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, 1998 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: 3,020,363 as of 11/5/98.
<PAGE>
REXHALL INDUSTRIES, INC.
INDEX
PART 1 - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
Financial Statements:
Condensed Balance Sheets at September 30, 1998 3
and December 31, 1997
Condensed Statements of Operations for the
three and nine months ended September 30,1998
and September 30, 1997 4, 5
Condensed Statements of Cash Flows for the
nine months ended September 30, 1998
and September 30, 1997 6
Notes to Condensed Financial Statements
as of September 30, 1998 7, 8, 9
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
And Year 2000 Update 10, 11, 12, 13
PART II - OTHER INFORMATION
Item 1.Legal Proceedings 14
Item 6.Exhibits and Reports on Form 8-K
Signatures 15
<PAGE>
(Audited) (Unaudited)
December 31 September 30
PART I - FINANCIAL INFORMATION 1997 1998
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
Assets:
Current Assets
Cash $ 811,000 $ 6,985,000
Accounts Receivable 5,378,000 3,833,000
Inventories 9,439,000 11,032,000
Other Current Assets 59,000 150,000
Income Tax Receivable 337,000 ---
Deferred Income Taxes 2,197,000 2,197,000
Total Current Assets 18,221,000 24,197,000
Property and Equipment - Net 4,957,000 5,069,000
Other Assets --- 385,000
TOTAL ASSETS $23,178,000 $29,651,000
Liabilities and Shareholders' Equity:
Current Liabilities
Accounts Payable 6,111,000 7,979,000
Restructuring Reserve 605,000 346,000
Warranty Allowance 937,000 1,108,000
Accrued Legal Settlement 1,590,000 1,384,000
Dealer Incentives 608,000 686,000
Other Accrued Liabilities 987,000 1,598,000
Income Taxes Payable --- 1,194,000
Current Portion of Long Term Debt 27,000 28,000
Total Current Liabilities 10,865,000 14,323,000
Deferred Income Tax Liabilities 36,000 36,000
Long Term Debt 797,000 776,000
Total Liabilities 11,698,000 15,135,000
Shareholders' Equity:
Preferred Stock - no par value;
Authorized 1,000,000 shares; no
shares outstanding at September 30,
1998 and December 31, 1997
Common Stock - no par value;
Authorized 10,000,000 shares;
Outstanding 3,020,000 shares
at September 30, 1998 and 2,714,000
shares at December 31, 1997 $ 6,267,000 $ 6,839,000
Retained Earnings 5,213,000 7,677,000
Total Shareholders' Equity 11,480,000 14,516,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,178,000 $29,651,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
Sept.30, 1997 Sept.30, 1998
Sales $15,997,000 $18,470,000
Cost of Sales 3,817,000 15,079,000
Gross Profit 2,180,000 3,391,000
Selling, General, Administrative
Expenses and Other Expenses 1,705,000 1,783,000
Income Before Taxes 475,000 1,608,000
Income Taxes 146,000 643,000
Net Income $ 329,000 $ 965,000
Basic Net Income Per Common Share $ 0.11 $ 0.33
Diluted Net Income Per Common and
Equivalent Share $ 0.11* $ .32
Weighted Average Number of Common
Shares Outstanding - Basic $ 2,888,400 $ 2,953,000
Weighted Average Number of Common and
Equivalent Shares Outstanding-Diluted $ 2,898,500 $ 2,980,000
*Originally reported as $.12 per share based on 2,757,000 shares outstanding.
However, given retroactive effect to the 5% stock dividend of 142,000 shares
on June 19, 1998, earnings were adjusted to $.11 per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
Sept. 30, 1997 Sept. 30, 1998
Sales $ 49,877,000 $51,020,000
Cost of Sales 42,665,000 42,542,000
Gross Profit 7,212,000 8,478,000
Selling, General, Administrative
Expenses and Other Expenses 4,686,000 4,374,000
Income Before Taxes 2,526,000 4,104,000
Income Taxes 1,036,000 1,640,000
Net Income $ 1,490,000 $2,464,000
Basic Net Income Per Common Share $ 0.52 $ 0.83
Diluted Net Income per Common and
Equivalent Share $ 0.51* $ 0.83
Weighted Average Number of
Common Shares Outstanding-Basic 2,888,400 2,953,000
Weighted Average Number of Common
and Equivalent Shares
Outstanding - Diluted 2,898,500 2,980,000
*Originally reported as $.54 Per share based on 2,757,000 shares outstanding.
However, given retroactive effect to the 5% stock dividend of 142,000 shares
on June 19, 1998, earnings were adjusted to $.51 Per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
REXHALL INDUSTRIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
1997 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,490,000 $ 2,464,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 222,000 253,000
(Increase) Decrease in accounts receivable (3,266,000) 1,545,000
(Increase) Decrease in inventories 355,000 (1,593,000)
Increase in other current assets (15,000) (91,000)
Decrease in income tax receivable 271,000 337,000
Increase in accounts payable 1,075,000 1,868,000
Decrease in deferred tax liabilities (4,000) --
Increase in other current liabilities 796,000 1,590,000
Net cash provided by operating activities 924,000 6,373,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities -
Additions to property and equipment (445,000) (366,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repurchase)Issuance of Common Stock (157,000) 187,000
Repayment of long-term debt (21,000) (20,000)
Net cash provided by (used in)
financing activities (178,000) 167,000
NET INCREASE IN CASH 301,000 6,174,000
BEGINNING CASH 742,000 811,000
ENDING CASH $ 1,043,000 $ 6,985,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR
Interest $ 203,000 $ 89,000
Income Taxes 646,000 106,000
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING
AND FINANCING ACTIVITIES:
Issuance of Common Shares
For Notes Receivable (Note 6) $ -- $ 385,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.
REXHALL INDUSTRIES, INC.
Notes to the Condensed Financial Statements
September 30, 1998
1. Basis of Presentation:
The accompanying unaudited 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.
However, in the opinion of management, they include all adjustments,
consisting of normal accruals, necessary to present fairly the information
set forth herein in accordance with generally accepted accounting principles
for interim reporting.
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, 1997.
The Results of Operations for any interim period are not necessarily
indicative of the results to be expected for the full year.
2. Summary of Significant Accounting Polices:
Income Taxes
Income tax expense is based upon the estimated effective tax rate for the
entire fiscal year. The effective tax rate is subject to ongoing evaluation
by management.
Earnings Per Share
Basic earnings per share represents net earnings divided by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share represents net earnings divided by the weighted-average
number of shares outstanding, inclusive of the dilutive impact of common
stock options and warrants. During the three and nine month periods ended
September 30,1998 and September 30,1997, the difference between basic and
diluted earning per share was due to the dilutive impact of options to
purchase common stock.
Recently Issued Pronouncements
In June 1997, The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS" 130"). SFAS 130 established standards for the reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. SFAS 130
requires all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement displayed with the same prominence as other financial statements.
SFAS 130 does not require a specific financial statement format but requires
an enterprise to display an amount representing total comprehensive income
for the period covered by the financial statement. Comprehensive income
include items such as net income, changes in value of available for sale
<PAGE>
securities and foreign currency translation gains and losses. SFAS 130 is
effective for fiscal years beginning after December 15, 1997. There is no
difference between net income and comprehensive income for quarter ended
September 30, 1998 or September 30, 1997.
In June 1997, FASB issued Statement of Financial Accounting Standards
No. 131, Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 established standards for public business
enterprises to report information about operating segments in annual
financial statements and requires those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also established standards for related disclosures about
products and services, geographic areas and major customers. SFAS 131 is
effective for financial statements for periods beginning after
December 15, 1997. In the initial year of application, comparative
information for earlier years is to be restated. SFAS 131 need not be
applied to interim financial statements in the initial year of application,
but comparative information for interim periods in the initial year of
application is to be reported in financial statements for interim periods in
the second year of application. The Company operates in only one business
segment, the manufacture and distribution of recreational vehicles.
Accordingly, SFAS 131 will not have an impact on the Company's financial
reporting.
3. Detail of Inventory December 31, 1997 September 30, 1998
Raw Material $ 4,659,000 5,732,000
Work in Process 2,124,000 1,155,000
Finished Motorhomes 2,656,000 4,145,000
TOTAL $ 9,439,000 $11,032,000
4. Income Per Share
The following is a reconciliation of the basic and diluted income per share
computation for the quarters ended September 30, 1997 and 1998.
Three Months Nine Months
Sept. 30, 1997 Sept. 30, 1998 Sept. 30, 1997 Sept. 30, 1998
Net income
used for
basic and
diluted income
per share $ 329,000 $ 965,000 $1,490,000 $ 2,464,000
Weighted
average shares used
In basic
computation 2,888,400 2,953,000 2,888,400 2,953,000
Weighted
effect of
dilutive stock
options 10,100 27,000 10,100 27,000
Shares used
in diluted
computation 2,898,500 2,980,000 2,898,500 2,980,000
Income per share:
Basic $ 0.11 $ 0.33 $ 0.52 $ 0.83
Diluted $ 0.11 $ 0.32 $ 0.51 $ 0.83
During 1998, the Company issued a 5% stock dividend, resulting in the
issuance of 142,000 shares of common stock. The impact of this stock
dividend has been retroactively recorded in the per share calculation for the
three months and nine months ended September 30, 1997.
5. Restructuring
During 1997, the Company's Board of Directors approved a restructuring of the
Company's operations. The restructuring plan provided for changes in the
operations, and production strategies. In implementing these plans, the
Company decided to cease manufacturing operations at Elkhart, Indiana plant.
<PAGE>
The Company recorded charges aggregating $1,042,000 as a result of this
restructuring plan in the fourth quarter of 1997.
The ceasing of manufacturing operations at the Elkhart facility was made in
conjunction with the recently completed expansion of the California facility
to accommodate the projected increase in production at the California plant.
As a result of this repositioning, the Company determined that certain of
fixed assets and inventories located at the Elkhart plant should be written
down, resulting in a charge of approximately $937,000. Additionally, the
Company recorded severance and other related costs relating to the closure of
the Elkhart plan for approximately $105,000, which was included as a
restructuring charge in the accompanying statements of operations for the
year-ended December 31, 1997. As of September 30, 1998, the Company had a
reserve of $346,000 relating to this restructuring.
Restructuring reserve at 12/31/97 $605,000
Payments and asset write-downs through
September 30, 1998 259,000
Future cash outlay and charges $346,000
6. Related Party Notes Receivable
The Company has advanced $385,000 to key employees during the nine months
ended September 30, 1998 under the Company's Incentive and Non-Statutory
Stock Option Plan (The Plan). The advances are evidenced by long term notes
receivable bearing interest annually until the maturity date. The notes bear
interest at the test rate as defined by Regulation 1.1274-4 of Internal
Revenue Code of 1986, as amended, subject to annual adjustment as approved by
the Company's Compensation Committee. The maturity date of the notes are
March 20, 2003 and April 19, 2003 and are secured by a pledge of the shares
purchased with proceeds of the notes under the Company's Plan. The number of
options exercised under the Plan was 123,000 shares during the nine months
ended September 30, 1998.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. - Management Discussion and Analysis of Financial Condition and
results of operations. All statements in this discussion and analysis which
relate to future sales, costs, capital expenditures or earnings are
"Forwarding Looking Statements" and should be read subject to the assumptions
contained in the "Forward Looking Statements".
Results of Operations
For the Three Months ended September 30, 1998 and for the Three Months ended
September 30, 1997
Sales - 1998 Compared with 1997
Sales for the quarter ended September 30, 1998, totaled $18,470,000 as
compared to $15,997,000 in 1997. The units sold for the quarter ended
September 30, 1998 were 293 vs 275 in 1997. Increased production efficiencies
coming on line at the California facility as a result of the Company's fourth
quarter 1997 restructuring plan was the principal factor in the increase in
sales for the third quarter.
Cost of Sales - 1998 compared with 1997
The Cost of Sales as a percentage of sales for the third quarter of 1998 was
81.6% vs 86.4% in the third quarter of 1997. The cost of sales percentage
for 1998 decreased due to an increase in production efficiencies fueled by an
increase in sales demand for the third quarter.
Gross Profit for the third quarter of 1998 was 18.4% vs 13.6% for the third
quarter of 1997. This increase was due to the cost decrease discussed in
Cost of Sales above. The Company had projected that gross margins would
improve in the future due to economies of scale realized in operating a one
production facility and this projection was realized. However, there can be
no assurance that gross margins will continue to improve due to the unknown
impact of competition within the industry.
Selling, General Administrative and Other Expenses-1998 compared with 1997
Selling, General Administrative, and Other Expenses slightly increased in the
third quarter of 1998 by $78,000. Selling, General and Administrative and
Other Expenses, as a percentage of sales were 9.7% in 1998 as compared to
10.7% in the third quarter of 1997. This decrease was due to the expense
amounts being spread over a larger sales base.
Results of Operations
For the Nine Months ended September 30, 1998 and for the Nine Months ended
September 30, 1997
Sales - 1998 Compared with 1997
Sales for the nine months ended September 30, 1998, totaled $51,020,000 as
compared to $49,877,000 in 1997. The increase in sales was principally due
to increased production and shipment of vehicles recorded as sales from the
economies realized in operating a one production facility together with
servicing the increased third quarter sales demand.
<PAGE>
Costs of Sales - 1998 compared with 1997
The Cost of Sales as a percentage of sales for the first nine months of 1998
was 83.4% vs 85.5% in the first nine months of 1997. The cost of sales
percentage for 1998 decreased due to the centralization of production in the
California facility
Gross Profit - 1998 Compared with 1997
Gross Profit for the first nine months of 1998 was 16.6% vs, 14.5% for the
first nine months of 1997. This increase was due to the cost decrease
discussed in Cost of Sales above. The Company had projected that gross
margins would improve in the future due to economies of scale realized in
operating one production facility. However, there can be no assurance that
gross margins will continue to improve.
Selling, General Administrative and Other Expenses - 1998 compared to 1997
Selling, General Administrative, and Other Expenses decreased in the first
nine months of 1998 by $312,000. Selling, General and Administrative and
Other Expenses, as a percentage, were 8.6% of sales in 1998 as compared to
9.4% in the first nine months of 1997. The decrease was principally due to
the expense amounts being saved due to centralization of production in the
California facility.
Income before taxes 1998 compared with 1997
The income before taxes in the first nine months of 1998 was 8.0% compared to
5.1% for the same period of 1997. The increase in income before taxes was
due to increased sales and efficiencies gained from the Company's
restructuring plan adopted in the fourth quarter of 1997, including
efficiencies gained from the Indiana plant closure, together with servicing
the increased sales demand of the third quarter. Certain benefits of
centralization have been realized and additional benefits may be realized in
the future.
Financial Condition, Capital Resources and Liquidity
The Company's cash needs are primarily to support inventory production,
refurbishment of facilities and equipment and systems development. The
Company has historically financed its operations primarily with internally
generated funds and trade credit. At September 30, 1998, working capital was
$9,874,000 as compared to working capital of $7,356,000 at December 31, 1997.
Cash provided by operating activities from the nine months ended September
30, 1998 was $6,373,000 as compared to $924,000 for the comparable period in
1997. During the first nine months, accounts receivable decreased by
$1,545,000 and accounts payable and other accrued liabilities increased by
$1,868,000 and $1,590,000 respectively. These cash flow sources and net
income of $2,464,000 were used in part to increase inventory by $1,593,000.
During the nine months ended September 30, 1998, $259,000 of cash was used to
execute the Company's restructuring plan adopted in fourth quarter of 1997.
Cash flows from investing activities for the nine months ended September 30,
1998 consisted solely of capital expenditures of $366,000 as compared to
$445,000 for the comparable period in 1997. The Company's capital
expenditures for the remainder of 1998 are currently expected to be
approximately $200,000 and will relate to refurbishment and expansion of
certain production facilities equipment and the enhancement of management
information system.
<PAGE>
Cash flows from financing activities for the first nine months ended
September 30, 1998 consisted principally of stock issued for $200,000,
stock repurchases of $13,000 and repayment of long term debt of $20,000.
The Company will buy back stock in the open market from time to time when the
market price is deemed to be appropriate by management. Future repurchases
of common stock for the remainder of 1998 are not expected to be significant.
Management believes that funds generated from operations, available borrowing
under its line of credit and the use of trade credit will be sufficient to
satisfy the Company's working capital requirements and commitments for
capital expenditures through the third quarter of 1999.
At present, the Company has available a $3,500,000 revolving line of credit
with a bank expiring on July 1, 1999 which can be used for working capital
purposes. At September 30, 1998, no amounts were outstanding under this line
but the Company had $365,000 against the line of credit for a stand-by Letter
of Credit permitting the company to remain self-insured for Worker'
Compensation.
SEASONALITY
The Company's business is subject to seasonal and quarterly fluctuations.
Historically, the Company has realized a higher portion of its sales in the
second quarter and third quarter, consistent with the summer vacation season.
This is consistent with industry trends.
YEAR 2000 UPDATE
In 1997, the Company established and began to implement a program to address
the Year 2000 issue. The Year 2000 program included the implementation of
previously planned systems as well as specific Year 2000 programs. All
programs are on track for completion before the year 2000 with various
applications being upgraded or replaced as needed. The Company does not
expect the Year 2000 program to have a material impact on its results of
operations, liquidity or financial condition. Additionally, the Year 2000
program has not deferred any other company projects that will have a material
impact on its results of operation, liquidity or financial condition.
IT Systems:
In 1997, with the development of the Year 2000 program the Company began
undertaking changes to bring compliant systems and accompanying methodology
on board. In 1998, in furtherance of the Year 2000 program, the Company
acquired a new Year 2000 compliant client server enterprise system and hired
a full time IS professional to oversee the implementation of the program.
The IT systems have been inventoried and the necessary Year 2000 upgrades,
replacements and retrofits identified. These projects are presently in
various stages of analysis, development and implementation. The Year 2000
program is currently scheduled to be completed by the fourth quarter of 1999.
Non-IT Systems:
Non-IT Systems may contain date sensitive embedded technology requiring the
Year 2000 upgrades. Examples of this technology include security equipment
such as access and alarm systems, as well as facilities equipment such as
heating and air conditioning units.
The Company is a product manufacturer; therefore, the "embedded chip" issue
<PAGE>
relates to production line components as well as to the equipment used by the
Company. Production line components and facilities and equipment are being
inventoried and assessments are in progress.
The Company is also addressing the readiness of its critical suppliers and
customers. The Company has inventoried its critical suppliers, and is
sending letters to suppliers, and where appropriate, contacting certain
suppliers requesting Year 2000 certification. The Company is also contacting
certain key customers where potential Year 2000 problems may exist. In
certain areas where the Company relies on products supplied by manufacturers
for the systems provided to its customers, the Company is seeking standard
Year 2000 warranties that, to the extent assignable, may be transferred to
customers.
Costs:
The total cost associated with required modifications to become Year 2000
compliant is not expected to be material to the Company's results of
operations, liquidity and financial condition. The estimated total cost of
the Year 2000 effort is expected to be under $100,000. This estimate does
not include the cost of the Company's previously planned business critical
systems upgrades, which have not been accelerated due to the Year 2000
problem.
Risks and Contingency Planning:
The Company has identified and assessed the areas that may be at risk related
to the Year 2000 problem. The failure to correct a material Year 2000
problem may result in an interruption in, or a failure of, certain normal
business operations or activities. Such failures could materially and
adversely affect the Company's results of operations, liquidity and financial
condition. Due to the general uncertainty inherent in the Year 2000 problem,
resulting in part from the uncertainty of the Year 2000 readiness of
third-party suppliers, the Company is unable to determine at this time
whether the consequences of the Year 2000 failures will have a material
impact on the Company's results of operations, liquidity or financial
condition. The Year 2000 program is expected to significantly reduce the
Company's level of uncertainty about the Year 2000 problem. The Company
believes that through its Year 2000 program, the possibility of significant
interruptions of normal business operations should be reduced.
Readers are cautioned that forward looking statements contained in the Year
2000 Update should be read in conjunction with the Company's disclosures
under the heading "Forward Looking Statements".
FORWARD-LOOKING STATEMENTS
Our report contains forward-looking statements. These are based on
assumptions and on facts as known to us today, and we do not intend to update
them. Rexhall's business is seasonal, and we are entering the historically
slow season for sales of recreational vehicles. Its business is also subject
to increases in material costs, pricing and other pressures from
substantially larger competitors, and labor disruptions. Adverse weather,
when it occurs, will reduce sales and make deliveries difficult. For some
time, favorable recreational vehicle industry sales have been achieved when
there are low interest rates, low unemployment, and ready availability of
motor fuel. All three of these factors may change rapidly, and they are
beyond Rexhall's control or ability to predict. Consumer confidence levels
have been stabilizing or declining recently, and may result in postponement
of discretionary recreational purchases.
<PAGE>
I - OTHER INFORMATION
Item 1 - Legal Proceedings
Legal Settlement - The class action lawsuit Masterjohn et al vs. Rexhall, et
al,, Case No. 752188 filed in the Superior Court of Orange County, California
has been settled and approved by the court. Under the settlement agreement
Rexhall will pay $825,000 in cash, and issue one coupon per vehicle owned by
members of the class of $1250 towards purchase of a new Rexhall vehicle or
$200 toward service, parts and labor. Coupons will be redeemable at
Rexhall's two service centers in Indiana and California, as well as three
other dealerships geographically dispersed. The total number of vehicles
owned by class members is estimated at approximately 5,000. The Company
recorded a charge of $1,590,000 in 1997 relating to this settlement. The
preliminary approval of the settlement has been accepted by the Superior
Court of Orange County, California and pursuant to that preliminary approval,
$206,000 has been paid to the plaintiffs' attorneys. Final approval was
accepted by the Superior Court of Orange County, California and pursuant to
that approval $619,000 was paid to the plaintiff's attorney on
October 6, 1998.
Item 6. - Exhibits and Reports on Form 8-K
The Company's Annual Report in form 10-K for the period ending December 31,
1997, is incorporated herein by reference, Edgar Accession Number
0000850476-98-000010.
There were no Reports on Form 8-K during the period covered by this
Form 10-Q.
<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: /s/William J. Rex
William J. Rex
Chairman, President and
Chief Executive Officer
Date: /s/Anthony J. Partipilo
Anthony J. Partipilo
Chief Financial Officer
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<PERIOD-END> SEP-30-1998
<CASH> 6,985,000
<SECURITIES> 0
<RECEIVABLES> 3,833,000
<ALLOWANCES> 0
<INVENTORY> 11,032,000
<CURRENT-ASSETS> 24,197,000
<PP&E> 5,069,000
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0
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<SALES> 51,020,000
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<CGS> 42,542,000
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