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 Quarter Ended June 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 8/1/1996.
<PAGE>
REXHALL INDUSTRIES, INC.
INDEX
PART 1 - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
Financial Statements:
Condensed Balance Sheets at June 30, 1996 3
and December 31, 1995
Condensed Statements of Operations for the
three and six months ended June 30,1996
and June 30, 1995 4, 5
Condensed Statements of Cash Flows (unaudited)
for the six months ended June 30, 1996
and June 30, 1995 6
Notes to Condensed Financial Statements
as of June 30, 1996 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 9
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 11
earnings per common and common equivalent share
amounts
Exhibit 27 - Financial Data Sheet Submitted via Edgar
Electronic Filing System 12
<PAGE>
(Audited) (Unaudited)
December 31 June 30
PART I - FINANCIAL INFORMATION 1995 1996
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
Assets:
Current Assets
Cash and Short Term Investments $1,998,000 $ 624,000
Accounts Receivable 5,063,000 5,565,000
Inventories 8,651,000 12,688,000
Other Current Assets 163,000 36,000
Deferred Income Taxes 286,000 279,000
Total Current Assets 16,161,000 19,192,000
Property and Equipment - Net 3,807,000 4,197,000
Other Assets 7,000 7,000
TOTAL ASSETS $19,975,000 $23,396,000
Liabilities and Shareholders' Equity:
Current Liabilities
Accounts Payable $5,747,000 $ 7,720,000
Warranty Allowance 311,000 206,000
Reserve for Self-Insurance 365,000 380,000
Other Accrued Liabilities 445,000 667,000
Income Taxes Payable -0- 14,000
Current Portion of Long Term Debt 24,000 24,000
Total Current Liabilities 6,892,000 9,011,000
Deferred Income Tax Liabilities 6,000 -0-
Long Term Debt 852,000 840,000
Total Liabilities $ 7,750,000 $ 9,851,000
Shareholders' Equity:
Preferred Stock - no par value;
Authorized 1,000,000 shares; no
shares outstanding at June 30,
1996 and December 31, 1995
Common Stock - no par value;
Authorized 10,000,000 shares;
Outstanding 2,636,030 shares
at 6/30/1996 and 2,501,000
shares at December 31, 1995 $ 6,461,000 6,493,000
Retained Earnings 5,764,000 7,052,000
Total Shareholders' Equity 12,225,000 13,545,000
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $19,975,000 $ 23,396,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
June 30, 1995 June 30, 1996
Sales $ 15,277,000 $ 18,780,000
Cost of Sales 12,876,000 15,543,000
Gross Profit 2,401,000 3,237,000
Selling, General, Administrative
Expenses and Other Expenses 1,354,000 1,843,000
Income Before Taxes 1,047,000 1,394,000
Income Taxes 419,000 566,000
Net Income $ 628,000 $ 828,000
Net Income Per Common Share $ .24(1) $ .31
Weighted Average Number of
Common Shares Outstanding (primary) $ 2,626,050(2) $ 2,712,918
(1) Net income per common share originally reported as .25. 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 OPERATIONS
(UNAUDITED)
Six Months Ended
June 30, 1995 June 30, 1996
Sales $ 30,558,000 $ 33,851,000
Cost of Sales 25,985,000 28,383,000
Gross Profit 4,573,000 5,468,000
Selling, General, Administrative
Expenses and Other Expenses 2,764,000 3,320,000
Income Before Taxes 1,809,000 2,148,000
Income Taxes 724,000 859,000
Net Income $ 1,085,000 $ 1,289,000
Net Income Per Common Share $ .41(1) $ .48
Weighted Average Number of
Common Shares Outstanding $ 2,626,050(2) $ 2,712,918
(Primary)
(1) Net income per common share originally reported as .43. 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 (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1996
1995 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,085,000 $ 1,289,000
Adjustments to reconcile net income to net cash
provided(used by) operating activities:
Depreciation and amortization 59,000 102,000
Decrease(Increase) in accounts receivable 339,000 (502,000)
Increase in inventories (4,256,000) (4,037,000)
Decrease in other current assets 63,000 134,000
Increase in accounts payable 1,489,000 1,973,000
Increase in reserve for self insurance 78,000 15,000
Decrease(Increase)in other current
liab. inc. warranty 355,000 (106,000)
Increase in non-current accrued liabilities -0- 242,000
Net cash used by operating activities (788,000) (890,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (376,000) (504,000)
Net cash used in investing activities (376,000) (504,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repurchase) Issuance of Common Stock (141,000) 32,000
Repayment of long-term debt -0- (12,000)
Net cash(used in) provided by financing activities (141,000) 20,000
NET DECREASE IN CASH AND CASH
EQUIVALENTS (1,305,000) (1,374,000)
BEGINNING CASH AND CASH EQUIVALENTS 2,518,000 1,998,000
ENDING CASH AND CASH EQUIVALENTS $ 1,213,000 $ 624,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.
REXHALL INDUSTRIES, INC.
Notes to the Condensed Financial Statements
June 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 restated 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 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 June 30, 1996
Raw Material $ 4,412,000 $ 6,915,000
Work in Process 1,459,000 1,970,000
Finished Motorhomes 2,780,000 3,803,000
TOTAL $ 8,651,000 $ 12,688,000
3. Cash in Bank $ 1,998,000 624,000
TOTAL $ 1,998,000 $ 624,000
4. On 4/17/96 the Board of Directors approved and issued a 5% common stock
divided 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 - 2nd Quarter 1996 Compared with 2nd Quarter 1995
Sales for the quarter ended June 30, 1996, totaled $18,780,000 as compared
to $15,277,000 in 1995. The units sold in 1996 were 336 vs. 290 in 1995.
The growing dealership network combined with an increase in sales
associated with the Elkhart Indiana plant account for the greater sales
revenue.
Cost of Sales - 2nd Quarter 1996 compared with 2nd Quarter 1995
The Cost of Sales as a percentage of sales for the second quarter of 1996
was 82.7% vs 84.3% in the second Quarter of 1995. This 1.6% reduction is
chiefly associated with the cost of parts. Management is continually
negotiating with its vendors to secure better prices as the production
volume increases.
Gross Profit - 2nd Quarter 1996 compared with 2nd Quarter 1995
Gross Profit for the second quarter of 1996 increased to 17.2% from 15.7%
for the second quarter of 1995. Management believes that the increase in
gross profit can be attributed to two key factors: 1) the increase in
quantity of motorhomes produced provided greater efficiency; 2) Rexhall
having no long term debt on its production facilities aided in keeping
manufacturing cost down.
Selling, General Administrative and Other Expenses - 2nd Quarter 1996
compared with 2nd Quarter 1995
Selling, General Administrative and Other Expenses were 9.8% of Sales
in 1996 as compared to 8.9% in the second quarter of 1995. The
expenses associated with sales commissions, advertising, and fees for
litigation were major factors involved in the increased expense.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. - Management Discussion and Analysis or Plan of Operations
Financial Condition, Capital Resources and Liquidity
At June 30, 1996, working capital was $10,181,000 as compared to working
capital of $9,269,000 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. At June 30, 1996,
the company had used $401,000 under this line of credit to obtain a
stand-by 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 it maintained with Wells Fargo Bank.
Management believes that internally generated funds, cash on hand, and
borrowing available under its line of credit will be sufficient for the
Company's cash needs for the next twelve months.
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
a) Exhibit 11. Computation supporting earnings per common and common
equivalent share amounts.
b) Reports on Form 8-K. No reports on Form 8-K have been filed during
the quarter for which this report is filed.
c) Exhibit 27. Financial data sheet submitted to SEC via Edgar Electronic
Filing System.
<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: August 14,1996
William J. Rex
Chairman, President and
Chief Executive Officer
Date: August 14, 1996
Carmen Ignacio
Controller
<PAGE>
Exhibit 11.
Computation Supporting Earnings per Common Share
Second Quarter
1995 1996
Net Income $ 628,000 $ 828,000
Weighted Average Number of Common
Shares Outstanding (primary) 2,626,050(1) 2,712,918
Earnings per Share $ .24 $ .31
(1) Originally reported as 2,501,000 shares outstanding and earnings per
share to be at .25. However, considering the 5% stock dividend paid on
4/17/96, the figures have been adjusted to reflect the dividend in order
to equitably compare like quarters.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 624,000
<SECURITIES> 0
<RECEIVABLES> 5,565,000
<ALLOWANCES> 0<F1>
<INVENTORY> 12,688,000
<CURRENT-ASSETS> 19,192,000
<PP&E> 4,197,000
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 23,396,000
<CURRENT-LIABILITIES> 9,011,000
<BONDS> 0
0
0
<COMMON> 6,493,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 23,396,000
<SALES> 18,780,000
<TOTAL-REVENUES> 18,780,000
<CGS> 15,543,000
<TOTAL-COSTS> 15,543,000
<OTHER-EXPENSES> 1,843,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,394,000
<INCOME-TAX> 566,000
<INCOME-CONTINUING> 828,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 828,000
<EPS-PRIMARY> .31
<EPS-DILUTED> .30
<FN>
<F1>Allowances taken into account at the end of the year.
<F2>Depreciation taken into account at the end of the year.
</FN>
</TABLE>
