<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 December 25, 1994
TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 0-22452
CLUB CAR, INC.
Delaware 13-3488925
-------------------------- ------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
4152 Washington Road
Martinez, Georgia 30907 (706) 863-3000
------------------------ ------------------
(Address of principal executive (Telephone Number)
offices)
Indicate by check (x) whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities 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 January 17, 1995, 9,078,806 shares of the registrant's Common
Stock were outstanding.
<PAGE> 2
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) PAGE NUMBER
-----------
Condensed Consolidated Balance Sheets as of
December 25, 1994 and September 25, 1994 3
Condensed Consolidated Statements of Operations for the
three months ended December 25, 1994
and December 26, 1993 4
Condensed Consolidated Statements of Cash Flows for the
three months ended December 25, 1994 and
December 26, 1993 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
Exhibit
Number Description
------ -----------
27 Financial Data Schedule (for SEC use only)
SIGNATURES 11
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
CLUB CAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
- -------------------------------------------------------------------------------------------------------------
ASSETS December 25, 1994 September 25, 1994
- ------ ----------------- ------------------
(Unaudited) (*)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . $ 10,544 $ 16,181
Accounts and notes receivable, net . . . . . . . . . 26,678 28,380
Inventories . . . . . . . . . . . . . . . . . . . . . 20,627 15,956
Other current assets . . . . . . . . . . . . . . . . 2,129 1,084
-------- --------
Total current assets . . . . . . . . . . . . . . . 59,978 61,601
PROPERTY ON OPERATING LEASES, net . . . . . . . . . . . 5,471 5,888
PROPERTY, PLANT AND EQUIPMENT, net . . . . . . . . . . 14,777 13,436
GOODWILL, net . . . . . . . . . . . . . . . . . . . . . 38,313 38,595
OTHER . . . . . . . . . . . . . . . . . . . . . . . . . 2,660 1,647
-------- --------
$121,199 $121,167
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . $ 13,592 $ 9,795
Accrued liabilities . . . . . . . . . . . . . . . . . 5,731 8,873
Income taxes payable . . . . . . . . . . . . . . . . 775 649
Current maturities of long-term debt . . . . . . . . 5,552 6,177
-------- -------
Total current liabilities . . . . . . . . . . . . 25,650 25,494
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . 34,536 35,927
OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . 4,905 4,677
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock . . . . . . . . . . . . . . . . . . . . 92 92
Additional paid-in capital . . . . . . . . . . . . . 64,356 64,347
Retained earnings . . . . . . . . . . . . . . . . . . 3,449 2,365
Other . . . . . . . . . . . . . . . . . . . . . . . . (11,789) (11,735)
-------- --------
Total stockholders' equity . . . . . . . . . . . . 56,108 55,069
-------- --------
$121,199 $121,167
======== ========
</TABLE>
(*) Condensed from audited consolidated financial statements
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE> 4
<TABLE>
<CAPTION>
CLUB CAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except for Per Share Data)
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
------------------
December 25, 1994 December 26, 1993
----------------- -----------------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,397 $ 32,662
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . 28,240 23,972
Selling, general and administrative expenses . . . . . . . 7,548 6,488
Amortization of goodwill . . . . . . . . . . . . . . . . . 282 282
---------- ----------
Operating income . . . . . . . . . . . . . . . . . . . 2,327 1,920
Interest expense, net . . . . . . . . . . . . . . . . . . . 406 1,839
---------- ----------
Income before provision for income taxes
and extraordinary item . . . . . . . . . . . . . . . . . . 1,921 81
Provision for income taxes . . . . . . . . . . . . . . . . 837 186
---------- ----------
Income (loss) before extraordinary item . . . . . . . . . . 1,084 (105)
Extraordinary loss on early retirement
of debt, net of income tax benefit of $3,023 . . . . . . . --- 4,941
---------- ----------
Net income (loss) . . . . . . . . . . . . . . . . . . . . . $ 1,084 $ (5,046)
========== ==========
Primary and fully diluted income (loss) per common share:
Before extraordinary item . . . . . . . . . . . . . . . . . $ 0.12 $ (0.01)
Extraordinary loss - debt retirement . . . . . . . . . . . --- (0.61)
---------- ----------
Net income (loss) per common share . . . . . . . . . . . . $ 0.12 $ (0.62)
========== ==========
Weighted average common shares:
Primary . . . . . . . . . . . . . . . . . . . . . . . . . 9,413,775 8,173,657
Fully diluted . . . . . . . . . . . . . . . . . . . . . . . 9,418,604 8,173,657
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
<TABLE>
<CAPTION>
CLUB CAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
------------------
December 25, 1994 December 26, 1993
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net Income (loss) . . . . . . . . . . . . . . . . . . . $ 1,084 $ (5,046)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Loss on early retirement of debt . . . . . . . . . . . . --- 4,941
Depreciation and amortization . . . . . . . . . . . . . . 910 933
Deferred compensation . . . . . . . . . . . . . . . . . . 85 94
Changes in current assets and liabilities:
Trade receivables . . . . . . . . . . . . . . . . . . . . 1,702 (1,312)
Inventories . . . . . . . . . . . . . . . . . . . . . . . (4,671) (4,791)
Accounts payable . . . . . . . . . . . . . . . . . . . . 3,797 301
Accrued liabilities . . . . . . . . . . . . . . . . . . . (3,142) (9,960)
Income taxes payable . . . . . . . . . . . . . . . . . . 126 32
Other, net . . . . . . . . . . . . . . . . . . . . . . . (1,102) (860)
------- --------
Net cash used in operating activities . . . . . . . . (1,211) (15,668)
------- --------
Cash flows from investing activities:
Property on operating leases . . . . . . . . . . . . . . 284 128
Property, plant and equipment additions, net . . . . . . (1,821) (607)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . (898) 761
------- --------
Net cash provided by (used in) investing activities . (2,435) 282
------- --------
Cash flows from financing activities:
Long-term debt retirements . . . . . . . . . . . . . . . (2,000) (64,058)
Long-term debt additions . . . . . . . . . . . . . . . . --- 21,000
Debt refinancing costs . . . . . . . . . . . . . . . . . --- (8,730)
Issuance of common stock . . . . . . . . . . . . . . . . 9 53,239
------- --------
Net cash provided by (used in) financing activities . (1,991) 1,451
------- --------
DECREASE IN CASH EQUIVALENTS . . . . . . . . . . . . . . (5,637) (13,935)
Balance, beginning of period . . . . . . . . . . . . . . . 16,181 14,429
------- --------
Balance, end of period . . . . . . . . . . . . . . . . . . $10,544 $ 494
======= ========
Interest paid during period . . . . . . . . . . . . . . . . $ 331 $ 6,804
======= ========
Income taxes paid (refunded) during period, net . . . . . . $ 712 $ (46)
======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
CLUB CAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 25, 1994
(Unaudited)
- --------------------------------------------------------------------------------
A. A SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and the notes
thereto included in the Annual Report on Form 10-K of Club Car, Inc.
(the "Company") for the fiscal year ended September 25, 1994 (File No.
0-22452).
The accompanying unaudited condensed consolidated financial statements
include, in the opinion of management, all adjustments, which are of a
normal recurring nature, necessary for a fair presentation for the
periods presented. Results presented for the three month periods
ended December 25, 1994 are not necessarily indicative of results that
may be expected for the full fiscal year.
EARNINGS PER COMMON SHARE
Earnings per share amounts are computed based upon the weighted
average common and equivalent shares outstanding during the period.
PRESENTATION
Certain prior year amounts have been reclassified to conform with the
current year presentation.
B. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
As of As of
December 25, September 25,
1994 1994
-------------- ----------------
<S> <C> <C>
Raw materials . . . . . . . . $ 8,495 $ 5,861
Work-in-process . . . . . . . 1,764 990
Finished goods . . . . . . . . 10,368 9,105
------- -------
$20,627 $15,956
======= =======
</TABLE>
6
<PAGE> 7
CLUB CAR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 25, 1994
(Unaudited)
- --------------------------------------------------------------------------------
C. INDEBTEDNESS
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
As of As of
December 25, September 25,
1994 1994
-------------- ----------------
<S> <C> <C>
Term loan . . . . . . . . . 40,000 $42,000
Other . . . . . . . . . . . 88 104
------- -------
40,088 42,104
Less current maturities
of long-term debt . . . . . (5,552) (6,177)
------- -------
$34,536 $35,927
======= =======
</TABLE>
D. STOCKHOLDERS' EQUITY
As of December 25, 1994, the Company's common stock, at $.01 par value
per share, was comprised of 20,000,000 authorized shares, 9,167,757
issued shares, and 9,067,606 outstanding shares.
E. COMMITMENTS AND CONTINGENCIES
The Company guarantees certain debt of distributors and retail
customers. Under the most significant of these guarantees, the
Company's obligation is limited to a maximum of $1 million per year.
In addition, as of December 25, 1994, the Company had guaranteed
residual values of golf cars (upon termination of leases to retail
customers) in the aggregate amount of approximately $18.6 million.
The Company is from time to time involved in various litigation,
primarily product liability claims. The Company believes that none of
the litigation in which it is currently involved is material to its
financial position, liquidity or results of operations. The Company
has maintained, since 1978, product liability insurance coverage in
varying amounts with no deductible.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
THREE MONTHS ENDED DECEMBER 25, 1994 VERSUS THREE MONTHS ENDED DECEMBER 26,
1993
The Company's net sales increased $5.7 million, or 17.6%, for the first three
months of fiscal 1995 over the same period of the previous year primarily as a
result of continued demand for the Company's products. New golf car net sales
increased $2.4 million, or 11.2%, new utility vehicle net sales increased $1.2
million, or 36.7%, used vehicle net sales increased $1.5 million, or 34.8%, and
parts and other net sales increased $0.6 million, or 21.9%. The golf car line
unit volume increased 6.0% and the average selling price per vehicle increased
4.9%. The utility line unit volume increased 30.1% and the average selling
price per vehicle increased 5.0%. The used vehicle line unit volume increased
16.9% and the average selling price per vehicle increased 15.3%.
The increase in utility vehicle sales is primarily due to expanded product line
models and new dedicated utility line branch sales offices added in fiscal
1994. The increase in used vehicle net sales is primarily the result of
increased direct sales generated by the Company's expanded direct sales force.
Both utility vehicles and used vehicles experienced larger increases than golf
cars in proportion to the overall sales increase. Total international sales
increased to $6.6 million in fiscal 1995 from $3.7 million in fiscal 1994, an
increase of 81.5%. As a percentage of net sales, international sales increased
to 17.3% for the first quarter of fiscal 1995 from 11.2% for the same period in
fiscal 1994.
Sales under extended payment terms amounted to approximately $14.0 million, or
36.4%, and $9.8 million, or 30.0%, of net sales for the first three months of
fiscal 1995 and the first three months of fiscal 1994, respectively.
Cost of sales increased $4.3 million, or 17.8%, for the first three months of
fiscal 1995 over the same period of the previous year. Gross profit margin
declined slightly to 26.5% in fiscal 1995 from 26.6% in fiscal 1994. Average
selling price increases described above were partially offset by increases in
the cost of materials.
Selling, general and administrative expenses increased by $1.1 million, or
16.3%, for the first three months of fiscal 1995 over the same period of the
previous year. Selling, general and administrative expenses as a percentage of
net sales decreased to 19.7% in fiscal 1995 from 19.9% in fiscal 1994. The
increase in these expenses is primarily attributable to increases in direct
selling expenses as a result of increased net sales.
The Company's interest expense declined $1.4 million, or 77.9%, for the first
three months of fiscal 1995 as compared to the same period of the previous
year. This decline is primarily due to the retirement during fiscal 1994 of
$83.9 million of 14-1/2% Senior Notes (the "Senior Notes") utilizing the net
proceeds from the Company's initial public offering of common stock and
borrowings at lower interest rates under the New Credit Facility.
The Company incurred an extraordinary loss in the first quarter of fiscal 1994
of $4.9 million, net of tax benefits of $3.0 million ($0.61 per common share)
due to the retirement of $63.9 million of the Senior Notes.
The Company had $0.8 million in income tax expense related to income before
extraordinary item in the first three months of fiscal 1995 as compared to $0.2
million for the same period of the previous
8
<PAGE> 9
year. The effective tax rate related to income before extraordinary item was
43.6% and 229.6% for the fiscal 1995 and 1994 periods, respectively. The
decline in the effective rate in 1995 is primarily a result of the effect of
the relative decline in nondeductible expenses in relation to the higher pretax
income in the first quarter of fiscal 1995. These effective tax rates vary
from the statutory federal income tax rate primarily due to amortization of
goodwill and other permanent adjustments that are not deductible for tax
purposes.
Liquidity and Capital Resources
The Company's present cash needs are primarily for working capital
requirements, capital expenditures and debt service obligations under the New
Credit Facility. Due to the seasonality of the markets in which the Company
operates, the Company has higher levels of inventories and receivables during
the second and third quarters of its fiscal year. Management believes that the
New Credit Facility and operations are adequate to meet the current capital
requirements of the Company.
As of December 25, 1994, the Company had (i) approximately $40 million of
borrowings outstanding under the New Credit Facility, consisting entirely of
amounts borrowed under the Term Loan Facility (ii) approximately $2.0 million
of outstanding letters of credit and (iii) had availability to borrow
approximately $28 million under the terms of the Revolving Credit Facility on
that date. Borrowings under the New Credit Facility bear interest at a
floating rate and are unsecured.
The Company had working capital of $34.3 million and $36.1 million at December
25, 1994 and September 25, 1994, respectively.
Cash used in operating activities was $1.2 million for the first three months
of fiscal 1995 as compared to $15.7 million for the same period of the previous
year. This $14.5 million decrease is primarily the result of a $6.1 million
increase in income before extraordinary item, greater collections on accounts
receivable, and a decline in accrued liabilities. The significant decline in
accrued liabilities is primarily due to a decrease in accrued interest expense
as a result of the redemption of a substantial portion of the Senior Notes in
the first quarter of fiscal 1994.
As of December 25, 1994 and September 25, 1994, sales under extended payment
terms amounted to approximately $14.0 million, or 53%, and $8.6 million, or
41%, respectively, of the Company's outstanding accounts receivable balance.
The Company historically has not experienced any significant returns associated
with extended payment terms.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibit 27 Financial Data Schedule (in thousands) (for SEC use only)
This schedule contains summary financial information extracted from
the financial statements of Club Car, Inc. for the quarter ended
December 25, 1994, and is qualified in its entirety by reference to
such financial statements.
<TABLE>
<CAPTION>
Item Item December 25,
Number Description 1994
------ ----------- ---------------
<S> <C> <C>
5-02(1) cash and cash items $10,544
5-02(2) marketable securities 0
5-02(3)(a)(1) notes and accounts receivable-trade 27,477
5-02(4) allowances for doubtful accounts 799
5-02(6) inventory 20,627
5-02(9) total current assets 59,978
5-02(13) property, plant and equipment 22,717
5-02(14) accumulated depreciation 7,940
5-02(18) total assets 121,199
5-02(21) total current liabilities 25,650
5-02(22) bonds, mortgages and similar debt 34,536
5-02(28) preferred stock-mandatory redemption 0
5-02(29) preferred stock-no mandatory redemption 0
5-02(30) common stock 92
5-02(31) other stockholders' equity 56,016
5-02(32) total liabilities and stockholders' equity 121,199
5-03(b)1(a) net sales of tangible products 38,397
5-03(b)1 total revenues 38,397
5-03(b)2(a) cost of tangible goods sold 28,240
5-03(b)2 total costs and expenses applicable to sales and revenues 35,788
5-03(b)3 other costs and expenses 282
5-03(b)5 provision for doubtful accounts and notes 0
5-03(b)(8) interest and amortization of debt discount 406
5-03(b)(10) income before taxes and other items 1,921
5-03(b)(11) income tax expense 837
5-03(b)(14) income/loss continuing operations 1,084
5-03(b)(15) discontinued operations 0
5-03(b)(17) extraordinary items 0
5-03(b)(18) cumulative effect-changes in accounting principles 0
5-03(b)(19) net income 1,084
5-03(b)(20) earnings per share - primary 0.12
5-03(b)(20) earnings per share - fully diluted 0.12
</TABLE>
b. No reports on Form 8-K were filed during the quarter ended December
25, 1994
10
<PAGE> 11
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.
CLUB CAR, INC.
Date: January 31, 1995 By /s/ A. Montague Miller
------------------------------
A. Montague Miller
President, Chief Operating Officer
and Secretary
By /s/ Eric L. Tyra
------------------------------
Eric L. Tyra
Vice President - Finance, Treasurer
and Chief Financial Officer
(Principal Financial and Accounting Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CLUB CAR, INC. FOR THE QUARTER ENDED DECEMBER 25, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-24-1995
<PERIOD-START> SEP-26-1994
<PERIOD-END> DEC-25-1994
<CASH> 10,544
<SECURITIES> 0
<RECEIVABLES> 27,477
<ALLOWANCES> 799
<INVENTORY> 20,627
<CURRENT-ASSETS> 59,978
<PP&E> 22,717
<DEPRECIATION> 7,940
<TOTAL-ASSETS> 121,199
<CURRENT-LIABILITIES> 25,650
<BONDS> 34,536
<COMMON> 92
0
0
<OTHER-SE> 56,016
<TOTAL-LIABILITY-AND-EQUITY> 121,199
<SALES> 38,397
<TOTAL-REVENUES> 38,397
<CGS> 28,240
<TOTAL-COSTS> 35,788
<OTHER-EXPENSES> 282
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 406
<INCOME-PRETAX> 1,921
<INCOME-TAX> 837
<INCOME-CONTINUING> 1,084
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,084
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
