeting held on January 31, 1995 in Jupiter, Florida:
1. The re-election of the Company's five member Board of
Directors consisting of Warren B. Mosler, Alan R. Simon,
Charles E. Spaeth, Burck E. Grosse and William R. Locke. A
sixth director, Richard N. Hornstrom, was also elected.
2. The re-appointment of the Company's independent accountants,
BDO Seidman.
3. The approval of a one-for-ten reverse split of Company's
common stock effective February 1, 1995, and a change in the
par value of this stock from $.001 per share to $.01 per
share.
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
<TABLE>
<CAPTION>
EXHIBIT
-------
DESCRIPTION
-----------
<S> <C>
11 Statement regarding computation of
earnings per share
27 Financial Data Schedule (for SEC use only)
</TABLE>
11
<PAGE> 12
(B) CURRENT REPORTS ON FORM 8-K
On March 3, 1995 the Company filed a Form 8-K disclosing the one-for-ten
reverse stock split approved at the Company's January 31 shareholders meeting,
and also disclosing the related change in par value of the Company's common
stock from $.001 to $.01 per share.
The Company did not file any other reports on Form 8-K during the three months
ended March 31, 1995.
12
<PAGE> 13
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: May 9, 1995 Thomas G. Weber
Vice President
Secretary/Treasurer
Chief Financial Officer
13
<PAGE> 1
EXHIBIT 11
CONSULIER ENGINEERING, INC.
COMPUTATION OF EARNINGS PER SHARE
PRIMARY AND FULLY DILUTED
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Net Income $ 169,728 $ 361,426
Shares used in computation:
Weighted average number of
common shares outstanding 2,522,346 2,555,330
Common stock equivalents
from assumed issuances
using the treasury
stock method -
Stock options and
warrants 153,285 67,249
---------- ----------
Total shares used 2,675,631 2,622,579
========== ==========
Earnings per share $ .06 $ .14
========== ==========
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,050
<SECURITIES> 0
<RECEIVABLES> 555
<ALLOWANCES> 10
<INVENTORY> 747
<CURRENT-ASSETS> 2,673
<PP&E> 789
<DEPRECIATION> 600
<TOTAL-ASSETS> 7,359
<CURRENT-LIABILITIES> 407
<BONDS> 2,275
<COMMON> 26
0
0
<OTHER-SE> 4,637
<TOTAL-LIABILITY-AND-EQUITY> 7,359
<SALES> 555
<TOTAL-REVENUES> 578
<CGS> 312
<TOTAL-COSTS> 333
<OTHER-EXPENSES> 389
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 275
<INCOME-TAX> 105
<INCOME-CONTINUING> 170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 170
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
