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, 1997 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: 2,767,806 as of 9/30/97.
<PAGE>
REXHALL INDUSTRIES, INC.
INDEX
PART 1 - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
Financial Statements:
Condensed Balance Sheets at September 30, 1997 3
and December 31, 1996
Condensed Statements of Operations for the
three and nine months ended September 30,1997
and September 30, 1996 4, 5
Condensed Statements of Cash Flows for the
nine months ended September 30, 1997
and September 30, 1996 6
Notes to Condensed Financial Statements
as of September 30, 1997 7
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8, 9
PART II - OTHER INFORMATION
Item 1.
Exhibits and Reports on Form 8-K 10
Form 8-K has 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 1996 1997
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
Assets:
Current Assets
Cash $742,000 $1,043,000
Accounts Receivable 3,208,000 6,474,000
Inventories 13,793,000 13,438,000
Other Current Assets 151,000 166,000
Income Tax Receivable 271,000 -0-
Deferred Income Taxes 439,000 439,000
Total Current Assets 18,604,000 21,560,000
Property and Equipment - Net 4,885,000 5,108,000
Other Assets 7,000 7,000
TOTAL ASSETS $23,496,000 $26,675,000
Liabilities and Shareholders' Equity:
Current Liabilities
Accounts Payable $7,591,000 $8,665,000
Warranty Allowance 355,000 321,000
Reserve for Self-Insurance 365,000 420,000
Other Accrued Liabilities 748,000 1,524,000
Current Portion of long-term debt 26,000 26,000
Total Current Liabilities 9,085,000 10,956,000
Deferred Income Tax Liabilities 4,000 -0-
Long-term debt 826,000 805,000
Total Liabilities 9,915,000 11,761,000
Shareholders' Equity:
Preferred Stock - no par value;
Authorized 1,000,000 shares; no
shares outstanding at September 30,
1997 and December 31, 1996
Common Stock - no par value;
Authorized 10,000,000 shares;
Issued & outstanding 2,767,806 shares
at Sept. 30, 1997 and 2,630,030
shares at December 31, 1996 6,553,000 6,376,000
Retained Earnings 7,048,000 8,538,000
Total Shareholders' Equity 13,581,000 14,914,000
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $23,496,000 $26,675,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
Sept. 30, 1996 Sept. 30, 1997
Sales $17,431,000 $15,997,000
Cost of Sales 15,008,000 13,817,000
Gross Profit 2,423,000 2,180,000
Selling, General, Administrative
Expenses and Other Expenses 1,628,000 1,705,000
Income Before Income Taxes 795,000 475,000
Income Taxes 318,000 146,000
Net Income 477,000 329,000
Net Income Per Common Share $ .17(1) $ .12
Weighted Average Number of
Common Shares Outstanding (primary) 2,859,800(2) 2,756,719
(1) Net Income per common share originally reported as .18. However,
considering the 5% stock dividend paid on 5/26/97, 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 2,712,918. Considering the 5/26/97 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, 1996 Sept. 30, 1997
Sales $51,281,000 $49,877,000
Cost of Sales 43,391,000 42,665,000
Gross Profit 7,890,000 7,212,000
Selling, General, Administrative
Expenses and Other Expenses 4,947,000 4,686,000
Income Before Income Taxes 2,943,000 2,526,000
Income Taxes 1,177,000 1,036,000
Net Income $1,766,000 $1,490,000
Net Income Per Common Share $ .62(1) $ .54
Weighted Average Number of
Common Shares Outstanding 2,859,800(2) 2,756,179
(1) Net income per common share originally reported as $.65. However,
considering the 5% stock dividend paid on 5/26/97, the figure has been
adjusted to reflect the dividend in order to equitable compare like
quarters
(2) Weighted average number of common shares outstanding was originally
reported as 2,732,619. Considering the 5/26/97 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, 1996 AND 1997
1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,762,000 $1,490,000
Adjustments to reconcile net income to net cash
provided(used)by operating activities:
Depreciation and amortization 102,000 222,000
(Increase) in accounts receivable (732,000) (3,266,000)
(Increase) in inventories (5,446,000) 355,000
Increase(Decrease) in other current assets (32,000) (15,000)
Increase(Decrease) in income tax receivable -0- 271,000
(Decrease)Increase in accounts payable 3,480,000) 1,075,000
Increase(Decrease) in reserve for self insurance (38,000) 55,000
Increase (Decrease) in other liability
including warranty (106,000) (35,000)
(Increase)Decrease in deferred tax liabilities -0- (4,000)
Increase in other current liabilities 242,000 776,000
Net cash (used in) provided by operating activities (768,000) 924,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (855,000) (445,000)
Net cash used in investing activities (855,000) (445,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repurchase)Issuance of Common Stock 18,000 (157,000)
Repayment of long-term debt (20,000) (21,000)
Net cash (used in) financing activities (2,000) (178,000)
NET INCREASE(DECREASE) IN CASH AND CASH
EQUIVALENTS (1,625,000) 301,000
BEGINNING CASH 1,998,000 742,000
ENDING CASH $ 373,000 $1,043,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.
REXHALL INDUSTRIES, INC.
Notes to the Condensed Financial Statements
(Unaudited)
September 30, 1997
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, 1996.
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, 1996 September 30, 1997
Raw Material $ 6,608,000 $ 7,707,000
Work in Process 2,753,000 2,038,000
Finished Motorhomes 4,432,000 3,693,000
TOTAL $13,793,000 $13,438,000
3. Cash in Bank 742,000 1,043,000
$ 742,000 $ 1,043,000
4. On 5/26/97 the Board of Directors approved and issued a 5% common stock
dividend to owners of record as of May 12, 1997. 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 1997 Compared with 1996 3rd Quarter
Sales for the quarter ended September 30, 1997, totaled $15,997,000 as
compared to $17,431,000 for the quarter ended September 30, 1996. The units
sold in 1997 were 275 vs. 312 in 1996. The decrease in sales was due to
the continuing restructuring of the Indiana plant.
Cost of Sales - 3rd Quarter 1997 compared with 3rd Quarter 1996
The cost of sales as a percentage of sales for the third quarter of 1997
was 86.4% vs 86.0% in the third quarter of 1996. The cost of sales
percentage for 1997 increased due to cost absorption of product
improvements.
Gross Profit - 1997 3rd Quarter compared with 1996 3rd Quarter
Gross Profit for the 3rd quarter of 1997 decreased to 13.6% from 13.9% for
the 3rd quarter of 1996. This decrease was due to the decline in sales
discussed in sales and cost of sales above.
Selling, General Administrative and Other Expenses - 3rd Quarter 1997
compared with 1996 3rd Quarter
Selling, General Administrative and Other Expenses were 10.7% of Sales in
1997 as compared to 9.3% in the 3rd quarter of 1996. Increase in expenses
are attributed to interest reimbursements to dealers, spiffs to dealers'
sales people and show rental expenses.
<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, 1997, working capital was $10,581,000 as compared to
working capital of $9,519,000 at December 31, 1996.
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 September 30, 1997, the
company had used $365,000 under this line of credit to obtain a Letter of
Credit permitting the company to remain self-insured for Workers'
Compensation.
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 1. - Exhibits and Reports on Form 8-K
a) Exhibit 11. Statement re:computation of per share earnings.
b) Reports on Form 8-K. The following reports, Form 8-K, have been filed.
Form 8-K 7/21/97
Form 8-K 8/28/97
<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, 1997 /S/William J. Rex
William J. Rex
Chairman, President and
Chief Executive Officer
Date: November 14, 1997 /S/Phillip J. Parks
Phillip J. Parks
Controller
<PAGE>
Exhibit 11.
Computation Supporting Earnings per Common Share
Third Quarter
1996 1997
Net Income (Loss) $ 477,000 $ 329,000
Weighted Average Number of
Shares Outstanding 2,859,800 2,756,719
Earnings (Loss) per Share $ .17(1) $ .12
(1) Originally reported as 2,723,619 shares outstanding and earnings per
share to be at .18. However, considering the 5% stock dividend paid on
5/26/97, the figures have been adjusted to reflect the dividend in order
to equitably compare like quarters.
