SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarterly Period Ended September 30, 1996 Commission file number: 0-17824
REXHALL INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
California 95-4135907
(State of Incorporation) (IRS Employer Identification No.)
46147 7th Street West, Lancaster, California 93534
(Address of principal executive offices) (Zip Code)
(805) 726-0565
(Registrant's telephone number, including area code)
Indicate by check mark 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 _____.
Applicable only to Corporate Issuers
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 2,636,030 as of 9/30/96.
<PAGE>
REXHALL INDUSTRIES, INC.
INDEX
PART 1 - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
Financial Statements:
Condensed Balance Sheets at September 30, 1996 (unaudited) 3
and December 31, 1995
Condensed Statements of Operations for the
three and nine months ended September 30,1996 (unaudited)
and September 30, 1995 (unaudited) 4, 5
Condensed Statements of Cash Flows for the
nine months ended September 30, 1996 (unaudited)
and September 30, 1995 (unaudited) 6
Notes to Condensed Financial Statements
as of September 30, 1996 (unaudited) 7
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8, 9
PART II - OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K 10
Reports on Form 8-K. No reports on Form 8-K have
been filed during the quarter for which this report is filed
Signatures 10
Exhibits
Exhibit 11 - Computation supporting earnings
per common and common equivalent share amount 11
Exhibit 27 - Financial Data Sheet Submitted via Edgar
Electronic Filing System 12
<PAGE>
(Audited) (Unaudited)
December 31 September 30
PART I - FINANCIAL INFORMATION 1995 1996
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
Assets:
Current Assets
Cash $1,998,000 $ 373,000
Accounts Receivable 5,063,000 5,795,000
Inventories 8,651,000 14,097,000
Other Current Assets 163,000 45,000
Deferred Income Taxes 286,000 279,000
Total Current Assets 16,161,000 20,589,000
Property and Equipment - Net 3,807,000 4,480,000
Other Assets 7,000 7,000
TOTAL ASSETS $19,975,000 $25,076,000
Liabilities and Shareholders' Equity:
Current Liabilities
Accounts Payable $5,747,000 $9,227,000
Warranty Allowance 311,000 158,000
Reserve for Self-Insurance 365,000 327,000
Other Accrued Liabilities 445,000 504,000
Current Portion of long-term debt 24,000 24,000
Total Current Liabilities 6,892,000 10,240,000
Deferred Income Tax Liabilities 6,000 -0-
Long-term debt 852,000 832,000
Total Liabilities 7,750,000 11,072,000
Shareholders' Equity:
Preferred Stock - no par value;
Authorized 1,000,000 shares; no
shares outstanding at September 30,
1996 and December 31, 1995
Common Stock - no par value;
Authorized 10,000,000 shares;
Issued & outstanding 2,636,030 shares
at Sept. 30, 1996 and 2,501,000
shares at December 31, 1995 6,461,000 6,479,000
Retained Earnings 5,764,000 7,525,000
Total Shareholders' Equity 12,225,000 14,004,000
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $19,975,000 $25,076,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
Sept. 30, 1995 Sept. 30, 1996
Sales $15,509,000 $17,431,000
Cost of Sales 13,513,000 15,008,000
Gross Profit 1,996,000 2,423,000
Selling, General, Administrative
Expenses and Other Expenses 1,176,000 1,628,000
Income Before Taxes 820,000 795,000
Income Taxes 328,000 318,000
Net Income 492,000 477,000
Net Income Per Common Share $ .19(1) $ .18
Weighted Average Number of
Common Shares Outstanding (primary) 2,636,050(2) 2,723,619
1) Net income per common share originally reported as .20. However,
considering the 5% stock dividend paid on 4/17/96, the figure has been
adjusted to reflect the divided in order to equitably compare like
quarters.
2) Weighted average number of common shares outstanding was originally
reported as 2,501,000. Considering the 4/17/96 5% dividend, the number
indicated above reflects such dividend.
page>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
Sept. 30, 1995 Sept. 30, 1996
Sales $ 46,067,000 $51,281,000
Cost of Sales 39,498,000 43,391,000
Gross Profit 6,569,000 7,890,000
Selling, General, Administrative
Expenses and Other Expenses 3,939,000 4,947,000
Income Before Taxes 2,630,000 2,943,000
Income Taxes 1,052,000 1,177,000
Net Income $1,578,000 $1,766,000
Net Income Per Common Share $ .60(1) $ .65
Weighted Average Number of
Common Shares Outstanding 2,636,050(2) 2,723,619
1) Net income per common share originally reported as .63. However,
considering the 5% stock dividend paid on 4/17/96, the figure has been
adjusted to reflect the dividend in order to equitably compare like
quarters.
2) Weighted average number of common shares outstanding was originally
reported as 2,501,000. Considering the 4/17/96 5% dividend, the number
indicated above reflects such dividend.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 (unaudited)
1995 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,578,000 $ 1,762,000
Adjustments to reconcile net income to net cash
provided(used)by operating activities:
Depreciation and amortization 56,000 102,000
(Increase) in accounts receivable (209,000) (732,000)
(Increase) in inventories (1,775,000) (5,446,000)
Increase(Decrease) in other current assets 60,000 (32,000)
(Decrease)Increase in accounts payable (104,000) 3,480,000
Increase(Decrease) in reserve for self insurance 81,000 (38,000)
Increase (Decrease) in reserve for warranty 45,000 (106,000)
Increase in other current liabilities 118,000 242,000
Net cash used by operating activities (150,000) (768,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (928,000) (855,000)
Net cash used in investing activities (928,000) (855,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repurchase)Issuance of Common Stock (185,000) 18,000
Repayment of long-term debt -0- (20,000)
Net cash used in financing activities (185,000) (2,000)
NET DECREASE IN CASH AND CASH
EQUIVALENTS (1,263,000) (1,625,000)
BEGINNING CASH 2,518,000 1,998,000
ENDING CASH $ 1,255,000 $ 373,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.
REXHALL INDUSTRIES, INC.
Notes to the Condensed Financial Statements
(Unaudited)
September 30, 1996
1. The accompanying condensed Financial Statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
Prior period financial statements have been reclassified to conform with
current period financial statement presentation. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.
For further information refer to the Financial Statements and footnotes
included in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995.
The Results of Operations for any interim period are not necessarily
indicative of the results to be expected for the full year.
2. Detail of Inventory December 31, 1995 September 30, 1996
(Audited) (Unaudited)
Raw Material $ 4,412,000 $ 8,677,000
Work in Process 1,459,000 1,608,000
Finished Motorhomes 2,780,000 3,812,000
TOTAL $ 8,651,000 $ 14,097,000
3. On 4/17/96 the Board of Directors approved and issued a 5% common stock
dividend to owners of record as of April 3, 1996. The earnings per share
data has been adjusted in order to equitably compare like quarters.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. - Management Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Sales - 3rd Quarter 1996 Compared with 1995 3rd Quarter
Sales for the quarter ended September 30, 1996, totaled $17,431,000 as
compared to $15,509,000 for the quarter ended September 30, 1995. The units
sold in 1996 were 312 vs. 292 in 1995. Management believes that the
increase in Sales is primarily due to continued expansion of Rexhall's
dealer network, as well as the increased awareness of both dealers and
customers to Rexhall's uniqueness with respect to manufacturing process,
quality of materials and an ongoing product improvement and refinements.
Gross Profit - 1996 3rd Quarter compared with 1995 3rd Quarter
Gross Profit for the 3rd quarter of 1996 increased to 13.9% from 12.9% for
the 3rd quarter of 1995. This increase was primarily due to the new
California facility, which lowered factory overhead.
Selling, General Administrative and Other Expenses - 3rd Quarter 1996
compared with 1995 3rd Quarter
Selling, General Administrative and Other Expenses were 9.3% of Sales in
1996 as compared to 7.6% in the 3rd quarter of 1995. Increase in expenses
are attributed to interest reimbursements to dealers, spiffs to dealers'
sales people, sales commission, show rental expenses and legal fees for
litigation.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. - Management Discussion and Analysis of Financial Condition and
Result of Operations.
Financial Condition, Capital Resources and Liquidity
At September 30, 1996, working capital was $10,349,000 as compared to
working capital of $9,379,000 at December 31, 1995.
At present, the Company has a $3,500,000 line of credit with Bank of America
which can be used for working capital purposes. On September 30, 1996, the
company had used $401,000 under this line of credit to obtain a Letter of
Credit permitting the company to remain self-insured for Workers'
Compensation. The $3,500,000 line replaced the $2,000,000 credit line we
maintained with Wells Fargo Bank.
Under the third quarter market conditions, the company decided to borrow
against its line of credit an additional $1,500,000 to maintain inventory
levels. This short term liability was indemnified in the beginning of the
4th quarter. 1996 cash acquisitions which include the purchase and building
of the new California facilities and purchase of the Indiana R.V. Service
Center, along with increased inventory level have led to a temporary use of
the credit line.
Management believes that inventory reduction will start with the largest
R.V. trade show in Louisville, Kentucky coupled with on going dealers
expansion. Notably, Rexhall's current ratio of assets to liabilities
remain an impressive 2 to 1.
<PAGE>
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
a) Exhibit 11. Statement re:computation of per share earnings.
b) Reports on Form 8-K. No reports on Form 8-K have been filed during the
quarter for which this report is filed.
<PAGE>
REXHALL INDUSTRIES, INC.
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.
REXHALL INDUSTRIES, INC. by
(Registrant)
Date: November 14, 1996 /S/William J. Rex
William J. Rex
Chairman, President and
Chief Executive Officer
Date: November 14, 1996 /S/Carmen Ignacio
Carmen Ignacio
Controller
<page
Exhibit 11.
Computation Supporting Earnings per Common Share
Third Quarter
1995 1996
Net Income (Loss) $ 492,000 $ 477,000
Weighted Average Number of
Shares Outstanding 2,636,050(1) 2,723,619
Earnings (Loss) per Share $ .19 $ .18
(1) Originally reported as 2,501,000 shares outstanding and earnings per
share to be at .20. However, considering the 5% stock dividend paid on
4/17/96, the figures have been adjusted to reflect the divided in order
to equitably compare like quarters.
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 373,000
<SECURITIES> 0
<RECEIVABLES> 5,795,000
<ALLOWANCES> 0
<INVENTORY> 14,097,000
<CURRENT-ASSETS> 20,589,000
<PP&E> 4,480,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,076,000
<CURRENT-LIABILITIES> 10,240,000
<BONDS> 0
0
0
<COMMON> 6,479,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25,076,000
<SALES> 17,431,000
<TOTAL-REVENUES> 17,431,000
<CGS> 15,008,000
<TOTAL-COSTS> 15,008,000
<OTHER-EXPENSES> 1,628,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 795,000
<INCOME-TAX> 318,000
<INCOME-CONTINUING> 477,00
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 477,000
<EPS-PRIMARY> .18
<EPS-DILUTED> .17
</TABLE>
